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Medicare Program; CY 2020 Revisions to Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Medicaid Promoting Interoperability Program Requirements for Eligible Professionals; Establishment of an Ambulance Data Collection System; Updates to the Quality Payment Program; Medicare Enrollment of Opioid Treatment Programs and Enhancements to Provider Enrollment Regulations Concerning Improper Prescribing and Patient Harm; and Amendments to Physician Self-Referral Law Advisory Opinion Regulations Final Rule; and Coding and Payment for Evaluation and Management, Observation and Provision of Self-Administered Esketamine Interim Final Rule

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AGENCY:

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

ACTION:

Final rule and interim final rule.

SUMMARY:

This major final rule addresses: Changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; Medicare Shared Savings Program quality reporting requirements; Medicaid Promoting Interoperability Program requirements for eligible professionals; the establishment of an ambulance data collection system; updates to the Quality Payment Program; Medicare enrollment of Opioid Treatment Programs and enhancements to provider enrollment regulations concerning improper prescribing and patient harm; and amendments to Physician Self-Referral Law advisory opinion regulations. In addition, we are issuing an interim final rule with comment period (IFC) to establish coding and payment for evaluation and management, observation and the provision of self-administered Esketamine to facilitate beneficiary access to care for treatment-resistant depression as efficiently as possible.

DATES:

Effective date: These regulations are effective on January 1, 2020.

Comment date: Comments will be accepted/considered ONLY on the Interim Rule “Coding and Payment for Evaluation and Management, Observation and Provision of Self-Administered Esketamine” contained in section V. of the preamble of this document. To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on December 31, 2019.

ADDRESSES:

In commenting, please refer to file code CMS-1715-IFC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):

1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the “Submit a comment” instructions.

2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1715-IFC, P.O. Box 8016, Baltimore, MD 21244-8016.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1715-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

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

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Jamie Hermansen, (410) 786-2064, for any issues not identified below.

Michael Soracoe, (410) 786-6312, for issues related to practice expense, work RVUs, conversion factor, and impacts.

Geri Mondowney, (410) 786-1172, or Tourette Jackson, (410) 786-4735, for issues related to malpractice RVUs and geographic practice cost indices (GPCIs).

Larry Chan, (410) 786-6864, or Geri Mondowney, (410) 786-1172, for issues related to potentially misvalued services under the PFS.

Lindsey Baldwin, (410) 786-1694, Emily Yoder, (410) 786-1804, or Patrick Sartini, (410) 786-9252, for issues related to telehealth services.

Pierre Yong, (410) 786-8896, or Lindsey Baldwin, (410) 786-1694, for issues related to Medicare coverage of opioid use disorder treatment services furnished by opioid treatment programs (OTPs).

Lindsey Baldwin, (410) 786-1694, for issues related to bundled payments under the PFS for substance use disorders.

Emily Yoder, (410) 786-1804, or Christiane LaBonte, (410) 786-7237, for issues related to the comment solicitation on opportunities for bundled payments under the PFS.

Regina Walker-Wren, (410) 786-9160, for issues related to physician supervision for physician assistant (PA) services and review and verification of medical record documentation.

Ann Marshall, (410) 786-3059, Emily Yoder, (410) 786-1804, Liane Grayson, (410) 786-6583, or Christiane LaBonte (410) 786-7237, for issues related to care management services.

Terry Simananda, (410) 786-8144, for issues related to interim final rule with comment period (payment for self-administered esketamine).

Kathy Bryant, (410) 786-3448, for issues related to coinsurance for colorectal cancer screening tests and global surgery data collection.

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

Ann Marshall, (410) 786-3059, Emily Yoder, (410) 786-1804, or Christiane LaBonte, (410) 786-7237, for issues related to payment for evaluation and management services.

Thomas Kessler, (410) 786-1991, for issues related to ambulance physician certification statement.

Felicia Eggleston, (410) 786-9287, or Amy Gruber, (410) 786-1542, for issues related to the ambulance fee schedule and the requirements related to the Medicare ground ambulance data collection system.

Linda Gousis, (410) 786-8616, for issues related to intensive cardiac rehabilitation.

David Koppel, (303) 844-2883, or Elizabeth LeBreton, (202) 615-3816, for issues related to the Medicaid Promoting Interoperability Program.

Fiona Larbi, (410) 786-7224, for issues related to the Medicare Shared Savings Program (Shared Savings Program) Quality Measures.

Katie Mucklow, (410) 786-0537, or Diana Behrendt (410) 786-6192, for issues related to open payments.

Cheryl Gilbreath, (410) 786-5919, for issues related to home infusion therapy benefit.

Joseph Schultz, (410) 786-2656, for issues related to Medicare enrollment of opioid treatment programs, and enhancements to provider enrollment regulations concerning improper prescribing and patient harm.Start Printed Page 62569

Jacqueline Leach, (410) 786-4282, for issues related to Deferring to State Scope of Practice Requirements: Ambulatory Surgical Centers (ASC).

Mary Rossi-Coajou, (410) 786-6051, for issues related to Deferring to State Scope of Practice Requirements: Hospice.

1877AdvisoryOpinion@cms.hhs.gov, for issues related to Advisory Opinions on Application of the Physician Self-referral law.

Molly MacHarris, (410) 786-4461, for inquiries related to Merit-based Incentive Payment System (MIPS).

Brittany LaCouture, (410) 786-0481, for inquiries related to Alternative Payment Models (APMs).

Patricia Taft, (410) 786-4561, for issues related to Physician Self-Referral Law: Annual Update to the List of CPT/HCPCS Codes Annual Update.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://regulations.gov. Follow the search instructions on that website to view public comments.

Addenda Available Only Through the Internet on the CMS Website: The PFS Addenda along with other supporting documents and tables referenced in this final rule are available on the CMS website at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html. Click on the link on the left side of the screen titled, “PFS Federal Regulations Notices” for a chronological list of PFS Federal Register and other related documents. For the CY 2020 PFS final rule, refer to item CMS-1715-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 website identified above should contact Jamie Hermansen at (410) 786-2064.

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 2019 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.

I. Executive Summary

A. Purpose

This major final rule revises payment polices under the Medicare PFS and makes other policy changes, including provisions to implement certain provisions of the Bipartisan Budget Act of 2018 (BBA of 2018) (Pub. L. 115-123, February 9, 2018) and the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (the SUPPORT Act) (Pub. L. 115-271, October 24, 2018), related to Medicare Part B payment, applicable to services furnished in CY 2020 and thereafter. In addition, this final rule includes provisions related to other payment policy changes that are addressed in section III. of this final rule.

To facilitate beneficiary access to treatment for treatment-resistant depression (TRD) as using esketamine, we are creating two new HCPCS G codes, G2082 and G2083, effective January 1, 2020 on an interim final basis. For 2020, we are establishing RVUs for these services that reflect the relative resource costs associated with the evaluation and management (E/M), observation and provision of the self-administered esketamine product.

1. Summary of the Major Provisions

The statute requires us to establish payments under the PFS based on national uniform relative value units (RVUs) that account for the relative resources used in furnishing a service. The statute requires that RVUs be established for three categories of resources: Work; practice expense (PE); and malpractice (MP) expense. In addition, the statute requires that we establish 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 final rule, we are establishing RVUs for CY 2020 for the PFS to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This final rule also includes discussions and provisions regarding several other Medicare Part B payment policies, Medicare Shared Savings Program quality reporting requirements, Medicaid Promoting Interoperability Program requirements for eligible professionals, the establishment of a ground ambulance data collection system, updates to the Quality Payment Program, Medicare enrollment of Opioid Treatment Programs and enhancements to provider enrollment regulations concerning improper prescribing and patient harm; and amendments to Physician Self-Referral Law advisory opinion regulations. Specifically, this final rule addresses:

  • Practice Expense RVUs (section II.B.)
  • Malpractice RVUs (section II.C.)
  • Geographic Practice Cost Indices (GPCIs) (section II.D.)
  • Potentially Misvalued Services under the PFS (section II.E.)
  • Telehealth Services (section II.F.)
  • Medicare Coverage for Opioid Use Disorder Treatment Services Furnished by Opioid Treatment Programs (section II.G.)
  • Bundled Payments Under the PFS for Substance Use Disorders (section II.H.)
  • Physician Supervision for Physician Assistant (PA) Services (section II.I.)
  • Review and Verification of Medical Record Documentation (section II.J.)
  • Care Management Services (section II.K.)
  • Coinsurance for Colorectal Cancer Screening Tests (section II.L.)
  • Therapy Services (section II.M.)
  • Valuation of Specific Codes (section II.N.)
  • Comment Solicitation on Opportunities for Bundled Payments under the PFS (section II.O.)
  • Payment for Evaluation and Management (E/M) Services (section II.P.)
  • Ambulance Coverage Services—Physician Certification Statement (section III.A.)
  • Ambulance Fee Schedule—Medicare Ground Ambulance Data Collection System (section III.B.)
  • Intensive Cardiac Rehabilitation (section III.C.)
  • Medicaid Promoting Interoperability Program Requirements for Eligible Professionals (EPs) (section III.D.)
  • Medicare Shared Savings Program Quality Measures (section III.E.)
  • Open Payments (section III.F.)
  • Home Infusion Therapy Benefit (section III.G.)
  • Medicare Enrollment of Opioid Treatment Programs and Enhancements to Existing General Enrollment Policies Related to Improper Prescribing and Patient Harm (section III.H.)
  • Deferring to State Scope of Practice Requirements (section III.I.)
  • Advisory Opinions on the Application of the Physician Self-Referral Law (section III.J.)Start Printed Page 62570
  • Updates to the Quality Payment Program (section III.K.)
  • Physician Self-Referral Law: Annual Update to the List of CPT/HCPCS Codes (section IV.)
  • Interim Final Rule with Comment Period: Coding and Payment for Evaluation and Management, Observation and Provision of Self-Administered Esketamine (HCPCS codes G2082 and G2083) (section V.)
  • Collection of Information Requirements (section VI.)
  • Regulatory Impact Analysis (section VII.)

2. Summary of Costs and Benefits

We have determined that this final rule is economically significant. For a detailed discussion of the economic impacts, see section VII. of this final rule.

II. Provisions of the Final Rule for the 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, practice expense (PE), and malpractice (MP), which are adjusted for geographic cost variations. These values are multiplied by a conversion factor (CF) to convert the relative value units (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 in the November 25, 1991 Federal Register (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 the services they furnish to Medicare beneficiaries.

1. Development of the RVUs

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 similar 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 MP 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 of 1997) delayed implementation of the resource-based PE RVU system until January 1, 1999. In addition, section 4505(b) of the BBA of 1997 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 the November 2, 1998 final rule (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 PFS 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 resource 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 specific facility resource costs 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 Start Printed Page 62571published 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 of 1997 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' MP 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, Determination of Malpractice Relative Value Units.

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 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 VII. of this final rule, the Regulatory Impact Analysis, 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. Please refer to the CY 2017 PFS final rule with comment period for a discussion of the last GPCI update (81 FR 80261 through 80270), and to the GPCI section of this current rule for the CY 2020 update.

RVUs are converted to dollar amounts through the application of a CF, which is calculated based on a statutory formula by CMS' 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 PE RVUs

1. Overview

Practice expense (PE) is the portion of the resources used in furnishing a service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages, but excluding MP expenses, as specified in section 1848(c)(1)(B) of the Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use a resource-based system for determining PE RVUs for each physicians' service. We develop PE RVUs by considering the direct and indirect practice resources involved in furnishing each service. Direct expense categories include clinical labor, medical supplies, and medical equipment. Indirect expenses include administrative labor, office expense, and all other expenses. The sections that follow provide more detailed information about the methodology for translating the resources involved in furnishing each service into service-specific PE RVUs. We refer readers to the CY 2010 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 PE Start Printed Page 62572methodology CY 2007 PFS proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629).

b. Indirect Practice Expense per Hour Data

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

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

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

Supplemental survey data on independent labs from the College of American Pathologists were implemented for payments beginning in CY 2005. Supplemental survey data from the National Coalition of Quality Diagnostic Imaging Services (NCQDIS), representing independent diagnostic testing facilities (IDTFs), were blended with supplementary survey data from the American College of Radiology (ACR) and implemented for payments beginning in CY 2007. Neither IDTFs, nor independent labs, participated in the PPIS. Therefore, we continue to use the PE/HR that was developed from their supplemental survey data.

Consistent with our past practice, the previous indirect PE/HR values from the supplemental surveys for these specialties were updated to CY 2006 using the Medicare Economic Index (MEI) to put them on a comparable basis with the PPIS data.

We also do not use the PPIS data for reproductive endocrinology and spine 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 2020 PFS Proposed Rule PE/HR” on the CMS website under downloads for the CY 2020 PFS proposed rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

For CY 2020, we have incorporated the available utilization data for two new specialties, each of which became a recognized Medicare specialty during 2018. These specialties are Medical Toxicology and Hematopoietic Cell Transplantation and Cellular Therapy. We proposed to use proxy PE/HR values for these new specialties, as there are no PPIS data for these specialties, by crosswalking the PE/HR as follows from specialties that furnish similar services in the Medicare claims data:

  • Medical Toxicology from Emergency Medicine; and
  • Hematopoietic Cell Transplantation and Cellular Therapy from Hematology/Oncology.

These updates are reflected in the “CY 2020 PFS Final Rule PE/HR” file available on the CMS website under the supporting data files for the CY 2020 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

We did not receive any public comments on the use of the proposed PE/HR proxy values for Medical Toxicology and Hematopoietic Cell Transplantation and Cellular Therapy. Therefore, we are finalizing our PE/HR crosswalks as proposed.

c. Allocation of PE to Services

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

(1) Direct Costs

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

(2) Indirect Costs

We allocate the indirect costs at the code level 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. 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 Start Printed Page 62573(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.
  • Then, we incorporate the specialty-specific indirect PE/HR data into the calculation. In our example, if, based on the survey data, the average indirect cost of the specialties furnishing the first service with an allocator of 10.00 was half of the average indirect cost of the specialties furnishing the second service with an indirect allocator of 5.00, the indirect portion of the PE RVUs of the first service would be equal to that of the second service.

(3) Facility and Nonfacility Costs

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

(4) Services With Technical Components and Professional Components

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

(5) PE RVU Methodology

For a more detailed description of the PE RVU methodology, we refer readers to the CY 2010 PFS final rule with comment period (74 FR 61745 through 61746). We also direct readers to the file called “Calculation of PE RVUs under Methodology for Selected Codes” which is available on our website under downloads for the CY 2020 PFS proposed rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html. This file contains a table that illustrates the calculation of PE RVUs as described in this proposed rule for individual codes.

(a) Setup File

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

(b) Calculate the Direct Cost PE RVUs

Sum the costs of each direct input.

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

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

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. Codes with low Medicare service volume require special attention since billing or enrollment irregularities for a given year can result in significant changes in specialty mix assignment. We finalized a policy in the CY 2018 PFS final rule (82 FR 52982 through 59283) to use the most recent year of claims data to determine which codes are low volume for the coming year (those that have fewer than 100 allowed services in the Medicare claims data). For codes that fall into this category, instead of assigning specialty mix based on the specialties of the practitioners reporting the services in the claims data, we instead use the expected specialty that we identify on a list developed based on medical review and input from expert stakeholders. We display this list of expected specialty assignments as part of the annual set of data files we make available as part of notice and comment rulemaking and consider recommendations from the RUC and other stakeholders on changes to this list on an annual basis. Services for which the specialty is automatically assigned based on previously finalized policies under our established methodology (for example, “always therapy” services) are unaffected by the list of expected specialty assignments. We also finalized in the CY 2018 PFS final rule (82 FR 52982 through 59283) a policy to apply these service-level overrides for both PE and MP, rather than one or the other category.Start Printed Page 62574

For CY 2020, we proposed to clarify the expected specialty assignment for a series of cardiothoracic services. Prior to the creation of the expected specialty list for low volume services in CY 2018, we previously finalized through rulemaking a crosswalk to the thoracic surgery specialty for a series of cardiothoracic services that typically had fewer than 100 services reported each year (see, for example, the CY 2012 PFS final rule (76 FR 73188-73189)). However, we noted that for many of the affected codes, the expected specialty list for low volume services incorrectly listed a crosswalk to the cardiac surgery specialty instead of the thoracic surgery specialty. We proposed to update the expected specialty list to accurately reflect the previously finalized crosswalk to thoracic surgery for these services. The affected codes are shown in Table 1.

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We note that the cardiac surgery and thoracic surgery specialties are similar to one another, sharing the same PE/HR data for PE valuation and nearly Start Printed Page 62576identical MP risk factors for MP valuation. As a result, we noted that we did not anticipate the proposal having a discernible effect on the valuation of the codes listed above. The complete list of expected specialty assignments for individual low volume services, including the assignments for the codes identified in Table 1, is available on our website under downloads for the CY 2020 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

We received public comments on the proposed updates to the expected specialty list. The following is a summary of the comments we received and our responses.

Comment: Several commenters stated that CMS had indicated that the expected specialty would be updated to include a column specifying if a service was identified as a low volume service for CY 2020, indicating if the service-level override was being applied for CY 2020. However, commenters noted that this additional column did not appear in the download version and asked for additional information.

Response: We thank the commenters for identifying this missing information and we apologize for the technical oversight that caused this information not to be displayed for the proposed rule. We will include this additional column in the public use files released with the final rule.

Comment: Several commenters disagreed with the CMS proposal to update the expected specialty list to accurately reflect the previously finalized crosswalk to thoracic surgery for these services. Commenters stated that when the expected specialty list was developed, the affected specialties specifically selected the cardiac surgery specialty for these codes. Commenters also stated that, for nearly all of the applicable codes, cardiac surgery was the dominant provider in the 2018 Medicare claims data. Commenters acknowledged that the MP risk factor for both cardiac surgery and thoracic surgery is naturally very similar, but still asked that CMS assign the codes listed in Table 1 to the cardiac surgery specialty.

Response: As we stated in the proposed rule, we did not propose to assign the codes listed in Table 1 to the cardiac surgery specialty. Instead, we proposed to update the incorrect documentation in our expected specialty list to accurately reflect the previously finalized crosswalk to thoracic surgery for these services. The previously finalized assignment of the cardiac specialty to these services has been in place since the CY 2012 rule cycle, and we believe that the expected specialty list should be updated to reflect the correct specialty assignment.

Comment: Several commenters disagreed with the CMS methodology used to determine low volume service status; that is, codes that have fewer than 100 allowed services in the non-modified 3-year average of Medicare claims data. Commenters stated that utilization frequencies are adjusted in the RUC database for certain codes based on the CPT modifiers that were appended to the code to ensure that certain services are not over- or underweighted, such as changes made for bilateral modifier 50, post-op only modifier 55 and anesthesia modifiers QK, QX and QY. Commenters stated that CMS does not discount the utilization when determining what constitutes a low volume service and instead uses the non-modified 3-year service count for this criterion. Commenters stated that this could lead to double-counting and overestimating utilization for the purposes of determining low volume status, and requested that CMS use discounted utilization for this purpose.

Response: We disagree that it would be more accurate to use a discounted form of utilization to determine low volume status. We finalized a policy in the CY 2018 PFS final rule (82 FR 52982 through 59283) to use claims data to determine which codes are low volume for the coming year, defining “low volume” as those that had fewer than 100 allowed services in the Medicare claims data. We did not finalize a policy to discount this utilization and we do not believe that it would be more accurate to do so, as a service is still performed even if a payment discount is applied to its billing. More importantly, we did not make any proposals concerning the methodology to determine what constitute a low volume service in the proposed rule, and therefore, we are not finalizing any changes to this methodology.

Comment: One commenter provided a list of 112 additional codes that the commenter stated were low volume procedures, with an expected specialty for each code. The commenter recommended that CMS append this list to the anticipated specialty assignment for low volume services. Another commenter stated that gastroenterologists do not perform CPT code 96571 on a current basis, and recommended that CMS remove gastroenterology as the expected specialty for this code.

Response: We appreciate the list of additional services identified by the commenter. As we have stated in previous rulemaking (82 FR 52982), we consider recommendations from the RUC and other stakeholders on changes to this list on an annual basis. In reviewing the submitted list of 112 additional codes, we noted that they generally fell into two categories—codes with a restricted coverage status code (“R”) or codes that exceed 100 services in the claims data, and therefore, did not meet our criteria for low volume status. We are finalizing the addition of these 112 codes to the low volume services list with the recommended expected specialty; however, we caution that many of these codes will continue to have utilization too high to meet the criteria for expected specialty assignment. We are adding these codes to the list in the interest of maintaining payment stability, such that, if they were to fall below 100 annual services at a future date, then an expected specialty would be assigned. We do not have indirect PE data for two of the specialties on the recommended list, and as a result we are substituting the established PE/HR crosswalk for these specialties. (The full list of all established PE/HR crosswalks is available on our website under downloads for the CY 2020 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.) The two affected specialties are Interventional Cardiology (crosswalked to Cardiology) and Surgical Oncology (crosswalked to General Surgery). We are also finalizing a change to the expected specialty for CPT code 96571 in response to the information supplied by the commenter, which we are changing to Pulmonary Disease to match the dominant specialty in the claims data. The complete list of additional updates to the low volume services list is detailed in Table 2.

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Comment: Several commenters stated that the non-facility PE RVUs for CPT code 55874 (Transperineal placement of biodegradable material, peri-prostatic, single or multiple injection(s), including image guidance, when performed) are projected to decrease 13 percent for CY 2020, which the commenter believed to be attributed to the current specialty mix utilizing the code. The commenters stated that the projected decrease for CY 2020 was due to CMS using the first year of actual claims data, which had a different ratio of the urology and radiation oncology specialties than in the previously projected utilization crosswalk. The commenters requested that CMS address the proposed decreases for CPT code 55874 in the final rule.

Response: We agree with the commenters that the proposed decreases for CPT code 55874 were due to changes in the specialty mix, as the code shifted from projected utilization to reported claims data. However, we do not agree with the commenters that there is a need to address the valuation of this code, as we believe that it is important to use actual claims data as opposed to utilization projections once the data for new codes has become available. The specialty mix on reported claims will necessarily be more accurate than the utilization projections created in advance before claims data exists. We also note that the specialty mix associated with CPT code 55874 in the claims data is unrelated to the low volume list or the assignment of an expected specialty.

Comment: A commenter stated that CPT codes 33271 (Insertion of subcutaneous implantable defibrillator electrode) and 33273 (Repositioning of previously implanted subcutaneous implantable defibrillator electrode) are low volume service codes that are proposed to have a service-level override to the anticipated specialty of cardiology. The commenter supported this expected specialty assignment.

Response: We appreciate the support for our proposals from the commenter.

After consideration of the public comments, we are finalizing our proposal to update the expected specialty list to accurately reflect the previously finalized crosswalk to thoracic surgery for these services. We are also finalizing the updates to the expected specialty list detailed above in Table 2; we reiterate again that we do not anticipate this finalized proposal having a discernible effect on the valuation of the codes in the table due to the similarity between the cardiac surgery and thoracic surgery specialties.

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 RVUs and the clinical labor PE RVUs. We do this to recognize that, for the PC service, indirect PEs would be allocated using the work RVUs, and for the TC service, indirect PEs would be allocated using the direct PE RVUs and the clinical labor PE RVUs. This also allows the global component RVUs to equal the sum of the PC and TC RVUs.)

For presentation purposes, in the examples in the download file 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 Start Printed Page 62579for 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).

(e) Setup File Information

  • Specialties excluded from ratesetting calculation: For the purposes of calculating the PE and MP RVUs, we exclude certain specialties, such as certain NPPs paid at a percentage of the PFS and low-volume specialties, from the calculation. These specialties are included for the purposes of calculating the BN adjustment. They are displayed in Table 2.
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  • 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 Start Printed Page 62581accordingly. Table 4 details the manner in which the modifiers are applied.

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 below 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 below in this final rule.

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

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.

Comment: A commenter stated that they disagreed with the 90 percent utilization metric for CT and MRI equipment, as the commenter did not believe it to be realistic in a typical outpatient imaging setting, but the commenter recognized that the percentage is dictated by statute. The commenter stated that the 90 percent equipment usage assumption for CT and MRI is inconsistent with actual imaging center practice and ignores scheduling in the “real world,” such as lunch and other mandated breaks, complicated patients, and downtime for maintenance and quality control. The commenter stated that to achieve a 90 percent utilization rate under ideal conditions would require two employees per unit; one doing pre-service tasks while the other is setting up the machine as opposed to assumptions of one CT or MRI technologist per scanner.

Response: We disagree with the commenters regarding the equipment time assigned to highly technical equipment such as CT or MRI machines. We continue to believe that certain highly technical pieces of equipment Start Printed Page 62582and 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 and are typically available for other patients even when one member of clinical staff may be occupied with a preservice or postservice task related to the procedure. For a more detailed description of this topic, we refer readers to the CY 2015 PFS final rule with comment period (79 FR 67639 through 67640).

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. The commenter also requested a meeting to discuss what options CMS would find acceptable in undertaking their own survey for ophthalmology services.

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 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). As we previously stated in the CY 2016 PFS final rule with comment period (80 FR 70897), we do not believe the annual maintenance factor for all equipment is precisely 5 percent, and we concur that the current rate likely understates the true cost of maintaining some equipment. We also 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 a different maintenance factor, we did not propose a variable maintenance factor for equipment cost per minute pricing as we noted that we did not believe that we have sufficient information at present to do so. We continue to investigate potential avenues for determining equipment maintenance costs across a broad range of equipment items.

Comment: A commenter stated that they continue to believe that maintenance costs for imaging equipment are much higher than the current 5 percent assumption. The commenter stated that the maintenance costs for an MRI unit include servicing the scanner itself plus replacing cryogens for a cost well in excess of 5 percent even using CMS' low assumptions of MRI and CT room cost.

Response: As detailed above, we continue to believe that the current 5 percent maintenance factor likely understates the true cost of maintaining some equipment and overstates the maintenance costs for other equipment. We continue at this time to lack publicly available datasets regarding equipment maintenance costs or another systematic data collection methodology for determining maintenance factor. We remind readers that 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.

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 2020. The Interest rates are listed in Table 5.

Comment: A commenter stated that they did not support the continued use of the 2012 SBA maximum interest rates, which the commenter stated are significantly lower than the 2019 rates. The commenter stated that CMS should also update the interest rates used to calculate PE RVUs for such items based on current SBA data.

Response: We appreciate the additional information regarding SBA Start Printed Page 62583maximum interest rates from the commenter. However, we did not propose any changes to these interest rates for CY 2020; we will consider potential changes to the interest rates used in the equipment cost per minute calculation for possible future rulemaking.

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 2020 direct PE input public use files, which are available on the CMS website under downloads for the CY 2020 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

a. Standardization of Clinical Labor Tasks

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

In the CY 2016 PFS final rule with comment period (80 FR 70901), we solicited comments on the appropriate standard minutes for the clinical labor tasks associated with services that use digital technology. After consideration of comments received, we finalized standard times for clinical labor tasks associated with digital imaging at 2 minutes for “Availability of prior images confirmed”, 2 minutes for “Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist”, 2 minutes for “Review examination with interpreting MD”, and 1 minute for “Exam documents scanned into PACS.” Exam completed in RIS system to generate billing process and to populate images into Radiologist work queue.” In the CY 2017 PFS final rule (81 FR 80184 through 80186), we finalized a policy to establish a range of appropriate standard minutes for the clinical labor activity, “Technologist QCs images in PACS, checking for all images, reformats, and dose page.” These standard minutes will be applied to new and revised codes that make use of this clinical labor activity when they are reviewed by us for valuation. We finalized a policy to establish 2 minutes as the standard for the simple case, 3 minutes as the standard for the intermediate case, 4 minutes as the standard for the complex case, and 5 minutes as the standard for the highly complex case. These values were based upon a review of the existing minutes assigned for this clinical labor activity; we determined that 2 minutes is the duration for most services and a small number of codes with more complex forms of digital imaging have higher values.

We also finalized standard times for clinical labor tasks associated with pathology services in the CY 2016 PFS final rule with comment period (80 FR 70902) at 4 minutes for “Accession specimen/prepare for examination”, 0.5 minutes for “Assemble and deliver slides with paperwork to pathologists”, 0.5 minutes for “Assemble other light microscopy slides, open nerve biopsy slides, and clinical history, and present to pathologist to prepare clinical pathologic interpretation”, 1 minute for “Clean room/equipment following procedure”, 1 minute for “Dispose of remaining specimens, spent chemicals/other consumables, and hazardous waste”, and 1 minute for “Prepare, pack and transport specimens and records for in-house storage and external storage (where applicable).” We do not believe these activities would be dependent on number of blocks or batch size, and we believe that these values accurately reflect the typical time it takes to perform these clinical labor tasks.

In reviewing the RUC-recommended direct PE inputs for CY 2019, we noticed that the 3 minutes of clinical labor time traditionally assigned to the “Prepare room, equipment and supplies” (CA013) clinical labor activity were split into 2 minutes for the “Prepare room, equipment and supplies” activity and 1 minute for the “Confirm order, protocol exam” (CA014) activity. We proposed to maintain the 3 minutes of clinical labor time for the “Prepare room, equipment and supplies” activity and remove the clinical labor time for the “Confirm order, protocol exam” activity wherever we observed this pattern in the RUC-recommended direct PE inputs. Commenters explained in response that when the new version of the PE worksheet introduced the activity codes for clinical labor, there was a need to translate old clinical labor tasks into the new activity codes, and that a prior clinical labor task was split into two of the new clinical labor activity codes: CA007 (“Review patient clinical extant information and questionnaire”) in the preservice period, and CA014 (“Confirm order, protocol exam”) in the service period. Commenters stated that the same clinical labor from the old PE worksheet was now divided into the CA007 and CA014 activity codes, with a standard of 1 minute for each activity. We agreed with commenters that we would finalize the RUC-recommended 2 minutes of clinical labor time for the CA007 activity code and 1 minute for the CA014 activity code in situations where this was the case. However, when reviewing the clinical labor for the reviewed codes affected by this issue, we found that several of the codes did not include this old clinical labor task, and we also noted that several of the reviewed codes that contained the CA014 clinical labor activity code did not contain any clinical labor for the CA007 activity. In these situations, we continue to believe that in these cases the 3 total minutes of clinical staff time would be more accurately described by the CA013 “Prepare room, equipment and supplies” activity code, and we finalized these clinical labor refinements. For additional details, we direct readers to the discussion in the CY 2019 PFS final rule (83 FR 59463 and 59464).

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 Start Printed Page 62584developing the recommendations. These variations have made it difficult for both the RUC's development and our review of code values for individual codes. Beginning with its recommendations for CY 2019, the RUC has mandated the use of a new PE worksheet for purposes of their recommendation development process that standardizes the clinical labor tasks and assigns them a clinical labor activity code. We believe the RUC's use of the new PE worksheet in developing and submitting recommendations will help us to simplify and standardize the hundreds of different clinical labor tasks currently listed in our direct PE database. As we did in previous calendar years, to facilitate rulemaking for CY 2020, we are continuing to display two versions of the Labor Task Detail public use file: One version with the old listing of clinical labor tasks, and one with the same tasks crosswalked to the new listing of clinical labor activity codes. These lists are available on the CMS website under downloads for the CY 2020 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

Comment: A commenter wrote to express their concerns with the manner in which data was displayed in the Proposed CY 2020 Direct PE Refinements table in the proposed rule (84 FR 40623-40666), specifically the common refinements to equipment time. The commenter stated that nearly 64 percent of the total PE refinements were related to equipment, and 59 percent of these refinements were listed as “E15: Refined equipment time to conform to changes in clinical labor time.” The commenter stated that they did not agree that these are separate refinements; rather, they are the formulaic result of the applying refinements to the clinical labor time. The commenter stated that including these instances as refinements adds a large quantity of rows to the PE refinement table and gives the impression that there are major inaccuracies in the RUC PE recommendations. The commenter provided an example of a single clinical labor refinement to a code family creating 32 rows of subsequent equipment refinements, and contended that articulating these edits was not necessary as they do not reflect either an error or a policy discrepancy with the RUC. The commenter requested that CMS no longer include refinements based on “E15: Refined equipment time to conform to changes in clinical labor time” in the refinement table of the proposed rule.

Response: We agree with the commenter that these equipment time refinements generated in response to clinical labor time refinements are indeed the result of applying standard equipment time formulas, and they do not reflect errors in the equipment recommendations or policy discrepancies with the RUC. We also agree that these refinements add a significant number of rows to the table of direct PE refinements. However, we disagree with the commenter on the subject of whether these constitute separate refinements, and we believe that it is important to publish the specific equipment times that we are proposing (or finalizing in the case of the final rule) when they differ from the recommended values. We include the direct cost change in dollars resulting from our PE refinements on the aforementioned table, and if we were to avoid including these equipment refinements, it would not always be clear what effect they were having on the direct costs for the procedure. For example, a modest reduction of a few minutes in clinical labor time can result in a substantial decrease in direct costs for procedures that employ highly expensive equipment. We believe that it is more important to provide additional transparency regarding the changes in direct costs resulting from our equipment time refinements so that the public can better comment on our proposals, as opposed to limiting the total number of printed equipment refinements.

However, we agree with the commenter that the information displayed in the table of direct PE refinements can be confusing and overwhelming, and we believe that it could potentially be provided to the public in a more useful fashion. For this CY PFS 2020 final rule, we will separate out the “E15: Refined equipment time to conform to changes in clinical labor time” direct PE refinements and print them in a separate table of refinements. We believe that this will help to address the issues raised by the commenter while also retaining all of the data included in previous rules. We refer readers to Table 28 in section II.N. of this final rule, the Valuation of Specific Codes section, for additional details.

b. 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 the review of the recommended direct PE inputs for the CY 2017 PFS proposed rule, we developed a structure that separates the scope, the associated video system, and any scope accessories that might be typical as distinct equipment items for each code. Under this approach, we proposed standalone prices for each scope, and separate prices for the video systems and accessories that are used with scopes.

(1) Scope Equipment

Beginning in the CY 2017 PFS proposed rule (81 FR 46176 through 46177), we 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 input 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. We did not propose to apply these policies Start Printed Page 62585to 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 noted we could consider proposing to apply to other codes in future rulemaking. 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 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 in the CY 2018 PFS proposed rule (82 FR 33961 through 33962) to continue clarifying scope equipment inputs, and sought comments regarding the new set of scope proposals. We considered 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 stated our belief that the variation between these scopes was not significant enough to warrant maintaining these distinctions, and we believed 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.

After considering the comments on the CY 2018 PFS proposed rule, we did not finalize our proposal to create and price a single scope equipment code for each of the five categories previously identified. Instead, we supported the recommendation from the commenters to create scope equipment codes on a per-specialty basis for six categories of scopes as applicable, including the addition of a new sixth category of multi-channeled flexible video scopes. Our goal was to create an administratively simple scheme that would be easier to maintain and help to reduce administrative burden. In 2018, the RUC convened a Scope Equipment Reorganization Workgroup to incorporate feedback from expert stakeholders with the intention of making recommendations to us on scope organization and scope pricing. Since the workgroup was not convened in time to submit recommendations for the CY 2019 PFS rulemaking cycle, we delayed proposals for any further changes to scope equipment until CY 2020 in order to incorporate the feedback from the aforementioned workgroup.

(2) Scope Video System

We proposed in the CY 2017 PFS proposed rule (81 FR 46176 through 46177) 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. 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 (81 FR 80188). 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. In the CY 2018 PFS final rule (82 FR 52991 through 52993), we outlined, but did not finalize, a proposal 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. We also described a proposal to increase the price of the scope video system by $1,000 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.). With the addition of the LED light (equipment code EQ382 at a price of $1,915), the updated total price of the scope video system would be set at $36,306.

We did not finalize this updated pricing to the scope video system in CY 2018, but we did propose and finalize the updated pricing for CY 2019 to $36,306 along with changing the name of the ES031 equipment item to “scope video system (monitor, processor, digital capture, cart, printer, LED light)” to reflect the fact that the use of the ES031 scope video system is not limited to endoscopy procedures.

(3) Scope Accessories

We understand that there may be other accessories associated with the use of scopes. We finalized a proposal in the CY 2017 PFS final rule (81 FR 80188) to separately price any scope accessories outside the use of the scope video system, 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.

(4) Scope Proposals for CY 2020

The Scope Equipment Reorganization Workgroup organized by the RUC submitted detailed recommendations to CMS for consideration in the CY 2020 rule cycle, describing 23 different types of scope equipment, the HCPCS codes associated with each scope type, and a series of invoices for scope pricing. We appreciate the information provided by the workgroup and continue to welcome additional comments and feedback from stakeholders. Based on the recommendations from the workgroup, we proposed to establish 23 new scope equipment codes as detailed in Table 6.

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We note that we did not receive invoices for many of the new scope equipment items. There also was some inconsistency in the workgroup recommendations regarding the non-channeled flexible digital scope, laryngoscopy (ES080) equipment item and the non-video flexible scope, laryngoscopy (ES092) equipment item. These scopes were listed as a single equipment item in some of the workgroup materials and listed as separate equipment items in other materials. We proposed to establish them as separate equipment items based on the submitted invoices, which demonstrated that these were two different types of scopes with distinct price points of approximately $17,000 and $5,000 respectively.

We noted a similar issue with the submitted invoices for the rigid scope, laryngoscopy (ES075) equipment item. Among the eight total invoices, five of them were clustered around a price point of approximately $4,000 while the other three invoices had prices of roughly $15,000 apiece. The invoices indicated that these prices came from two distinct types of equipment, and as a result we proposed to consider these items separately. We proposed to use the initial five invoices to establish a proposed price of $3,966.08 for the rigid scope, laryngoscopy (ES075) equipment item. We noted that this is a close match for the current price of $3,178.08 used by the endoscope, rigid, laryngoscopy (ES010) equipment, which is the closest equivalent scope equipment. We also noted that the other three invoices appear to describe a type of stroboscopy system rather than a scope, and they have an average price of $14,737. This is a reasonably close match for the price of our current stroboscoby system (ES065) equipment, which has a CY 2020 price of $17,950.28 as it transitions to a final CY 2022 destination price of $16,843.87 (see the 4-year pricing transition of the market-based supply and equipment pricing update discussed later in this section for more information). We stated that we believe that these invoices reinforce the value established by the market-based pricing update for the stroboscoby system carried out last year, and we did not propose to update the price of the ES065 equipment. We also noted that we were open to feedback from stakeholders if they believe it would be more accurate to assign a price of $14,737 to the stroboscoby system based on these invoice submissions, as opposed to maintaining the current pricing transition to a CY 2022 price of $16,843.87.

For the eight new scope equipment items where we received submitted invoices for pricing, we proposed to replace the existing scopes with the new scope equipment. We noted that we received recommendations from the RUC's scope workgroup regarding which HCPCS codes make use of the new scope equipment items, and we proposed to make this scope replacement for approximately 100 HCPCS codes in total (see Table 7).

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In all but three cases (as identified with an asterisk (*) in Table 7), we proposed for the new scope equipment item to replace the existing scope with the identical amount of equipment time. For CPT codes 92612 (Flexible endoscopic evaluation of swallowing by cine or video recording), 92614 (Flexible endoscopic evaluation, laryngeal sensory testing by cine or video recording), and 92616 (Flexible endoscopic evaluation of swallowing and laryngeal sensory testing by cine or video recording), we noted the current scopes in use are the FEES video system Start Printed Page 62591(ES027) and the FEESST video system (ES028). Since we proposed the use of a non-channeled flexible digital scope that requires a corresponding scope video system, we also proposed to add the ES080 equipment at the same equipment time to these three procedures rather than replacing the ES027 and ES028 equipment. In all other cases, we proposed to replace the current scope equipment listed in Table 7 with the new scope equipment, while maintaining the same amount of equipment time.

We identified inconsistencies with the workgroup recommendations for a small number of HCPCS codes. CPT code 45350 (Sigmoidoscopy, flexible; with band ligation(s) (e.g., hemorrhoids)) was recommended to include a multi-channeled flexible digital scope, flexible sigmoidoscopy (ES085); however, we noted that this CPT code does not include any scopes among its current direct PE inputs. CPT code 31595 was recommended to include a non-channeled flexible digital scope, laryngoscopy (ES080) but it no longer exists as a CPT code after having been deleted for CY 2019. CPT code 43232 (Esophagoscopy, flexible, transoral; with transendoscopic ultrasound-guided intramural or transmural fine needle aspiration/biopsy(s)) was recommended to include a multi-channeled flexible digital scope, esophagoscopy (ES088), but it does not include a scope amongst its direct PE inputs any longer following clarification from the same workgroup recommendations that CPT code 43232 is never performed in the nonfacility setting. In all three of these cases, we did not propose to add one of the new scope equipment items to these procedures.

We noted that we did not receive pricing information along with the workgroup recommendations for the other 15 new scope equipment items. Therefore, we proposed to establish new equipment codes for these scopes as detailed in Table 6. However, we noted that due to a lack of pricing information, we did not propose to replace existing scope equipment with the new equipment items as we did for the other eight new scope equipment items for CY 2020. We welcomed additional feedback from stakeholders regarding the pricing of these scope equipment items, especially the submission of detailed invoices with pricing data. We proposed to transition the scopes for which we did have pricing information over to the new equipment items for CY 2020, and we noted that we looked forward to engaging with stakeholders to assist in pricing and then transitioning the remaining scopes in future rulemaking.

We received public comments on our scope equipment proposals. The following is a summary of the comments we received and our responses.

Comment: Several commenters stated that they appreciated the proposal of the recommended 23 new scope equipment codes and the proposed pricing of 8 of those new scope equipment codes. Commenters also stated that they appreciated the proposal of scope replacements for 100 CPT codes as recommended by the RUC utilizing the 8 scopes that CMS was able to price. One commenter encouraged CMS to continue to work with the RUC workgroup and other stakeholders to obtain detailed invoices for the scopes for which it did not have pricing data to assist in the correct pricing and transition of these equipment items.

Response: We appreciate the support for our proposals from the commenters. We welcome the submission of additional pricing data from the RUC scope workgroup and other stakeholders regarding the pricing of the remaining scope equipment items.

Comment: One commenter stated that they appreciated the recognition of the existing specialized equipment that is required in addition to the proposed scope equipment, and they supported the proposal to add ES080 and retain ES027 or ES028 at the same equipment time for CPT codes 92612, 92614, and 92616.

Response: We appreciate the support for our proposals from the commenter.

Comment: Several commenters stated it was their understanding that additional scope pricing information submitted now would be considered for the CY 2021 PFS proposed rule. These commenters asked for clarification that the CPT codes impacted by any scope proposals for CY 2021 will be outlined in a table just as the impacted codes for CY 2020 were outlined in Table 7, so that they will be subject to stakeholder review and comment prior to implementation.

Response: As we stated in the proposed rule, we welcome additional feedback from stakeholders regarding the pricing of these remaining scope equipment items, especially the submission of detailed invoices with pricing data. Any future proposals that we make regarding scope equipment will be subject to notice and comment rulemaking, including displaying information in a table similar Table 7, if it would be appropriate to do so.

Comment: A commenter stated that they had identified inconsistencies with the scope workgroup recommendations for a small number of HCPCS codes. The commenter stated that CPT code 45350 (Sigmoidoscopy, flexible; with band ligation(s) (e.g., hemorrhoids)) was recommended by the workgroup to include a multi-channeled flexible digital scope, flexible sigmoidoscopy (ES085); however, CMS noted in the proposed rule that this CPT code does not include any scopes among its current direct PE inputs. The commenter stated that all codes in the flexible sigmoidoscopy family require a flexible sigmoidoscope in order to perform the procedure, and therefore, the commenter requested that CMS add the ES085 scope equipment to CPT code 45350.

Response: We appreciate the feedback from the commenter in pointing out this inconsistency in the direct PE inputs for CPT code 45350. Based on the information supplied by the commenter, we are finalizing the addition of the ES085 scope equipment to CPT code 45350. We are finalizing an equipment time of 59 minutes based on the use of our standard equipment time formula for scopes.

Comment: A commenter requested that the “rigid scope, hysteroscopy” (ES071) equipment be updated to read “rigid scope, channeled, hysteroscopy” and that the hysteroscopy codes (that is, CPT codes 58555, 58562, 58565) be valued with ES071. The commenter submitted an invoice with pricing information associated with the ES071 scope equipment.

Response: We appreciate the submission of an invoice from the commenter for use in pricing the ES071 scope. Based on the information provided by the commenter, we are finalizing a change in the name of the ES071 scope from “rigid scope, hysteroscopy” to “rigid scope, channeled, hysteroscopy.” We are also finalizing a price of $6,795 for the ES071 scope based on the pricing data supplied by the commenter, and we are finalizing the replacement of the existing “endoscope, rigid, hysteroscopy” (ES009) scope with the new ES071 scope equipment. The CPT codes affected by this replacement are CPT codes 58555, 58562, and 58565 as identified by the commenter, as well as CPT code 58563 which is the only other code that previously employed the ES009 scope. These scope replacements are summarized below in Table 9.

Comment: One commenter provided a series of invoices for different types of rigid scopes in response to the comment solicitation.

Response: We appreciate the submission of additional invoices from the commenter. Based on the Start Printed Page 62592information included in these invoices, we are finalizing prices for three scopes that did not previously have pricing data. We are finalizing a price of $2,333.98 for the “rigid scope, otoscopy” (ES072) equipment, a price of $3,004.75 for the “rigid scope, nasal/sinus endoscopy” (ES073) equipment, and a price of $21,923.425 for the “non-channeled flexible digital scope, nasopharyngoscopy” (ES078) equipment. We are not finalizing the replacement of any of the old scope equipment codes with these three new scope equipment items for CY 2020, as the commenter did not identify the HCPCS codes in which this replacement would take place. We will consider additional scope pricing information for these three scope equipment codes, including the HCPCS codes in which they would typically be employed, as part of the CY 2021 PFS proposed rule.

The commenter also provided five new invoices for the pricing of the “non-video flexible scope, laryngoscopy” (ES092) equipment. These five invoices had an average price of $5,105.97, which was nearly identical to our proposed price of $5,078.04 for the ES092 scope. We believe that these invoices reinforce the accuracy of the proposed pricing. We are finalizing an increase in the price of the ES092 scope to $5,105.97, which will slightly increase the direct costs for the 14 HCPCS codes containing this scope listed above in Table 7.

Comment: Several commenters sent a series of additional invoices, and recommended crosswalks from existing equipment codes to the proposed equipment codes to ensure that the equipment currently listed for GI endoscopy procedures was appropriately attributed to the correct new scopes. Although the commenters did not provide information to update any of the proposed scope equipment prices, the commenters did clarify that several of the new scope equipment items which lacked proposed prices in fact shared the same current scope equipment codes as other new scope equipment items that did have proposed pricing. For example, CMS proposed to replace the “videoscope, gastroscopy” (ES034) scope equipment with the new “multi-channeled flexible digital scope, esophagoscopy” (ES088) scope equipment. The commenters clarified that this same ES034 equipment, when used in additional CPT codes, would be replaced by either the “multi-channeled flexible digital scope, esophagoscopy gastroscopy duodenoscopy” (ES087) or the “multi-channeled flexible digital scope, ileoscopy” (ES089) equipment items, all of which should share the same proposed price of $34,585.35. The commenter also explained that the same “Video Sigmoidoscope” (ES043) equipment which CMS proposed to replace with the “multi-channeled flexible digital scope, pouchoscopy” (ES090) new scope equipment would, in additional CPT codes, be replaced by the new “multi-channeled flexible digital scope, flexible sigmoidoscopy” (ES085) scope equipment, and that both ES085 and ES090 should share the same proposed price of $19,308.56. Finally, the commenter also stated that the new “ultrasound digital scope, endoscopic ultrasound” (ES091) equipment item would only be used in the facility setting, and that none of the HCPCS codes that included this scope contained direct PE inputs.

Response: We appreciate the submission of additional invoices and the clarification of the relationship between the former scope equipment codes and the newly created scope equipment codes. After considering this additional information supplied by the commenters, we are updating Table 8 of CY 2020 new scope equipment codes.

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We note again that we are not finalizing changes to the pricing of the group of new scope equipment codes with previously proposed prices, aside from the minor increase in the price of the ES092 equipment, only newly pricing several scopes that previously lacked pricing, and extending proposed pricing such that the ES087 and ES089 scopes share the same price with the ES088 scope, and the ES090 scope shares the same price with the ES085 scope. The new scope equipment codes ES087, ES088, and ES089 all share the same price because they are replacing the same current scope equipment code (ES034), and similarly the new ES085 and ES090 scope equipment codes share the same price because they are both replacing the same current scope equipment code (ES043). There are 21 HCPCS codes which are affected by the new scope replacements; these codes are detailed in Table 9.

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Although we are updating the scope equipment pricing for CY 2020 such that the ES087 and ES089 scopes share the same price with the ES088 scope, and the ES090 scope shares the same price with the ES085 scope, we do not mean to suggest that these scopes that share pricing are identical with one another. We are assigning the same price to these scopes because they are replacing the same current scope equipment codes, and because we do not have individual pricing information for them at the moment. We are open to the submission of additional invoices in future rule cycles to establish individual pricing for these scopes, and we continue to welcome more data to help identify pricing for the remaining 7 scope equipment codes that still lack invoices.

After consideration of the public comments, we are finalizing pricing for the new scope equipment as detailed above in Table 8. We are also finalizing the scope equipment replacements as detailed in Tables 7 and 9.

c. Technical Corrections To Direct PE Input Database and Supporting Files

Subsequent to the publication of the CY 2019 PFS final rule, stakeholders alerted us to several clerical inconsistencies in the direct PE database. We proposed to correct these inconsistencies as described below and reflected in the CY 2020 proposed direct PE input database displayed on the CMS website under downloads for the CY 2020 PFS proposed rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

For CY 2020, we proposed to address the following inconsistencies:

  • The RUC's Scope Equipment Reorganization Workgroup recommended deletion of the non-facility inputs for CPT codes 43231 (Esophagoscopy, flexible, transoral; with endoscopic ultrasound examination) and 43232 (Esophagoscopy, flexible, transoral; with transendoscopic ultrasound-guided intramural or transmural fine needle aspiration/biopsy(s)). The gastroenterology specialty societies stated that these services are never performed in the non-facility setting. After our own review of these services, we agreed with the workgroup's recommendation, and we proposed to remove the non-facility direct PE inputs for these two CPT codes.
  • In rulemaking for CY 2018, we reviewed a series of CPT codes describing nasal sinus endoscopy surgeries. At that time, we sought comments on whether the broader family of nasal sinus endoscopy surgery services should be subject to the special rules for multiple endoscopic procedures instead of the standard multiple procedure payment reduction. We received very few comments in response to our solicitation. In the CY 2018 PFS final rule (82 FR 53043), we indicated that we would continue to explore this option for future rulemaking. We proposed to apply the special rule for multiple endoscopic procedures to this family of codes beginning in CY 2020. We noted this proposal would treat this group of CPT codes consistently with other similar endoscopic procedures when codes within the CPT code family are billed together with another endoscopy service in the same family. Similar to other similar endoscopic procedure code families, we proposed that CPT code 31231 (Nasal endoscopy, diagnostic, unilateral or bilateral (separate procedure)) would be the base procedure for the remainder of nasal sinus endoscopies. The codes affected by the proposal are detailed in Table 10.
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Special rules for multiple endoscopic procedures would apply if any of the procedures listed in Table 10 are billed together for the same patient on the same day. We apply the multiple endoscopy payment rules to a code family before ranking the family with other procedures performed on the same day (for example, if multiple endoscopies in the same family are reported on the same day as endoscopies in another family, or on the same day as a non-endoscopic procedure). If an endoscopic procedure is reported together with its base procedure, we do not pay separately for the base procedure. Payment for the base procedure is included in the payment for the other endoscopy. For additional information about the payment adjustment under the special rule for multiple endoscopic services, we refer readers to the CY 1992 PFS final rule where this policy was established (56 FR 59515) and to Public Law 100-04, Medicare Claims Processing Manual, Chapter 23 (available on the CMS website at https://www.cms.gov/​Regulations-and-Guidance/​Guidance/​Manuals/​Downloads/​clm104c23.pdf).

We received public comments on the proposed technical corrections to the direct PE input database and supporting files. The following is a summary of the comments we received and our responses.

Comment: One commenter agreed with the RUC workgroup's recommendation and the CMS proposal to remove the non-facility direct PE inputs from CPT code 43231 and 43232.

Response: We appreciate the support for our proposals from the commenter.

Comment: One commenter stated that the proposed approach for nasal sinus endoscopy procedure better reflects the work RVU associated with the different levels of sinus endoscopy procedures and stated their support for this payment change. The commenter requested clarification regarding the application of the bilateral adjustment in conjunction with the special rules for multiple endoscopic procedures. The commenter stated that it was their understanding that if the CPT code is reported as a bilateral procedure and is reported with other procedure codes on the same day, the guidance is to apply the bilateral adjustment before applying any form of multiple procedure rules.

Response: The special rule for multiple endoscopic procedures has been described correctly in general terms by the commenter, although we encourage readers once again to refer to the CY 1992 PFS final rule where this policy was established (56 FR 59515) and to Public Law 100-04, Medicare Claims Processing Manual, Chapter 23. This manual text states that special rules for multiple endoscopic procedures apply if the procedure is billed with another endoscopy in the same family (i.e., another endoscopy that has the same base procedure). The base procedure for each code with this indicator is identified in the endoscopic base code field. In these situations, we apply the multiple endoscopy rules to a family before ranking the family with other procedures performed on the same day (for example, if multiple endoscopies in the same family are reported on the same day as endoscopies in another family or on the same day as a non-endoscopic procedure). If an endoscopic procedure is reported with only its base procedure, we do not pay separately for the base procedure. Payment for the base procedure is included in the payment for the other endoscopy.

Comment: A commenter requested clarification regarding the proposal to apply the special rule for multiple endoscopic procedures to the family of codes listed in Table 10. The commenter stated that it was their understanding that that the diagnostic endoscopy described by CPT code 31231 is included in the valuation of all of the surgical procedure codes on the list (for example, CPT codes 31254, 31256, 31276, etc.), and therefore, CPT Code 31231 would not be billed on the same side that any nasal endoscopic surgical code(s) are performed. However, the commenter stated that it was their understanding that CPT code 31231 could be billed for one side of the nose if it was the only procedure performed and there was no surgical intervention on that side. Assuming that this interpretation was correct, the commenter stated that they supported the application of the special rules for endoscopy to the nasal endoscopy family.

Response: We reiterate that the special rule for multiple endoscopic procedures has been described correctly in general terms by the commenter, although we encourage readers once again to refer to the CY 1992 PFS final rule where this policy was established (56 FR 59515) and to Public Law 100-Start Printed Page 6259704, Medicare Claims Processing Manual, Chapter 23. We encourage stakeholders to contact their local Medicare Administrative Contractor (MAC) for information regarding proper billing instructions for CPT code 31231.

Comment: One commenter stated that they were troubled by the proposal to apply the multiple endoscopy payment methodology to the CPT codes included in Table 10 without further clarification in the regulatory language or the Medicare Carriers Manual about the number of multiple procedure modifiers CMS can append to one claim. The commenter questioned whether these 27 codes will be assigned a multiple procedure indicator of “3” and if that would override the prior multiple procedure indicator of “4”. The commenter stated that they did not support the application of multiple endoscopy payment rules if CMS intended to assign reductions for both multiple endoscopy and multiple procedures, as application of both payment rules would result in inappropriate reductions to this set of services.

Response: In response to the commenter's question, only one multiple procedure indicator can be applied to each HCPCS code. We also clarify that our proposal would assign a multiple procedure indicator of “3” to all of the codes listed in Table 10 aside from CPT code 31231, which would be the endoscopic “base code” and would be assigned a multiple procedure indicator of “2”. We also note that none of these codes previously contained a multiple procedure indicator of “4”, which is associated with certain diagnostic imaging services. We encourage readers once again to refer to the CY 1992 PFS final rule where this policy was established (56 FR 59515) and to Pub. 100-04, Medicare Claims Processing Manual, Chapter 23.

Comment: One commenter stated that although they recognized that by including the nasal endoscopy family among the codes using the special rule for multiple endoscopies, CMS may be trying to harmonize endoscopic procedures, and they stated that the unique situation surrounding the nasal endoscopy code family should prohibit the application of this special rule. The commenter stated that the nasal endoscopy code family differed significantly from colonoscopy procedures in that there is not uniformity across the sites of service where these sinus procedures are performed, since these services could be performed in both the facility and non-facility settings. The commenter stated that applying the special rules for multiple endoscopic procedures to this group would result in a significant inappropriate reduction in the value of the secondary and subsequent nasal surgical codes performed on the same patient on the same day when performed in the office setting, and the commenter stated that they opposed the application of the special rules for multiple endoscopies to the nasal endoscopy family in the non-facility setting.

Response: We disagree that this nasal endoscopy code family differs significantly from other colonoscopy families where the special rule for multiple endoscopic procedures has long been in place. Although the commenter stated that the nasal endoscopy codes were unique in the sense that they could be performed in both the facility and non-facility settings, and that the base code for the family, CPT code 31231, is typically an office-based procedure with significant PE built into the code, we note in response that there are many other groups of codes which utilize the special rule for multiple endoscopic procedures and are also performed in both the facility and non-facility settings. These include CPT codes 31573-31579 (base CPT code 31575), CPT codes 43220-43229 (base CPT code 43220), CPT codes 44389-44394 (base CPT code 44388), and CPT codes 45303-45320 (base CPT code 45300). There are dozens of these codes which can be performed in both the facility and non-facility settings, many of them with significant PE inputs built into their non-facility valuation. In light of this evidence, we disagree with the commenter that there is a unique situation regarding the nasal endoscopy family of codes.

Comment: Several commenters requested that CMS utilize the RUC-recommended direct PE inputs to publish PE relative value units for CPT code 90460, which was reviewed by the RUC in October 2009. Rather than finalize the RUC recommendations, CMS crosswalked CPT code 90460 from CPT code 90471, which is crosswalked from CPT code 96372 (formerly CPT code 90772 and then 90782). Commenters stated that the recent measles crisis spotlights the importance of immunization administration being appropriately valued, and that the crosswalk from CPT code 96372 to codes CPT codes 90471/90460 has brought about a 60 percent reduction in PE RVUs. Commenters stated that CMS typically only uses a crosswalk for work values, not PE values, and requested that CMS disconnect the codes after the initial crosswalk so that changes to the source code no longer affect the crosswalked code. One commenter stated that CMS was proposing to reduce the non-facility PE RVUs for CPT code 90471 from 0.29 in 2019 to 0.22 in 2020, and while this may appear to be a relatively small change in RVUs, if finalized it would reduce the national unadjusted payment for CPT code 90471 (and consequently the payment rates for HCPCS codes G0008 and G0009) by 15 percent.

Response: We appreciate the feedback from the commenters and note that we finalized the crosswalks associated with CPT code 90460 in the CY 2011 final rule (75 FR 73306). However, we note that we are separately addressing the valuation of HCPCS codes G0008, G0009, and G0010 in the codes valuation section of this rule.

We also received comments regarding a variety of subjects about which we did not make proposals for CY 2020. These included comments regarding the proper specialty employed to determine indirect cost factors for home PT/INR monitoring services and the application of the multiple procedure payment reduction to physical therapist services. We will take the feedback from the commenters on these subjects into consideration for future rulemaking.

After consideration of the public comments, we are finalizing the proposal to remove the non-facility direct PE inputs from CPT code 43231 and 43232. We are also finalizing the proposal to apply the special rule for multiple endoscopic procedures to the family of codes listed in Table 10 without refinement.

d. 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 2020, we proposed the following price updates for existing direct PE inputs.

We proposed to update the price of one supply and one equipment item in response to the public submission of invoices. As these pricing updates were each part of the formal review for a code family, we proposed that the new pricing take effect for CY 2020 for these items instead of being phased in over 4 years.

We also proposed to update the name of the EP001 equipment item from “DNA/digital image analyzer (ACIS)” to “DNA/Digital Image Analyzer” due to Start Printed Page 62598clarification from stakeholders regarding the typical use of this equipment.

(1) Market-Based Supply and Equipment Pricing Update

Section 220(a) of the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93) provides that the Secretary may collect or obtain information from any eligible professional or any other source on the resources directly or indirectly related to furnishing services for which payment is made under the PFS, and that such information may be used in the determination of relative values for services under the PFS. Such information may include the time involved in furnishing services; the amounts, types and prices of PE inputs; overhead and accounting information for practices of physicians and other suppliers, and any other elements that would improve the valuation of services under the PFS.

As part of our authority under section 1848(c)(2)(M) of the Act, we initiated a market research contract with StrategyGen to conduct an in-depth and robust market research study to update the PFS direct PE inputs (DPEI) for supply and equipment pricing for CY 2019. These supply and equipment prices were last systematically developed in 2004-2005. StrategyGen submitted a report with updated pricing recommendations for approximately 1,300 supplies and 750 equipment items currently used as direct PE inputs. This report is available as a public use file displayed on the CMS website under downloads for the CY 2019 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

The StrategyGen team of researchers, attorneys, physicians, and health policy experts conducted a market research study of the supply and equipment items currently used in the PFS direct PE input database. Resources and methodologies included field surveys, aggregate databases, vendor resources, market scans, market analysis, physician substantiation, and statistical analysis to estimate and validate current prices for medical equipment and medical supplies. StrategyGen conducted secondary market research on each of the 2,072 DPEI medical equipment and supply items that CMS identified from the current DPEI. The primary and secondary resources StrategyGen used to gather price data and other information were:

  • Telephone surveys with vendors for top priority items (Vendor Survey).
  • Physician panel validation of market research results, prioritized by total spending (Physician Panel).
  • The General Services Administration system (GSA).
  • An aggregate health system buyers database with discounted prices (Buyers).
  • Publicly available vendor resources, that is, Amazon Business, Cardinal Health (Vendors).
  • Federal Register, current DPEI data, historical proposed and final rules prior to CY 2018, and other resources; that is, AMA RUC reports (References).

StrategyGen prioritized the equipment and supply research based on current share of PE RVUs attributable by item provided by CMS. StrategyGen developed the preliminary Recommended Price (RP) methodology based on the following rules in hierarchical order considering both data representativeness and reliability.

(1) If the market share, as well as the sample size, for the top three commercial products were available, the weighted average price (weighted by percent market share) was the reported RP. Commercial price, as a weighted average of market share, represents a more robust estimate for each piece of equipment and a more precise reference for the RP.

(2) If no data were available for commercial products, the current CMS prices were used as the RP.

GSA prices were not used to calculate the StrategyGen recommended prices, due to our concern that the GSA system curtails the number and type of suppliers whose products may be accessed on the GSA Advantage website, and that the GSA prices may often be lower than prices that are available to non-governmental purchasers. After reviewing the StrategyGen report, we proposed to adopt the updated direct PE input prices for supplies and equipment as recommended by StrategyGen.

StrategyGen found that despite technological advancements, the average commercial price for medical equipment and supplies has remained relatively consistent with the current CMS price. Specifically, preliminary data indicated that there was no statistically significant difference between the estimated commercial prices and the current CMS prices for both equipment and supplies. This cumulative stable pricing for medical equipment and supplies appears similar to the pricing impacts of non-medical technology advancements where some historically high-priced equipment (that is, desktop PCs) has been increasingly substituted with current technology (that is, laptops and tablets) at similar or lower price points. However, while there were no statistically significant differences in pricing at the aggregate level, medical specialties would experience increases or decreases in their Medicare payments if CMS were to adopt the pricing updates recommended by StrategyGen. At the service level, there may be large shifts in PE RVUs for individual codes that happened to contain supplies and/or equipment with major changes in pricing, although we note that codes with a sizable PE RVU decrease would be limited by the requirement to phase in significant reductions in RVUs, as required by section 1848(c)(7) of the Act. The phase-in requirement limits the maximum RVU reduction for codes that are not new or revised to 19 percent in any individual calendar year.

We believe that it is important to make use of the most current information available for supply and equipment pricing instead of continuing to rely on pricing information that is more than a decade old. Given the potentially significant changes in payment that would occur, both for specific services and more broadly at the specialty level, in the CY 2019 PFS proposed rule we proposed to phase in our use of the new direct PE input pricing over a 4-year period using a 25/75 percent (CY 2019), 50/50 percent (CY 2020), 75/25 percent (CY 2021), and 100/0 percent (CY 2022) split between new and old pricing. This approach is consistent with how we have previously incorporated significant new data into the calculation of PE RVUs, such as the 4-year transition period finalized in CY 2007 PFS final rule with comment period when changing to the “bottom-up” PE methodology (71 FR 69641). This transition period will not only ease the shift to the updated supply and equipment pricing, but will also allow interested parties an opportunity to review and respond to the new pricing information associated with their services.

We proposed to implement this phase-in over 4 years so that supply and equipment values transition smoothly from the prices we currently include to the final updated prices in CY 2022. We proposed to implement this pricing transition such that one quarter of the difference between the current price and the fully phased-in price is implemented for CY 2019, one third of the difference between the CY 2019 price and the final price is implemented for CY 2020, and one half of the difference between the CY 2020 price and the final price is implemented for CY 2021, with the new direct PE prices Start Printed Page 62599fully implemented for CY 2022. An example of the transition from the current to the fully-implemented new pricing is provided in Table 11.

For new supply and equipment codes for which we establish prices during the transition years (CYs 2019, 2020 and 2021) based on the public submission of invoices, we proposed to fully implement those prices with no transition since there are no current prices for these supply and equipment items. These new supply and equipment codes would immediately be priced at their newly established values. We also proposed that, for existing supply and equipment codes, when we establish prices based on invoices that are submitted as part of a revaluation or comprehensive review of a code or code family, they will be fully implemented for the year they are adopted without being phased in over the 4-year pricing transition. The formal review process for a HCPCS code includes a review of pricing of the supplies and equipment included in the code. When we find that the price on the submitted invoice is typical for the item in question, we believe it would be appropriate to finalize the new pricing immediately along with any other revisions we adopt for the code valuation.

For existing supply and equipment codes that are not part of a comprehensive review and valuation of a code family and for which we establish prices based on invoices submitted by the public, we proposed to implement the established invoice price as the updated price and to phase in the new price over the remaining years of the proposed 4-year pricing transition. During the proposed transition period, where price changes for supplies and equipment are adopted without a formal review of the HCPCS codes that include them (as is the case for the many updated prices we proposed to phase in over the 4-year transition period), we believe it is important to include them in the remaining transition toward the updated price. We also proposed to phase in any updated pricing we establish during the 4-year transition period for very commonly used supplies and equipment that are included in 100 or more codes, such as sterile gloves (SB024) or exam tables (EF023), even if invoices are provided as part of the formal review of a code family. We would implement the new prices for any such supplies and equipment over the remaining years of the proposed 4-year transition period. Our proposal was intended to minimize any potential disruptive effects during the proposed transition period that could be caused by other sudden shifts in RVUs due to the high number of services that make use of these very common supply and equipment items (meaning that these items are included in 100 or more codes).

We believed that implementing the proposed updated prices with a 4-year phase-in would improve payment accuracy, while maintaining stability and allowing stakeholders the opportunity to address potential concerns about changes in payment for particular items. Updating the pricing of direct PE inputs for supplies and equipment over a longer timeframe will allow more opportunities for public comment and submission of additional, applicable data. We welcomed feedback from stakeholders on the proposed updated supply and equipment pricing, including the submission of additional invoices for consideration.

We received many comments regarding the market-based supply and equipment pricing proposal following the publication of the CY 2019 PFS proposed rule. For a full discussion of these comments, we direct readers to the CY 2019 PFS final rule (83 FR 59475-59480). In each instance in which a commenter raised questions about the accuracy of a supply or equipment code's recommended price, the StrategyGen contractor conducted further research on the item and its price with special attention to ensuring that the recommended price was based on the correct item in question and the clarified unit of measure. Based on the commenters' requests, the StrategyGen contractor conducted an extensive examination of the pricing of any supply or equipment items that any commenter identified as requiring additional review. Invoices submitted by multiple commenters were greatly appreciated and ensured that medical equipment and supplies were re-examined and clarified. Multiple researchers reviewed these specified supply and equipment codes for accuracy and proper pricing. In most cases, the contractor also reached out to a team of nurses and their physician panel to further validate the accuracy of the data and pricing information. In some cases, the pricing for individual items needed further clarification due to a lack of information or due to significant variation in packaged items. After consideration of the comments and this additional price research, we updated the recommended prices for approximately 70 supply and equipment codes identified by the commenters. Table 9 in the CY 2019 PFS final rule lists the supply and equipment codes with price changes based on feedback from the commenters and the resulting additional research into pricing (83 FR 59479-59480).

After consideration of the public comments, we finalized our proposals associated with the market research study to update the PFS direct PE inputs for supply and equipment pricing. We continue to believe that implementing the proposed updated prices with a 4-year phase-in will improve payment accuracy, while maintaining stability and allowing stakeholders the opportunity to address potential concerns about changes in payment for particular items. We continue to welcome feedback from stakeholders on the proposed updated supply and equipment pricing, including the submission of additional invoices for consideration.

For CY 2020, we received invoice submissions for approximately 30 supply and equipment codes from stakeholders as part of the second year of the market-based supply and Start Printed Page 62600equipment pricing update. These invoices were reviewed by the StrategyGen contractor and the submitted invoices were used in many cases to supplement the pricing originally proposed for the CY 2019 PFS rule cycle. The contractor reviewed the invoices, as well as prior data for the relevant supply/equipment codes to make sure the item in the invoice was representative of the supply/equipment item in question and aligned with past research. Based on this research, we proposed to update the prices of the supply and equipment items listed in Table 9 of the CY 2020 PFS proposed rule.

For most supply and equipment items, there was an alignment between the research carried out by the StrategyGen contractor and the submitted invoice. The updated CY 2020 pricing was calculated using an average between the previous market research and the newly submitted invoices in these cases. In some cases the submitted invoices were not representative of market prices, such as for the centrifuge with rotor (EP007) equipment item where the invoice price of $8,563 appeared to be an outlier. We did not use the invoices to calculate our pricing recommendation in these situations and instead continued to rely on our prior pricing data. In other instances, such as for the kit, probe, cryoablation, prostate (Galil-Endocare) (SA099) supply item, our research indicated that the submitted invoice price was more representative of the commercial price than our CY 2019 research and pricing. We proposed the new invoice prices for these supply and equipment items due to our belief in their greater accuracy.

For some of the remaining supply and equipment items, such as the five-gallon paraffin (EP031) equipment and the Olympus DP21 camera (EP089) equipment, we maintained the extant pricing for CY 2019 due to a lack of sufficient data to update the pricing. In these situations where we did not have an updated price for CY 2019, we believe that the newly submitted invoices are more representative of the current commercial prices that are being paid on the market. We proposed the new invoice prices for these supply and equipment items due to our belief in their greater accuracy.

In addition, we were alerted by stakeholders that the price of the EM visit pack (SA047) supply did not match the sum of the component prices of the supplies included in the pack. After reviewing the prices of the individual component supplies, we agree with the stakeholders that there was a discrepancy in the previous pricing of this supply pack. We proposed to update the price of the EM visit pack to $5.47 to match the sum of the prices of the component supplies, and proposed to continue to transition towards this price over the remaining years of the phase-in period.

We finalized a policy last year to phase in the new supply and equipment pricing over 4 years so that supply and equipment values transition smoothly from their current prices to the final updated prices in CY 2022. We finalized our proposal to implement this pricing transition such that one quarter of the difference between the current price and the fully phased in price was implemented for CY 2019, one third of the difference between the CY 2019 price and the final price is implemented for CY 2020, and one half of the difference between the CY 2020 price and the final price is implemented for CY 2021, with the new direct PE prices fully implemented for CY 2022. An example of the transition from the current to the fully-implemented new pricing is provided in Table 11. For CY 2020, one third of the difference between the CY 2019 price and the final price will be implemented as per the previously finalized policy. Table 12 contains the list of proposed CY 2020 market-based supply and equipment pricing updates:

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(2) Invoice Submission

The full list of updated supply and equipment pricing as it will be implemented over the 4-year transition period will be made available as a public use file displayed on the CMS website under downloads for the CY 2020 PFS proposed rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

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

Comment: Many commenters were supportive of the proposed update to supply and equipment pricing based on the submission of additional invoices as detailed in Table 12. One commenter thanked CMS for gathering additional pertinent information and proposing a more accurate price for the balloon sinus surgery kit (SA106) supply for CY 2020. Several commenters urged CMS to finalize the proposed updates to the direct PE supplies and equipment prices as listed in the table. One commenter encouraged CMS to continue to carefully consider all pricing data including invoices and other supporting evidence that they receive from the specialty societies throughout this comment period and the entirety of the 4-year transition period.

Response: We will continue to carefully consider all pricing data submitted from commenters throughout the 4-year transition period.

Comment: Several commenters stated that they were concerned that supply and equipment pricing will quickly become outdated once the transition to updated prices is complete in CY 2022. The commenters encouraged CMS to move to an ongoing update process for supplies and equipment, as well as for clinical labor staff costs, one that is open for public comment through the rulemaking process.

Response: We share the concerns from the commenters that the supply and equipment pricing will eventually become outdated again after the pricing transition is complete. We welcome additional feedback from stakeholders on potential solutions to this issue, and we will consider the possibility of different approaches to supply and equipment pricing for use in future rulemaking.

Comment: One commenter stated that they appreciated and supported recognition by CMS that the supplies and equipment associated with physician services were past due for review, but noted that there remains large numbers of supplies and equipment that are overdue for updates. The commenter stated that they supported a gradual transition of the pricing given the widespread impact on the PE values; however, doing so creates a situation in which items that have seen dramatic increases over a short time are not being adequately compensated for several years. The commenter asked CMS to consider shortening the transition period from 4 years to 3 years for the supply and equipment pricing.

Response: Although we appreciate the feedback from the commenter, we finalized a policy last year to phase in the new supply and equipment pricing over 4 years so that supply and equipment values transition smoothly from their current prices to the final updated prices in CY 2022 (83 FR 59479-59480). We did not propose any changes to this transition period, and therefore, we decline to adopt a different approach.

Comment: One commenter stated that they supported the CMS proposal to update the price of the EM visit pack (SA047) supply to $5.47 to match the sum of the prices of the component supplies. The commenter also stated that they had concerns over the pricing of the other bundled supply items (such as kits, trays, and packs) that may have been similarly mispriced by StrategyGen. The commenter stated that they could not assist CMS in correcting supply codes that may have been incorrectly priced without details about the pricing for individual component supplies.

Response: We appreciate the support for our proposed pricing of the EM visit pack (SA047) supply by the commenter. We encourage stakeholders to comment Start Printed Page 62603upon and submit pricing information for any supply items that they believe may have been mispriced by StrategyGen. In the absence of alternative pricing information, we continue to believe that our proposed prices are the most accurate source of data.

Comment: One commenter recommended CMS consider only the best available evidence and market research data in proposing any changes to the pricing approach of the balloon sinus surgery kit (SA106). The commenter stated that the use of navigation instruments has increased for this supply kit, particularly in the lower cost office setting, which enhances the ability to navigate the complex sinus anatomy, resulting in improved safety and reliability of the procedure, which benefits the patient.

Response: We note that the commenter did not make any specific recommendations regarding the pricing of this supply or submit invoices with additional pricing information. In the absence of alternative pricing information, we continue to believe that our proposed prices are the most accurate source of data.

Comment: Several commenters stated that they supported and urged CMS to finalize the proposed prices for the general ultrasound room (EL015) and vascular ultrasound room (EL016) equipment. Commenters stated that the proposed prices more accurately reflected the costs faced by vascular ultrasound practitioners and would reduce health care costs by ensuring ultrasound services are readily available to the most vulnerable Medicare beneficiaries.

Response: We appreciate the support for our proposed pricing by the commenters.

Comment: One commenter disagreed with the proposed pricing of the general ultrasound room (EL015) equipment. The commenter stated that the proposed pricing would drastically reduce the general ultrasound room price by 65 percent, which would have a downstream impact on the vascular ultrasound room, resulting in a 57 percent reduction. The commenter stated that a 40 percent reduction in payment as a result of this pricing would significantly reduce patient access to ultrasound services across the board.

Response: We clarify for the commenter that we did not propose a reduction in the price of the general ultrasound room (EL015) equipment. We proposed to update the price of the general ultrasound room to $410,303.32 and proposed to continue to transition towards this price over the remaining years of the phase-in period, with a CY 2020 price of $383,397.77. We note that this is a slight increase over the finalized CY 2019 price of $369,945.00; we encourage readers to consult the full list of supply and equipment pricing as detailed in the public use files.

Comment: Several commenters disagreed with the proposed pricing of the “HDR Afterload System, Nucletron—Oldelft” (ER003) equipment, the “treatment planning system, IMRT (Corvus w-Peregrine 3D Monte Carlo)” (ED033) equipment, and the “SRS system, SBRT, six systems, average” (ER083) equipment. The commenters stated that all of these equipment items have proposed prices that are below industry standards, and that given the high cost of these items and their substantial utilization in certain radiation oncology delivery codes, it was imperative that the CMS inputs accurately reflect the marketplace pricing. The commenters recommended that CMS conduct additional research regarding fair and accurate market pricing for equipment items ER003, ED033 and ER083. Another commenter also disagreed with the proposed pricing of the ER003 equipment, and stated that StrategyGen may have included updated pricing for a less costly electronic brachytherapy system used to treat non-melanoma skin cancer, or alternatively the proposed price for ER003 may represent an equipment upgrade or refurbished equipment.

Response: We share the concerns of the commenters on the importance to ensure fair and accurate market-based pricing for supplies and equipment. However, the commenters did not submit invoices or other pricing data for the ER003, ED033, and ER083 equipment items, and, as previously stated, in the absence of alternative pricing information, we continue to believe that our proposed prices are the most accurate source of data. We continue to welcome feedback from stakeholders on the proposed updated supply and equipment pricing over the ongoing 4-year transition period, including the submission of additional invoices for consideration.

Comment: Several commenters stated that they supported the efforts by CMS to ensure accurate pricing for direct PE inputs and supported the updated valuation of the ultrasound room and vascular ultrasound room. However, the commenters stated that there was an inconsistency with the pricing for the CT room (EL007), PET room (EL009), and PET-CT room (EL010) equipment. The commenters stated that it did not follow logically that the EL009 equipment is increasing from $1,328,996 to $2,410,677 and the EL007 equipment is increasing from $1,284,000 to $1,429,967 while a room that is a combination of these two, EL010, is decreasing from $2,136,283 to $206,326. The commenters asked that CMS investigate this issue further while delaying any price change for this one item.

Response: With regards to the pricing of the PET-CT room (EL010) equipment, we share the desire of the commenters to ensure fair and accurate market-based pricing for this equipment item. However, as we noted in the previous comment response, the commenters did not submit invoices or other pricing data for the EL010 equipment, and, as previously stated, in the absence of alternative pricing information, we continue to believe that our proposed prices are the most accurate source of data. We remind stakeholders that the proposed pricing was based on market research carried out by the StrategyGen contractor during the prior rule cycle. We continue to welcome feedback from stakeholders on the proposed updated supply and equipment pricing over the ongoing 4-year transition period, and we are willing to revisit the subject of pricing for this equipment if provided with market-based pricing data.

Comment: Several commenters disagreed with the proposed price of the “stent, vascular, deployment system, Cordis SMART” (SA103) and “stent, balloon, implantable” (SD299) supplies. Commenters stated that the Cordis SMART stent (SA103) supply is not FDA approved to stent iliac veins in CPT codes 37238-37239 due to the markedly undersized diameters of the available stents, and that this supply is essentially never used in iliac veins due to its much smaller size. The commenter stated that they believe the proposed pricing of the SA103 supply to be inaccurate, and stated that they were submitting 10 invoices in the hopes of pricing a new supply code at $2,537 which would replace the SA103 supply in these CPT codes. The commenters also stated a desire to work with CMS to reconsider pricing of the SD299 supply given the likely non-viability by CY 2022 of the services represented by CPT codes 37236 and 37237 in the office setting, and to resolve the lack of clarity surrounding the implantable stent balloon.

Response: We appreciate the desire on the part of the commenters to submit invoices with additional pricing data. However, despite an exhaustive search of the comments, we were unable to find the 10 invoices mentioned in the letters from the commenters, which Start Printed Page 62604were not included along with the rest of the submitted text. Although we are willing to consider these invoices if they were to be submitted, as previously stated, in the absence of alternative pricing information, we continue to believe that our proposed prices are the most accurate source of data. We urge commenters submitting invoices to include them as part of their comment letter to avoid any potential for miscommunication. We also note for the commenters that we did not make any proposals regarding CPT codes 37238-37239 or CPT codes 37236-37237, and therefore, we decline to make changes to the supplies for these codes at this time.

Comment: Several commenters disagreed with the proposed price of the percutaneous neuro test stimulation kit (SA022) supply. The commenters stated that the proposed price of $114.52 was insufficient to reflect the cost associated with the SA022 supply, and that there may have been some misunderstanding about what items comprise the sacral nerve test kit. The commenters stated that it appears that the line item reflecting the device that generates the neurostimulation, which is the most expensive component of the test kit, was not included in the proposed pricing for this supply, which instead reflects the costs of the test kit leads only. The commenters stated that they reviewed all of the paid invoices for kits sold during January and February 2019, which resulted in pricing that was more in line with the CY 2018 pricing of $420 for the kit. One commenter submitted a random sample of 120 paid invoices (out of the 481 paid invoices that the commenter accumulated in total) for consideration by CMS.

Response: We appreciate the submission of a large quantity of additional invoices with pricing data from the commenter. After further review, we agree with the commenters that the proposed price failed to incorporate all of the components of the test kit. Based on the data submitted by the commenters, we are finalizing an update in the price of the percutaneous neuro test stimulation kit (SA022) supply to $413.24, and we will continue to transition towards this price over the remaining years of the phase-in period.

Comment: One commenter stated that the proposed price of $752.40 for the “plasma LDL adsorption column (Liposorber)” (SD186) supply did not accurately reflect the actual average prices paid by their provider customers. The commenter submitted copies of all U.S. customer invoices for purchases of the SD186 supply for the most recent three-month period from June 1 through August 30, 2019 and requested that the price should be updated to reflect the average market pricing.

Response: We appreciate the submission of a large quantity of additional invoices with pricing data from the commenter. Based on the data submitted by the commenter, we are finalizing an update in the price of the “plasma LDL adsorption column (Liposorber)” (SD186) supply to $1118.06, and we will continue to transition towards this price over the remaining years of the phase-in period.

Comment: The same commenter stated that the “plasma antibody adsorption column (Prosorba)” (SD185) supply was withdrawn from the market by its manufacturer more than 10 years ago, and the associated procedure code (CPT code 36515) has been deleted. The commenter also stated that the blood warmer tubing set (SC084) supply is not utilized to perform LDL apheresis with a Liposorber System, and therefore, recommended that this supply should be delisted as a direct PE input for CPT code 36516.

Response: We appreciate the additional information provided by the commenter regarding these supply items. After conducting our own review, we agree with the commenter that there is no longer any need for the “plasma antibody adsorption column (Prosorba)” (SD185) supply, which is not utilized by any HCPCS codes and has been withdrawn from the market. Therefore, we are finalizing the deletion of the SD185 supply code. We are not finalizing the removal of the blood warmer tubing set (SC084) supply at this time, as it is currently utilized in two codes (CPT codes 36514 and 36516), and we did not make any proposals on this issue. We welcome additional feedback from stakeholders regarding the use of the SC084 supply for potential future rulemaking.

Comment: One commenter stated that they appreciated recent efforts by CMS to update the price of supply and equipment inputs to better reflect current market rates. The commenter requested that CMS update the price inputs for three inputs: The Biodegradable Material Kit—PeriProstatic (SA126) supply, the Rezum delivery device kit (SA128) supply, and the water thermotherapy procedure generator (EQ389) equipment. The commenter submitted invoices with updated pricing data for consideration by CMS.

Response: Based on the data submitted by the commenters, we are finalizing an update in the price of all three of these direct PE inputs. We are finalizing an increase in the price of the Biodegradable Material Kit—PeriProstatic (SA126) supply from $2,850 to $2,965 based on averaging the submission of eight invoices. We are finalizing an increase in the price of the Rezum delivery device kit (SA128) supply from $1,150 to $1,220 based on averaging the submission of ten invoices. Finally, we are finalizing an increase in the price of the water thermotherapy procedure generator (EQ389) equipment from $27,538 to $33,950 based on averaging the submission of two invoices.

Comment: One commenter disagreed with the proposed pricing for the “fluorescein inj (5ml uou)” (SH033) supply. The commenter stated that the proposed price for injectable fluorescein was concerning as it did not reflect the most recent price increase of nearly 60 percent. The commenter stated that for several months practices have been paying $38.02 per vial and submitted four invoices to this effect.

Response: After reviewing the submitted invoices, we are finalizing an increase of the price of the SH033 supply to $38.02 to match the information detailed by the commenter.

Comment: One commenter disagreed with the proposed pricing for HCPCS code G0166 (External counterpulsation, per treatment session) and stated that the reductions in the proposed pricing would decrease the availability of this service and have already impacted their ability to provide external counterpulsation (ECP) therapy. The commenter stated that the prior review of HCPCS code G0166 in the CY 2019 rule cycle contained major errors, including omissions that artificially deflated the cost of the equipment associated with ECP therapy, inappropriate valuation of the ECP therapy equipment, and a failure to reflect the clinical guidelines and requirements for delivering ECP therapy. The commenter requested that CMS reverse the CY 2019 RVU reductions such that ECP therapy would return to the CY 2018 payment rates, or alternately pause any future reductions until CMS considered and acted upon forthcoming RUC recommendations for HCPCS code G0166. The commenter also submitted a series of invoices for the EECP external counterpulsation system (EQ012) equipment and a number of additional equipment items that previously lacked pricing.

Response: We remind commenters that we nominated HCPCS code G0166 as potentially misvalued in the CY 2020 PFS proposed rule (84 FR 40516) due to concerns that the RVUs for this code did not fully reflect the total resources required to deliver the service. Aside from nominating HCPCS code G0166 as Start Printed Page 62605potentially misvalued, we did not make any other proposals concerning this code. We are aware that the RUC plans to review HCPCS code G0166 for the CY 2021 PFS rule cycle, and we look forward to considering their recommendations for next year's rulemaking.

However, although we are not reviewing the work RVU or direct PE inputs for HCPCS code G0166 for CY 2020, we were able to consider the submission of invoices from the commenter as part of our market-based supply and equipment pricing transition. Based on the information provided by the commenters, we are finalizing an increase in the price of the EECP external counterpulsation system (EQ012) equipment from $61,490.75 to $117,495.00. For the additional equipment items submitted by the commenter, which are not currently included in the direct PE inputs for HCPCS code G0166, we are finalizing the use of a proxy item for equipment pricing. We are finalizing the addition of a medium instrument pack (EQ138) priced at $1,500.00 at the same equipment time of 73 minutes used by the EECP external counterpulsation system as a proxy to represent the cost of these additional items. Although the medium instrument pack is a collection of surgical instruments and not table accessories, it contains 20 different small items which individually fall under our $500 threshold for equipment pricing, much as the additional equipment items on the submitted invoices also failed to meet the typical $500 threshold. We will further consider pricing for both the EECP external counterpulsation as part of the review process for this code along with the RUC recommendations when they arrive for CY 2021.

Comment: One commenter disagreed with the proposed pricing of the INR analysis and reporting system w-software (EQ312) equipment. The commenter stated that the finalized price for the INR analysis and reporting system during the CY 2019 rule cycle was orders of magnitude lower than the amount submitted by the home INR manufacturers and suppliers, and the commenter was under the belief that the pricing for this equipment was not reviewed and/or updated. The commenter urged CMS to review and update the price for the PT/INR analysis and reporting system based on current market invoices; the commenter also submitted additional invoices from the same vendor with their letter.

Response: We clarify for the commenter that we did review the invoices that they submitted during the previous rule cycle in CY 2019. Those invoices, along with the additional invoices submitted for the current CY 2020 rule cycle from the same vendor, did not contain pricing information for the purchase of an INR analysis and reporting system (EQ312) equipment item. These invoices instead constituted a monthly service fee for “customization and management of provided applications” as detailed on the billing form. Under our PE methodology, monthly service fees are a form of administrative expense, and payment for these costs is included as part of our indirect PE allocation. We did not use these invoices for pricing in CY 2019 and we are not using them for pricing in CY 2020, as they detail a form of indirect PE under our methodology. We also note that the equipment per-minute cost formula includes maintenance costs, interest costs, and a useful life assumption; this formula already incorporates equipment costs that extend across multiple years. Taking a monthly service fee and multiplying it across 12 months and then again across 5 years, as the commenters suggested should take place for these invoices, would result in equipment costs that are inappropriately excessive, such as the $6 million equipment price detailed on these invoices. We will continue to price the INR analysis and reporting system at $19,325 and continue to transition towards this price over the remaining years of the phase-in period.

After consideration of the public comments, we are finalizing the market-based supply and equipment pricing updates listed in Table 12, along with the additional finalized pricing changes detailed in the preceding paragraphs. The full list of updated supply and equipment pricing as it will be implemented over the 4-year transition period will be made available as a public use file displayed on the CMS website under downloads for the CY 2020 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

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 2020, we noted 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 we noted for consideration of RUC recommendations. However, we would consider invoices submitted as public comments during the comment period following the publication of the PFS proposed rule, and would consider any invoices received after February 10th or outside of the public comment process as part of our established annual process for requests to update supply and equipment prices.

(3) Adjustment to Allocation of Indirect PE for Some Office-Based Services

In the CY 2018 PFS final rule (82 FR 52999 through 53000), we established criteria for identifying the services most affected by the indirect PE allocation anomaly that does not allow for a site of service differential that accurately reflects the relative indirect costs involved in furnishing services in nonfacility settings. We also finalized a modification in the PE methodology for allocating indirect PE RVUs to better reflect the relative indirect PE resources involved in furnishing these services. The methodology, as described, is based on the difference between the ratio of indirect PE to work RVUs for each of the codes meeting eligibility criteria and the ratio of indirect PE to work RVU for the most commonly reported visit code. We refer readers to the CY 2018 PFS final rule (82 FR 52999 through 53000) for a discussion of our process for selecting services subject to the revised methodology, as well as a description of the methodology, which we began implementing for CY 2018 as the first year of a 4-year transition. For CY 2020, we proposed to continue with the third year of the transition of this adjustment to the standard process for allocating indirect PE.

We did not receive any public comments on the proposed adjustments to allocation of indirect PE for some office-based services. Therefore, we are finalizing the continuation of the third year of the transition as proposed.

e. Technical Evaluation Panel Related to Practice Expense

The RAND Corporation is currently studying potential improvements to CMS' PE allocation methodology and the data that underlie it. As part of this study, RAND will be convening a technical expert panel in late 2019 or early 2020 to obtain input from stakeholders including physicians, practice and health system managers, health care accountants, and health policy experts. The expert panel's recommendations will be discussed in a Start Printed Page 62606report to be published by RAND in CY 2020.

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 (79 FR 67591 through 67596), we implemented the third review and update of MP RVUs. For a comprehensive discussion of the third review and update of MP RVUs, see the CY 2015 PFS proposed rule (79 FR 40349 through 40355) and final rule with comment period (79 FR 67591 through 67596). In the CY 2018 PFS proposed rule (82 FR 33965 through 33970), we proposed to update the specialty-level risk factors, used in the calculation of MP RVUs, prior to the next required 5 year update (CY 2020), using the updated MP premium data that were used in the eighth Geographic Practice Cost Index (GPCI) update for CY 2017; however the proposal was ultimately not finalized for CY 2018.

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

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

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

Section 1848(e)(1)(C) of the Act requires us to review, and if necessary, adjust the GPCIs at least every 3 years. For CY 2020, we are conducting the statutorily required 3-year review of the GPCIs, which coincides with the statutorily required 5-year review of the MP RVUs. We note that the MP premium data used to update the MP GPCIs are the same data used to determine the specialty-level risk factors, which are used in the calculation of MP RVUs. Going forward, we believe it would be logical and efficient to align the update of MP premium data used to determine the MP RVUs with the update of the MP GPCIs. Therefore, we proposed to align the update of MP premium data with the update to the MP GPCIs, that is, we proposed to review, and if necessary update the MP RVUs at least every 3 years, similar to our review and update of the GPCIs. If we align the two updates, we would conduct the next statutorily-mandated review and update of both the GPCI and MP RVU for implementation in CY 2023. We proposed to implement the fourth comprehensive review and update of MP RVUs for CY 2020 and are seeking comment on these proposals.

We received no specific comment regarding our proposal to align the update of MP premium data with the update to the MP GPCIs. That is, to review, and if necessary update the MP RVUs at least every 3 years, similar to our review and update of the GPCIs; therefore, we are finalizing as proposed.

2. Methodology for the Proposed Revision of Resource-Based Malpractice (MP) RVUs

a. General Discussion

We calculated the proposed MP RVUs using updated MP premium data obtained from state insurance rate filings. The methodology used in calculating the proposed CY 2020 review and update of resource-based MP RVUs largely parallels the process used in the CY 2015 update; however, we proposed to incorporate several methodological refinements, which are described below. The MP RVU calculation requires us to obtain information on specialty-specific MP premiums that are linked to specific services, and using this information, we derive relative risk factors (RFs) for the various specialties that furnish a particular service. Because MP premiums vary by state and specialty, the MP premium information must be weighted geographically and by specialty. We calculated the proposed MP RVUs using four data sources: MP premium data presumed to be in effect as of December 31, 2017; CY 2018 Medicare payment and utilization data; higher of the CY 2020 proposed work RVUs or the clinical labor portion of the direct PE RVUs); and CY 2019 GPCIs. We used the higher of the CY 2020 final work RVUs or clinical labor portion of the direct PE RVUs in our calculation to develop the CY 2020 final MP RVUs while maintaining overall PFS budget neutrality.

Similar to the CY 2015 update, the proposed MP RVUs were calculated using specialty-specific MP premium data because they represent the expense incurred by practitioners to obtain MP insurance as reported by insurers. For CY 2020, the most current MP premium data available, with a presumed effective date of no later than December 31, 2017, were obtained from insurers with the largest market share in each Start Printed Page 62607state. We identified insurers with the largest market share using the National Association of Insurance Commissioners (NAIC) market share report. This annual report provides state-level market share for entities that provide premium liability insurance (PLI) in a state. Premium data were downloaded from the System for Electronic Rates & Forms Filing Access Interface (SERFF) (accessed from the NAIC website) for participating states. For non-SERFF states, data were downloaded from the state-specific website (if available online) or obtained directly from the state's alternate access to filings. For SERFF states and non-SERFF states with online access to filings, the 2017 market share report was used to select companies. For non-SERFF states without online access to filings, the 2016 market share report was used to identify companies. These were the most current data available during the data collection and acquisition process.

MP insurance premium data were collected from all 50 States, and the District of Columbia. Efforts were made to collect filings from Puerto Rico; however, no recent filings were submitted at the time of data collection, and therefore, filings from the previous update were used. Consistent with the CY 2015 update, no filings were collected for the other U.S. territories: American Samoa, Guam, Virgin Islands, or Northern Mariana Islands. MP premiums were collected for coverage limits of $1 million/$3 million, mature, claims-made policies (policies covering claims made, rather than those covering losses occurring, during the policy term). A $1 million/$3 million liability limit policy means that the most that would be paid on any claim is $1 million and the most that the policy would pay for claims over the timeframe of the policy is $3 million. Adjustments were made to the premium data to reflect mandatory surcharges for patient compensation funds (PCF, funds used to pay for any claim beyond the state's statutory amount, thereby limiting an individual physician's liability in cases of a large suit) in states where participation in such funds is mandatory.

Premium data were included for all physician and nonphysician practitioner (NPP) specialties, and all risk classifications available in the collected rate filings. Although premium data were collected from all states, the District of Columbia, and previous filings for Puerto Rico were utilized, not all specialties had distinct premium data in the rate filings from all states. In previous updates, specialties for which premium data were not available for at least 35 states, and specialties for which there were not distinct risk groups (surgical, non-surgical, and surgical with obstetrics) among premium data in the rate filings, were crosswalked to a similar specialty, either conceptually or based on available premium data. This resulted in not using those premium data because the 35 state threshold was not met. In the CY 2020 PFS proposed rule, we noted that the proposed methodological improvements discussed below expands the specialties and amount of filings data used to develop the proposed risk factors, which are used to develop the proposed MP RVUs.

b. Proposed Methodological Refinements

For the CY 2020 update, we proposed the following methodological improvements to the development of MP premium data:

(1) Downloading and using a broader set of filings from the largest market share insurers in each state, beyond those listed as “physician” and “surgeon” to obtain a more comprehensive data set.

We received public comments on the proposed methodological improvement to download and use a broader set of filings from the largest market share insurers in each state, beyond those listed as “physician” and “surgeon” to obtain a more comprehensive data. The following is a summary of the comments we received and our responses.

Comment: Commenters noted appreciation for CMS' efforts to improve the premium data collection process and the opportunity to provide comments on the new methodology. Commenters were supportive of our proposed methodological refinement to download and use a broader set of filings from the largest market share insurers in each state, beyond those listed as “physician” and “surgeon” to obtain a more comprehensive data set.

Response: We thank commenters for their feedback and support; we are finalizing as proposed.

(2) Combining minor surgery and major surgery premiums to create the surgery service risk group, which yields a more representative surgical risk factor. In the previous update, only premiums for major surgery were used in developing the surgical risk factor.

We received public comments on the proposed methodological improvement to combine minor surgery and major surgery premiums to create the surgery service risk group, which yields a more representative surgical risk factor. In the previous update, only premium data for major surgery were used in developing the surgical risk factor. The following is a summary of the comments we received and our responses.

Comment: Commenters stated they appreciated that CMS considered methods to calculate surgical risk factors, but noted concerns with the method CMS used to classify surgeries as either minor or major, stating it was arbitrary and inconsistent with other CMS policy. Commenters further noted that the definition of minor surgeries and major surgeries should be consistent and developed with a consensus methodology among physician specialties. Commenters recommended that CMS work with the physician community to more accurately define major and minor surgeries.

Response: We thank commenters for their appreciation of our work to calculate a more representative surgical risk factor. We note that we did not propose definitions for minor and major surgery and will continue to work with all interested stakeholders on our proposals.

Comment: Commenters were not supportive of our proposal to categorize services between HCPCS 59000 and HCPCS 59899 as OB services and services between HCPCS 10000 and HCPCS 69999 (excluding the OB services) as surgical, with a physician work value greater than 5.00 as “major” surgery, for the purpose of the analysis. Commenters noted that in doing so, CMS selected an arbitrary and misguided definition of “minor” surgery for any code between the HCPCS 10000 and HCPCS 69999 section of the CPT code book with a physician work value less than 5.00. Commenters noted that if CMS intends to collect data at the minor vs major level, the data must reflect the different risk factors for those specialties and specifically be applied to codes defined as minor vs major surgery, and not broadly applied to an entire specialty. Commenters noted that the proposal could lead to an unfair valuation for certain specialties and services. The commenter further noted that CMS should hold off on moving to differentiating between minor and major surgeries until CMS is able to work with the RUC and impacted specialties to establish such definitions.

Response: We reiterate that we did not propose to define minor surgery and major surgery. The proposal leveraged an existing policy (64 FR 59834), that categorized services within the surgical range of HCPCS codes (and the list of invasive cardiology services outside the surgical range) as surgical. Building upon that existing policy, we proposed a methodological improvement to Start Printed Page 62608combine minor surgery and major surgery premiums when both were delineated in rate filings for a specialty and to set a threshold of a physician work RVU greater 5.00 to categorize surgical services as major surgery, (surgical services under 5.00 would be categorized as minor surgery) for the purpose of the analysis. The methodological improvement would have developed a more representative surgical risk factor by combining minor surgery and major surgery premiums. We further note that this would have produced more data to use in the analysis and enabled the analysis to reflect a more representative risk factor for specialties that could have been applied to the code level for services categorized as minor surgery or major surgery. We note that in previous updates only major surgery premium data were used (when both minor surgery and major surgery are delineated on the rate filings for a specialty) to develop the surgical risk factors, this was based on a physician work RVU threshold of greater than 5.0, but was based on rate filings that delineated major surgery for a specialty.

In consideration of concerns from commenters, we are not finalizing our proposed methodological refinement to combine major surgery and minor surgery premiums when both are delineated on the rate filings for a specialty nor are we finalizing our proposal to use a physician work RVU greater than 5.00 as a threshold to categorize surgical services as major surgery (or to categorize surgical services under 5.00 as minor surgery), for the purpose of the analysis. Instead we are finalizing to maintain the current methodology and only use major surgery premium data when both minor surgery and major surgery are delineated in the rate filings for a specialty (minor surgery premium data are discarded in those cases) and to use minor surgery premium data when only minor surgery premium data are delineated in the rate filings for a specialty—to develop surgical risk factors. However, we note that the objective of our proposal was to develop a more representative surgical risk factor by refining our current methodology to allow for the use of rate filings data that delineated minor and major surgery. Our work to establish methods to categorize surgical services as minor and major surgery is ongoing, we look forward to working with and receiving feedback from stakeholders for consideration in future rulemaking.

(3) Utilizing partial and total imputation to develop a more comprehensive data set when CMS specialty names are not distinctly identified in the insurer filings, which sometimes use unique specialty names.

In instances where insurers report data for some (but not all) specialties that explicitly corresponded to a CMS specialty, where those data were missing, we proposed to use partial imputation based on available data to establish what the premiums would likely have been had that specialty been delineated in the filing. In instances where there were no data corresponding to a CMS specialty in the filing, we proposed to use total imputation to establish premiums.

For example, if a specialty of Sleep Medicine is listed on some insurers' rate filings, this rate will be matched to the CMS specialty Sleep Medicine (C0)—partial imputation. However, if the Sleep Medicine specialty is not listed on the insurer's rate filing, under our proposed methodology, the insurer's rate filing for General Practice would be matched to the CMS specialty of Sleep Medicine (C0)—total imputation. In this example, we believe (consistent with the longstanding mappings of the regulatory impact table included in all PFS Federal Register notices) that the rate for General Practice is likely to be consistent with the rate that a Sleep Medicine provider would be charged by that insurer, this principle for mapping is used for the appropriate type of imputation. We note the proposed methodological improvement would mean that instead of discarding specialty-specific information from some insurers' filings because other insurers lacked that same level of detail, we would instead impute the missing rates at the insurer/specialty level to utilize as much of the information from the filings as possible.

We solicited comment on these proposed methodological improvements. Additional technical details about our proposal are available in our interim report, “Interim Report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare Physician Fee Schedule,” on our website. It is located under the supporting documents section for the CY 2020 PFS proposed rule located at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

We received public comments on the proposed methodological improvement to utilize partial and total imputation to develop a more comprehensive data set when CMS specialty names are not distinctly identified in the insurer filings, which sometimes use unique specialty names. The following is a summary of the comments we received and our responses.

Comment: Several commenters disagreed with some of the proposed specialty mappings for partial and total imputation. Some of these commenters recommended that CMS use different mappings other than those that were proposed. A few commenters recommended that CMS publish impacts for all CMS specialties and not attempt to bundle or map specialties to what CMS believes are related specialties or professions.

Response: We note that the MP RVU calculation requires us to obtain information on specialty-specific MP premiums that are linked to specific services, and using this information, we derive relative risk factors for the various specialties that furnish a particular service. We reiterate that the proposed mappings for partial imputation parallel the longstanding mappings of the regulatory impact table included in all PFS Federal Register notices that group CMS specialties (present on Medicare claims) into clusters of related specialties (impact specialties) when CMS examines the potential impact of PFS payment policies on the distribution of payments by providers. This table is included in section VII. of this final rule, the Regulatory Impact Analysis.

Furthermore, the proposed mappings for total imputation (when a CMS specialty name is not listed on the insurer's rate filing) reflect the speciality-specifc relationship of the underlying principle to identify the premium that an individual in a specialty would have been charged. The proposed mappings for total imputation, specifically for NPP specialties, parallel the proposal to crosswalk NPP specialties for which we do not have sufficient comparable professional liability data, to the lowest physician specialty, which was found to be allergy/immunology.

We note that partial and total imputation are necessary to expand the specialty specific filings data used to develop the proposed risk factors, which are used to develop the proposed MP RVUs. This improvement resulted in the development of a more comprehensive data set, when CMS specialty names were not distinctly identified in the insurer filings, which sometimes use unique specialty names; we are finalizing as proposed.

Comment: A commenter noted that they joined the RUC in urging CMS to collect premium data for specialties that are missing data or where data are not available, and in the meantime, to work Start Printed Page 62609with the RUC to better identify appropriate crosswalks.

Response: We reiterate that we have, and will continue to work with the RUC and all interested stakeholders to improve the premium data collection. Moreover, we continue to make progress in this area as evidenced in the CY 2020 PFS proposed rule (84 FR 40506), where we determined that there were sufficient data for surgery and non-surgery premiums, as well as sufficient differences in rates between classes for 15 specialties, there were 10 such specialties in the CY 2015 update.

Comment: Commenters recommended that CMS utilize any and all premium data available to determine accurate crosswalks for specialties that cannot be directly matched to one of CMS' specialty names.

Response: We reiterate that we use all of the premium data collected to match CMS specialties to the rate that a provider in the specialty would have been charged under each filing, even though PLI insurers use their own distinctive specialty names.

Comment: One commenter recommended that CMS map RFs for cardiac electrophysiology to the risk factor for cardiology (surgery) and cardiology (no surgery). The commenter noted that they did not understand the rationale that CMS applied to determine that the RF should be set at 1.89 and ask CMS to detail how it arrived at that recommended RF. One commenter noted that electrophysiology is a distinct specialty of cardiology, with eligibility for board certification in clinical cardiac electrophysiology through the American Board of Internal Medicine, as well as in cardiology. Several commenters noted that cardiac electrophysiology is a relatively small specialty that may not clearly show in premium data. These commenters further noted that it would not make sense for services like pacemaker implantation that includes placing transvenous wires inside the heart or catheter ablations to treat cardiac arrhythmias inside the heart to receive a non-surgical PLI risk factor. Several commenters noted that cardiac electrophysiology currently has a surgery and non-surgery risk factor.

Response: We reiterate that details on the data sources and the methodological approach used to develop RFs are detailed in the CY 2020 PFS proposed rule (84 FR 40504) and the interim report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare PFS. We also remind stakeholders that we are using updated premium data as reported in the SERFF for participating states and downloaded from the state-specific website for non-SERFF states or obtained directly from the state's alternate access to filings to develop RFs. We were able to collect more data, and use those data to develop specialty-specific RFs for specialties that were previously entirely mapped to a different specialty out of necessity, because we did not have sufficient data. Therefore, we create a specialty-specific RF based on the distinct data of each specialty, as reflected in the rate filings, when sufficient. Thus, the RFs may be considerably different from the previous update, as a result of utilizing the specialty's own data and not that of a crosswalk to another specialty as was the case for cardiac electrophysiology in the proposed rule. Using these data, as reflected in the filings, more accurately reflects premiums associated with the specialty.

We appreciate the additional information provided by the commenters as to why cardiac electrophysiology should remain mapped to the RF for cardiology (surgery) and cardiology (no surgery). Upon additional review of the additional information provided by commenters, we are not finalizing our proposal to map cardiac electrophysiology to a RF of 1.89, and instead we are finalizing the mapping of RFs for cardiac electrophysiology to the risk factor for cardiology (surgery) and cardiology (no surgery).

Comment: One commenter stated that while the proposal maintains CMS' established policy of applying the cardiology surgical risk factor to the procedures identified in Table 15 of the CY 2015 PFS proposed rule (79 FR 40353 through 40354), it is inconsistent with the CY 2015 PFS final rule, wherein CMS finalized that the cardiology surgical risk factor would apply to a list of procedures (classified as injection procedures used in conjunction with cardiac catheterization) that are outside the code range that CMS considered surgical. This same commenter stated they are concerned that the proposal to have fewer subgroups for cardiac electrophysiology inadvertently undervalues many cardiology surgical procedures on the basis of subspecialty mix performing the procedure, rather than valuing the procedure on its surgical status.

Response: We believe the commenter may have misinterpreted both the CY 2015 PFS proposed rule (79 FR 40353) and CY 2015 PFS final rule (79 FR 67595), which led to a subsequently misinterpreting what CMS proposed to maintain in the CY 2020 PFS proposed rule (84 FR 40504). In CY 2015, we finalized a policy to classify invasive cardiology services (cardiac catheterizations and angioplasties) that are outside of the surgical HCPCS code range as surgery for purposes of assigning specialty-specific risk factors, and to apply the higher cardiology surgical risk factor to the list of codes outside of the surgical HCPCS code range, when those services are performed by providers with a specialty of cardiology. To that end, this is not to imply that we apply the higher cardiology surgical risk factor to the cardiology services that are outside the surgical code range regardless of the provider specialty performing those services, as indicated by the commenter. We note that the higher surgical risk factor is applied to the list of codes outside of the surgical HCPCS code range only when performed by a provider with a specialty of cardiology.

We reiterate, we calculate service level risk factors based on the mix of specialties that furnish a given service as indicated by Medicare claims data. Medicare claims data reflect the service volume by Medicare primary specialty designations. For CY 2020, we continue to classify services that are outside of the surgical HCPCS code range as surgery for purposes of assigning specialty-specific risk factors, and when furnished by providers with cardiology as the Medicare primary specialty code on the Medicare claim, apply the higher cardiology surgical risk factor.

Comment: One commenter expressed concern with the statement that cardiac electrophysiology is not typically associated with the number and mix of surgical services of other surgical specialties. The commenter further noted that cardiac electrophysiology accounts for about 75 percent of the utilization, on average, across the cardiac ablation codes, with the specialty of cardiology accounting for most of the remainder.

Response: We note that the statement “cardiac electrophysiology is not typically associated with the number and mix of surgical services of cardiologists” was not made to imply that providers with a specialty of cardiac electrophysiology do not perform surgical procedures. We acknowledge that providers with the specialty of cardiac electrophysiology perform surgical procedures, as evidenced by our classification of codes outside of the surgical HCPCS code range as surgery for purposes of assigning specialty-specific risk factors, which are performed by providers with specialty of cardiac electrophysiology and other specialties.Start Printed Page 62610

Furthermore, in the case of the list of invasive cardiology services, classified as surgery for purposes of assigning service level risk factors, we note that the percentage of allowed services attributed to cardiology decreased for some of these service codes while the percentage of allowed services furnished by other specialties with risk factors lower than cardiology, such as cardiac physiology, increased.

Additionally, we received several general comments related to the proposed methodological refinements.

Comment: One commenter noted appreciation for CMS' attempt to improve the premium data collection process, stating that the Agency was successful in acquiring national premium data for 16 specialties that were formerly mapped entirely to another specialty, and that there is no longer a mention of the arbitrary 35 state threshold used in the previous update that triggered the CMS crosswalk methodology used to develop PLI RVUs for specialties for which there was not premium data for at least 35 states.

Response: We note that implementation of the methodological refinements noted above, no longer necessitated the 35 state threshold.

Comment: One commenter noted concerns about the percentage of market share premium data that was collected for Connecticut and Massachusetts, noting that only 30 percent of market share data were collected in that locality, even though Connecticut has relatively high PLI premiums, when compared to the rest of the country.

Response: As detailed in the “Final Report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare PFS”, which is available on the CMS website under the downloads section of the CY 2020 PFS final rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html medical professional liability insurance is issued at maximum coverage limits. Premiums were collected for coverage limits of $1 million per occurrence and $3 million aggregate. States with Patient Compensation Funds may have different coverage limits, which we accounted for, as noted in the aforementioned final report. Although data collection for a state may not have met the threshold of collecting filings until either cumulative market share met or exceeded 50 percent or filings had been collected for four groups or companies, it does not imply that premiums were collected for coverage limits below $1 million per occurrence and $3 million aggregate.

We note that the market share filings for Connecticut met the threshold, because we collected data for four groups. In the case of Massachusetts, this is a non-SERFF state, so we were limited to the amount of data provided by the state in response to our request to the state for these data; we have revised Table 7.A in the final report to easily identify non-SERFF states.

Additionally, in our review of the findings reported in Table 7.A in the final report, we recognized the need for additional clarification for two states. We clarify that data collection for New York State did not meet either threshold, because some of the filings collected were incomplete and unusable, leaving data for three groups, accounting for 32 percent remaining for the market share analysis. In the case of Rhode Island, we identified a typographical error in the chart, which has been fixed.

Comment: Several commenters noted concerns with the data displayed in Table 8.B Volume-weighted Distribution of 2017 Physician Work RVUs by Service Type by CMS Specialty the final report.

Response: We thank commenters for noting their concerns. These data display the share of total work RVUs by service risk group used when combining or splitting premiums across service risk groups as reported by specialties on rate filings to match the final set of specialty/service risk groups used in the analysis. The data displayed in that table are solely for the purposes of the analysis. In consideration of the comments we received, we have provided additional details on the calculations in the “Final Report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare PFS”, which is available on the CMS website under the downloads section of the CY 2020 PFS final rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html. Additionally, the table has been revised to reflect that we are not finalizing our proposed methodological refinement to combine minor and major surgery premiums when both are present in the filings for a specialty.

c. Steps for Calculating Malpractice RVUs

Calculation of the proposed MP RVUs conceptually follows the specialty-weighted approach used in the CY 2015 PFS final rule with comment period (79 FR 67591), along with the above proposed methodological improvements. The specialty-weighted approach bases the MP RVUs for a given service on a weighted average of the risk factors of all specialties furnishing the service. This approach ensures that all specialties furnishing a given service are reflected in the calculation of the MP RVUs. The steps for calculating the proposed MP RVUs are described below. We note that not all of the proposed methodological refinements are being finalized, and therefore, some of steps for calculating malpractice RVUs differ from the proposal.

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

Insurance rating area MP premiums for each specialty are mapped to the county level. The specialty premium for each county is then multiplied by its share of the total U.S. population (from the U.S. Census Bureau's 2013-2017 American Community Survey (ACS) 5-year estimates). This is in contrast to the method used for creating national average premiums for each specialty in the 2015 update; in that update, specialty premiums were weighted by the total RVU per county, rather than by the county share of the total U.S. population. We refer readers to the CY 2016 PFS final rule with comment period (80 FR 70909) for a discussion of why we have adopted a weighting method based on share of total U.S. population. This calculation is then divided by the average MP GPCI across all counties for each specialty to yield a normalized national average premium for each specialty. The specialty premiums are normalized for geographic variation so that the locality cost differences (as reflected by the 2019 GPCIs) would not be counted twice. Without the geographic variation adjustment, the cost differences among fee schedule areas would be reflected once under the methodology used to calculate the MP RVUs and again when computing the service specific payment amount for a given fee schedule area.

Step (2): Determine which premium service risk groups to use within each specialty.

Some specialties had premium rates that differed for surgery, surgery with obstetrics, and non-surgery. These premium classes are designed to reflect differences in risk of professional liability and the cost of MP claims if they occur. To account for the presence of different classes in the MP premium data and the task of mapping these premiums to procedures, we calculated distinct risk factors for surgical, surgical with obstetrics, and nonsurgical procedures where applicable. However, the availability of data by surgery and non-surgery varied across specialties. Historically, no single approach accurately addressed the variability in premium class among specialties, and we previously employed several Start Printed Page 62611methods for calculating average premiums by specialty. These methods are discussed below.

Developing Distinct Service Risk Groups: We determined that there were sufficient data for surgery and non-surgery premiums, as well as sufficient differences in rates between classes for 15 specialties (there were 10 such specialties in the CY 2015 update). These specialties are listed in Table 13. Additionally, as described in the proposed methodological refinements, in some instances, we combined minor surgery and major surgery premiums to create a premium to develop the surgery service risk group, rather than discard minor surgery premium data as was done in the previous update. We note that we are not finalizing the proposed methodological change to combine minor surgery and major surgery premium data when both are delineated the rate filings for a specialty. For all other specialties (those that are not listed in Table 13) that typically do not distinguish premiums as described above, a single risk factor was calculated, and that specialty risk factor was applied to all services performed by those specialties.

This is consistent with prior practice; however, we have refined the nomenclature to more precisely describe that some specialties are delineated into service risk groups, as is the case for surgical, non-surgical, and surgical with obstetrics, and some specialties are not further delineated into service risk subgroups and are instead referred to as “All”—meaning that all services performed by that specialty receive the same risk factor.

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-level risk factor. These risk factors are 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, which remains allergy and immunology (03). For specialties with rate filings that are indicative of sufficient surgical and non-surgical premium data, we recognized those service-risk groups (that is, surgical, and non-surgical) as risk groups of the specialty and we calculated both a surgical and non-surgical risk factor. Similarly, for specialties with rate filings that distinguished surgical premiums with obstetrics, we recognized that service-risk subgroup of the specialty and calculated a separate surgical with obstetrics risk factor.

(a) Technical Component (TC) Only Services

We note 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. Those data were obtained from a survey conducted by the Radiology Business Management Association (RBMA) in 2009; we ultimately used those 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 PFS final rule with comment period (79 FR 67595), RBMA voluntarily submitted updated MP premium information collected from IDTFs in 2014, and requested that we use those data to calculate the CY 2015 MP RVUs for TC-only services. We declined to utilize those data and stated that we believe further study is necessary and we would consider this matter and propose any changes through future rulemaking. We continue to believe that data for a broader set of TC-only services are needed, and are working to acquire a broader set of data.

For CY 2020, we proposed to assign a risk factor of 1.00 for TC-only services, which corresponds to the lowest physician specialty-level risk factor. We assigned the risk factor of 1.00 to the TC-only services because we do not have sufficient comparable professional liability premium data for the full range of clinicians that furnish TC-only services. In lieu of comprehensive, comparable data, we propose to assign 1.00, the lowest physician specialty-level risk factor calculated using the updated premium data, as the default minimum risk factor. However, we seek information on the most comparable and appropriate proxy for the broader set of TC-only services for future use, as well as any empirical information that would support assignment of an alternative risk factor for these services.

Table 14 shows the risk factors by specialty type and service risk group.

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We received public comments on the steps for calculating MP RVUs. The following is a summary of the comments we received and our responses.

Comment: Commenters disagreed with our proposal to assign a risk factor of 1.00, which is the risk factor of the lowest physician specialty, to TC-only services because of insufficient comparable professional liability premium data for the full range of health professionals that furnish TC-only services. The commenters recommended retaining the current RF for TC-only services until comprehensive data is acquired rather Start Printed Page 62614than assigning the lowest physician specialty-level risk factor to these services. Commenters noted that we should continue to work with stakeholders to obtain these data.

Response: We reiterate that we have, and will continue to work in collaboration with all interested stakeholders to find sufficient comparable professional liability data for the full range of clinicians that furnish TC-only services. In general, we continue to make progress in acquiring premium data as evidenced by the fact that for the CY 2020 update we collected service-specific premium data for an increasing number of specialties, as compared to the CY 2015 update. We note that the current RF for TC-only services is 0.91. Although we were able to find some data for health professionals that furnish TC-only services, we were unable to find sufficient comparable professional liability premium data for the full range of health professionals that furnish TC-only services. We are finalizing our proposal to assign a RF of 1.00, which is the RF of the lowest physician specialty (allergy/immunology), to TC-only services.

Comment: Commenters noted that consistent with the previous update CMS continued to assign the RF of the lowest physician specialty to NPPs for which there were insufficient or no premium data. We received contrasting comments on this proposal. For instance, one commenter was supportive of our proposal to continue assigning the risk factor of the lowest physician specialty to NPPs for which CMS was unable to collect sufficient data. In contrast, a few commenters, including the RUC, stated that CMS should not crosswalk NPPs to the lowest physician specialty, which is allergy and immunology, and to continue to aggressively collect premium data on NPPs.

Response: Our efforts to improve the premium data collection for NPPs is ongoing. We have made progress in acquiring premium data as evidenced by the fact that for the CY 2020 update we collected service-specific premium data for an increasing number of specialties, as compared to the CY 2015 update, including some NPP specialties, for which we previously did not have data that were mapped entirely to another specialty. Although we were able to find data for several NPPs for which we previously did not have data, we were unable to find premium data for the full range of NPPs. Premium data collection for NPPs is ongoing and will continue ahead of the next MP RVU update. We are finalizing a policy to maintain the current assignment of a RF of 1.00 for NPP specialties, which corresponds to the lowest physician specialty RF, allergy and immunology.

Comment: One commenter stated that an alternate option to crosswalking NPPs to the lowest physician risk factor of allergy and immunology would be to assign them the RF of another NPP specialty for which CMS was able to obtain data, the commenter recommended optometry.

Response: We reiterate that our proposal was to maintain the crosswalk of NPPs for which we had insufficient or no premium data to the lowest physician specialty, not to crosswalk NPPs to the RF of a NPP for which we were able to collect data. At this time, because we were unable to find premium data for the full range of NPPs, we do not believe it is appropriate, as suggested by commenters, to assign all NPPs for which we had insufficient or no premium data to the RF of optometry, another NPP specialty for which we were able to find some data. We reiterate that CMS' efforts to improve the premium data collection for all NPP specialties is ongoing and will continue ahead of the next MP RVU update.

Comment: One commenter suggested that the Agency assign codes performed predominantly by the select NPPs a 0.00 PLI as their premiums are so inconsequential that even a 0.01 PLI overcompensate them for their minimal PLI premiums.

Response: We disagree that NPPs should be assigned a 0.00 PLI and moreover, we disagree that even a 0.01 PLI overcompensate them for their minimal PLI premiums. This incorrectly implies that there is zero risk for NPPs to provide medical services. We reiterate that although we were able to find data for several NPP specialties for which we previously did not have data, we were unable to find premium data for the full range of NPP specialties. Premium data collection for NPP specialties is ongoing and will continue ahead of the next update.

Comment: One commenter noted that they previously referenced an insurance carrier, Health Providers Service Organization (HPSO) (www.hpso.com), as a source of potential premium data for most NPPs. This same commenter provided PLI premium data for several NPPs for a single state from this source, which ranged from $153 to $1,008.

Response: We thank the commenter for their feedback and potential data source, as CMS continues efforts to collect premium data on the full range of NPP specialties ahead of the next MP RVU update.

Step (4): Calculate MP RVUs for each CPT/HCPCS code.

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

Low volume service codes: As we discussed above in this final rule, for low volume services code, we finalized the proposal in the CY 2018 PFS final rule (82 FR 53000 through 53006) to apply the list of expected specialties instead of the claims-based specialty mix for low volume services to address stakeholder concerns about the year to year variability in PE and MP RVUs for low volume services (which also includes no volume services); these are defined as codes that have 100 allowed services or fewer. These service-level overrides are used to determine the specialty for low volume procedures for both PE and MP.

In the CY 2018 PFS final rule (82 FR 53000 through 53006), we also finalized our proposal to eliminate general use of an MP-specific specialty-mix crosswalk for new and revised codes. However, we indicated that we would continue to consider, in conjunction with annual recommendations, specific recommendations regarding specialty mix assignments for new and revised codes, particularly in cases where coding changes are expected to result in differential reporting of services by specialty, or where the new or revised code is expected to be low-volume. Absent such information, the specialty mix assumption for a new or revised code would derive from the analytic crosswalk in the first year, followed by the introduction of actual claims data, which is consistent with our approach for developing PE RVUs.

For CY 2020, we solicited public comment on the list of expected specialties. We also noted that the list has been updated to include a column indicating if a service is identified as a low volume service for CY 2020, and therefore, whether or not the service-level override is being applied for CY Start Printed Page 626152020. The proposed list of codes and expected specialties is available on our website under downloads for the CY 2020 PFS proposed rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

We received public comments on the proposed updates to the expected specialty list for low volume services. The following is a summary of the comments we received and our responses.

Comment: Several commenters stated that CMS had indicated that the expected specialty list would be updated to include a column specifying if a service was identified as a low volume service for CY 2020, indicating if the service-level override was being applied for CY 2020. However, commenters noted that this additional column did not appear in the download version and asked for additional information.

Response: We thank the commenters for identifying this missing information and we apologize for the technical oversight that caused this information not to be displayed for the proposed rule. We are finalizing a policy to include this additional column in the public use files released with the final rule. Additional comments on the proposed updates to the expected specialty list have been addressed in section II.B. of this final rule.

Step (5): Rescale for budget neutrality.

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

Specialties Excluded from Ratesetting Calculation: In section II.B. of this final rule, Determination of Practice Expense Relative Value Units, we discuss specialties that are excluded from ratesetting for the purposes of calculating PE RVUs. We proposed to treat those excluded specialties in a consistent manner for the purposes of calculating MP RVUs. We note that all specialties are included for purposes of calculating the final BN adjustment. The list of specialties excluded from the ratesetting calculation for the purpose of calculating the PE RVUs that we proposed to also exclude for the purpose of calculating MP RVUs is available in section II.B. of this final rule, Determination of Practice Expense Relative Value Units. The resource-based MP RVUs are shown in Addendum B, which is available on the CMS website under the downloads section of the CY 2020 PFS rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

Because a different share of the resources involved in furnishing PFS services is reflected in each of the three fee schedule components, implementation of the resource-based MP RVU update will have much smaller payment effects than implementing updates of resource-based work RVUs and resource-based PE RVUs. On average, work represents about 50.9 percent of payment for a service under the fee schedule, PE about 44.8 percent, and MP about 4.3 percent. Therefore, a 25 percent change in PE RVUs or work RVUs for a service would result in a change in payment of about 11 to 13 percent. In contrast, a corresponding 25 percent change in MP values for a service would yield a change in payment of only about 1 percent. Estimates of the effects on payment by specialty type is detailed in section VII. of this final rule, the Regulatory Impact Analysis.

We received no specific comments regarding our proposal to treat excluded specialties in a consistent manner for the purposes of calculating MP RVUs, we are finalizing as proposed.

Additional information on our methodology for updating the MP RVUs is available in the “Final Report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare Physician Fee Schedule,” which is available on the CMS website under the downloads section of the CY 2020 PFS final rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

After consideration of the comments, we are finalizing the CY 2020 update as proposed with minor modifications, as indicated above. We are finalizing our proposal to download and use a broader set of filings from the largest market share insurers in each state, beyond those listed as “physician” and “surgeon” to obtain a more comprehensive data set. We are not finalizing our proposal to combine minor and major surgery premiums when both are delineated on rate filings for a specialty nor are we finalizing our proposal to use a physician work RVU of greater than 5.00, as a threshold to identify surgical services as major surgery (or to categorize surgical services under 5.00 as minor surgery). Instead, we are finalizing a policy to develop RFs by maintaining the current methodology to only use major surgery premium data when both minor surgery and major surgery are delineated on rate filings for a specialty, and to use the minor surgery premium data when it is the only premium type in the rate filings for a specialty. We are finalizing a policy to map risk factors for cardiac electrophysiology to the risk factor for cardiology (surgery) and cardiology (no surgery). We are finalizing our proposal to assign the RF of the lowest physician specialty (allergy/immunology) to TC-only services, which is a RF of 1.00. We are finalizing a policy to maintain assigning the current RF of the lowest physician specialty (allergy/immunology), which is a RF of 1.00 to NPP specialties. We are finalizing our proposal to include an additional column on the anticipated low volume specialty list which specifies if a service was identified as a low volume service for CY 2020, indicating if the service-level override was being applied for CY 2020. We are finalizing our proposal to treat excluded specialties in a consistent manner for the purposes of calculating MP RVUs.

D. Geographic Practice Cost Indices (GPCIs)

1. Background

Section 1848(e)(1)(A) of the Act requires us to develop separate Geographic Practice Cost Indices (GPCIs) to measure relative cost differences among localities compared to the national average for each of the three fee schedule components (that is, work, practice expense (PE), and malpractice (MP)). We discuss the localities established under the PFS below in this section. Although the statute requires that the PE and MP GPCIs reflect full relative cost differences, section 1848(e)(1)(A)(iii) of the Act requires that the work GPCIs reflect only one-quarter of the relative cost differences compared to the national average. In addition, section 1848(e)(1)(G) of the Act sets a permanent 1.5 work GPCI floor for services furnished in Alaska beginning January 1, 2009, and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE GPCI floor for services furnished in frontier states (as defined in section 1848(e)(1)(I) of the Act) beginning January 1, 2011. Additionally, section 1848(e)(1)(E) of the Act provided for a 1.0 floor for the work GPCIs, which was set to expire at the end of 2017. Section 50201 of the Bipartisan Budget Act of 2018 (BBA of 2018) (Pub. L. 115-123, Start Printed Page 62616enacted February 9, 2018) amended the statute to extend the 1.0 floor for the work GPCIs through CY 2019 (that is, for services furnished no later than December 31, 2019).

Section 1848(e)(1)(C) of the Act requires us to review and, if necessary, adjust the GPCIs at least every 3 years. Section 1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed since the date of the last previous GPCI adjustment, the adjustment to be applied in the first year of the next adjustment shall be 1/2 of the adjustment that otherwise would be made. Therefore, since the previous GPCI update was implemented in CYs 2017 and 2018, we proposed to phase in 1/2 of the latest GPCI adjustment in CY 2020.

We have completed a review of the GPCIs and are finalizing new GPCIs in this final rule. We also calculate a geographic adjustment factor (GAF) for each PFS locality. The GAFs are a weighted composite of each PFS locality's work, PE and MP expense GPCIs using the national GPCI cost share weights. While we do not actually use GAFs in computing the fee schedule payment for a specific service, they are useful in comparing overall areas costs and payments. The actual effect on payment for any actual service would deviate from the GAF to the extent that the proportions of work, PE and MP RVUs for the service differ from those of the GAF.

As noted above, section 50201 of the BBA of 2018 extended the 1.0 work GPCI floor for services furnished only through December 31, 2019. Therefore, the final CY 2020 work GPCIs and summarized GAFs do not reflect the 1.0 work floor. However, as required by sections 1848(e)(1)(G) and (I) of the Act, the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI floor for frontier states are permanent, and therefore, applicable in CY 2020. See Addenda D and E to this final rule for the CY 2020 final GPCIs and summarized GAFs available on the CMS website under the supporting documents section of the CY 2020 PFS final rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

2. Payment Locality Background

Prior to 1992, Medicare payments for physicians' services were made under the reasonable charge system. Payments under this system largely reflected the charging patterns of physicians, which resulted in large differences in payment for physicians' services among types of services, physician specialties and geographic payment areas.

Local Medicare carriers initially established 210 payment localities, to reflect local physician charging patterns and economic conditions. These localities changed little between the inception of Medicare in 1967 and the beginning of the PFS in 1992. In 1994, we undertook a study that culminated in a comprehensive locality revision (based on locality resource cost differences as reflected by the GPCIs) that we implemented in 1997. The development of the current locality structure is described in detail in the CY 1997 PFS final rule (61 FR 34615) and the subsequent final rule with comment period (61 FR 59494). The revised locality structure reduced the number of localities from 210 to 89, and increased the number of statewide localities from 22 to 34.

Section 220(h) of the Protecting Access to Medicare Act (PAMA) (Pub. L. 113-93, enacted April 1, 2014) required modifications to the payment localities in California for payment purposes beginning with 2017. As a result, in the CY 2017 PFS final rule (81 FR 80265 through 80268) we established 23 additional localities, increasing the total number of PFS localities from 89 to 112. The current 112 payment localities include 34 statewide areas (that is, only one locality for the entire state) and 75 localities in the other 16 states, with 10 states having two localities, two states having three localities, one state having four localities, and three states having five or more localities. The remainder of the 112 PFS payment localities are comprised as follows: the combined District of Columbia, Maryland, and Virginia suburbs; Puerto Rico; and the Virgin Islands. We note that the localities generally represent a grouping of one or more constituent counties.

The current 112 fee schedule areas, also referred to as payment localities, are defined alternatively by state boundaries (statewide areas for example, Wisconsin), metropolitan areas (for example, Metropolitan St. Louis, MO), portions of a metropolitan area (for example, Manhattan), or rest-of-state areas that exclude metropolitan areas (for example, Rest of Missouri). This locality configuration is used to calculate the GPCIs that are in turn used to calculate locality adjusted payments for physicians' services under the PFS.

As stated in the CY 2011 PFS final rule with comment period (75 FR 73261), changes to the PFS locality structure would generally result in changes that are budget neutral within a state. For many years, before making any locality changes, we have sought consensus from among the professionals whose payments would be affected. We refer readers to the CY 2014 PFS final rule with comment period (78 FR 74384 through 74386) for further discussion regarding additional information about locality configuration considerations.

3. GPCI Update

As required by the statute, we developed GPCIs to measure relative cost differences among payment localities compared to the national average for each of the three fee schedule components (that is, work, PE, and MP). We describe the data sources and methodologies we use to calculate each of the three GPCIs below in this section. Additional information on the CY 2020 GPCI update is available in a final report, “Final Report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare PFS,” on our website located under the supporting documents section for the CY 2020 PFS final rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

a. Work GPCIs

The work GPCIs are designed to reflect the relative cost of physician labor by Medicare PFS locality. As required by statute, the work GPCI reflects one quarter of the relative wage differences for each locality compared to the national average.

To calculate the work GPCIs, we use wage data for seven professional specialty occupation categories, adjusted to reflect one-quarter of the relative cost differences for each locality compared to the national average, as a proxy for physicians' wages. Physicians' wages are not included in the occupation categories used in calculating the work GPCI because Medicare payments are a key determinant of physicians' earnings. Including physician wage data in calculating the work GPCIs would potentially introduce some circularity to the adjustment since Medicare payments typically contribute to or influence physician wages. That is, including physicians' wages in the physician work GPCIs would, in effect, make the indices, to some extent, dependent upon Medicare payments.

The work GPCI updates in CYs 2001, 2003, 2005, and 2008 were based on professional earnings data from the 2000 Census. However, for the CY 2011 GPCI update (75 FR 73252), the 2000 data were outdated and wage and earnings data were not available from the more recent Census because the “long form” was discontinued. Therefore, we used the median hourly earnings from the 2006 through 2008 Bureau of Labor Statistics (BLS) Occupational Start Printed Page 62617Employment Statistics (OES) wage data as a replacement for the 2000 Census data. The BLS OES data meet several criteria that we consider to be important for selecting a data source for purposes of calculating the GPCIs. For example, the BLS OES wage and employment data are derived from a large sample size of approximately 200,000 establishments of varying sizes nationwide from every metropolitan area and can be easily accessible to the public at no cost. Additionally, the BLS OES is updated regularly, and includes a comprehensive set of occupations and industries (for example, 800 occupations in 450 industries). For the CY 2014 GPCI update, we used updated BLS OES data (2009 through 2011) as a replacement for the 2006 through 2008 data to compute the work GPCIs; and for the CY 2017 GPCI update, we used updated BLS OES data (2011 through 2014) as a replacement for the 2009 through 2011 data to compute the work GPCIs.

Because of its reliability, public availability, level of detail, and national scope, we believe the BLS OES data continue to be the most appropriate source of wage and employment data for use in calculating the work GPCIs (and as discussed below, the employee wage component and purchased services component of the PE GPCI). Therefore, for the CY 2020 GPCI update, we used updated BLS OES data (2014 through 2017) as a replacement for the 2011 through 2014 data to compute the work GPCIs.

b. Practice Expense (PE) GPCIs

The PE GPCIs are designed to measure the relative cost difference in the mix of goods and services comprising PEs (not including MP expenses) among the PFS localities as compared to the national average of these costs. Whereas the physician work GPCIs (and as discussed later in this section, the MP GPCIs) are comprised of a single index, the PE GPCIs are comprised of four component indices (employee wages; purchased services; office rent; and equipment, supplies and other miscellaneous expenses). The employee wage index component measures geographic variation in the cost of the kinds of skilled and unskilled labor that would be directly employed by a physician practice. Although the employee wage index adjusts for geographic variation in the cost of labor employed directly by physician practices, it does not account for geographic variation in the cost of services that typically would be purchased from other entities, such as law firms, accounting firms, information technology consultants, building service managers, or any other third-party vendor. The purchased services index component of the PE GPCI (which is a separate index from employee wages) measures geographic variation in the cost of contracted services that physician practices would typically buy. For more information on the development of the purchased service index, we refer readers to the CY 2012 PFS final rule with comment period (76 FR 73084 through 73085). The office rent index component of the PE GPCI measures relative geographic variation in the cost of typical physician office rents. For the medical equipment, supplies, and miscellaneous expenses component, we believe there is a national market for these items such that there is not significant geographic variation in costs. Therefore, the equipment, supplies and other miscellaneous expense cost index component of the PE GPCI is given a value of 1.000 for each PFS locality.

For the previous update to the GPCIs (implemented in CY 2017), we used 2011 through 2014 BLS OES data to calculate the employee wage and purchased services indices for the PE GPCI. As discussed previously in this section, because of its reliability, public availability, level of detail, and national scope, we continue to believe the BLS OES is the most appropriate data source for collecting wage and employment data. Therefore, in calculating the CY 2020 GPCI update, we used updated BLS OES data (2014 through 2017) as a replacement for the 2011 through 2014 data for purposes of calculating the employee wage component and purchased service index component of the PE GPCI. In calculating the CY 2020 GPCI update, for the office rent index component of the PE GPCI we used the most recently available, 2013 through 2017, American Community Survey (ACS) 5-year estimates as a replacement for the 2009 through 2013 ACS data.

c. Malpractice Expense (MP) GPCIs

The MP GPCIs measure the relative cost differences among PFS localities for the purchase of professional liability insurance (PLI). The MP GPCIs are calculated based on insurer rate filings of premium data for $1 million/$3 million mature claims-made policies (policies for claims made rather than losses occurring during the policy term). For the CY 2017 GPCI update, we used 2014 and 2015 malpractice premium data. The CY 2020 MP GPCI update reflects premium data presumed in effect as of December 30, 2017. We note that we finalized a few technical refinements to the MP GPCI methodology in CY 2017, and refer readers to the CY 2017 PFS final rule (81 FR 80270) for additional discussion.

d. GPCI Cost Share Weights

For CY 2020 GPCIs, we proposed to continue to use the current cost share weights for determining the PE GPCI values and locality GAFs. We refer readers to the CY 2014 PFS final rule with comment period (78 FR 74382 through 74383), for further discussion regarding the 2006-based MEI cost share weights revised in CY 2014 that we also finalized for use in the CY 2017 GPCI update.

The GPCI cost share weights for CY 2020 are displayed in Table 15.

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e. PE GPCI Floor for Frontier States

Section 10324(c) of the Affordable Care Act added a new subparagraph (I) under section 1848(e)(1) of the Act to establish a 1.0 PE GPCI floor for physicians' services furnished in frontier states effective January 1, 2011. In accordance with section 1848(e)(1)(I) of the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for physicians' services furnished in states determined to be frontier states. In general, a frontier state is one in which at least 50 percent of the counties are “frontier counties,” which are those that have a population per square mile of less than 6. For more information on the criteria used to define a frontier state, we refer readers to the FY 2011 Inpatient Prospective Payment System (IPPS) final rule (75 FR 50160 through 50161). There are no changes in the states identified as Frontier States for the CY 2020 PFS final rule. The qualifying states are: Montana; Wyoming; North Dakota; South Dakota; and Nevada. In accordance with statute, we will apply a 1.0 PE GPCI floor for these states in CY 2020.

f. Methodology for Calculating GPCIs in the U.S. Territories

Prior to CY 2017, for all the island territories other than Puerto Rico, the lack of comprehensive data about unique costs for island territories had minimal impact on GPCIs because we used either the Hawaii GPCIs (for the Pacific territories: Guam; American Samoa; and Northern Mariana Islands) or used the unadjusted national averages (for the Virgin Islands). In an effort to provide greater consistency in the calculation of GPCIs given the lack of comprehensive data regarding the validity of applying the proxy data used in the States in accurately accounting for variability of costs for these island territories, in the CY 2017 PFS final rule (81 FR 80268 through 80270), we finalized a policy to treat the Caribbean Island territories (the Virgin Islands and Puerto Rico) in a consistent manner. We do so by assigning the national average of 1.0 to each GPCI index for both Puerto Rico and the Virgin Islands. We refer readers to the CY 2017 PFS final rule for a comprehensive discussion of this policy.

g. California Locality Update to the Fee Schedule Areas Used for Payment Under Section 220(h) of the Protecting Access to Medicare Act

Section 220(h) of the PAMA added a new section 1848(e)(6) to the Act that modified the fee schedule areas used for payment purposes in California beginning in CY 2017. Prior to CY 2017, the fee schedule areas used for payment in California were based on the revised locality structure that was implemented in 1997 as previously discussed. Beginning in CY 2017, section 1848(e)(6)(A)(i) of the Act required that the fee schedule areas used for payment in California must be Metropolitan Statistical Areas (MSAs) as defined by the Office of Management and Budget (OMB) as of December 31 of the previous year; and section 1848(e)(6)(A)(ii) of the Act required that all areas not located in an MSA must be treated as a single rest-of-state fee schedule area. The resulting modifications to California's locality structure increased its number of localities from 9 under the current locality structure to 27 under the MSA-based locality structure; although for the purposes of payment the actual number of localities under the MSA-based locality structure is 32. We refer readers to the CY 2017 PFS final rule (81 FR 80267) for a detailed discussion of this operational consideration.

Section 1848(e)(6)(D) of the Act defined transition areas as the fee schedule areas for 2013 that were the rest-of-state locality, and locality 3, which was comprised of Marin County, Napa County, and Solano County. Section 1848(e)(6)(B) of the Act specified that the GPCI values used for payment in a transition area are to be phased in over 6 years, from 2017 through 2022, using a weighted sum of the GPCIs calculated under the new MSA-based locality structure and the GPCIs calculated under the PFS locality structure that was in place prior to CY 2017. That is, the GPCI values applicable for these areas during this transition period are a blend of what the GPCI values would have been for California under the locality structure that was in place prior to CY 2017, and what the GPCI values would be for California under the MSA-based locality structure. For example, in CY 2020, which represents the fourth year, the applicable GPCI values for counties that were previously in rest-of-state or locality 3 and are now in MSAs are a blend of 2/3 of the GPCI value calculated for the year under the MSA-based locality structure, and 1/3 of the GPCI value calculated for the year under the locality structure that was in place prior to CY 2017. The proportions continue to shift by 1/6 in each subsequent year so that, by CY 2021, the applicable GPCI values for counties within transition areas are a blend of 5/6 of the GPCI value for the year under the MSA-based locality structure, and 1/6 of the GPCI value for the year under the locality structure that was in place prior to CY 2017. Beginning in CY 2022, the applicable GPCI values for counties in transition areas are the values calculated solely under the new MSA-based locality structure. For clarity, we reiterate that this incremental phase-in is only applicable to those counties that are in transition areas that are now in MSAs, which are only some of the counties in the 2013 California rest-of state locality and locality 3.

Additionally, section 1848(e)(6)(C) of the Act establishes a hold harmless for transition areas beginning with CY 2017 whereby the applicable GPCI values for a year under the new MSA-based locality structure may not be less than what they would have been for the year under the locality structure that was in place prior to CY 2017. There are a total of 58 counties in California, 50 of which are in transition areas as defined in section 1848(e)(6)(D) of the Act. The eight counties that are not within transition areas are: Orange; Los Angeles; Alameda; Contra Costa; San Francisco; San Mateo; Santa Clara; and Ventura counties.

For the purposes of calculating budget neutrality and consistent with the PFS budget neutrality requirements as specified under section 1848(c)(2)(B)(ii)(II) of the Act, we finalized the policy to start by calculating the national GPCIs as if the localities that were in place prior to CY 2017 are still applicable nationwide; then, for the purposes of payment in California, we override the GPCI values with the values that are applicable for California consistent with the requirements of section 1848(e)(6) of the Act. This approach is consistent with the implementation of the GPCI floor provisions that have previously been implemented—that is, as an after-the-fact adjustment that is implemented for purposes of payment after both the GPCIs and PFS budget neutrality have already been calculated.

Additionally, section 1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed since the date of the last previous GPCI adjustment, the adjustment to be applied in the first year of the next adjustment shall be 1/2 of the adjustment that otherwise would be made. However, since section 1848(e)(6)(B) of the Act provides for a gradual phase in of the GPCI values under the new MSA-based locality structure for California, specifically in one-sixth increments over 6 years, if we were to also apply the requirement to phase in 1/2 of the adjustment in year 1 of the GPCI update then the first year increment would effectively be 1/12. Start Printed Page 62619Therefore, in CY 2017, we finalized a policy that the requirement at section 1848(e)(1)(C) of the Act to phase in 1/2 of the adjustment in year 1 of the GPCI update would not apply to counties that were previously in the rest-of-state or locality 3 and are now in MSAs that are subject to the blended phase-in as described above in this section. We reiterate that this is only applicable through CY 2021 since, beginning in CY 2022, the GPCI values for such areas in an MSA would be fully based on the values calculated under the new MSA-based locality structure for California. For a comprehensive discussion of this provision, transition areas, and operational considerations, we refer readers to the CY 2017 PFS final rule (81 FR 80265 through 80268).

h. Refinements to the GPCI Methodology

In the process of calculating GPCIs for the purposes of this final rule, we identified two technical refinements to the methodology that yield improvements over the current method; these refinements are applicable to the work GPCI and the employee wage index and purchased services index components of the PE GPCI. We proposed to weight by total employment when computing county median wages for each occupation code which addresses the fact that the occupation wage can vary by industry within a county. Additionally, we proposed to use a weighted average when calculating the final county-level wage index; this removes the possibility that a county index would imply a wage of 0 for any occupation group not present in the county's data. These methodological refinements yield improved mathematical precision. Additional information on the GPCI methodology and the refinements are available in the final report, “Final Report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare PFS” on our website located under the supporting documents section of the CY 2020 PFS final rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

i. Proposed GPCI Update Summary

As explained above in the Background section above in this section, the periodic review and adjustment of GPCIs is mandated by section 1848(e)(1)(C) of the Act. At each update, the GPCIs are published in the PFS proposed rule to provide an opportunity for public comment and further revisions in response to comments prior to implementation. The CY 2020 updated GPCIs for the first and second year of the 2-year phase-in, along with the GAFs, are displayed in Addenda D and E to this final rule available on our website under the supporting documents section of the CY 2020 PFS final rule web page at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

The following is a summary of the comments we received on the GPCI proposals and our responses.

Comment: A few commenters expressed concern over the expiring work GPCI floor of 1.0. Some of the commenters stated an objection to any proposals that could have a negative impact on rural areas such as the expiration of the work GPCI floor and stated that the GPCIs needs to account for the unique practice needs of rural providers.

Response: The 1.0 work GPCI floor is established by statute and expires on December 31, 2019. We do not have the authority to extend the 1.0 work GPCI floor beyond December 31, 2019. We note that 34 states have a statewide payment locality, which means that physicians, whether in urban or rural areas, receive the same geographic adjustment thus reducing rural/urban payment differentials within a state.

Comment: A few commenters expressed support for the elimination of all GAFs under the PFS, except those designed to achieve a specific public policy goal, such as to encourage physicians to practice in underserved areas. The commenters stated that GPCIs tend to favor urban localities over their rural counterparts and works at cross purposes to the health professional shortage area (HPSA) bonus and other incentives intended to encourage and support rural physicians. The commenters also stated that rural beneficiaries would be better served if the GPCIs were eliminated from the PFS so that the HPSA bonus and other incentives are not undermined in their efforts to sustain the rural physician workforce needed to care for those beneficiaries.

Response: As previously discussed, section 1848(e)(1)(A) of the Act requires us to develop separate GPCIs to measure resource cost differences among localities compared to the national average for each of the three GPCI components, and section 1848(e)(1)(C) of the Act requires us to review and, if necessary, adjust the GPCIs at least every 3 years; and based on new data GPCI values may increase or decrease. Additionally, as noted above, 34 states have a statewide locality, thus reducing rural/urban payment differentials within a state.

Comment: One commenter stated that CMS uses salary data for individuals with 5 or more years of college, and should instead evaluate the feasibility of using salary data only from individuals with graduate degrees in the work GPCI calculations. The commenter also stated that CMS should also consider that physicians invest a portion of their compensation in the practice and that portion should not be counted as salary.

Response: We note that physicians are not one of the seven occupation groups used in the work GPCI calculation; therefore, we are unclear about the commenter's assertion that investments of a portion of a physician's salary back into the practice should not be counted as salary. As described above, and consistent with our longstanding practice, a set of occupation groups representing a variety of professionals are used in the calculation. We note that the proxy occupations currently used represent highly educated professional occupation categories, and therefore, we believe we are already including salary data for individuals with advanced degrees.

Comment: One commenter stated concern that the work GPCI does not utilize actual physician wage data, and states that CMS' statement that including physician wage data in calculating the work GPCI would potentially introduce some circularity to the adjustment since Medicare payments typically contribute to physician wages is flawed. The commenter stated that in the era of increasing physician employment, more physicians receive a salary dependent upon local market conditions and not the portion of their patient panel on Medicare. The commenter also stated that two of the proxy professional wage categories—pharmacists, and registered nurses—are professions whose wages are also comprised, in part, of income gained from participation in the Medicare program.

Response: We note that we have long maintained that including physicians' wages in the physician work GPCI would, in effect make the physician work GPCI to some extent dependent upon Medicare payments which in turn are impacted by the indices. We do not dispute the assertion that local market conditions may also play a role in determination of a physician's salary; however, we do not believe that mitigates the potential for circularity and maintain that, still, Medicare payment is a significant determinant of physician's earnings. We also recognize that the seven proxy professional wage Start Printed Page 62620categories span several different industries, including pharmacists, and registered nurses which demonstrates that the healthcare industry is represented in those proxy wage categories; however, physicians in particular are not included in those categories as previously described. We continue to believe in the majority of instances, the earnings of physicians will vary among areas to the same degree that the earnings of other professionals across an array of industries vary. We reiterate that the work GPCI is not an absolute measure of physician earnings, rather it is a measure of the relative wage differences for each locality as compared to the national average. Additionally, the work GPCI reflects only one quarter of those relative wage differences consistent with the statutory requirement as discussed previously in this section.

Comment: A few commenters stated that CMS should re-evaluate existing databases to find or develop a nationwide measure of commercial office rents for use in calculating PE GPCIs. One commenter stated that CMS should either collect true medical office expense data or alternatively use data sources available to federal agencies such as office expense data from the Federally Qualified Health Center Network.

Response: We appreciate the commenter's feedback. We note that our efforts are ongoing to identify a publicly-available, robust, nationally representative commercial rent data source that could be made available to CMS for this purpose. Further, we welcome opportunities to discuss such data sources with stakeholders and to incorporate such data, as appropriate in the GPCI calculation process, through our standard annual rulemaking process.

Comment: One commenter expressed support for the proposed methodological refinements and stated that it could yield improvements that would be beneficial to all fields of medicine.

Response: We thank the commenter for the support of our proposed methodological refinements.

Comment: A few commenters stated that the proposed refinement to the weighting of the physician work, employee wage, and purchased services indices results in inconsistent comparisons of occupational wages from one county to the next, because industry wages within an occupational group will vary from one county to the next based on employment. The commenters recommended using the previous methodology and also stated that for counties with zero inputs that we use inputs from MSAs as is done for the rent index or use the national average as used in the previous update.

Response: The use of employment weights better captures variation in median wages themselves, which is exactly what the indices are meant to reflect. As the commenter indicated, the unweighted approach captures variation in wages reported by category in an index-like manner. This is undesirable both substantively and mathematically, since it makes the GPCIs an index based on an index rather than on the underlying data of interest. We have reviewed the process for developing county-level median wages as described in the proposed rule, and continue to believe that the use of employment weights, as we proposed, is an improvement over the use of unweighted values as requested by the commenter. We intend to continue considering how measures are weighted and summarized throughout the GPCI development process and will invite public comment on any additional potential improvements we identify through future rulemaking.

Comment: A few commenters stated that they find it challenging to extract and collate the publicly-available BLS OES data (available from the BLS website), that are used for the work and PE GPCIs in a manner that enables them to reproduce the data sets used in the work GPCI and the employee wages, and purchased services components of the PE GPCI; the commenters stated that CMS should provide more detailed information in the interest of transparency.

Response: We note that we provide web links to the publicly-available data sources used in this GPCI update, the methodological parameters, as well as an overview of how we develop each GPCI component in the final report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare PFS. This practice is consistent with previous updates. However, in consideration of the commenters' concerns that navigating the publicly-available BLS OES data on the BLS website is cumbersome, we have included more detailed steps in the aforementioned report to further assist interested parties in navigating these data.

Comment: One commenter stated that the GPCIs in Hawaii do not account for the unique costs of providing medical services in Hawaii and that this will lead to an accelerating shortage of health care providers across the state of Hawaii. The commenter stated that Hawaii's unique geography makes providing care more expensive and that the cost of living ranks amongst the highest in the nation, and the data used by CMS do not reflect the cost of living. The commenter stated that it disputes the assertion that the equipment, supplies, and miscellaneous expenses component of the PE GPCI do not vary by geographic area, and therefore, do not require updating. The commenter stated that the high cost of shipping equipment plays a major part in the high cost of healthcare in Hawaii and the PEs should reflect that additional cost that exists in Hawaii and not in the mainland United States. The commenter stated that the 1.5 work GPCI floor for Alaska, and the 1.0 PE GPCI floor for the frontier states should serve as a basis for reevaluating the cost of providing medical services in Hawaii. The commenter stated that the GPCIs should be adjusted to reflect a factor at least equal to Alaska's work GPCI.

Response: We reiterate that the GPCIs, in particular the work GPCI and the PE GPCI to which the commenter refers, are based on nationally-representative and publicly-available wage data from the BLS OES for the work GPCI and employee wage and purchased services components of the PE GPCI, and the Census Bureau's ACS data for the rent index component of the PE GPCI. The GPCIs are a measure of relative resource cost differences among localities compared to the national average as informed by the data (not a measure of absolute costs). With regards to the supplies, equipment, and miscellaneous expense cost index component of the PE GPCIs, we have stated that we believe there is a national market for these items and there is not significant geographic variation in those costs, and as such we assign a value of 1.00 for this component for each locality, consistent with the national average. Stakeholders have previously indicated that shipping and transportation expenses increase the cost of acquiring medical equipment and supplies in islands relative to the mainland. We have previously attempted to locate data sources specific to geographic variation in shipping costs, and we found no comprehensive national data source for this information, and therefore, we have not been able to quantify variation in costs specific to islands as indicated by the commenter (we refer readers to 78 FR 74387 through 74388 for a detailed discussion of this issue). The commenter did not provide any data to quantify the variation. We would encourage the commenter and other stakeholders to submit data supporting this assertion for consideration in future rulemaking; specifically, we would be Start Printed Page 62621interested in information regarding potential data sources for shipping costs for medical equipment and supplies that are accessible to the public, available on a national basis for both urban and rural areas, and updated regularly. We remind commenters that the work GPCI value for Alaska is not based on the data for that state, instead section 1848(e)(1)(G) of the Act sets a permanent 1.5 work GPCI floor for Alaska. Similarly, section 1848(e)(1) of the Act sets a permanent PE GPCI floor of 1.0 for the frontier states. Additionally, we note that the GAF in Hawaii, displayed in Addendum D, which represents the weighted composite of each PFS localities GPCIs, is increasing in the GPCI update from CY 2019 to years 1 and 2 of the update (CY 2020 and CY 2021).

Comment: One commenter noted that the MP GPCIs changed more significantly than other GPCIs, but also acknowledged that MP accounts for a small share of average total payments so these swings generally translate into modest payment changes. The commenter urged CMS to give consideration to comments from state medical associations and other organizations representing physicians who practice in localities facing reductions to ensure that the data driving reductions are accurate.

Response: We note that larger changes in MP GPCI values in an update year are not unprecedented, and the commenter has correctly characterized that changes in MP will equate to minimal changes in payment because MP represents a small share of average total payments. As discussed in section II.C of this final rule, there were several proposed methodological refinements in the development of the MP premium data which underlies the MP risk factors used in determining both MP RVUs and MP GPCIs which has also contributed to some of the changes; we note that not all of those proposed methodological refinements were finalized for CY 2020, and the final MP GPCIs in Addendum E of this final rule are reflective of that.

We emphasize that we do give consideration to the public comments that we receive. We note that only a few comments were received with regards to the GPCI proposals, though during the process of developing the CY 2020 final rule GPCIs, which includes reviewing the underlying data (which are obtained from publicly-available sources as previously discussed) and reviewing our programming, we did observe the following issue. The work, PE, and MP GPCIs are based on the 2017 utilization data as described in the final report for the CY 2020 Update of GPCIs and MP RVUs for the Medicare PFS. These data became available after the CY 2020 PFS proposed rule analytic programs had been written for these measures, but for the purposes of developing the analytic programs the CY 2016 utilization data were used as a placeholder. During the final rule development we realized an oversight whereby the 2016 utilization data had not been replaced with the 2017 utilization data for the work and PE GPCIs, though we note that for the MP GPCI, the 2017 utilization data were being used. We have resolved this issue for the final rule and all 3 GPCI components reflect the updated 2017 utilization data as described in the aforementioned report. We note that utilization data are highly correlated year to year so the effect of this change on final GPCI values was quite modest; specifically, the updated utilization data had virtually no effect on the resulting work, PE, and MP GPCIs and the GAFs. Outside of California (see below for a discussion regarding California), the correlation coefficient between each of the three GPCIs and the GAF in the proposed rule, and their corresponding values in the final rule is 0.999.

Comment: A few commenters expressed concern with regards to the county rent indices delineated in the county-level data public use file whereby they noted consistent discrepancies in New England states as compared to the rest of the country. The commenters stated that before finalizing the PE GPCIs, CMS should review the indices to ensure that the relative differences in the indices accurately reflect the relative differences in rents from the source data file. One of the commenters indicated that this issue is not observed in any areas outside of New England.

Response: We note that during the review of the underlying data and analytic programs for the final rule, we identified an issue with the data in New England (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut) where the raw data values were defined at sub-county areas in New England, but were not summarized to the county-level in the development of the proposed CY 2020 GPCI values. This led to distorted office rent index values for the six states in New England, which in turn affected the proposed PE GPCIs in those states. The CY 2020 PFS final rule office rent index that underlies the PE GPCI has been corrected so that the input data element is now summarized at the county-level before being used to develop the index. Similar to the aforementioned update to the utilization data, the corrected mapping of raw data values in New England as described above had virtually no effect on the resulting work, PE, and MP GPCIs and the GAFs. Outside of California (see below for a discussion regarding California), the correlation coefficient between each of the three GPCIs and the GAF in the proposed rule, and their corresponding values in the final rule is 0.999.

Comment: One commenter expressed concern with the implementation of the GPCI requirements in California consistent with section 1848(e)(6) of the Act which was implemented in the CY 2017 PFS final rule (81 FR 80261 through 80270). The commenter requested that CMS remedy any errors in the GPCI values. Specifically, the commenter indicated that CMS did not accurately implement the California MSA-based structure in the CY 2020 PFS proposed rule consistent with the methodology finalized in CY 2017 based on the requirements of the statute. The commenter specifically highlighted issues with the GPCIs for the San Francisco-Oakland-Hayward localities (localities 05, 06, 07, and 53); the San Jose-Sunnyvale-Santa Clara localities (localities 09, and 65); and the Los Angeles-Long Beach-Anaheim localities (localities 26, and 18). The commenter provided their analysis with their commenter letter, and stated that based on their findings, the proposed GPCIs for the nine counties contained in the eight aforementioned localities are inaccurate. The commenter also requested that CMS provide the traditional source data for the PE rent and wage indices or the relative value units (RVUs) by county that have been published in the past. Aside from the issues with these eight localities as described above, the commenter indicated that for the remaining California localities, they support and agree with the proposed GPCIs and commend CMS for accurately completing the difficult calculations as required by statute.

Response: We appreciate the analysis provided by the commenter with regards to the eight aforementioned localities and thank the commenter for bringing this to our attention. We agree with the commenter that there were issues with the calculation of the GPCI values reflected in the CY 2020 PFS proposed rule for California. In the programming, we inadvertently used the 32 MSA-based localities for which current GPCIs are defined to account for different treatment of some counties within MSAs when creating the new GPCIs, as opposed to using the 27 MSA-based localities to determine the new MSA-based payment area GPCI amounts. Additionally, we identified a Start Printed Page 62622sequencing issue in our programming that led to issues in establishing the transition values and applying the hold harmless provision. We apologize for the confusion caused by these issues and have resolved these programming issues and recalculated the California GPCIs. The final CY 2020 GPCI values in California reflect the transition and hold harmless provisions executed in the proper order based on the requirements of the law. In summary, in California the issue was the level of aggregation used to create the proposed rule values, which erroneously resulted in different proposed rule values for counties within payment localities where there should not be any differences. Correcting this, along with other changes in the final rule relative to the proposed rule, led to GAFs that are higher in all but three of the 32 payment localities in California. In those three, the GAF is lower because it is now correctly equal among non-transition counties within the new MSA-based payment areas; these three counties had higher values when erroneously calculated as individual payment localities in the proposed rule than they have when correctly averaged within the MSA for the final rule GPCIs. The final rule GAFs for these three areas are lower than those published in the proposed rule by 0.1 percent in locality 26 (Los Angeles-Long Beach-Anaheim (Orange cty)), 1.4 percent in locality 05 (San Francisco-Oakland-Hayward (San Francisco cty)), and 1.8 percent in locality 06 (San Francisco-Oakland-Hayward (San Mateo cty)), but all three localities have CY 2020 PFS final rule GAFs that are higher than their current CY 2019 values. In the other 29 California payment localities, the increase in final rule GAFs relative to the proposed rule values ranges from 0.5 percent to 6.2 percent, with 13 areas experiencing an increase of 1.2 percent.

Additionally, we note that we have provided a county-level GPCI data file as one of the GPCI public use files in the downloads section of the CY 2020 PFS final rule on the CMS website, that delineates the requested source data, as well as the RVUs by county, consistent with what has been published in the past. We reiterate that the county-level data file also reflects the correction to the oversight in the proposed rule whereby we inadvertently used the 2016 utilization data for the work and PE GPCIs (though we correctly used the 2017 utilization data for the MP GPCIs) as previously discussed.

Comment: One commenter stated that for CY 2020 in California there should be 29 distinct fee schedule areas and not 32 fee schedule areas as finalized when this provision was implemented in CY 2017. The commenter stated that some of the distinct fee schedule areas that were used during the period between CY 2017 and CY 2018 are no longer necessary. The commenter stated that Orange and Los Angeles counties, which are both in the Los-Angeles-Long Beach-Anaheim MSA, should have the same GPCI values and be one locality number instead of two. Similarly, Alameda, Contra Cosa, San Francisco and San Mateo counties (all in the San Francisco-Oakland-Hayward MSA) should be identified by one locality number instead of three, and the San Francisco-Oakland-Hayward (Marin cnty) locality would remain its own distinct locality number.

Response: There are 27 MSAs in California, and when CMS implemented the MSA-based locality structure for California as discussed above, for operational considerations, we finalized 32 unique MSA-based locality numbers. We did not propose to make changes to the number of unique locality numbers for California for CY 2020. Since two of the MSAs that required multiple unique locality numbers (San Francisco-Oakland-Hayward, and San Jose-Sunnyvale-Santa Clara) to address operational considerations as described in the CY 2017 PFS final rule (81 FR 80265 through 80268) contain both transition and non-transition counties, we would still need to maintain some unique locality numbers. We remind the commenter that though starting in CY 2022, the applicable GPCIs for counties in transition areas will be calculated solely under the MSA-based locality structure as described above, the statutorily-required hold-harmless provision for counties in transition areas is permanent.

With regards to the Los Angeles-Long Beach-Anaheim MSA, which contains 2 counties (across two unique locality numbers: 18 and 26) that are not transition areas, we acknowledge that the Los Angeles-Long Beach-Anaheim MSA only needed separate unique locality numbers, for payment purposes, in year 1 (CY 2017) of the implementation of the MSA-based structure as neither of the counties in the MSA (Orange nor Los Angeles counties) are transition counties (and therefore, are not subject to aforementioned the one-sixth incremental phase-in nor hold-harmless provision). We will consider the feasibility of assigning one locality number for that MSA in future rulemaking since there will be no difference in the GPCI values, for payment purposes, for those localities going forward. Similarly, the San Francisco-Oakland-Hayward MSA contains four counties (across three unique locality numbers: 05, 06, and 07) that are not transition areas and will receive the same GPCI values, for payment purposes, going forward (San Francisco, San Mateo, Alameda, and Contra Costa counties). As such, we will consider the feasibility of collapsing those three unique locality numbers and assigning one unique locality number in future rulemaking. If we determine that to be operationally feasible, we would propose any changes in future rulemaking. We note that it would ultimately change the number of distinct fee schedule areas needed, for payment purposes, in California from 32 to 29 as suggested by the commenter.

Additionally, during the development of the CY 2020 PFS final rule GPCIs, we identified typographical errors in the naming conventions of four of the California MSA-based localities in Addendum D and Addendum E: Locality 05-San Francisco-Oakland-Hayward (San Francisco cnty) was listed as San Francisco; locality 06-San Francisco-Oakland-Hayward (San Mateo cnty) was listed as San Mateo; locality 07-San Francisco-Oakland-Hayward (Alameda/Contra Costa cnty) was listed as Oakland/Berkeley; and San Jose-Sunnyvale-Santa Clara (Santa Clara cnty) was listed as Santa Clara. This display issue has been corrected in Addendum D and Addendum E for the final rule.

Comment: One commenter stated that it believes large cuts to rural and rest-of-state areas should be avoided or minimized, but locality boundaries with large payment differences should not be in the middle of urban areas, because they create payment cliffs where payment can change if an office is moved across a street or down a block. The commenter stated that CMS should create locality definitions that are not constrained by county boundaries, and advocated implementing locality definitions based on Metropolitan Statistical Areas.

Response: We appreciate the suggestions for revisions to the PFS locality structure; however, we did not propose any changes to the PFS locality structure and decline to do so at this time. Further, we clarify that just as the localities under the locality structure used in the PFS are comprised of one or more constituent counties, so are Metropolitan Statistical Areas. Therefore, the concept of a payment cliff between neighboring counties as described by the commenter would not necessarily be mitigated by a change from PFS fee schedule areas to Metropolitan Fee Schedule Areas.Start Printed Page 62623

After consideration of the comments, we are finalizing the CY 2020 GPCI update, and the methodological refinements as proposed. The final GPCIs and summarized GAFs in Addenda D and E to this final rule also reflect the correction of the underlying programming issues described above.

E. Potentially Misvalued Services Under the PFS

1. Background

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

As discussed in section II.N. of this final rule, Valuation of Specific Codes, each year we develop appropriate adjustments to the RVUs taking into account recommendations provided by the RUC, MedPAC, and other stakeholders. 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 Merit-based Incentive Payment System (MIPS) data. In addition to considering the most recently available data, we assess the results of physician surveys and specialty recommendations submitted to us by the RUC for our review. We also consider information provided by other 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/​reports/​Mar06_​Ch03.pdf?​sfvrsn=​0), MedPAC discussed the importance of appropriately valuing physicians' services, noting that misvalued services can distort the market for physicians' services, as well as for other health care services that physicians order, such as hospital services. In that same report, MedPAC postulated that physicians' services under the PFS can become misvalued over time. MedPAC stated, “When a new service is added to the physician fee schedule, it may be assigned a relatively high value because of the time, technical skill, and psychological stress that are often required to furnish that service. Over time, the work required for certain services would be expected to decline as physicians become more familiar with the service and more efficient in furnishing it.” We believe services can also become overvalued when PE 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 PE.
  • 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 PFS.
  • 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 intraservice work per unit of time.
  • Codes with high PE RVUs.
  • Codes with high cost supplies.
  • Codes as determined appropriate by the Secretary.

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

2. Progress in Identifying and Reviewing Potentially Misvalued Codes

To fulfill our statutory mandate, we have identified and reviewed numerous Start Printed Page 62624potentially misvalued codes as specified in section 1848(c)(2)(K)(ii) of the Act, and we intend to continue our work examining potentially misvalued codes in these areas over the upcoming years. As part of our current process, we identify potentially misvalued codes for review, and request recommendations from the RUC and other public commenters on revised work RVUs and direct PE inputs for those codes. The RUC, through its own processes, also identifies potentially misvalued codes for review. Through our public nomination process for potentially misvalued codes established in the CY 2012 PFS final rule with comment period, other individuals and stakeholder groups submit nominations for review of potentially misvalued codes as well. Individuals and stakeholder groups may submit codes for review under the potentially misvalued codes initiative to CMS in one of two ways. Nominations may be submitted to CMS via email or through postal mail. Email submissions should be sent to the CMS emailbox MedicarePhysicianFeeSchedule@cms.hhs.gov, with the phrase “Potentially Misvalued Codes” in the subject line. Physical letters for nominations should be sent via the U.S. Postal Service to the Centers for Medicare and Medicaid Service, Mail Stop: C4-01-26, 7500 Security Blvd., Baltimore, Maryland 21244. Envelopes containing the nomination letters must be labeled “Attention: Division of Practitioner Services, Potentially Misvalued Codes”. Nominations for consideration in our next annual rule cycle should be received by our February 10th deadline. Since CY 2009, as a part of the annual potentially misvalued code review and Five-Year Review process, we have reviewed over 1,700 potentially misvalued codes to refine work RVUs and direct PE inputs. We have assigned appropriate work RVUs and direct PE inputs for these services as a result of these reviews. A more detailed discussion of the extensive prior reviews of potentially misvalued codes is included in the Medicare Program; Payment Policies Under the Physician Fee Schedule, Five-Year Review of Work Relative Value Units, Clinical Laboratory Fee Schedule: Signature on Requisition, and Other Revisions to Part B for CY 2012; Final Rule (76 FR 73052 through 73055) (hereinafter referred to as the “CY 2012 PFS final rule with comment period”). 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 Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, DME Face-to-Face Encounters, Elimination of the Requirement for Termination of Non-Random Prepayment Complex Medical Review and Other Revisions to Part B for CY 2013 (77 FR 68892) (hereinafter referred to as 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 the Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2009; and Revisions to the Amendment of the E-Prescribing Exemption for Computer Generated Facsimile Transmissions; Proposed Rule (73 FR 38589) (hereinafter referred to the “CY 2009 PFS proposed rule”), 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 Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2016 final rule with comment period (80 FR 70886) (hereinafter referred to as 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 codes 95970-95982). We also finalized as potentially misvalued 103 codes identified through our screen of high expenditure services across specialties.

In the Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements final rule (81 FR 80170) (hereinafter referred to as 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.

In the CY 2018 PFS final rule, we finalized arthrodesis of sacroiliac joint (CPT code 27279) as potentially misvalued. Through the use of comment solicitations with regard to specific codes, we also examined the valuations of other services, in addition to, new potentially misvalued code screens (82 FR 53017 through 53018).

3. CY 2020 Identification and Review of Potentially Misvalued Services

In the CY 2012 PFS final rule with comment period (76 FR 73058), we finalized a process for the public to nominate potentially misvalued codes. In the CY 2015 PFS final rule with comment period (79 FR 67606 through 67608), we modified this process whereby the public and stakeholders may nominate potentially misvalued codes for review by submitting the code with supporting documentation by February 10th of each year. Supporting documentation for codes nominated for the annual review of potentially misvalued codes may include the following:

  • Documentation in peer reviewed medical literature or other reliable data that demonstrate changes in physician work due to one or more of the following: Technique, knowledge and technology, patient population, site-of-service, length of hospital stay, and work time.
  • 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 Start Printed Page 62625misleading 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, VA, NSQIP, the STS National Database, and the MIPS data).
  • 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 for each nominated code whether we agree with its inclusion as a potentially misvalued code. The public has the opportunity to comment on these and all other proposed potentially misvalued codes. In that year's final rule, we finalize our list of potentially misvalued codes.

a. Public Nominations

We received three submissions that nominated codes for review under the potentially misvalued code initiative, prior to our February 10, 2019 deadline. In addition to three public nominations, CMS also nominated one additional code for review.

One commenter requested that CMS consider CPT code 10005 (Fine needle aspiration biopsy, including ultrasound guidance; first lesion) and CPT code 10021 (Fine needle aspiration biopsy, without imaging guidance; first lesion) for nomination as potentially misvalued. We note that these two CPT codes were recently reviewed within a family of 13 similar codes. Our review of these codes and our rationale for finalizing the current values are discussed extensively in the CY 2019 PFS final rule (83 FR 59517). For CPT code 10021, the RUC recommended a 32 percent reduction from its previous physician time and a 5 percent reduction in the work RVU. The commenter disagreed with this change and stated that there was a change in intensity of the procedure now as compared to what it was in 1995 when this code was last evaluated. The commenter also stated that there was a change in intensity of the work performed due to use of more complicated equipment, more stringent specimen sampling that allow for extensive examination of smaller and deeper lesions within the body. The commenter disagreed with the CMS' crosswalked CPT code 36440 (Push blood transfusion, patient 2 years or younger) and presented CPT codes 40490 (Biopsy of lip) and 95865 (Needle measurement and recording of electrical activity of muscles of voice box) as more appropriate crosswalks.

Another commenter requested that CMS consider HCPCS code G0166 (External counterpulsation, per treatment session) as potentially misvalued. This code was reviewed for the CY 2019 PFS final rule (83 FR 59578), and the work RVU and direct PE inputs as recommended by the AMA RUC were finalized by CMS. We finalized the valuation of this code with no refinements. However, the commenter noted that the PE inputs that were considered for this code did not fully reflect the total resources required to deliver the service. We stated we would review the commenter's submission of additional new data and public comments received in combination with what was previously presented in the CY 2019 PFS final rule.

CMS nominated CPT code 76377 (3D rendering with interpretation and reporting of computed tomography, magnetic resonance imaging, ultrasound, or other tomographic modality with image postprocessing under concurrent supervision; requiring image postprocessing on an independent workstation) as potentially misvalued. CPT code 76376 (3D rendering with interpretation and reporting of computed tomography, magnetic resonance imaging, ultrasound, or other tomographic modality with image postprocessing under concurrent supervision; not requiring image postprocessing on an independent workstation) was reviewed by the AMA RUC at the April 2018 RUC meeting. However, CPT code 76377, which is very similar to CPT code 76376, was not reviewed, and is likely now misvalued, in light of the similarities between the two codes. The specialty societies noted that the two codes are different because they are utilized by different patient populations (as evidenced by the ICD-10 diagnoses); however, we view both codes to be similar enough that CPT code 76377 should be reviewed to maintain relativity in the code family.

We have received and reviewed all public comments to all these codes that were nominated as potentially misvalued. Below, we present the summarizations of all these public comments.

Comment: One commenter provided information to CMS in which they stated that the work involved in furnishing services represented by the office/outpatient E/M code set (CPT codes 99201-99215) has changed sufficiently to warrant revaluation. Specifically, the commenter stated that these codes have not been reviewed in over 12 years and in that time have suffered passive devaluation as more and more procedures and other services have been added to the CPT code set, which are subsequently valued in a budget neutral manner, through notice and comment rulemaking, on the Medicare PFS. The commenter also stated that re-evaluation of these codes is critical to the success of CMS' objective of advancing value-based care through the introduction of Advanced Alternative Payment Models (APMs) as these APMs rely on the underlying E/M codes as the basis for payment or reference price for bundled payments.

Response: We acknowledge the points made by the commenter regarding the valuation of E/M codes for office and outpatient visits. We agreed, in principle, that the existing set of office/outpatient E/M CPT codes may not be correctly valued. In recent years, we have specifically considered how best to update and revalue the E/M codes, which represent a significant proportion of PFS expenditures, and have also engaged in ongoing dialogue with the practitioner community. In the CY 2019 PFS proposed and final rules, in part due to these ongoing stakeholder discussions, we proposed and finalized changes to E/M payment and documentation requirements to implement policy objectives focused on reducing provider documentation burden (83 FR 59625).

As we stated in the proposed rule, concurrently, the CPT Editorial Panel, under similar policy objectives, convened a workgroup and proposed to refine the existing E/M office/outpatient code set. Shortly thereafter, the AMA RUC revalued these services and submitted recommendations to CMS for review. In the CY 2020 PFS proposed rule, we considered the RUC-recommended values for office/outpatient E/M codes in proposing new values for CY 2021. For more detail on our review and consideration of the revalued office/outpatient E/M services please refer to section II.P of this final rule.

Table 16 lists the HCPCS and CPT codes that we proposed as potentially misvalued.

Start Printed Page 62626

We received public comments on the HCPCS and CPT codes that we proposed as potentially misvalued. The following is a summary of the comments we received and our responses.

Comment: Several commenters submitted comments about HCPCS code G0166 and claimed that in the CY 2019 PFS final rule, CMS did not have the complete list of inputs for this “Practice Expense only” code, which resulted in an under-valuation of its payment.

Response: We note that the AMA RUC in its comment letter to the proposed rule informed CMS that it would review this service and forward any recommendations to CMS for review. We will review the AMA RUC's forthcoming recommendations and will consider any refinements to the valuation for this code through our standard rulemaking process for CY 2021.

Comment: Several commenters highlighted the payment reduction to code G0166 in CY 2019 relative to CY 2018 and requested that CMS revert back to the CY 2018 payment. Commenters also noted that the current and reduced payment may endanger continued offering of this service, particularly to beneficiaries with coronary artery disease with angina for whom surgical intervention may not be appropriate and where medications have proved to be ineffective.

Response: We acknowledge the receipt of all comments related to HCPCS code G0166 outlining that it may be inaccurately valued. We have reviewed the information included in the comments received, and look forward to reviewing the AMA RUC recommendations for this service. We will review the AMA RUC's forthcoming recommendations and will consider any refinements to the valuation for this code through our standard rulemaking process for CY 2021.

We refer readers to section II.B of this final rule for details on the limited updates to the supply and equipment pricing for HCPCS code G0166.

Comment: Several commenters responded to the inclusion of CPT codes 10005 and 10021 on the potentially misvalued codes list, with the majority urging CMS to revise the CY 2019 finalized RVUs by adopting the higher RUC recommended RVUs.

Response: We appreciate commenters' perspective on the valuation of CPT codes 10005 and 10021 but refer the commenters to our CY 2019 PFS final rule for our review of the relevant inputs and RUC recommendations for these codes. We have reviewed the comments received, including any additional information in response to our discussion of these codes under the potentially misvalued code initiative. We believe our refinements to the valuations for these services continue to be valid, as no new compelling information has been presented.

Comment: Commenters disagreed with using the crosswalked CPT code 36440 as the reference code for valuing CPT code 10021, even though the physician work times for both codes are very similar. One commenter stated that the previous values for work time (1995) were also based on a crosswalk (CPT codes 88170 and 88171) and not a survey, and therefore, the decrease in work time did not warrant a proportional change in work RVU as the previous times were inaccurate. Also, as discussed in the CY 2019 PFS final rule with comment period (83 FR 59517), commenters stated that the work intensity for both codes are unequal as well their incongruous procedure descriptors, pointing out the fact that CPT codes 36440, 88170, and 88171 are clinically very different to CPT code 10021.

Response: As we have discussed in previous rules, we agree that it is important to use the most recent data available regarding time, and we note that when many years have passed between when time is measured, significant discrepancies can occur. However, we continue to believe that our operating assumption regarding the validity of the existing values as a point of comparison is critical to the integrity of the relative value system as currently constructed. The times currently associated with codes play a very important role in PFS ratesetting, both as points of comparison in establishing work RVUs and in the allocation of indirect PE RVUs by specialty. If we were to operate under the assumption that previously recommended work times had routinely been overestimated, this would undermine the relativity of the work RVUs on the PFS in general, given the process under which codes are often valued by comparisons to codes with similar times, and it also would undermine the validity of the allocation of indirect PE RVUs to physician specialties across the PFS. Instead, we believe that it is crucial that the code valuation process take place with the understanding that the existing work times used in the PFS ratesetting processes are accurate. We recognize that adjusting work RVUs for changes in time is not always a straightforward process and that the intensity associated with changes in time is not necessarily always linear, which is why we apply various methodologies to identify several potential work values for individual codes. We continue to disagree with commenters' distinction of different types of physician work times as being better or worse in their measure of validity in comparison to each other, and believe that CPT code 36440 is a good comparable code to CPT code 10021 in physician work and physician work times.

Comment: For CPT code 10021, one commenter disagreed with CMS maintaining the code's global indicator of “XXX” (global concept does not apply) and recommended a change to “000” (minor surgery/zero day global).

Response: We did change the multiple procedure indicator for CPT code 10021 from a “0” (payment rules do not apply) to a “2” (standard payment adjustments do apply), but as we stated in CY 2019 PFS final rule (83 FR 59520), we do not agree that it would have been more accurate to use codes with a 0-day global period as references for the codes in this family, and the multiple procedure policy continues to apply for CPT code 10021.

In concluding our review of all the comments submitted for the nominated potentially misvalued CPT codes of 10005 and 10021, we do not believe we have received any additional Start Printed Page 62627information to consider in the context of our previous review of these services. Therefore, we are not including CPT codes 10005 and 10021 on our final list of potentially misvalued codes for CY 2020.

Comment: One commenter noted on the CMS nominated CPT code 76377 (which we found to be very similar to CPT code 76376 that was AMA RUC reviewed for CY 2020), that although both code descriptors are similar, they have different clinical indications, different patients, different complexity in the work and require different resources and equipment, and that CPT code 76377 was not identified on any of the normal screens.

Response: CMS' nominated CPT code 76377 as potentially misvalued due to its similarity to CPT code 76376 (3D rendering with interpretation and reporting of computed tomography, magnetic resonance imaging, ultrasound, or other tomographic modality with image postprocessing under concurrent supervision; not requiring image postprocessing on an independent workstation), which is reviewed and finalized for 2020. Due to the refinements made to CPT code 76376, CPT code 76377 should be similarly reviewed to resolve the two codes' likely discrepancies. We will consider the valuation of this code in future rulemaking. During this review, we will determine if the clinical indications, the complexity of the work, and the resources that are required, are similar or different for both of these codes.

Comment: We received several comments regarding the AMA RUC's survey and recommended values for the E/M office/outpatient evaluation and management codes (99201-99015) for CY 2021.

Response: We refer readers to section II. P. of this final rule where we discuss these codes in detail.

After consideration of the comments received, in summary, we are including CPT code 76377 and HCPCS code G0166 on our final list of potentially misvalued codes for CY 2020. However, we are not including CPT codes 10005 and 10021 on our final list of potentially misvalued codes for CY 2020.

4. Insertion, Removal, and Removal and Insertion of Implantable Interstitial Glucose Sensor System (Category III CPT codes 0446T, 0447T, and 0448T)

Category III CPT codes 0446T, 0447T, and 0448T describe the services related to the insertion, removal, and removal and insertion of an implantable interstitial glucose sensor from subcutaneous pocket, in a subcutaneous pocket via incision. The implantable interstitial glucose sensors are part of systems that can allow real-time glucose monitoring, provides glucose trend information, and signal alerts for detection and prediction of episodes of low blood glucose (hypoglycemia) and high blood glucose (hyperglycemia).

Diabetes is the sixth leading cause of death in the United States, and approximately 20 million Americans have diabetes with an estimated 20.9 percent of the senior population age 60 and older being affected. Millions of people have diabetes and do not know it. Left undiagnosed, diabetes can lead to severe complications such as heart disease, stroke, blindness, kidney failure, leg and foot amputations, and death related to pneumonia and flu. Scientific evidence now shows that early detection and treatment of diabetes with diet, physical activity, and new medicines can prevent or delay much of the illness and complications associated with diabetes. As with management of other chronic conditions, we believe innovative technologies that provide improved data to physicians and patients can be important tools in promoting patient-centered care.

The codes that describe the implantation, removal, and removal and implantation of implantable interstitial glucose sensors are currently contractor-priced. Since the publication of the CY 2020 PFS proposed rule, we have become aware that the contractor pricing for these services has contributed to significant confusion in the community with regards to Medicare payment rules for these kinds of monitoring systems. We understand that this confusion has led to inhibited access to these services for Medicare beneficiaries.

Given the immediate needs of Medicare beneficiaries with diabetes, including some who could benefit from these innovative technologies, we are seeking information from stakeholders to ensure proper payment for this important physician's service by establishing national payment rates in future rulemaking.

We are seeking information from stakeholders on the resources involved in furnishing the services described by Category III CPT codes 0446T (Creation of subcutaneous pocket with insertion of implantable interstitial glucose sensor, including system activation and patient training), 0447T (Removal of implantable interstitial glucose sensor from subcutaneous pocket via incision), and 0448T (Removal of implantable interstitial glucose sensor with creation of subcutaneous pocket at different anatomic site and insertion of new implantable sensor, including system activation). We are specifically seeking recommendations, including the work RVUs, work time, and direct PE inputs, associated with the resources involved in inserting and removing the device, as well as the resource costs of the implantable device and disposable supplies (that is, the supply costs of the implantable device “implantable interstitial glucose sensor”, and the smart transmitter).

Under our existing policies, we welcome recommendations on appropriate valuation for these services and any recommendations submitted by February 10, 2020 would be considered for CY 2021 PFS rulemaking.

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

As discussed in this rule and in prior rulemaking, several conditions must be met for Medicare to make payment for telehealth services under the PFS. For further details, see the full discussion of the scope of Medicare telehealth services in the CY 2018 PFS final rule (82 FR 53006) and in 42 CFR 410.78 and 414.65.

1. Adding Services to the List of Medicare Telehealth Services

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 in accordance with section 1834(m)(4)(F)(ii) of the Act. 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 add to the list of telehealth services to one of the following two categories:

  • 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 those on the current list of Start Printed Page 62628telehealth 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 additions described later in this section, can be located on the CMS website at https://www.cms.gov/​Medicare/​Medicare-General-Information/​Telehealth/​index.html.

Historically, requests to add services to the list of Medicare telehealth services had to be submitted and received no later than December 31 of each calendar year to be considered for the next rulemaking cycle. However, beginning in CY 2019 we stated that for CY 2019 and onward, we intend to accept requests through February 10, consistent with the deadline for our receipt of code valuation recommendations from the RUC. For example, to be considered during PFS rulemaking for CY 2021, requests to add services to the list of Medicare telehealth services must be submitted and received by February 10, 2020. 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 the vehicle to make changes to the list of Medicare telehealth services, requesters should be advised that any information submitted as part of a request is subject to public disclosure for this purpose. For more information on submitting a request to add services to the list of Medicare telehealth services, including where to mail these requests, see our website at https://www.cms.gov/​Medicare/​Medicare-General-Information/​Telehealth/​index.html.

2. Requests To Add Services to the List of Telehealth Services for CY 2020

Under our current 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 did not receive any requests from the public for additions to the Medicare Telehealth list for CY 2020. We believe that the vast majority of services under the PFS that can be appropriately furnished as Medicare telehealth services have already been added to the list.

However, we proposed adding three new HCPCS G codes describing new bundled services for treatment of opioid use disorders in section II.H. of the CY 2020 PFS proposed rule which we noted are sufficiently similar to services currently on the telehealth list to be added on a Category 1 basis. Therefore, we proposed to add the face-to-face portions of the following services to the telehealth list on a Category 1 basis for CY 2020:

  • HCPCS code G2086: Office-based treatment for opioid use disorder, including development of the treatment plan, care coordination, individual therapy and group therapy and counseling; at least 70 minutes in the first calendar month.
  • HCPCS code G2087: Office-based treatment for opioid use disorder, including care coordination, individual therapy and group therapy and counseling; at least 60 minutes in a subsequent calendar month.
  • HCPCS code G2088: Office-based treatment for opioid use disorder, including care coordination, individual therapy and group therapy and counseling; each additional 30 minutes beyond the first 120 minutes (List separately in addition to code for primary procedure).

We note that in the CY 2020 PFS proposed rule (84 FR 40518), we referred to these services using placeholder codes, HCPCS codes GYYY1, GYYY2, and GYYY3, which are being replaced with the final G codes above. Similar to our addition of the required face-to-face visit component of TCM services to the Medicare Telehealth list in the CY 2014 PFS final rule with comment period (78 FR 74403), since HCPCS codes G2086, G2087, and G2088 include face-to-face psychotherapy services, we believe that the face-to-face portions of these services are sufficiently similar to services currently on the list of Medicare telehealth services for these services to be added under Category 1. Specifically, we believe that the psychotherapy portions of the bundled codes are similar to the psychotherapy codes described by CPT codes 90832 and 90853, which are currently on the Medicare telehealth list. We note that like certain other non-face-to-face PFS services, the other components of HCPCS codes G2086-G2088 describing care coordination are commonly furnished remotely using telecommunications technology, and do not require the patient to be present in-person with the practitioner when they are furnished. As such, we do not need to consider whether the non-face-to-face aspects of HCPCS codes G2086-G2088 are similar to other telehealth services. Were these components of HCPCS codes G2086-G2088 separately billable, they would not need to be on the Medicare telehealth list to be covered and paid in the same way as services delivered without the use of telecommunications technology. We also note that by considering the face-to-face portion of these services to be eligible for telehealth services, the originating site facility fee could be reported, consistent with all other rules, when these services are furnished via telehealth.

As discussed in the CY 2019 PFS final rule (83 FR 59496), we note that section 2001(a) of the SUPPORT Act (Pub. L. 115-271, October 24, 2018) amended section 1834(m) of the Act, adding a new paragraph (7) that removes the geographic limitations for telehealth services furnished on or after July 1, 2019, for individuals diagnosed with a Start Printed Page 62629substance use disorder (SUD) for the purpose of treating the SUD or a co-occurring mental health disorder. Section 1834(m)(7) of the Act also allows telehealth services for treatment of a diagnosed SUD or co-occurring mental health disorder to be furnished to individuals at any telehealth originating site (other than a renal dialysis facility), including in a patient's home. Section 2001(a) of the SUPPORT Act additionally amended section 1834(m) of the Act to require that no originating site facility fee will be paid in instances when the individual's home is the originating site. We believe that adding HCPCS codes G2086, G2087, and G2088 to the Medicare telehealth list will complement the existing policies related to flexibilities in treating SUDs.

We note that we welcome public nominations for additions to the Medicare telehealth list. More information on the nomination process is posted under the Telehealth section of the CMS website, which can be accessed at the following web address https://www.cms.gov/​Medicare/​Medicare-General-Information/​Telehealth/​index.html.

We received public comments on the proposed HCPCS codes for addition to the telehealth list on a Category 1 basis. The following is a summary of the comments we received and our responses.

Comment: The majority of commenters supported our proposal to add HCPCS codes G2086, G2087, and G2088 to the Medicare telehealth list, although a few disagreed, stating that these services should only be furnished in person.

Response: We thank the commenters for their support and feedback. We note that the psychotherapy services that are included in this bundled payment are already on the list of Medicare telehealth services. After consideration of the comments received, we are finalizing our proposal to add HCPCS codes G2086, G2087, and G2088 to the Medicare telehealth list beginning in CY 2020.

Comment: Several commenters disagreed with CMS' statement that most eligible services had been added to the Medicare telehealth list and suggested that CMS should continue to engage with stakeholders to identify other services that could be furnished via Medicare telehealth or communication technology-based services. A few commenters also provided recommendations for additional services that could be added to the Medicare telehealth list, as well as suggestions for how CMS could improve the process of requesting that services be added. Commenters reiterated as they have for many years that the statutory restrictions under section 1834(m) of the Act limit availability of telehealth services, and many encouraged CMS to utilize its demonstration authority to waive restrictions.

Response: We will continue to engage with stakeholders to identify services to add to the Medicare telehealth list and other ways to leverage technology in furnishing services under the PFS within the scope of the statute. We note that the deadline for submitting requests for additions to the Medicare Telehealth list is February 10 of the year prior to the year in which the codes could be added to the Medicare telehealth list, and any requests that are received after that time will be considered in the following year's rulemaking.

Comment: A few commenters requested that CMS allow visits with the prescribing physician for medications that require medical visits for monitoring (for example, buprenorphine) to also be furnished via telehealth.

Response: We note that the majority of the E/M visit codes are already on the Medicare telehealth list and can be furnished in addition to HCPCS codes G2086, G2087, and G2088. Specific requests for consideration of additional codes for the Medicare telehealth list should be submitted through the process outlined above. We also note that there are existing rules related to telemedicine and prescribing buprenorphine for the treatment of OUD (https://www.hhs.gov/​opioids/​sites/​default/​files/​2018-09/​hhs-telemedicine-hhs-statement-final-508compliant.pdf).

3. 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 2019 is $26.15. The MEI increase for 2020 is 1.9 percent and is based on the most recent historical update of the MEI through 2019Q2 (2.4 percent), and the most recent historical multifactor productivity adjustment (MFP) through calendar year 2018 (0.5 percent). Therefore, for CY 2020, the payment amount for HCPCS code Q3014 (Telehealth originating site facility fee) is 80 percent of the lesser of the actual charge or $26.65. The Medicare telehealth originating site facility fee and the MEI increase by the applicable time period is shown in Table 17.

Start Printed Page 62630

G. Medicare Coverage for Opioid Use Disorder Treatment Services Furnished by Opioid Treatment Programs (OTPs)

1. Overview

Opioid use disorder (OUD) and deaths from prescription and illegal opioid overdoses have reached alarming levels. The Centers for Disease Control and Prevention (CDC) estimated 47,000 overdose deaths were from opioids in 2017 and 36 percent of those deaths were from prescription opioids.[1] OUD has become a public health crisis. On October 26, 2017, Acting Health and Human Services Secretary, Eric D. Hargan declared a nationwide public health emergency on the opioid crisis as requested by President Donald Trump.[2] This public health emergency was renewed by Secretary Alex M. Azar II on January 24, 2018, April 24, 2018, July 23, 2018, and October 21, 2018, January 17, 2019, April 19, 2019, July 17, 2019, and most recently, October 16, 2019.[3]

The Medicare population, including individuals who are eligible for both Medicare and Medicaid, has the fastest growing prevalence of OUD compared to the general adult population, with more than 300,000 beneficiaries diagnosed with OUD in 2014.[4] An effective treatment for OUD is known as medication-assisted treatment (MAT). The Substance Abuse and Mental Health Services Administration (SAMHSA) defines MAT as the use of medication in combination with behavioral health services to provide an individualized approach to the treatment of substance use disorder (SUD), including OUD (§ 8.2). Currently, Medicare covers medications for MAT, including buprenorphine, buprenorphine-naloxone combination products, and extended-release injectable naltrexone under Part B or Part D, but does not cover methadone. Medicare also covers counseling and behavioral therapy services that are reasonable and necessary and furnished by practitioners that can bill and receive payment under Medicare.

Historically, Medicare has not covered methadone for MAT because of the unique manner in which this drug is dispensed and administered. Medicare Part B covers physician-administered drugs, drugs used in conjunction with durable medical equipment, and certain other statutorily-specified drugs. Medicare Part D covers drugs that are dispensed upon a prescription by a pharmacy. Methadone for MAT is not a drug administered by a physician under the “incident to” benefit like other MAT drugs (that is, implanted buprenorphine or injectable extended-release naltrexone) and therefore has not previously been covered by Medicare Part B. Methadone for MAT is also not a drug dispensed by a pharmacy like certain other MAT drugs (that is buprenorphine or buprenorphine-naloxone combination products) and therefore is not covered under Medicare Part D. Methadone for MAT is a schedule II controlled substance that is highly regulated because it has a high potential for abuse which may lead to severe psychological or physical dependence. As a result, methadone for MAT can only be dispensed and administered by an opioid treatment program (OTP) as provided under section 303(g)(1) of the Controlled Substances Act (21 U.S.C. 823(g)(1)) and 42 CFR part 8. Additionally, OTPs, which are healthcare entities that focus on providing MAT for people diagnosed with OUD, were not previously entities that could bill and receive payment from Medicare for the services they furnish. Therefore, there has historically been a gap in Medicare coverage of MAT for OUD since methadone (one of the three Food and Drug Administration (FDA)-approved drugs for MAT) has not been covered.

Section 2005 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (the SUPPORT Act) (Pub. L. 115-271, enacted October 24, 2018) added a new Start Printed Page 62631section 1861(jjj) to the Act, establishing a new Part B benefit category for OUD treatment services furnished by an OTP beginning on or after January 1, 2020. Section 1861(jjj)(1) of the Act defines OUD treatment services as items and services furnished by an OTP (as defined in section 1861(jjj)(2) of the Act) for treatment of OUD. Section 2005 of the SUPPORT Act also amended the definition of “medical and other health services” in section 1861(s) of the Act to provide for coverage of OUD treatment services and added a new section 1834(w) to the Act and amended section 1833(a)(1) of the Act to establish a bundled payment to OTPs for OUD treatment services furnished during an episode of care beginning on or after January 1, 2020.

OTPs must have a current, valid certification from SAMHSA to satisfy the Controlled Substances Act registration requirement under 21 U.S.C. 823(g)(1). To obtain SAMHSA certification, OTPs must have a valid accreditation by an accrediting body approved by SAMHSA, and must be certified by SAMHSA as meeting federal opioid treatment standards in § 8.12. There are currently about 1,700 OTPs nationwide.[5] All states except Wyoming have OTPs. Approximately 74 percent of patients receiving services from OTPs receive methadone for MAT, with the vast majority of the remaining patients receiving buprenorphine.[6]

Many payers currently cover MAT services for treatment of OUD. Medicaid [7] is one of the largest payers of medications for SUD, including methadone for MAT provided in OTPs.[8] OUD treatment services and MAT are also covered by other payers such as TRICARE and private insurers. TRICARE established coverage and payment for MAT and OUD treatment services furnished by OTPs in late 2016 (81 FR 61068). In addition, as discussed in the “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2020” final rule, many qualified health plans covered MAT medications for plan year 2018 (84 FR 17536).

In the CY 2019 PFS final rule (83 FR 59497), we included a Request for Information (RFI) to solicit public comments on the implementation of the new Medicare benefit category for OUD treatment services furnished by OTPs established by section 2005 of the SUPPORT Act. We received 9 public comments. Commenters were generally supportive of the new benefit and expanding access to OUD treatment for Medicare beneficiaries. We received feedback that the bundled payments to OTPs should recognize the intensity of services furnished in the initiation stages, durations of care, the needs of patients with more complex needs, costs of emerging technologies, and use of peer support groups. We also received feedback that costs associated with care coordination among the beneficiary's practitioners should be included in the bundled payment given the myriad of health issues beneficiaries with OUD face. We considered this feedback as we developed our proposals for implementing the new benefit category for OUD treatment services furnished by OTPs and the proposed bundled payments for these services.

To implement section 2005 of the SUPPORT Act, we proposed to establish rules to govern Medicare coverage of and payment for OUD treatment services furnished in OTPs. We proposed to establish definitions of OUD treatment services and OTP for purposes of the Medicare Program. We also proposed a methodology for determining Medicare payment for such services provided by OTPs. We proposed to codify these policies in a new section of the regulations at § 410.67. For a discussion about Medicare enrollment requirements and the program integrity approach for OTPs, we refer readers to section III.H. in this final rule, Medicare Enrollment of Opioid Treatment Programs.

2. Definitions

a. Opioid Use Disorder Treatment Services

The SUPPORT Act amended section 1861 of the Act by adding a new subsection (jjj)(1) that defines “opioid use disorder treatment services” as the items and services that are furnished by an OTP for the treatment of OUD, as set forth in subparagraphs (A) through (F) of section 1861(jjj)(1) of the Act which include:

  • Opioid agonist and antagonist treatment medications (including oral, injected, or implanted versions) that are approved by the Food and Drug Administration (FDA) under section 505 of the Federal Food, Drug, and Cosmetic Act (FFDCA) (21 U.S.C. 355) for use in the treatment of OUD;
  • Dispensing and administration of such medications, if applicable;
  • Substance use counseling by a professional to the extent authorized under state law to furnish such services;
  • Individual and group therapy with a physician or psychologist (or other mental health professional to the extent authorized under state law);
  • Toxicology testing; and
  • Other items and services that the Secretary determines are appropriate (but in no event to include meals or transportation).

As described previously, section 1861(jjj)(1)(A) of the Act defines covered OUD treatment services to include oral, injected, and implanted opioid agonist and antagonist medications approved by the FDA under section 505 of the FFDCA for use in the treatment of OUD. There are three drugs currently approved by the FDA for the treatment of opioid dependence: Buprenorphine, methadone, and naltrexone.[9] FDA notes that all three of these medications have been demonstrated to be safe and effective in combination with counseling and psychosocial support and that those seeking treatment for an OUD should be offered access to all three options as this allows providers to work with patients to select the medication best suited to an individual's needs.[10] Each of these medications is discussed below in more detail.

Buprenorphine is FDA-approved for acute and chronic pain in addition to opioid dependence. It is listed by the Drug Enforcement Administration (DEA) as a Schedule III controlled substance because of its moderate to low potential for physical and psychological dependence.[11 12] The medication's partial agonist properties allow for its use in opioid replacement therapy, which is a process of treating OUD by using a substance, for example, buprenorphine or methadone, to substitute for a stronger full agonist opioid.[13] Buprenorphine drug products that are currently FDA-approved and marketed for the treatment of opioid dependence include oral buprenorphine tablets, oral buprenorphine with Start Printed Page 62632naloxone [14] films and tablets, an extended-release buprenorphine injection for subcutaneous use, and a buprenorphine implant for subdermal administration.[15] In most patients with opioid dependence, the initial oral dose is 2 to 4 mg per day with a maintenance dose of 8-12 mg per day.[16] Dosing for the extended-release injection is 300 mg monthly for the first 2 months followed by a maintenance dose of 100 mg monthly.[17] The extended-release injection is indicated for patients who have initiated treatment with an oral buprenorphine product for a minimum of 7 days.[18] The buprenorphine implant consists of four rods containing 74.2 mg of buprenorphine each, and provides up to 6 months of treatment for patients who are clinically stable on low-to-moderate doses of an oral buprenorphine-containing product.[19] Currently, federal regulations permit buprenorphine to be prescribed or dispensed by qualifying physicians and qualifying other practitioners at office-based practices and dispensed in OTPs.[20 21]

Methadone is FDA-approved for management of severe pain in addition to opioid dependence. It is listed by the DEA as a Schedule II controlled substance because of its high potential for abuse, with use potentially leading to severe psychological or physical dependence.[22 23] Methadone drug products that are FDA-approved for the treatment of opioid dependence include oral methadone concentrate and tablets.[24] In patients with opioid dependence, the total daily dose of methadone on the first day of treatment should not ordinarily exceed 40 mg, unless the program physician documents in the patient's record that 40 mg did not suppress opioid abstinence, with clinical stability generally achieved at doses between 80 to 120 mg/day.[25] By law, methadone used for treatment of OUD can only be dispensed through an OTP certified by SAMHSA except in certain, very limited circumstances.[26]

Naltrexone is FDA-approved to treat alcohol dependence in addition to OUD.[27] Unlike buprenorphine and methadone, which activate opioid receptors, naltrexone binds and blocks opioid receptors and reduces opioid cravings.[28] Therefore, naltrexone is not a scheduled substance; there is no abuse and diversion potential with naltrexone.[29 30] The naltrexone drug product that is FDA-approved for the treatment of opioid dependence is an extended-release, intramuscular injection.[31] The recommended dose is 380 mg delivered intramuscularly every 4 weeks or once a month after the patient has achieved an opioid-free duration of a minimum of 7-10 days.[32] Naltrexone can be prescribed by any health care provider who is licensed to prescribe medications.[33]

We proposed that the OUD treatment services that may be furnished by OTPs include the first five items and services listed in the statutory definition described above, specifically the medications approved by the FDA under section 505 of the FFDCA for use in the treatment of OUD; the dispensing and administration of such medication, if applicable; substance use counseling; individual and group therapy; and toxicology testing. We also proposed to use our discretion under section 1861(jjj)(1)(F) of the Act to include other items and services that the Secretary determines are appropriate to include the use of telecommunications for certain services, as discussed later in this section. We proposed to codify this definition of OUD treatment services furnished by OTPs at § 410.67(b). As part of this definition, we also proposed to specify that an OUD treatment service is an item or service that is furnished by an OTP that meets the applicable requirements to participate in the Medicare Program and receive payment.

We solicited comment on any other items and services (not including meals or transportation as they are statutorily prohibited) currently covered and paid for under Medicare Part B when furnished by Medicare-enrolled providers/suppliers that the Secretary should consider adding to this definition, including any evidence supporting the impact of the use of such items and services in the treatment of OUD and enumeration of their costs. We noted we were particularly interested in public feedback on whether intake activities, which may include services such as an initial physical examination, initial assessments and preparation of a treatment plan, as well as periodic assessments, should be included in the definition of OUD treatment services. Additionally, we noted that while the current FDA-approved medications under section 505 of the FFDCA for the treatment of OUD are opioid agonists and antagonist medications, other medications that are not opioid agonist and antagonist medications, including drugs and biologicals, could be developed for the treatment of OUD in the future. We solicited public feedback on whether there are any drug development efforts in the pipeline that could result in medications intended for use in the treatment of OUD with a novel mechanism of action that does not involve opioid agonist and antagonist mechanisms (that is, outside of activating and/or blocking opioid receptors). We also solicited comment on how medications that may be approved by the FDA in the future for use in the treatment of OUD with a novel mechanism of action, such as medications approved under section 505 of the FFDCA to treat OUD and biological products licensed under section 351 of the Public Health Service Act to treat OUD, should be considered in the context of OUD treatment services provided by OTPs, and whether CMS should use the discretion afforded under section 1861(jjj)(1)(F) of the Act to include such medications in the definition of OUD treatment services given the possibility that such medications could be approved in the future.

We received a number of public comments on the proposed definition of “opioid use disorder treatment services.” The following is a summary of the comments we received and our responses.

Comment: Commenters were generally supportive of including the five statutorily-required items and services in the definition of OUD treatment services: (1) Opioid agonist and antagonist treatment medications approved by the FDA for treatment of OUD; (2) dispensing and administration Start Printed Page 62633of such medications; (3) substance use counseling; (4) individual and group therapy; and (5) toxicology testing. Commenters were also generally supportive of the use of telecommunications for substance use counseling and individual and group therapy services.

Response: We thank commenters for their support of including the five statutorily-required items and services and the use of telecommunications for certain services in the definition of OUD treatment services. We are finalizing a definition of OUD treatment services that includes these items and services at § 410.67(b).

Comment: Many commenters expressed support for allowing licensed mental health professionals to directly bill Medicare for counseling and therapy services provided in an OTP. Some commenters requested clarification on whether OUD treatment services would only include substance use counseling and individual and group therapy services furnished by physicians, psychologists, and practitioners that can bill Medicare directly and not services furnished by other types of mental health professionals that are licensed by the state, such as licensed professional counselors, licensed mental health counselors, and licensed clinical professional counselors. These commenters raised concerns that only allowing physicians and psychologists to furnish these services and not including other mental health professionals authorized by the state to furnish counseling and therapy services would limit access to care due to workforce shortages. Some commenters requested that we clarify the distinction between substance use counseling and individual and group therapy services or allow these terms to be generally used interchangeably.

Response: Under sections 1861(jjj)(1)(C) and (D) of the Act, substance use counseling for OUD treatment can be provided by “a professional to the extent authorized under State law to furnish such services,” while individual and group therapy can be “with a physician or psychologist (or other mental health professional to the extent authorized under State law).” Consistent with the statute, in the proposed rule we did not propose to limit the professionals that can provide these services to physicians, psychologists, or other practitioners who can bill Medicare directly. Instead, we noted that the professionals that could provide such services could include licensed professional counselors, licensed clinical alcohol and drug counselors, and certified peer specialists that are permitted to furnish this type of therapy or counseling by state law and scope of practice. To the extent that the individuals furnishing therapy or counseling services are not authorized under state law to furnish such services, the therapy or counseling services provided by these professionals would not be covered as OUD treatment services. Regarding the commenters' request for clarification of the distinction between substance use counseling and therapy services, we are not specifying the differences between these two types of services, but would note that different types of professionals may be authorized to furnish substance use counseling versus therapy services under state law. Regarding the comments that supported allowing licensed mental health professionals to directly bill Medicare for counseling and therapy services provided in an OTP, we note that only OTPs can bill for the bundled payment for furnishing OUD treatment services.

Comment: Several commenters opined on the types of toxicology testing that should be included in the definition of OUD treatment services. One commenter recommended that we clarify the language regarding “toxicology testing” in the definition of OUD treatment services to include “presumptive and definitive drug testing in line with clinical best practice” to better de-stigmatize the use of these services. Other commenters suggested that only presumptive toxicology testing be included in the definition and that definitive testing be billed separately under the Medicare Clinical Laboratory Fee Schedule (CLFS). Alternatively, if definitive testing were to be included, commenters suggested that the bundled payment rate should be updated to reflect the cost of this type of toxicology testing by increasing the bundled payment rate or establishing add-on payments for definitive testing. Commenters raised the differences in complexities and costs between presumptive and definitive toxicology testing. These commenters explained that presumptive testing is an initial test that is conducted through point of care rapid result cup testing, which has testing and accuracy limitations. OTPs typically perform presumptive toxicology testing for drugs of abuse on-site using cups and dipsticks that indicate the presence or absence of drug classes as long as the test systems that are used are classified as waived test systems under the regulations implementing the Clinical Laboratory Improvement Amendments (CLIA) (Pub. L. 100-578, enacted October 31, 1988), as amended, 42 CFR part 493, and the OTP has a valid certificate of waiver that authorizes it to perform CLIA waived tests.

Due to limitations of presumptive testing, OTPs may also send urine samples to reference labs for definitive drug testing to make sure they know exactly which drugs have been ingested. Definitive drug testing uses liquid or gas chromatography coupled with mass spectrometry to identify hundreds of specific drugs and their metabolites. Definitive drug testing identifies and precisely quantifies specific drugs and/or metabolites that are positive in a sample. A treating physician may order a confirmatory test despite the outcome of the presumptive testing to obtain more information on the drugs that a patient is taking. Commenters raised the cost differences under the CY 2019 Medicare CLFS between the two types of tests ranging from $12.60-$64.65 for presumptive testing to $114.43-$246.92 for definitive testing. Some commenters requested clarification of the distinction between the toxicology testing that would be included in the definition of OUD treatment services and would be paid under the bundle and medically-necessary toxicology testing that is billed and paid under the Medicare CLFS.

Response: We noted in the CY 2020 PFS proposed rule that under SAMHSA certification standards at § 8.12(f)(6), OTPs are required to provide adequate testing or analysis for drugs of abuse, including at least eight random drug abuse tests per year, per patient in maintenance treatment in accordance with generally accepted clinical practice. These drug abuse tests are used for diagnosing, monitoring and evaluating progress in treatment (84 FR 40527). Consistent with the discussion of the different types of toxicology testing in the proposed rule, we are clarifying that the reference to toxicology testing in the definition of OUD treatment services includes both presumptive and definitive testing. We are also clarifying that all types of toxicology testing that are used for diagnosing, monitoring and evaluating the progress in treatment at the OTP are included in the definition of OUD treatment services and would be paid under the bundled payment. Toxicology tests that are unrelated to the care and treatment for OUD at an OTP may be paid separately under the CLFS, if reasonable and necessary, since toxicology tests for these purposes are not included in the bundled payments to OTPs. CMS expects that the ordering Start Printed Page 62634practitioner would document the medical necessity for this additional testing in the beneficiary's medical record.

Comment: Many commenters supported the inclusion of intake activities, such as the initial physician examination, initial assessment and preparation of a treatment plan, as well as periodic assessments in the definition of OUD treatment services. One of the commenters noted these were significant activities performed by the treatment teams that were not included in the proposed bundle, nor are they paid for separately in the OTPs, and stated these services should be included. Another commenter stated that initial assessment and treatment planning activities are generally the first part of OUD treatment and that treatment planning cannot always be linear and must, at times, be revised. The commenter noted that these activities are typical of any substance abuse treatment program and should be included in the definition of OUD treatment services.

Response: We agree with commenters that intake activities, such as the initial physician examination, initial assessment and preparation of a treatment plan, should be included in the definition of OUD treatment services. We also agree with commenters that periodic assessment should be included in the definition of OUD treatment services. We note that an initial medical examination and both initial and periodic assessments are required under the SAMHSA regulations. Specifically, under the SAMHSA requirements at § 8.12(f)(2), OTPs shall require each patient to undergo a complete, fully documented physical evaluation by a program physician or a primary care physician, or an authorized healthcare professional under the supervision of a program physician, before admission to the OTP. The full medical examination, including the results of serology and other tests, must be completed within 14 days following admission.

Under § 8.12(f)(4), OTPs are required to do initial and periodic assessments. Each patient accepted for treatment at an OTP shall be assessed initially and periodically by qualified personnel to determine the most appropriate combination of services and treatment. The initial assessment must include preparation of a treatment plan that includes: The patient's short-term goals and the tasks the patient must perform to complete the short-term goals; the patient's requirements for education, vocational rehabilitation, and employment; and the medical, psychosocial, economic, legal, or other supportive services that a patient needs. The treatment plan also must identify the frequency with which these services are to be provided. The plan must be reviewed and updated to reflect that patient's personal history, his or her current needs for medical, social, and psychological services, and his or her current needs for education, vocational rehabilitation, and employment services. We understand that intake activities and periodic assessments are integral services for the establishment and maintenance of OUD treatment for a beneficiary at an OTP. Therefore, we are believe it is reasonable to include these services in the definition of OUD treatment services. Accordingly, we are finalizing a revised definition of OUD treatment services in § 410.67(b) that reflects the required intake activities and periodic assessments. We discuss coding and payment for these services in the Coding section below.

Comment: A few commenters requested that CMS publish a detailed list of the items and services that are covered as OUD treatment services and would be included in the bundled payment to the OTPs.

Response: The items and services included in the definition of OUD treatment services are listed in the preamble of this final rule and in the regulations at § 410.67(b). We note that the items and services that are medically-necessary for OUD treatment could in some cases also be furnished and billed by other Medicare practitioners under another Medicare benefit category. For example, we anticipate that some beneficiaries receiving counseling or therapy as part of an OTP bundle of services may also be receiving medically reasonable and necessary counseling or therapy as part of a physician's service during the same time period. In this scenario, the counseling or therapy provided as part of a physician's service could be billed separately.

Comment: One commenter supported a definition of OUD treatment services that would allow for coverage of innovative therapies in development that have not yet been approved by the FDA for treatment of OUD. The commenter suggested changing the proposed regulatory language in § 410.67(b)(1) to “Therapies approved by the Food and Drug Administration under section 505 of the Federal, Food, Drug, and Cosmetic Act for use in treatment of opioid use disorder.” A few commenters recommended that drugs used for opioid detoxification withdrawal and management maintenance such as naloxone, clonidine, and lofexidine be included in the definition of OUD treatment services.

Response: We thank the commenters for their feedback on including drugs that are not opioid agonist or antagonist medications in the definition of OUD treatment services. For CY 2020, we are finalizing a definition of OUD treatment services that reflects the statutory requirement in section 1861(jjj)(1)(A) of the Act to include opioid agonist and antagonist treatment medications approved by the FDA in the definition of OUD treatment services. We will consider these comments on additional drugs to include in the definition of OUD treatment services under our discretionary authority in section 1861(jjj)(1)(F) of the Act as we continue to work on refining this new Medicare benefit in future rulemaking.

Comment: In response to the request for comment on adding various other types of items and services to the definition of OUD treatment services, several commenters indicated that case management and care coordination are services furnished by OTPs and should be included in the definition of OUD treatment services. Some commenters also requested that peer-to-peer support, crisis management, and non-opioid alternative treatment be included in the definition of OUD treatment services. One commenter urged CMS to include Medical Nutrition Therapy services that are furnished by registered dietician nutritionists as a core component of OTPs because individuals with OUD suffer from gastrointestinal issues, eating disorders and malnutrition. The commenter stated it is essential that CMS build a payment model that leverages the different expertises of the full health care team, including registered dietician nutritionists. Another commenter urged CMS to include physical therapy within the list of OUD treatment services and recommended adjusting the bundled payment rates to account for instances in which effective treatment requires physical therapy and other nonpharmacological treatment services. Some commenters noted that the proposed bundled payment should include both e-prescribing and behavioral health information technology consultation and support services. One commenter urged that the definition of OUD treatment services include services performed by pharmacists including psychiatric pharmacists, such as medication adherence, management, and education or counseling. Some commenters suggested adding other laboratory tests, including HIV, Hepatitis, liver disease, Start Printed Page 62635or infectious diseases. Other commenters noted SAMHSA requirements for treatment for tobacco use disorder, alcohol use disorder, and family services for OTPs and recommended that these should be included in the definition of OUD treatment.

Response: We appreciate the comments recommending additional types of items and services that could be added to the definition of OUD treatment services. For CY 2020, we are finalizing a definition of OUD treatment services that includes those items and services that we understand are required for all OTPs to furnish as specified in SAMHSA regulations (part 8). Because this is the first year of the OTP benefit, we believe it would be premature to include in the definition additional items and services until we have additional information regarding their use by OTPs in the treatment of Medicare beneficiaries with OUD. However, we note that the definition of OUD treatment services does not prevent an OTP from furnishing the additional items and services suggested above in accordance with best practices as clinically appropriate, SAMHSA regulations and guidance, and State law. We may consider the items and services suggested by commenters further as we continue to work on refining this new Medicare benefit in future rulemaking. Accordingly, we are interested in continued feedback and data on the specific items and services, including their frequency, furnished to beneficiaries by an OTP.

After consideration of the public comments, we are finalizing our proposal to include the five statutorily-required items and services in the definition of OUD treatment services in § 410.67(b). For the reasons discussed previously, we will also include intake activities and periodic assessments required under § 8.14(f)(4) in the definition of OUD treatment services in § 410.67(b).

b. Opioid Treatment Program

Section 2005 of the SUPPORT Act also amended section 1861 of the Act by adding a new subsection (jjj)(2) to define an OTP as an entity meeting the definition of OTP in 42 CFR 8.2 or any successor regulation (that is, a program or practitioner engaged in opioid treatment of individuals with an opioid agonist treatment medication registered under 21 U.S.C. 823(g)(1)), that meets the additional requirements set forth in subparagraphs (A) through (D) of section 1861(jjj)(2) of the Act. Specifically, the OTP:

  • Is enrolled under section 1866(j) of the Act;
  • Has in effect a certification by SAMHSA for such a program;
  • Is accredited by an accrediting body approved by SAMHSA; and
  • Meets such additional conditions as the Secretary may find necessary to ensure the health and safety of individuals being furnished services under such program and the effective and efficient furnishing of such services.

These requirements are discussed in more detail in this section.

(1) Enrollment

As discussed previously, under section 1861(jjj)(2)(A) of the Act, an OTP must be enrolled in Medicare to receive Medicare payment for covered OUD treatment services under section 1861(jjj)(1) of the Act. We refer the reader to section III.H. of this final rule, Medicare Enrollment of Opioid Treatment Programs, for further details on our policies related to enrollment of OTPs.

(2) Certification by SAMHSA

As provided in section 1861(jjj)(2)(B) of the Act, OTPs must be certified by SAMHSA to furnish Medicare-covered OUD treatment services. SAMHSA has created a system to certify and accredit OTPs, which is governed by part 8, subparts B and C. This regulatory framework allows SAMHSA to focus its oversight efforts on improving treatment rather than solely ensuring that OTPs are meeting regulatory criteria, and preserves states' authority to regulate OTPs. To be certified by SAMHSA, OTPs must comply with the federal opioid treatment standards as outlined in § 8.12, be accredited by a SAMHSA-approved accreditation body, and comply with any other conditions for certification established by SAMHSA. Specifically, SAMHSA requires OTPs to provide the following services:

  • General—OTPs shall provide adequate medical, counseling, vocational, educational, and other assessment and treatment services.
  • Initial medical examination services—OTPs shall require each patient to undergo a complete, fully documented physical evaluation by a program physician or a primary care physician, or an authorized healthcare professional under the supervision of a program physician, before admission to the OTP.
  • Special services for pregnant patients—OTPs must maintain current policies and procedures that reflect the special needs of patients who are pregnant. Prenatal care and other gender specific services for pregnant patients must be provided either by the OTP or by referral to appropriate healthcare providers.
  • Initial and periodic assessment services—Each patient accepted for treatment at an OTP shall be assessed initially and periodically by qualified personnel to determine the most appropriate combination of services and treatment.
  • Counseling services—OTPs must provide adequate substance abuse counseling to each patient as clinically necessary by a program counselor, qualified by education, training, or experience to assess the patient's psychological and sociological background.
  • Drug abuse testing services—OTPs must provide adequate testing or analysis for drugs of abuse, including at least eight random drug abuse tests per year, per patient in maintenance treatment, in accordance with generally accepted clinical practice. For patients in short-term detoxification treatment, defined in § 8.2 as detoxification treatment not in excess of 30 days, the OTP shall perform at least one initial drug abuse test. For patients receiving long-term detoxification treatment, the program shall perform initial and monthly random tests on each patient.

The provisions governing recordkeeping and patient confidentiality at § 8.12(g)(1) require that OTPs shall establish and maintain a recordkeeping system that is adequate to document and monitor patient care. All records are required to be kept confidential in accordance with all applicable federal and state requirements. The requirements at § 8.12(g)(2) state that OTPs shall document in each patient's record that the OTP made a good faith effort to review whether or not the patient is enrolled in any other OTP. A patient enrolled in an OTP shall not be permitted to obtain treatment in any other OTP except in exceptional circumstances, as determined by the medical director or program physician of the OTP in which the patient is enrolled (§ 8.12(g)(2)). Additionally, the requirements at § 8.12(h) address medication administration, dispensing, and use.

SAMHSA requires that OTPs shall ensure that opioid agonist treatment medications are administered or dispensed only by a practitioner licensed under the appropriate state law and registered under the appropriate state and federal laws to administer or dispense opioid drugs, or by an agent of such a practitioner, supervised by and under the order of the licensed practitioner. OTPs shall use only those Start Printed Page 62636opioid agonist treatment medications that are approved by the FDA for use in the treatment of OUD. They must maintain current procedures that are adequate to ensure that the dosing requirements are met, and each opioid agonist treatment medication used by the program is administered and dispensed in accordance with its approved product labeling.

At § 8.12(i), regarding unsupervised or “take-home” use of opioid agonist treatment medications, SAMHSA has specified that OTPs must follow requirements specified by SAMHSA to limit the potential for diversion of opioid agonist treatment medications to the illicit market when dispensed to patients as take-homes, including maintaining current procedures to identify the theft or diversion of take-home medications. The requirements at § 8.12(j) for interim maintenance treatment, state that the program sponsor of a public or nonprofit private OTP subject to the approval of SAMHSA and the state, may place an individual, who is eligible for admission to comprehensive maintenance treatment, in interim maintenance treatment if the individual cannot be placed in a public or nonprofit private comprehensive program within a reasonable geographic area and within 14 days of the individual's application for admission to comprehensive maintenance treatment. Patients in interim maintenance treatment are permitted to receive daily dosing, but take-homes are not permitted. During interim maintenance treatment, initial treatment plans and periodic treatment plan evaluations are not required and a primary counselor is not required to be assigned to the patient. The OTP must be able to transfer these patients from interim maintenance into comprehensive maintenance treatment within 120 days. Interim maintenance treatment must be provided in a manner consistent with all applicable federal and state laws.

The SAMHSA requirements at § 8.12(b) address administrative and organizational structure, requiring that an OTP's organizational structure and facilities shall be adequate to ensure quality patient care and meet the requirements of all pertinent federal, state, and local laws and regulations. At a minimum, each OTP shall formally designate a program sponsor and medical director who is a physician who is licensed to practice medicine in the jurisdiction in which the OTP is located. The program sponsor shall agree on behalf of the OTP to adhere to all requirements set forth in part 8, subpart C, and any regulations regarding the use of opioid agonist treatment medications in the treatment of OUD that may be promulgated in the future. The medical director shall assume responsibility for administering all medical services performed by the OTP. In addition, the medical director shall be responsible for ensuring that the OTP is in compliance with all applicable federal, state, and local laws and regulations.

The provision governing patient admission criteria at § 8.12(e) requires that an OTP shall maintain current procedures designed to ensure that patients are admitted to maintenance treatment by qualified personnel who have determined, using accepted medical criteria such as those listed in the Diagnostic and Statistical Manual of Mental Disorders, that the person has had an OUD for at least 1 year before admission for treatment. If under 18 years of age, the patient is required to have had two documented unsuccessful attempts at short-term detoxification or drug-free treatment within a 12-month period and have the written consent of a parent, legal guardian, or responsible adult designated by the relevant state authority, to be eligible for maintenance treatment.

To ensure continuous quality improvement, the requirements at § 8.12(c) state that an OTP must maintain current quality assurance and quality control plans that include, among other things, annual reviews of program policies and procedures and ongoing assessment of patient outcomes, and a current Diversion Control Plan as part of its quality assurance program.

The requirements at § 8.12(d) with respect to staff credentials, state that each person engaged in the treatment of OUD must have sufficient education, training, and experience, or any combination thereof, to enable that person to perform the assigned functions. In addition, all physicians, nurses, and other licensed professional care providers, including addiction counselors, must comply with the credentialing requirements of their respective professions.

In addition to meeting the criteria described above, OTPs must apply to SAMHSA for certification. As part of the conditions for certification, SAMHSA specifies that OTPs shall:

  • Comply with all pertinent state laws and regulations.
  • Allow inspections and surveys by duly authorized employees of SAMHSA, by accreditation bodies, by the DEA, and by authorized employees of any relevant State or federal governmental authority.
  • Comply with the provisions of 42 CFR part 2 (regarding confidentiality of SUD patient records).
  • Notify SAMHSA within 3 weeks of any replacement or other change in the status of the program sponsor or medical director.
  • Comply with all regulations enforced by the DEA under 21 CFR chapter II, and be registered by the DEA before administering or dispensing opioid agonist treatment medications.
  • Operate in accordance with federal opioid treatment standards and approved accreditation elements.

Furthermore, SAMHSA has issued additional guidance for OTPs that describes how programs can achieve and maintain compliance with federal regulations.[34]

(3) Accreditation of OTPs by a SAMHSA-Approved Accrediting Body

As provided in section 1861(jjj)(2)(C) of the Act, OTPs must be accredited by a SAMHSA-approved accrediting body in order to furnish Medicare-covered OUD treatment services. In 2001, the Department of Health and Human Services (HHS) and SAMHSA issued final regulations to establish a new oversight system for the treatment of SUDs with MAT (part 8). SAMHSA-approved accrediting bodies evaluate OTPs and perform site visits to ensure SAMHSA's opioid dependency treatment standards are met. SAMHSA also requires OTPs to be accredited by a SAMHSA-approved accrediting body (§ 8.11).

The SAMHSA regulations establish procedures for an entity to apply to become a SAMHSA-approved accrediting body (§ 8.3). When determining whether to approve an applicant as an accreditation body, SAMHSA examines the following:

  • Evidence of the nonprofit status of the applicant (that is, of fulfilling Internal Revenue Service requirements as a nonprofit organization) if the applicant is not a state governmental entity or political subdivision;
  • The applicant's accreditation elements or standards and a detailed discussion showing how the proposed accreditation elements or standards will ensure that each OTP surveyed by the applicant is qualified to meet or is meeting each of the federal opioid treatment standards set forth in § 8.12;
  • A detailed description of the applicant's decision-making process, including:

++ Procedures for initiating and performing onsite accreditation surveys of OTPs;Start Printed Page 62637

++ Procedures for assessing OTP personnel qualifications;

++ Copies of an application for accreditation, guidelines, instructions, and other materials the applicant will send to OTPs during the accreditation process;

++ Policies and procedures for notifying OTPs and SAMHSA of deficiencies and for monitoring corrections of deficiencies by OTPs; for suspending or revoking an OTP's accreditation; and to ensure processing of applications for accreditation and for renewal of accreditation within a timeframe approved by SAMHSA; and;

++ A description of the applicant's appeals process to allow OTPs to contest adverse accreditation decisions.

  • Policies and procedures established by the accreditation body to avoid conflicts of interest, or the appearance of conflicts of interest;
  • A description of the education, experience, and training requirements for the applicant's professional staff, accreditation survey team membership, and the identification of at least one licensed physician on the applicant's staff;
  • A description of the applicant's training policies;
  • Fee schedules, with supporting cost data;
  • Satisfactory assurances that the applicant will comply with the requirements of § 8.4, including a contingency plan for investigating complaints under § 8.4(e);
  • Policies and procedures established to protect confidential information the applicant will collect or receive in its role as an accreditation body; and
  • Any other information SAMHSA may require.

SAMHSA periodically evaluates the performance of accreditation bodies primarily by inspecting a selected sample of the OTPs accredited by the accrediting body and by evaluating the accreditation body's reports of surveys conducted, to determine whether the OTPs surveyed and accredited by the accreditation body are in compliance with the federal opioid treatment standards. There are currently six SAMHSA-approved accreditation bodies.[35]

(4) Provider Agreement

Section 2005(d) of the SUPPORT Act amended section 1866(e) of the Act by adding a new paragraph (3) which includes OTPs (but only with respect to the furnishing of OUD treatment services) as a “provider of services” for purposes of section 1866 of the Act. All providers of services under section 1866 of the Act must enter into a provider agreement with the Secretary and comply with other requirements specified in that section. These requirements are codified at 42 CFR part 489. Therefore, we proposed to amend part 489 to include OTPs (but only for furnishing OUD treatment services) as a provider. Specifically, we proposed to add OTPs (but only for the furnishing of OUD treatment services) to the list of providers in § 489.2. This addition makes clear that the other requirements specified in section 1866 of the Act, and implemented in part 489, which include the limits on charges to beneficiaries, will apply to OTPs (in connection with the furnishing of OUD treatment services). We also proposed additional changes to make clear that certain parts of part 489, which implement statutory requirements other than section 1866 of the Act, do not apply to OTPs. For example, since we did not propose any conditions of participation for OTPs, we proposed to amend § 489.10(a), which states that providers specified in § 489.2 must meet conditions of participation, to add that OTPs must meet the requirements set forth in part 489 and elsewhere in that chapter. In addition, we proposed to specify that the effective date of the provider agreement is the date on which CMS accepts a signed agreement (proposed amendment to § 489.13(a)(2)), and is not dependent on surveys or an accrediting organization's determination related to conditions of participation. As noted earlier in the preamble to this final rule, OTPs are required to be certified by SAMHSA and accredited by an accrediting body approved by SAMHSA. In § 489.53, we proposed to create a basis for termination of the provider agreement if the OTP no longer meets the requirements set forth in part 489 or elsewhere in that chapter (including if it no longer has a SAMHSA certification or accreditation by a SAMHSA-approved accrediting body). Finally, we proposed to revise 42 CFR part 498 to ensure that OTPs have access to the appeal process in case of an adverse determination concerning continued participation in the Medicare program. Specifically, we proposed to amend the definition of provider in § 498.2 to include OTPs. We also indicated that we would continue to review the application of the provider agreement requirements to OTPs to determine whether any further amendments to parts 489 and 498 were needed to ensure that the existing provider agreement regulations are applied to OTPs consistent with our proposals and section 2005 of the SUPPORT Act.

Comment: Multiple commenters questioned whether provider agreements, once executed, will be made retroactive to January 1, 2020.

Response: We proposed in § 489.13(a)(2)(i) that the effective date of an OTP provider agreement would be the date on which we accept a signed agreement that ensures that the OTP meets all federal requirements. Yet, as discussed in section III.H of the final rule we also proposed retrospective billing dates in § 424.520(d) and § 424.521(a) if the requirements of those sections were met. To ensure that the provider agreement and billing effective dates are uniform, we are not finalizing our proposed change to § 489.13(a)(2)(i). Instead, we will establish a new § 489.13(a)(2)(iii) stating that the provider agreement effective date is to be consistent with the billing effective date established pursuant § 424.520(d) or § 424.521(a), as applicable. In sum, the effective dates of OTP provider agreements will not automatically be made retroactive to January 1, 2020, but will instead be governed by § 489.13(a)(2)(iii).

After consideration of comments received, we are making changes to § 489.13(a)(2)(i) to align with the provider agreement effective date to the billing effective date under § 424.520(d) or § 424.521(a), as applicable. We did not receive any other comments on the proposals for the provider agreement requirements in §§ 489.2, 489.10, 489.43, and 498.2., and are finalizing these changes as proposed.

(5) Additional Conditions

As provided in section 1861(jjj)(2)(D) of the Act, to furnish Medicare-covered OUD treatment services, OTPs must meet any additional conditions as the Secretary may find necessary to ensure the health and safety of individuals being furnished services under such program and the effective and efficient furnishing of such services. The comprehensive OTP standards for certification of OTPs address the same topics as would be addressed by CMS supplier standards, such as client assessment and the services required to be provided. Furthermore, the detailed process established by SAMHSA for selecting and overseeing its accreditation organizations is similar to the accrediting organization oversight process that would typically be established by CMS. Thus, in the proposed rule, we stated that we believe the existing SAMHSA certification and accreditation requirements are both Start Printed Page 62638appropriate and sufficient to ensure the health and safety of individuals being furnished services by OTPs, as well as the effective and efficient furnishing of such services. We also indicated that we believe that creating additional conditions at this time for participation in Medicare by OTPs could create unnecessary regulatory duplication and could be potentially burdensome for OTPs. Therefore, we did not propose any additional conditions for participation in Medicare by OTPs in the CY 2020 PFS proposed rule. We solicited public comments on our proposed approach, including input on whether there are any additional conditions that should be required for OTPs furnishing Medicare-covered OUD treatment services.

(6) Proposed Definition of Opioid Treatment Program

We proposed to define “opioid treatment program” at § 410.67(b) as an entity that is an OTP as defined in § 8.2 (or any successor regulation) and meets the applicable requirements for an OTP. We proposed to codify this definition at § 410.67(b). In addition, we proposed that for an OTP to participate and receive payment under the Medicare program, the OTP must be enrolled under section 1866(j) of the Act, have in effect a certification by SAMHSA for such a program, and be accredited by an accrediting body approved by SAMHSA. We also proposed that an OTP must have a provider agreement as required by section 1866(a) of the Act. We proposed to codify these requirements at § 410.67(c). We solicited public comments on the proposed definition of OTP and the proposed Medicare requirements for OTPs.

The following is a summary of the comments we received and our responses.

Comment: Commenters generally supported the proposed definition of OTP, including the requirements that OTPs be enrolled under section 1866(j) of the Act, have in effect a certification by SAMHSA for such a program, and be accredited by an accrediting body approved by SAMHSA. One commenter stated that these policies represent only the start of an ongoing effort to address the opioid epidemic.

Response: We appreciate the support for the proposed definition of OTPs. We understand the importance of combating the opioid epidemic and intend to monitor the implementation of this new Medicare benefit and may propose further refinements in future rulemaking. After consideration of the comments received, we are finalizing our proposed definition of “opioid treatment program” at § 410.67(b).

Comment: Commenters supported the proposed Medicare requirements for OTPs, including the requirement that they have in effect a provider agreement with the Secretary. One commenter welcomed CMS' reminder to providers that being a Medicare provider carries with it a limit on charges to beneficiaries, and stated that in addition to the proposal for zero cost sharing for OTP services, this policy would help to protect beneficiary access to care and economic security.

Response: We appreciate the support for the proposal to require OTPs to enter into a provider agreement and are finalizing this requirement at § 410.67(c), along with § 424.67(b). Additionally, we reiterate that as indicated in the Health Insurance Benefit Agreement (Form CMS-1561),[36] the provider agrees to conform to the provisions of section 1866 of the Social Security Act and the applicable provisions in Title 42 Code of Federal Regulations (CFR), which in part establish the requirement that a provider must accept assignment of Medicare payment.

Comment: Many commenters supported CMS' view that the comprehensive OTP standards for certification of OTPs established by SAMHSA address the same topics as would be addressed by CMS conditions of participation, and that the detailed process established by SAMHSA for selecting and overseeing its accreditation organizations is similar to the accrediting organization oversight process that would typically be established by CMS. Furthermore, commenters agreed with CMS' conclusion that the existing SAMHSA certification and accreditation requirements are both appropriate and sufficient to ensure the health and safety of individuals receiving services from OTPs, as well as the effective and efficient furnishing of such services. Commenters also noted the regulations established by the DEA and the regulations established by states for licensure purposes as additional assurances of patient health and safety. The commenters agreed that creating additional conditions at this time for participation in Medicare by OTPs could create unnecessary regulatory duplication and could be potentially burdensome for OTPs. Thus, the commenters supported the proposal to accept the existing SAMHSA requirements for certification and accreditation as the health and safety standards that must be met in order for an OTP to participate in Medicare.

Response: We are finalizing our proposal to adopt the existing SAMHSA requirements for certification and accreditation as the health and safety standards that must be met in order for an OTP to participate in Medicare. This approach will avoid unnecessary regulatory duplication while assuring Medicare beneficiary safety at OTPs.

After consideration of the comments, we are finalizing the proposed definition of “opioid treatment program” at § 410.67(b). We are also finalizing the proposed Medicare requirements for OTPs at § 410.67(c). Specifically, in order for an OTP to participate and receive payment under the Medicare program, the OTP must be enrolled under section 1866(j) of the Act, have in effect certification by SAMHSA, and be accredited by an accrediting body approved by SAMHSA. Additionally, we are finalizing our proposal that an OTP must have a provider agreement as required by section 1866(a) of the Act.

3. Bundled Payments for OUD Treatment Services

Section 1834(w) of the Act, added by section 2005 of the SUPPORT Act, directs the Secretary to pay to the OTP an amount that is equal to 100 percent of a bundled payment for OUD treatment services that are furnished by the OTP to an individual during an episode of care. We proposed to establish bundled payments for OUD treatment services which, as discussed above, would include the medications approved by the FDA under section 505 of the FFDCA for use in the treatment of OUD; the dispensing and administration of such medication, if applicable; substance use counseling; individual and group therapy; and toxicology testing. In calculating the bundled payments, we proposed to apply separate payment methodologies for the drug component (which includes the medications approved by the FDA under section 505 of the FFDCA for use in the treatment of OUD) and the non-drug component (which includes the dispensing and administration of such medications, if applicable; substance use counseling; individual and group therapy; and toxicology testing) of the bundled payments. We proposed to calculate the full bundled payment rate by combining the drug component and the non-drug components. We outlined our proposals for determining the bundled payments for OUD treatment services addressing payment rates for these services under the Medicaid and Start Printed Page 62639TRICARE programs, duration of the episode of care for which the bundled payment is made (including partial episodes), methodology for determining bundled payment rates for the drug and non-drug components, site of service, coding and beneficiary cost sharing. We proposed to codify the methodology for determining the bundled payment rates for OUD treatment services at § 410.67(d).

We received a number of public comments on the proposed approach to calculating the full bundled payment rate. The following is a summary of the comments we received and our responses.

Comment: A few commenters supported the proposal to calculate the full bundled payment rate by combining the drug component and the non-drug components. Another commenter stated that clinical services, such as individual and group counseling, should be billed separately from the medication.

Response: Section 1861(jjj) of the Act defines OUD treatment services to include certain opioid treatment medications furnished by an OTP, as well as other services such as substance use counseling and individual and group therapy. Section 1834(w) of the Act instructs the Secretary to make a bundled payment for the services that are furnished by an OTP to an individual during an episode of care. We do not believe the statute supports unbundling the medications from the other OUD treatment services furnished by OTPs during the same episode of care.

After consideration of the public comments, we are finalizing our proposal to calculate the full bundled payment rate for services furnished by OTPs by combining the drug component and the non-drug components. We are codifying the methodology for determining the bundled payment rates for OUD treatment services at § 410.67(d).

a. Review of Medicaid and TRICARE Programs

Section 1834(w)(2) of the Act, added by section 2005(c) of the SUPPORT Act, provides that in developing the bundled payment rates for OUD treatment services furnished by OTPs, the Secretary may consider payment rates paid to the OTPs for comparable services under the state plans under title XIX of the Act (Medicaid) or under the TRICARE program under chapter 55 of title 10 of the United States Code (U.S.C.). The payments for comparable services under TRICARE and Medicaid programs are discussed below. In the proposed rule, we acknowledged that many private payers cover services furnished by OTPs, and welcomed comment on the scope of private payer OTP coverage and the payment rates private payers have established for OTPs furnishing comparable OUD treatment services. We also indicated that we might consider this information as part of the development of the final bundled payment rates for OUD treatment services furnished by OTPs.

(1) TRICARE

In the “TRICARE: Mental Health and Substance Use Disorder Treatment” final rule, which appeared in the September 2, 2016 Federal Register (81 FR 61068) (hereinafter referred to as the 2016 TRICARE final rule), the Department of Defense (DOD) finalized its methodology for determining payments for services furnished to TRICARE beneficiaries by an OTP in the regulations at 32 CFR 199.14(a)(2)(ix). The payments are also described in Chapter 7, Section 5 and Chapter 1, Section 15 of the TRICARE Reimbursement Manual 6010.61-M, April 1, 2015. As discussed in the 2016 TRICARE final rule, a number of commenters indicated that they believed the rates established by DOD are near market rates and acceptable (81 FR 61079).

In the 2016 TRICARE final rule, DOD established separate payment methodologies for treatment in OTPs based on the particular medication being administered. DOD finalized a weekly all-inclusive per diem rate for OTPs when furnishing methadone for MAT. Under 32 CFR 199.14(a)(2)(ix)(A)(3)(i), this weekly rate includes the cost of the drug and the cost of related non-drug services (that is, the costs related to intake/assessment, drug dispensing and screening and integrated psychosocial and medical treatment and supportive services), hereafter referred as the non-drug services. In the proposed rule (84 FR 40524), we noted that the services included in the TRICARE weekly bundle are generally comparable to the definition of OUD treatment services in section 2005 of the SUPPORT Act. The weekly all-inclusive per diem rate for these services was determined based on preliminary review of industry billing practices (which included Medicaid and other third-party payers) for the dispensing of methadone, including an estimated daily drug cost of $3 and a daily estimated cost of $15 for the non-drug services. These daily costs were converted to an estimated weekly per diem rate of $126 ($18 per day × 7 days) in the 2016 TRICARE final rule. Under 32 CFR 199.14(a)(2)(iv)(C)(2), this rate is updated annually by the Medicare hospital inpatient prospective payment system (IPPS) update factor. The 2019 TRICARE weekly per diem rate for methadone treatment in an OTP is $133.15.[37] Beneficiary cost-sharing consists of a flat copayment that may be applied to this weekly rate.

DOD also established payment rates for other medications used for MAT (buprenorphine and extended-release injectable naltrexone) to allow OTPs to bill for the full range of medications available. Under 32 CFR 199.14(a)(2)(ix)(A)(3)(ii), DOD established a fee-for-service (FFS) payment methodology for buprenorphine and extended-release injectable naltrexone because they are more likely to be prescribed and administered in an office-based treatment setting but are still available for treatment furnished in an OTP. DOD stated in the 2016 TRICARE final rule (81 FR 61080) that treatment with buprenorphine and naltrexone is more variable in dosage and frequency than with methadone. Therefore, TRICARE pays for these medications and the accompanying non-drug services separately on a FFS basis. Buprenorphine is paid based on 95 percent of average wholesale price (AWP) and the non-drug component is paid on a per visit basis at an estimated cost of $22.50 per visit. Extended-release injectable naltrexone is paid at the average sales price (ASP) plus a drug administration fee while the non-drug services are also paid at an estimated per visit cost of $22.50. DOD also reserved discretion to establish the payment methodology for new drugs and biologicals that may become available for the treatment of SUDs in OTPs.

DOD instructed that OTPs use the “Alcohol and/or other drug use services, not otherwise specified” H-code for billing the non-drug services when buprenorphine or naltrexone is used, and required OTPs to also include both the J-code and the National Drug Code (NDC) for the drug used, as well as the dosage and acquisition cost on the claim form.[38] Drugs listed on Medicare's Part B ASP files are paid using the ASP.[39] Drugs not appearing on the Medicare ASP file are paid at the lesser of billed Start Printed Page 62640charges or 95 percent of the AWP.[40] Using this methodology, TRICARE estimated a daily drug cost of $10 for buprenorphine and a monthly drug cost of $1,129 for extended-release injectable naltrexone.[41]

(2) Medicaid (Title XIX)

States have the flexibility to administer the Medicaid program to meet their own needs within the Medicaid program parameters set forth in federal statute and regulations. All states cover and pay for some form of medications for MAT of OUD under their Medicaid programs. However, as of 2018, only 42 states covered methadone for MAT for OUD under their Medicaid programs.[42] We note that section 1006(b) of the SUPPORT Act amended sections 1902 and 1905 of the Act to require that Medicaid State plans cover all drugs approved under section 505 of the FFDCA to treat OUD, including methadone, and all biological products licensed under section 351 of the Public Health Service Act to treat OUD, beginning October 1, 2020. This requirement sunsets on September 30, 2025.

In reviewing Medicaid payments for OUD treatment services furnished by OTPs in a few states, we found significant variation in the MAT coverage, OUD treatment services, and payment structure among the states. Thus, it is difficult to identify a standardized Medicaid payment amount for OTP services. A number of factors such as the unit of payment, types of services bundled within a payment code, and how MAT services are paid varied among the states. For example, for treatment of OUD using methadone for MAT, most OTPs bill under HCPCS code H0020 (Alcohol and/or drug services; methadone administration and/or service (provision of the drug by a licensed program)) under the Medicaid program; however, the unit of payment varies by state from daily, weekly, or monthly. For example, the unit of payment in California is daily for methadone treatment,[43] while the unit of payment in Maryland for methadone maintenance is weekly,[44] and Vermont uses a monthly unit[45] of payment of these OUD treatment items and services.

For the other MAT drugs, all states cover buprenorphine and the buprenorphine-naloxone medications;[46] however, fewer than 70 percent cover the implanted or extended-release injectable versions of buprenorphine.[47] In addition, all states cover the extended-release injectable naltrexone.[48] We also found that many states pay different rates based on the specific type of drug used for MAT.

Non-drug items and services may be included in a bundled payment with the drug or paid separately, depending on the state, and can include dosing, dispensing and administration of the drug, individual and group counseling, and toxicology testing. In some states, certain services such as assessments, individual and group counseling, and toxicology testing can be billed separately. For example, some states (such as Maryland,[49] Texas,[50] and California [51] ) separately reimburse for individual and group counseling services, while other states (such as Vermont [52] and New Mexico [53] ) include these services in the OUD bundled payment.

b. Aspects of the Bundle

(1) Duration of Bundle

Section 1834(w)(1) of the Act requires the Secretary to pay an OTP an amount that is equal to 100 percent of the bundled payment for OUD treatment services that are furnished by the OTP to an individual during an episode of care (as defined by the Secretary) beginning on or after January 1, 2020. We proposed that the duration of an episode of care for OUD treatment services would be a week (that is, a contiguous 7-day period that may start on any day of the week). As noted in the proposed rule, this is similar to the structure of the TRICARE bundled payment to OTPs for methadone, which is based on a weekly bundled rate (81 FR 61079), as well as the payments by some state Medicaid programs. Given this similarity to existing coding structures, we stated that we believe a weekly duration for an episode of care would be most familiar to OTPs, and therefore, the least disruptive to adopt. We proposed to define an episode of care at § 410.67(b) as a 1-week (contiguous 7-day) period; however, we also solicited comments on whether we should consider a daily or monthly bundled payment.

We also recognized that patients receiving MAT are often on this treatment regimen for an indefinite amount of time, and therefore, we did not propose any maximum number of weeks during an overall course of treatment for OUD.

We received a number of public comments on the duration of the bundled payment. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported the proposal to define an episode of care as a 1-week (contiguous 7-day) period, while several commenters stated that a monthly episode of care may be more appropriate in some circumstances, such as during the maintenance phase of treatment, and a few commenters supported daily bundles because that approach is more consistent with the payment structure under their state Medicaid program. Many commenters were supportive of our decision not to propose any maximum number of weeks for a course of treatment for OUD.

Response: While we recognize that the clinical needs of patients may differ depending on their stage of treatment, we are finalizing our proposal to define an episode of care as a 1-week (contiguous 7-day) period. OTPs are generally familiar with weekly episodes and we believe use of a weekly bundle will be less disruptive to the extent that an OTP already has processes in place to bill for weekly episodes. We recognize that patients receiving MAT are often on this treatment regimen for an indefinite amount of time, and therefore, we are not imposing any limit on the maximum number of weeks Start Printed Page 62641during an overall course of treatment for OUD.

After consideration of the public comments, we are finalizing our proposal to define an episode of care as a 1-week (contiguous 7-day) period at § 410.67(b). We are not finalizing any limit on the maximum number of weeks during an overall course of treatment for OUD.

(a) Requirements for an Episode

In the proposed rule (84 FR 40525), we noted that SAMHSA requires OTPs to have a treatment plan for each patient that identifies the frequency with which items and services are to be provided (§ 8.12(f)(4)). We recognized that there is a range of service intensity depending on the severity of a patient's OUD and stage of treatment, and therefore, a “full weekly bundle” may consist of a very different frequency of services for a patient in the initial phase of treatment compared to a patient in the maintenance phase of treatment, but that we would still consider the requirements to bill for the full weekly bundle to be met if the patient is receiving the majority of the services identified in their treatment plan at that time. However, for the purposes of valuation, we assumed one substance use counseling session, one individual therapy session, and one group therapy session per week and one toxicology test per month. Given the anticipated changes in service intensity over time based on the individual patient's needs, we explained that we expect that treatment plans would be updated to reflect these changes or noted in the patient's medical record, for example, in a progress note. In cases where the OTP has furnished the majority (51 percent or more) of the services identified in the patient's current treatment plan (including any changes noted in the patient's medical record) over the course of a week, we proposed that it could bill for a full weekly bundle. We proposed to codify the payment methodology for full episodes of care (as well as partial episodes of care and non-drug episodes of care, as discussed below) in § 410.67(d)(2).

Comment: Several commenters stated that the frequency of services listed in the proposed rule for a typical case (we assumed one substance use counseling session, one individual therapy session, and one group therapy session per week and one toxicology test per month) would usually only occur during the initial phase of treatment/stabilization.

Response: We reiterate that we understand that the frequency of services will vary over time, and may be very different for a patient in the initial phase of treatment compared to a patient in the maintenance phase of treatment. We note that while we identified a set of services for purposes of calculating the payment rate for the weekly bundle, it is not a requirement for billing the bundled payment that all of those services be furnished in a given episode of care. Rather, as we discuss in more detail below, we are finalizing a policy under which the threshold to bill for an episode of care will be that at least one service was furnished to the patient during the week that corresponds to the episode of care.

(b) Partial Episode of Care

As we explained in the proposed rule, we understand that there may be instances in which a beneficiary does not receive all of the services expected in a given week due to any number of issues, including, for example, an inpatient hospitalization during which a beneficiary would not be able to go to the OTP or inclement weather that impedes access to transportation. To provide more accurate payment to OTPs in cases where a beneficiary is not able to or chooses not to receive all items and services described in their treatment plan or the OTP is unable to furnish services, for example, in the case of a natural disaster, we proposed to establish separate payment rates for partial episodes that correspond with each of the full weekly bundles. In cases where the OTP has furnished at least one of the items or services (for example, dispensing one day of an oral MAT medication or one counseling session or one toxicology test) but less than 51 percent of the items and services included in OUD treatment services identified in the patient's current treatment plan (including any changes noted in the patient's medical record) over the course of a week, we proposed that it could bill for a partial weekly bundle. In cases in which the beneficiary does not receive a drug during the partial episode, we proposed that the code describing a non-drug partial weekly bundle must be used. For example, the OTP could bill for a partial episode in instances where the OTP is transitioning the beneficiary from one OUD medication to another and therefore the beneficiary is receiving less than a week of one type of medication. In those cases, two partial episodes could be billed, one for each of the medications, or one partial episode and one full episode, if all requirements for billing are met. We noted our intent to monitor this issue and to consider the need to make changes to this policy in future rulemaking to ensure that the billing for partial episodes is not being abused. We proposed to define a partial episode of care in § 410.67(b) and to codify the payment methodology for partial episodes in § 410.67(d). We solicited comments on our proposed approach to full and partial episodes, including the threshold that should be applied to determine when an OTP may bill for the full weekly bundle versus a partial episode. We also solicited comment on the minimum threshold that should be applied to determine when a partial episode could be billed (for example, at least one item or service, or an alternative threshold such as 10 or 25 percent of the items and services included in the OUD treatment services identified in the patient's current treatment plan (including any changes noted in the patient's medical record) over the course of a week). We also solicited comment regarding whether any other payers of OTP services allow for billing of partial bundles and what thresholds they use.

We received public comments on our proposal to create separate coding and payment for partial episodes. The following is a summary of the comments we received and our responses.

Comment: Many commenters noted that determining the threshold for when to bill the partial episode versus the full episode was impractical, stating it would be cumbersome to implement and would require far more frequent updating of the treatment plan than is typical, especially since the frequency of services delivered can vary significantly from week to week. Commenters also requested clarification on how various services would count toward the 51 percent threshold, and urged CMS to eliminate the partial bundled payment to simplify billing and reduce confusion that could lead to billing compliance issues. A few commenters stated that the total number of services associated with a patient's treatment plan is not documented in a way that would facilitate using the proposed threshold for billing for a full bundle, and therefore, it would not be feasible for OTPs to operationalize the proposed approach. Some commenters also noted that operationalizing this approach would require them to obtain additional administrative resources to track the services provided to each patient in relation to their treatment plan in order to determine when the threshold for billing for a full bundle is met. A few commenters stated that applying partial episodes to the TRICARE bundled rate is inconsistent with TRICARE's approach, which already accounts for differences in treatment intensity in a single unified payment rate. Others recommended that Start Printed Page 62642CMS should not apply partial week payments, as the reduced resource costs for some episodes are already reflected in the payment rate for the full week bundle. A few commenters supported the concept of partial episodes, but requested clarification about the billing threshold.

Response: Based on the concerns raised by the commenters, we are not finalizing partial episodes at this time. We understand that many OTPs would need to change their documentation patterns to operationalize the proposed threshold for determining when to bill a full episode versus a partial episode and that having to make such changes in a short amount of time could be burdensome and potentially create barriers to providing care. In the interest of combating the opioid crisis and in the best interest of beneficiaries, our goal is to minimize barriers to OTPs enrolling in Medicare and beginning to furnish services to Medicare beneficiaries. Accordingly, for CY 2020, we are finalizing only the proposal to establish full weekly bundled payments at § 410.67(d)(2). The threshold to bill a full episode will be that at least one service was furnished (from either the drug or non-drug component) to the patient during the week that corresponds to the episode of care. We are finalizing this threshold at § 410.67(d)(3). We note that we will be monitoring for abuse given this lower threshold for billing for full weekly bundled payment. We also note that we remain interested in implementing a payment policy for partial episodes at some point in the future. We would establish the policies to govern partial episodes through notice and comment rulemaking, and we are interested in working with OTPs to explore how such a policy would best be applied.

(c) Non-Drug Episode of Care

In addition to the bundled payments for full and partial episodes of care that are based on the medication administered for treatment (and include both a drug and non-drug component as described in detail below), we proposed to establish a non-drug episode of care to provide a mechanism for OTPs to bill for non-drug services, including substance use counseling, individual and group therapy, and toxicology testing that are rendered during weeks when a medication is not administered, for example, in cases where a patient is being treated with injectable buprenorphine or naltrexone on a monthly basis or has a buprenorphine implant. We proposed to codify this non-drug episode of care at § 410.67(d).

We did not receive any comments on non-drug episodes of care, and are finalizing the policies governing the use of non-drug episodes of care in § 410.67(d)(1)(iii).

(2) Drug and Non-Drug Components

As discussed above, in establishing the bundled payment rates, we proposed to develop separate payment methodologies for the drug component and the non-drug (which includes the dispensing and administration of such medication, if applicable; substance use counseling; individual and group therapy; and toxicology testing) components of the bundled payment. Each of these components is discussed in this section.

(a) Drug Component

As discussed previously, the cost of medications used by OTPs to treat OUD varies widely. Creating a single bundled payment rate that does not reflect the type of drug used could result in access issues for beneficiaries who might be best served by treatment using a more expensive medication. As a result, in the proposed rule (84 FR 40526), we stated our belief that the significant variation in the cost of these drugs would need to be reflected adequately in the bundled payment rates for OTP services to avoid impairing access to appropriate care.

Section 1834(w)(2) of the Act states that the Secretary may implement the bundled payment to OTPs though one or more bundles based on a number of factors, including the type of medication provided (such as buprenorphine, methadone, extended-release injectable naltrexone, or a new innovative drug). Accordingly, consistent with the discretion afforded under section 1834(w)(2) of the Act, and after consideration of payment rates paid to OTPs for comparable services by other payers as discussed above, we proposed to base the OTP bundled payment rates, in part, on the type of medication used for treatment. Specifically, we proposed the following categories of bundled payments to reflect those drugs currently approved by the FDA under section 505 of the FFDCA for use in treatment of OUD:

  • Methadone (oral).
  • Buprenorphine (oral).
  • Buprenorphine (injection).
  • Buprenorphine (implant).
  • Naltrexone (injection).

In addition, we proposed to create a category of bundled payment describing a drug not otherwise specified to be used for new drugs (as discussed further below). We also proposed a non-drug bundled payment to be used when medication is not administered (as discussed further below) noting that we believe creating these categories of bundled payments based on the drug used for treatment would strike a reasonable balance between recognizing the variable costs of these medications and the statutory requirement to make a bundled payment for OTP services. We proposed to codify this policy of establishing the categories of bundled payments based on the type of opioid agonist and antagonist treatment medication in § 410.67(d)(1).

We received public comments related to our proposal to establish categories of OTP bundled payments based on the type of opioid agonist and antagonist treatment medication used during the episode of care. The following is a summary of the comments we received and our responses.

Comment: Several commenters submitted comments concerning our proposal to base the OTP bundled payment rates, in part, on the type of medication (that is, methadone (oral), buprenorphine (oral), buprenorphine (injection), buprenorphine (implant), naltrexone (injection)) used for treatment. A few commenters supported our proposal to use the five medication categories. Another commenter supported the medication categories but cautioned CMS to monitor and evaluate drug pricing and availability to ensure the payments are sufficient to cover the cost of medications. In contrast, another commenter stated that the medications should not be bundled and that the bundles, if used, were too broad. This commenter believed such an approach would inhibit the ability of the health care provider to choose the best treatment for a patient.

Response: Section 1861(jjj)(1) of the Act defines OUD treatment services to include certain opioid treatment medications furnished by an OTP. Section 1834(w) of the Act instructs the Secretary to make a bundled payment for these services. We do not believe the statute supports unbundling the medications from the other OUD treatment services furnished by OTPs. We defined the five medication categories to represent the distinct types of covered OTP medications currently on the market based on primary active ingredient, method of administration, and cost. We believe these categories of bundled payments strike a reasonable balance between recognizing the variable costs of these medications and the statutory requirement to make a bundled payment for OTP services. We discuss our treatment of new drugs below.Start Printed Page 62643

Comment: One commenter urged CMS to clarify whether the naltrexone bundled payment category referred to injectable or oral naltrexone.

Response: The naltrexone drug product that is FDA-approved for the treatment of opioid dependence is an extended-release, intramuscular injection.[54] The naltrexone bundled payment category refers to this injectable product.

Comment: A commenter brought to our attention the fact that buprenorphine-only products are both FDA-approved and marketed for the treatment of opioid dependence by generic manufacturers, whereas in the proposed rule, we stated our understanding that all oral buprenorphine products also contained naloxone as an active ingredient. The commenter recommended that we clarify the definition of buprenorphine products to note the inclusion of these products as well.

Response: Upon further inspection, we have identified marketed buprenorphine-only products. We have also reviewed the available pricing for both the buprenorphine-only and the buprenorphine with naloxone products and found them to be similar. We believe that including both types of products in the same drug category for payment purposes would not negatively impact patient access to either of these two versions of buprenorphine. Therefore, we are clarifying that the proposed “Buprenorphine (oral)” drug category includes both the buprenorphine-only and buprenorphine-naloxone products that are currently FDA-approved and marketed for the treatment of opioid dependence.

After consideration of the public comments, we are finalizing our proposal to base the OTP bundled payment rates, in part, on the type of medication used for treatment. These categories reflect those drugs currently approved by the FDA under section 505 of the FFDCA for use in treatment of OUD: that is, methadone (oral), buprenorphine (oral), buprenorphine (injection), buprenorphine (implant), naltrexone (injection)). We will codify this policy of establishing the categories of bundled payments based on the type of opioid agonist and antagonist treatment medication in § 410.67(d)(1).

i. New Drugs

We anticipate that there may be new FDA-approved opioid agonist and antagonist treatment medications to treat OUD in the future. In the scenario where an OTP furnishes MAT using a new FDA-approved opioid agonist or antagonist medication for OUD treatment that is not specified in one of our existing codes, we proposed that OTPs would bill for the episode of care using the medication not otherwise specified (NOS) code (HCPCS code G2075). In such cases, we proposed to use the typical or average maintenance dose to determine the drug cost for the new bundle. We also proposed that pricing would be determined based on the relevant pricing methodology (described in section II.G.3. of this final rule) or invoice pricing in the event the information necessary to apply the relevant pricing methodology is not available. For example, in the case of injectable and implantable drugs, which are generally covered and paid for under Medicare Part B, we proposed to use the methodology in section 1847A of the Act (which bases most payments on ASP). For oral medications, which are generally covered and paid for under Medicare Part D, we proposed to use ASP-based payment when we receive manufacturer-submitted ASP data for these drugs. In the event that we do not receive manufacturer-submitted ASP pricing data, we considered several potential pricing mechanisms (discussed further below) to estimate the payment amounts for oral drugs typically paid for under Medicare Part D but that would become OTP drugs paid under Part B when used as part of MAT furnished in an OTP. We did not propose a specific pricing mechanism for the situation in which we do not receive manufacturer-submitted ASP pricing data, but solicited public comment on several potential approaches for estimating the acquisition cost and payment amounts for these drugs. If the information necessary to apply the alternative pricing methodology chosen for the oral drugs is also not available to price the new medication, we proposed to use invoice pricing until either ASP pricing data or the information necessary to apply the chosen alternate pricing methodology becomes available to price the medication. We proposed to codify this approach for determining the amount of the bundled payment for new medications in § 410.67(d)(2). The medication NOS code would be used until we have the opportunity to consider through rulemaking establishing a unique bundled payment for episodes of care during which the new drug is furnished. We solicited comments on this proposed approach to the treatment of new drugs used for MAT in OTPs.

We received public comments on the proposals related to new drugs. The following is a summary of the comments we received and our responses.

Comment: A few commenters generally supported coverage of new FDA-approved medications for OUD. One commenter noted that a flexible approach to innovative therapies to treat OUD is critical to ensure that Medicare beneficiaries have access to all FDA-approved therapies that best meet their needs.

Response: We believe that our proposal to allow providers to bill using a medication NOS code would offer OTPs the flexibility to provide beneficiaries with quick access to new FDA-approved medications for OUD until we have the opportunity to consider through rulemaking establishing a unique bundled payment for episodes of care during which the new drug is furnished.

Therefore, we are finalizing our proposal to allow OTPs to bill for an episode of care using the medication not otherwise specified (NOS) code (HCPCS code G2075) in the scenario where an OTP furnishes MAT using a new FDA-approved opioid agonist or antagonist medication for OUD treatment that is not specified in one of our existing codes. In such cases, the typical or average maintenance dose would be used to determine the drug cost for the new bundle, which contractors would then add to the non-drug component payment amount that corresponds with the relevant payment for drug administration (oral, injectable, or implantable) to determine the total bundled payment for the episode of care. We are also finalizing our proposal that pricing would be determined based on the relevant pricing methodology as described in section II.G.3. of this final rule or through invoice pricing in the event the information necessary to apply the relevant pricing methodology is not available. We are codifying this approach for determining the amount of the bundled payment for episodes of care with new medications in § 410.67(d)(2)(i)(C).

As discussed above, we also solicited comments on how new medications that may be approved by the FDA in the future for use in the treatment of OUD with a novel mechanism of action (for example, not an opioid agonist and/or antagonist), such as medications approved under section 505 of the FFDCA to treat OUD and biological products licensed under section 351 of the Public Health Service Act to treat OUD, should be considered in the Start Printed Page 62644context of OUD treatment services provided by OTPs. Additionally, we solicited comments on how such new drugs with a novel mechanism of action should be priced, and specifically whether pricing for these new non-opioid agonist and/or antagonist medications should be determined using the same pricing methodology proposed for new opioid agonist and antagonist treatment medications, described above or whether an alternative pricing methodology should be used.

We did not receive any comments on the pricing of new drugs with a novel mechanism of action. We intend to monitor for the development of such new drugs for the treatment of OUD, and may consider this topic further in future rulemaking.

(b) Non-Drug Component

i. Counseling, Therapy, Toxicology Testing, and Drug Administration

As discussed above, the bundled payment is for OUD treatment services furnished during the episode of care, which we proposed to define as the FDA-approved opioid agonist and antagonist treatment medications, the dispensing and administration of such medications (if applicable), substance use counseling by a professional to the extent authorized under state law to furnish such services, individual and group therapy with a physician or psychologist (or other mental health professional to the extent authorized under state law), and toxicology testing. The non-drug component of the OUD treatment services includes all items and services furnished during an episode of care except for the medication.

Under the SAMHSA certification standards at § 8.12(f)(5), OTPs must provide adequate substance abuse counseling to each patient as clinically necessary. We note that section 1861(jjj)(1)(C) of the Act, as added by section 2005(b) of the SUPPORT Act defines OUD treatment services as including “substance use counseling by a professional to the extent authorized under state law to furnish such services.” Therefore, professionals furnishing therapy or counseling services for OUD treatment must be operating within state law and scope of practice. These professionals could include licensed professional counselors, licensed clinical alcohol and drug counselors, and certified peer specialists that are permitted to furnish this type of therapy or counseling by state law and scope of practice. To the extent that the individuals furnishing therapy or counseling services are not authorized under state law to furnish such services, the therapy or counseling services would not be covered as OUD treatment services.

Additionally, under the SAMHSA certification standards at § 8.12(f)(6), OTPs are required to provide adequate testing or analysis for drugs of abuse, including at least eight random drug abuse tests per year, per patient in maintenance treatment, in accordance with generally accepted clinical practice. These drug abuse tests (which are identified as toxicology tests in the definition of OUD treatment services in section 1861(jjj)(1)(E) of the Act) are used for diagnosing, monitoring and evaluating progress in treatment. The testing typically includes tests for opioids and other controlled substances. Urinalysis is primarily used for this testing; however, there are other types of testing such as hair or fluid analysis that could be used. We note that any of these types of toxicology tests would be considered to be OUD treatment services and would be included in the bundled payment for services furnished by an OTP.

The non-drug component of the bundle also includes the cost of drug dispensing and/or administration, as applicable. Additional details regarding our proposed approach for pricing this aspect of the non-drug component of the bundle are included in our discussion of payment rates later in this section. We did not receive comments on our proposal to include counseling, therapy, toxicology testing, and drug administration in the non-drug component of the bundle.

ii. Other Services

As discussed in the CY 2020 PFS proposed rule, we proposed to define OUD treatment services as those items and services that are specifically enumerated in section 1861(jjj)(1) of the Act, including services that are furnished via telecommunications technology, and solicited comment on any other items and services we might consider including as OUD treatment services under the discretion given to the Secretary in subparagraph (F) of that section to determine other appropriate items and services. We noted that if we were to finalize a definition of OUD treatment services that includes any other items or services, such as intake activities or periodic assessments as discussed above, we would consider whether any changes to the payment rates for the bundled payments would be necessary. As discussed above, we received comments that were supportive of creating add-on payment adjustments for intake activities and periodic assessments, and we are finalizing including intake activities and periodic assessment in the definition of OUD treatment services.

(3) Adjustment to Bundled Payment Rate for Additional Counseling or Therapy Services

In addition to the items and services that we proposed to include in the bundles, we recognized that counseling and therapy are important components of MAT and that patients may need to receive counseling and/or therapy more frequently at certain points in their treatment. In developing our policies for the proposed rule, we sought to ensure that patients have access to these needed services. Accordingly, we proposed to adjust the bundled payment rates through the use of an add-on code in order to account for instances in which effective treatment requires additional counseling or group or individual therapy to be furnished for a particular patient that substantially exceeds the amount specified in the patient's individualized treatment plan. As noted previously, we understand that there is variability in the frequency of services a patient might receive in a given week depending on the patient's severity and stage of treatment; however, in the proposed rule, we assumed that a typical case might include one substance use counseling session, one individual therapy session, and one group therapy session per week. As we explained in the proposed rule, we understand that the frequency of services will vary among patients and will change over time based on the individual patient's needs. We expect that the patient's treatment plan or the medical record will be updated to reflect when there are changes in the expected frequency of medically-necessary services based on the patient's condition and following such an update, the add-on code should no longer be billed if the frequency of the patient's counseling and/or therapy services is consistent with the treatment plan or medical record. In the case of unexpected or unforeseen circumstances that are time-limited, resolve quickly, and do not lead to updates to the treatment plan, we explained that we expect the medical necessity for billing the add-on code would be documented in the medical record. The proposed add-on code would reflect each additional 30 minutes of counseling or group or individual therapy furnished in a week of MAT, and could be billed in conjunction with the codes describing the full episode of care. For example, Start Printed Page 62645there may be some weeks when a patient has a relapse or unexpected psychosocial stressors arise that warrant additional reasonable and necessary counseling services that were not foreseen at the time that the treatment plan was developed. We acknowledged that an unintended consequence of using the treatment plan to determine when billing of the add-on code would be permissible is a potential incentive for OTPs to document minimal counseling and/or therapy needs for a beneficiary, thereby resulting in increased opportunity for billing the add-on code. We indicated that we expect OTPs will ensure that treatment plans reflect the full scope of services expected to be furnished during an episode of care and will update treatment plans regularly to reflect changes. We noted that we intend to monitor this issue and would consider making changes to this policy through future rulemaking if necessary to ensure that this payment adjustment is not being billed inappropriately. We solicited comments on the add-on code and the threshold for billing. We proposed to codify this adjustment to the bundled payment rate for additional counseling or therapy services in § 410.67(d)(3)(i).

We received several comments on our proposed adjustment to the bundled payment rate for additional counseling or therapy services. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported our proposal to create an add-on G-code to adjust the bundled payment rate for additional counseling or therapy services furnished. Several commenters stated that the number of therapy and counseling services described in the proposed rule usually only occurs during the initial stages of treatment and a few commenters stated that patients with that level of need in a given week may be referred for more intensive treatment, such as Intensive Outpatient (IOP) treatment. Some commenters noted the variation in payment rates for counseling across various state Medicaid programs and a few commenters suggested that we use HCPCS code G0396 as a reference code in valuing the payment rate for the counseling add-on code.

Response: After consideration of the public comments, we are finalizing our proposal to establish an add-on code to describe an adjustment to the bundled payment when additional counseling or therapy services are furnished. This add-on payment is codified in the regulations at § 410.67(d)(4)(i)(A). The payment rate we are finalizing for this add-on payment is discussed in more detail later in this final rule. This add-on code may be billed when counseling or therapy services are furnished that substantially exceed the amount specified in the patient's individualized treatment plan. OTPs will be required to document the medical necessity for these services in the patient's medical record. Additionally, we note that we understand the frequency with which counseling and therapy services are furnished will vary over time for each individual patient and will often decrease over time as a patient stabilizes. Nevertheless, we believe it is important to acknowledge that some patients will require more intensive counseling and therapy services at certain times during their treatment and to establish a payment methodology under which OTPs may receive payment for furnishing these medically necessary services.

(4) Site of Service (Telecommunications)

In recent years, we have sought to decrease barriers to access to care by furthering policies that expand the use of communication technologies. In the CY 2019 PFS final rule (83 FR 59482), we finalized new separate payments for communication technology-based services, including a virtual check-in and a remote evaluation of pre-recorded patient information. SAMHSA's federal guidelines (https://store.samhsa.gov/​system/​files/​pep15-fedguideotp.pdf) for OTPs refer to the CMS guidance on telemedicine and also state that OTPs are advised to proceed with full understanding of requirements established by state or health professional licensing boards. SAMHSA's federal guidelines for OTPs state that exceptional attention needs to be paid to data security and privacy in this evolving field. Telemedicine services should, under no circumstances, expand the scope of practice of a healthcare professional or permit practice in a jurisdiction (the location of the patient) where the provider is not licensed.

We proposed to allow OTPs to furnish the substance use counseling, individual therapy, and group therapy included in the bundle via two-way interactive audio-video communication technology, as clinically appropriate, in order to increase access to care for beneficiaries. We believed this would be an appropriate approach because, as discussed previously, we expected the telehealth services that will be furnished by OTPs will be similar to the Medicare telehealth services furnished under section 1834(m) of the Act, and the use of two-way interactive audio-video communication technology is required for these Medicare telehealth services under § 410.78(a)(3). By allowing use of communication technology in furnishing these services, OTPs in rural communities or federally-designated geographic health professional shortage areas would be able to facilitate treatment through virtual care coming from an urban or other external site; however, we noted that the physicians and other practitioners furnishing these services would be required to comply with all applicable requirements related to professional licensing and scope of practice.

We noted that section 1834(m) of the Act applies only to Medicare telehealth services furnished by a physician or other practitioner. Because OUD treatment services furnished by an OTP are not considered to be services furnished by a physician or other practitioner, we indicated that the restrictions of section 1834(m) of the Act would not apply. Additionally, we noted that counseling or therapy furnished via communication technology as part of OUD treatment services furnished by an OTP must not be separately billed by the practitioner furnishing the counseling or therapy because these services would already be paid through the bundled payment made to the OTP.

We proposed to include language in § 410.67(b) in the definition of OUD treatment services to allow OTPs to use two-way interactive audio-video communication technology, as clinically appropriate, in furnishing substance use counseling and individual and group therapy services, respectively. We solicited comment as to whether the proposal, including the furnishing of these services through communication technology, would be clinically appropriate. We also solicited public comment on other components of the bundle that may be clinically appropriate to be furnished via communication technology, while considering SAMHSA's guidance that OTPs should pay exceptional attention to data security and privacy.

We received public comments on the proposal to include substance use counseling and individual and group therapy services furnished using telecommunications technology in the definition of OUD treatment services. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported the proposal to allow OTPs to use two-way interactive audio-video Start Printed Page 62646communication technology, as clinically appropriate, in furnishing substance use counseling and individual and group therapy services, respectively. Several commenters noted that allowing the use of communication technology in furnishing these services has the potential to vastly expand OTPs' reach, particularly in underserved areas. A few commenters urged CMS to afford OTPs maximum flexibility in how telemedicine is deployed, such as allowing the provision of such services regardless of whether or not the counselor or patient is physically located at an OTP and noted that several states already support less restrictive telemedicine practices. One commenter recommended that CMS should also allow OTPs to furnish other important medical services to beneficiaries via telecommunications, including: Medication dose assessment and interactions, basic primary care, and HIV and hepatitis C risk reduction. A few commenters requested clarification as to whether a patient participating in individual and/or group counseling could do so from their home or another location of their choosing as opposed to a designated satellite location.

Response: We are finalizing our proposal to allow OTPs to use two-way interactive audio-video communication technology, as clinically appropriate, in furnishing substance use counseling and individual and group therapy services. In response to the requests for clarification regarding where the beneficiary and practitioner can be located at the time the service is furnished, we note that section 2001 of the SUPPORT Act allows telehealth services for treatment of a diagnosed SUD or co-occurring mental health disorder to be furnished to individuals at any telehealth originating site (other than a renal dialysis facility), including in a patient's home. Accordingly, consistent with this policy, we believe it is appropriate to permit beneficiaries to receive substance use counseling and individual group therapy services furnished by an OTP using telecommunications technology in their home or any other telehealth originating site, provided the requirements that apply to telehealth services payable under the PFS after July 1, 2019, are met. In response to commenters who recommended that CMS should allow OTPs to furnish other medical services to beneficiaries via telecommunications, we note that SAMHSA and the DEA have regulations related to OUD services furnished via telecommunications that we would need further time to consider, but we may revisit this recommendation in developing our policies for future rulemaking.

After consideration of the public comments, we are finalizing our proposal to allow OTPs to use two-way interactive audio-video communication technology, as clinically appropriate, in furnishing substance use counseling and individual and group therapy services. We are also finalizing our proposal to include substance use counseling and individual and group therapy services furnished via two-way interactive audio-video communication technology in the definition of opioid use disorder treatment service in § 410.67(b). We note that as OTP services are not PFS services, no originating site facility fee (HCPCS code Q3014) applies to OUD treatment services, and OTPs are not authorized to bill for the originating site facility fee.

(5) Coding

We proposed to adopt a coding structure for OUD treatment services that would vary by the medication administered. To operationalize this approach, we proposed to establish G codes for weekly bundles describing treatment with methadone, buprenorphine oral, buprenorphine injectable, buprenorphine implants (insertion, removal, and insertion/removal), extended-release injectable naltrexone, a non-drug bundle, and one for a medication not otherwise specified. We also proposed to establish partial episode G codes to correspond with each of those bundles, respectively. Additionally, we proposed to create an add-on code to describe additional counseling that is furnished beyond the amount specified in the patient's treatment plan. We also noted that were we to finalize including intake activities and periodic assessments in the definition of OUD treatment services, we welcomed feedback on whether we should consider modifying the payment associated with the bundle or creating add-on codes for services such as the initial physical examination, initial assessments and preparation of a treatment plan, periodic assessments or additional toxicology testing, and if so, what inputs we might consider in pricing such services, such as payment amounts for similar services under the PFS or CLFS. For example, we noted that to price the initial assessment, medical examination, and development of a treatment plan, we could crosswalk to the Medicare payment rate for a level 3 evaluation and management (E/M) visit for a new patient and to price the periodic assessments, we could crosswalk to the Medicare payment rate for a level 3 E/M visit for an established patient. To price additional toxicology testing, we could crosswalk to the Medicare payment for presumptive drug testing, such as that described by CPT code 80305. Additionally, we welcomed feedback on whether we should consider creating codes to describe bundled payments that include only the cost of the drug and drug administration as applicable in order to account for beneficiaries who are receiving interim maintenance treatment (as described previously in this section) or other situations in which the beneficiary is not receiving all of the services described in the full bundles.

Regarding the non-drug bundle, we noted that this code would be billed for services furnished during an episode of care or partial episode of care when a medication is not administered. For example, when a patient receives a buprenorphine injection on a monthly basis, the OTP will only require payment for the medication during the first week of the month when the injection is given, and therefore, would bill the code describing the bundle that includes injectable buprenorphine during the first week of the month and would bill the code describing the non-drug bundle for the remaining weeks in that month for services such as substance use counseling, individual and group therapy, and toxicology testing.

As discussed previously, we proposed that the codes describing the bundled payment for an episode of care or partial episode of care with a medication not otherwise specified should be used when the OTP furnishes MAT with a new opioid agonist or antagonist treatment medication approved by the FDA under section 505 of the FFDCA for the treatment of OUD. OTPs would use these codes until we have the opportunity to propose and finalize a new G code to describe the bundled payment for treatment using that drug and price it accordingly in the next rulemaking cycle. We noted that the code describing the weekly bundle for a medication not otherwise specified should not be used when the drug being administered is not a new opioid agonist or antagonist treatment medication approved by the FDA under section 505 of the FFDCA for the treatment of OUD, and therefore, for which Medicare would not have the authority to make payment since section 1861(jjj)(1)(A) of the Act requires that the medication must be an opioid agonist or antagonist treatment medication approved by the FDA under section 505 of the FFDCA for the treatment of OUD. Given the program integrity concerns regarding the Start Printed Page 62647potential for misuse of a medication not otherwise specified code, we also welcomed comments as to whether this code was needed.

See Table 18 for a list of the HCPCS codes for the weekly bundles that we are finalizing (G2067-G2075). We proposed that only an entity enrolled with Medicare as an OTP could bill these codes. Additionally, we proposed that OTPs would be limited to billing only these codes describing bundled payments, and may not bill for other codes, such as those paid under the PFS.

We received many comments related to coding and payment for OTP services. The following is a summary of the comments we received and our responses.

Comment: As described previously, many commenters supported the inclusion of intake activities, such as the initial physician examination, initial assessment and preparation of a treatment plan, as well as periodic assessments in the definition of OUD treatment services. Many commenters suggested that we create add-on codes to describe these services, and several commenters specifically suggested that we use CPT codes 99204 and 99214 as reference codes for pricing the intake and periodic assessment add-ons, respectively. A few commenters recommended that CMS work with OTPs and/or SAMHSA to determine whether an add-on for periodic assessments would sufficiently cover the needs of pregnant and postpartum women who seek care at OTPs.

Response: As discussed above, we are finalizing including intake activities and periodic assessment in the definition of OUD treatment services. It is our understanding that these services are furnished much less frequently than the other services included in the weekly bundled payments; therefore, we are creating add-on G-codes to describe these services, which will allow us to make more targeted payments for these services. We note that the add-on code describing intake activities should only be billed for new patients (that is, patients starting treatment at the OTP). We agree with the commenters that the level 4 office/outpatient E/M visits are a good approximation of the services provided at intake and during periodic assessments at OTPs based on the expected acuity of patients with OUD receiving services at OTPs, who are likely to have multiple co-morbidities and present with problems that are of moderate to high severity and require medical decision making of moderate complexity. Therefore, we are pricing the add-on code describing intake activities using CPT code 99204 (Office or other outpatient visit for the evaluation and management of a new patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; Medical decision making of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Typically, 45 minutes are spent face-to-face with the patient and/or family) as a reference code, which is assigned a CY 2019 non-facility rate of $166.86 under the PFS in addition to accounting for one toxicology test furnished at intake, using CPT code 80305 (Drug test(s), presumptive, any number of drug classes, any number of devices or procedures; capable of being read by direct optical observation only (e.g., utilizing immunoassay [e.g., dipsticks, cups, cards, or cartridges]), includes sample validation when performed, per date of service) as a reference code, which is assigned a rate of $12.60 under the CLFS in CY 2019. Therefore, we summed those two amounts to calculate the total payment rate for the add-on code describing intake activities, which is $179.46. Similarly, we are pricing the add-on code describing periodic assessments using CPT code 99214 (Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: A detailed history; A detailed examination; Medical decision making of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Typically, 25 minutes are spent face-to-face with the patient and/or family) as a reference code, which is assigned a CY 2019 non-facility rate of $110.28 under the PFS. The medical services described by these add-on codes could be furnished by a program physician, a primary care physician or an authorized healthcare professional under the supervision of a program physician or qualified personnel such as nurse practitioners and physician assistants. The other assessments, including psychosocial assessments could be furnished by practitioners who are eligible to do so under their state law and scope of licensure. Additionally, we note that the add-on code describing periodic assessments could be billed for each periodic assessment performed for patients that require multiple assessments during an episode of care, such as patients who are pregnant or postpartum. We note that in order to bill for the add-on code, the services would need to be medically reasonable and necessary and that OTPs should document the rationale for billing the add-on code in the patient's medical record. We also plan to monitor utilization of the periodic assessment add-on code given program integrity concerns about overutilization, and may consider further refinements in future rulemaking.

Comment: Several commenters supported the creation of add-on codes to account for more frequent presumptive testing, including presumptive testing using instrumented chemistry analyzers, and for definitive testing. Several commenters highlighted the differences between presumptive and definitive tests, stating that CPT code 80305 describes a presumptive screen test by Dipstick or Point of Care rapid test cup, and noted that there is a significant difference in the payment rate for this code compared to the codes describing definitive drug testing. Several commenters requested that CMS set a rate that encompasses medically-appropriate testing frequencies, but also addresses the complexity of testing, noting that that the presumptive screening test uses limited technology and should not be relied upon by clinicians for providing true actionable and reliable information and stated that a bundled rate that includes only a crosswalk to a point-of-care rapid test will severely impact patient care. A few commenters noted that most basic drug tests will not detect Fentanyl and that failure to properly identify Fentanyl may place patients' lives at risk, and therefore, recommended that CMS consider referencing the current CLFS rates for codes HCPCS codes G0480-G0483, which describe definitive drug testing. A few commenters noted that point of care immunoassay testing is rarely able to detect methadone or buprenorphine and can never detect naltrexone and, if methadone or buprenorphine is detected, the immunoassay is unable to determine whether the patient is compliant or is adulterating the urine sample. In contrast, definitive testing is appropriate for detecting all of the drugs used for MAT therapy.

Response: We find the commenters' arguments that both higher level presumptive tests and definitive tests Start Printed Page 62648can be clinically appropriate in the treatment of OUD to be compelling. Further, we want to avoid creating financial disincentives that would prevent OTPs from furnishing medically-necessary care. Accordingly, we are building into the bundled payments both presumptive and definitive testing. We understand from commenters that while SAMHSA requires at least 8 toxicology screenings per year per patient, toxicology screening is frequently done more often, including up to weekly in new patients and that this is most frequently presumptive testing, but in more rare circumstances definitive testing is also performed. Thus, in consideration of what we believe might be an average case, we are assuming that beneficiaries will receive an average of two presumptive tests and one definitive test per month.

We priced the presumptive test based on the CLFS rate for CPT code 80305, which is $12.60, and then prorated that amount by dividing that rate by 2 to reflect the presumption that this type of testing would be furnished only twice a month. We priced the definitive test based on the CLFS rate for HCPCS code G0480, which is $114.43 and then prorated that amount by dividing that rate by 4 to reflect our presumption that this type of testing would be furnished once a month. Additionally, we note that we interpret the statute to require that all toxicology testing furnished by the OTP must be included in the bundled payment or adjustments to the bundled payment and could not be billed separately under the CLFS. We have elected to build the payment for these tests into the weekly bundled rates, rather than creating add-on codes, in order to avoid creating an incentive to furnish testing more frequently than needed. However, as OTPs begin to bill Medicare, if we find that there is an issue with beneficiaries receiving access to medically-necessary definitive testing, we may consider making changes to how these tests are paid through future rulemaking.

Comment: Several commenters stated that OTPs often provide case management and/or care management services and requested that CMS consider reimbursing for these services either as part of the standard bundle or as an adjustment to the bundled payment, as applicable. A few commenters stated that OTPs serve as a fixed point of responsibility in the provision of whole person-centered care and improving health outcomes through collaborative arrangements with health care providers outside of the OTP and that the goal of care management is to reduce health care costs, specifically preventable hospital admissions, readmissions, and avoidable emergency room visits. The commenters also stated that OTP staff also help patients with accessing food benefits, housing, and employment searches, which are critical components for sustained recovery, as part of case management.

Response: We appreciate the feedback and note that we would like to work with OTPs to better understand how these services are furnished in the OTP setting and, as noted previously, we are interested in continued feedback and data on the specific items and services, including their frequency, furnished to beneficiaries by an OTP. We may consider making payment for case management/care management activities in future rulemaking.

We note that the definition of OUD treatment services described in this final rule would need to be revised in future rulemaking to include any such additional items and services.

Comment: A few commenters requested that CMS clarify whether the proposed billing codes could be used when a patient is undergoing detoxification in an OTP and some commenters requested a separate code describing a bundled payment for the costs associated with medications for medically-supervised management of opioid withdrawal, as well as counseling and toxicology testing. One commenter requested guidance to clarify how OTPs could bill for a “naloxone challenge test” prior to initiation of treatment with Vivitrol (naltrexone for extended-release injectable suspension).

Response: We note that there is no specified dosage required for billing the bundled payments, so if a patient is tapering off methadone or buprenorphine while undergoing detoxification, the bundled payments describing those drugs may be used if the requirements for billing are satisfied and the non-drug bundle could be billed during any time that the patient is not being dispensed or administered a covered OUD treatment medication. We may consider for future rulemaking whether additional coding or payment changes are needed with respect to detoxification or the provision of naloxone.

Comment: Several commenters requested clarification related to how take-home dosages of medication should be billed. A few commenters noted that the proposed definition of a partial episode does not account for patients who have earned take-home dose privileges and as a result may only attend the OTP once or twice in a month.

Response: We agree with the commenters that additional coding is required to accurately account for the costs associated with providing a patient with take-home doses of medication. Accordingly, we are finalizing two codes to describe adjustments to the bundled payments, one for take-home supplies of methadone, which describes up to 7 additional days of medication, and can be billed along with the respective weekly bundled payment in units of up to 3 (for a total of up to a one month supply), and one for take-home supplies of oral buprenorphine, which also describes up to 7 additional days of medication and can be billed along with the base bundle in units of up to 3 (for a total of up to a 1 month supply). We note that SAMHSA allows a maximum take-home supply of one month of medication; therefore, we do not expect the add-on codes describing take-home doses of methadone and oral buprenorphine to be billed any more than 3 times in one month (in addition to the weekly bundled payment). We also note that the add-on code for take-home doses of methadone can only be used with the methadone weekly episode of care code (HCPCS code G2067). Similarly, the add-on code for take-home doses of oral buprenorphine can only be used with the oral buprenorphine weekly episode of care code (HCPCS code G2068). We are pricing the add-on code describing take-home supplies of methadone, HCPCS code G2078, based on the payment rate for the drug component for the weekly bundle describing treatment with methadone ($35.28) and we are pricing the add-on code describing take home supplies of buprenorphine, HCPCS code G2079, based on the payment rate for the drug component for the weekly bundle describing treatment with oral buprenorphine ($86.26).

Comment: Several commenters requested clarification related to how the bundled payment codes should be billed in a variety of situations. A few commenters specifically requested clarification on how “guest dosing” should be billed and others inquired as to whether prior authorization would be required.

Response: In response to comments seeking clarification about the threshold to bill the partial vs. the full episodes, as noted above, we are finalizing only full episodes at this time and will consider partial episodes for future rulemaking. Additionally, as noted above, we are finalizing a number of add-on G codes to describe adjustments Start Printed Page 62649to the bundle. Specifically, we are creating add-on codes for intake activities, periodic assessments, take-home supplies of methadone, take home supplies of oral buprenorphine, and additional counseling furnished. We note that some of the bundled payment codes describe a drug that is typically only administered once per month, such as the injectable drugs, or once in a 6-month period, in the case of the buprenorphine implants. In those cases, the code describing the bundled payment that includes the cost of the drug would be billed during the week that the drug is administered, and if at least once service is furnished in a subsequent week, the non-drug bundle would be billed. For example, in the case of a patient receiving injectable buprenorphine, we would expect that HCPCS code G2069 would be billed for the week during which the injection was administered and that HCPCS code G2074, which describes a bundle not including the drug, would be billed during any subsequent weeks that at least one non-drug service is furnished until the injection is administered again, at which time HCPCS code G2069 would be billed again for that week. We note that as HCPCS codes G2067-G2075 cover episodes of care of 7 contiguous days, we will not permit an OTP to bill any of these codes for the same beneficiary more than once per 7 contiguous day period. Additionally, consistent with FDA labelling, we do not generally expect the codes describing bundled payments including the injectable drugs (HCPCS codes G2069 and G2073) to be furnished more than once every 4 weeks. Similarly, consistent with FDA labelling, we do not generally expect the codes describing bundled payments including insertion of the buprenorphine implants (HCPCS codes G2070 and G2072) to be furnished more than once every 6 months.

However, we do understand there are limited clinical scenarios when a beneficiary may be appropriately furnished OUD treatment services at more than one OTP within a 7 contiguous day period, such as for guest dosing or when a beneficiary transfers care between OTPs. We note that in these limited circumstances, each of the involved OTPs may bill the appropriate HCPCS codes that reflect the services furnished to the beneficiary. We expect that both OTPs involved would provide sufficient documentation in the patient's medical record to reflect the clinical situation and services provided. We will be monitoring the claims data to ensure that this flexibility is not being abused. Additionally, in instances in which a patient is switching from one drug to another, the OTP should only bill for one code describing a weekly bundled payment for that week and should determine which code to bill based on which drug was furnished for the majority of the week. In response to commenters who requested clarification regarding prior authorization, we note that we did not propose, and are not finalizing any prior authorization requirements for services furnished in OTPs, as our goal is not to restrict access to necessary care.

The codes and long descriptors for the OTP bundled services and add-on services we are finalizing are:

  • HCPCS code G2067: Medication assisted treatment, methadone; weekly bundle including dispensing and/or administration, substance use counseling, individual and group therapy, and toxicology testing, if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program).
  • HCPCS code G2068: Medication assisted treatment, buprenorphine (oral); weekly bundle including dispensing and/or administration, substance use counseling, individual and group therapy, and toxicology testing if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program).
  • HCPCS code G2069: Medication assisted treatment, buprenorphine (injectable); weekly bundle including dispensing and/or administration, substance use counseling, individual and group therapy, and toxicology testing if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program).
  • HCPCS code G2070: Medication assisted treatment, buprenorphine (implant insertion); weekly bundle including dispensing and/or administration, substance use counseling, individual and group therapy, and toxicology testing if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program).
  • HCPCS code G2071: Medication assisted treatment, buprenorphine (implant removal); weekly bundle including dispensing and/or administration, substance use counseling, individual and group therapy, and toxicology testing if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program).
  • HCPCS code G2072: Medication assisted treatment, buprenorphine (implant insertion and removal); weekly bundle including dispensing and/or administration, substance use counseling, individual and group therapy, and toxicology testing if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program).
  • HCPCS code G2073: Medication assisted treatment, naltrexone; weekly bundle including dispensing and/or administration, substance use counseling, individual and group therapy, and toxicology testing if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program).
  • HCPCS code G2074: Medication assisted treatment, weekly bundle not including the drug, including substance use counseling, individual and group therapy, and toxicology testing if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program).
  • HCPCS code G2075: Medication assisted treatment, medication not otherwise specified; weekly bundle including dispensing and/or administration, substance use counseling, individual and group therapy, and toxicology testing, if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program).
  • HCPCS code G2076: Intake activities, including initial medical examination that is a complete, fully documented physical evaluation and initial assessment conducted by a program physician or a primary care physician, or an authorized healthcare professional under the supervision of a program physician or qualified personnel that includes preparation of a treatment plan that includes the patient's short-term goals and the tasks the patient must perform to complete the short-term goals; the patient's requirements for education, vocational rehabilitation, and employment; and the medical, psycho-social, economic, legal, or other supportive services that a patient needs, conducted by qualified personnel (provision of the services by a Medicare-enrolled Opioid Treatment Program); List separately in addition to code for primary procedure.
  • HCPCS code G2077: Periodic assessment; assessing periodically by qualified personnel to determine the most appropriate combination of services and treatment (provision of the services by a Medicare-enrolled Opioid Treatment Program); List separately in addition to code for primary procedure.
  • HCPCS code G2078: Take-home supply of methadone; up to 7 additional day supply (provision of the services by a Medicare-enrolled Opioid Treatment Start Printed Page 62650Program); List separately in addition to code for primary procedure.
  • HCPCS code G2079: Take-home supply of buprenorphine (oral); up to 7 additional day supply (provision of the services by a Medicare-enrolled Opioid Treatment Program); List separately in addition to code for primary procedure.
  • HCPCS code G2080: Each additional 30 minutes of counseling or group or individual therapy in a week of medication assisted treatment, (provision of the services by a Medicare-enrolled Opioid Treatment Program); List separately in addition to code for primary procedure.

Finally, we proposed that only an entity enrolled with Medicare as an OTP could bill these codes. Additionally, we proposed that OTPs would be limited to billing only these codes describing bundled payments, and may not bill for other codes, such as those paid under the PFS. We did not receive comments on these proposals, and are finalizing both these proposals.

(6) Payment Rates

We proposed that the codes describing the OTP bundled services (HCPCS codes G2067-G2075) would be assigned flat dollar payment amounts, as listed in Table 18. As discussed previously, section 2005 of the SUPPORT Act amended the definition of “medical and other health services” in section 1861(s) of the Act to provide for coverage of OUD treatment services furnished by an OTP and also added a new section 1834(w) to the Act and amended section 1833(a)(1) of the Act to establish a bundled payment to OTPs for OUD treatment services furnished during an episode of care beginning on or after January 1, 2020. Therefore, OUD treatment services and the payments for such services are wholly separate from physicians' services, as defined under section 1848(j)(3) of the Act, and for which payment is made under section 1848 of the Act. Because OUD treatment services are not considered physicians' services and are paid outside the PFS, we indicated that they would not be priced using relative value units (RVUs).

Consistent with section 1834(w) of the Act, which requires the Secretary to make a bundled payment for OUD treatment services furnished by OTPs, we proposed to build the payment rates for OUD treatment services by combining the cost of the drug and the non-drug components (as applicable) into a single bundled payment as described in more detail below.

(a) Drug Component

As part of determining a payment rate for the proposed bundles for OUD treatment services, a dosage of the applicable medication must be selected in order to calculate the costs of the drug component of the bundle. We proposed to use the typical or average maintenance dose to determine the drug costs for each of the bundles. As dosing for some, but not all, of these drugs varies considerably, this approach attempts to strike an appropriate balance between high- and low-dose drug regimens in the context of a bundled payment. Specifically, we proposed to calculate payment rates using a 100 mg daily dose for methadone, a 10 mg daily dose for oral buprenorphine, a 100 mg monthly dose for the extended-release buprenorphine injection, four rods each containing 74.2 mg of buprenorphine for the 6-month buprenorphine implant, and a 380 mg monthly dose for extended-release injectable naltrexone. We solicited public comments on our proposal to use the typical maintenance dose in order to calculate the drug component of the bundled payment rate for each of the proposed codes. We also solicited comment on the specific typical maintenance dosage level that we have identified for each drug, and a process for identifying the typical maintenance dose for new opioid agonist or antagonist treatment medication approved by the FDA under section 505 of the FFDCA when such medications are billed using the medication NOS code, such as using the FDA-approved prescribing information or a review of the published, preferably peer-reviewed, literature. We noted that the bundled payment rates were intended to be comprehensive with respect to the drugs provided; therefore, we did not intend to include any other amounts related to drugs, other than for administration, as discussed below. This means, for example, that we would not pay for drug wastage, which we did not anticipate to be significant in the OTP setting.

We received several comments on our proposal to use typical maintenance dosage levels to calculate payment rates.

Comment: One commenter expressed concern over the proposal to use average maintenance doses to determine the drug cost component of the bundled payment. This commenter noted that TRICARE explicitly rejected this approach for buprenorphine and naltrexone due to significant variation in the dosage and frequency of administration for these drugs; and, instead, suggested an alternative methodology that would more appropriately account for variations in the clinical needs of patients.

Response: While the TRICARE payment rates for OTP services were considered in determining the Medicare payment for OTP services, we note that section 1834(w)(2) of the Act expressly directs the Secretary to implement the Medicare OTP benefit using one or more payment bundles. We recognize that there may be some variation in the dosage and frequency of administration of these medications. Some beneficiaries may receive a larger than average dose, while other beneficiaries will receive a smaller than average dose; but payment based on the typical dose means that, across the Medicare beneficiaries served by the OTP, the payment amount should be reasonable and represent the average costs incurred in furnishing the drug component of the OUD treatment services. We believe the proposal to use the typical maintenance dosages is a reasonable approach to address the variable dosing of these medications within the statutory direction to implement this payment through one or more bundles.

Comment: Most commenters agreed that the proposed 100 mg daily dose for methadone was reasonable. A couple of commenters also agreed with the proposed typical maintenance dosages of four rods each containing 74.2 mg of buprenorphine for the 6-month buprenorphine implant and a 380 mg monthly dose for extended-release injectable naltrexone. However, several commenters stated that the proposed typical maintenance dosage for oral buprenorphine of 10 mg is too low. A few commenters suggested that there is evidence indicating that higher doses of buprenorphine are associated with better treatment retention. Other commenters stated that OTP patients respond better to a higher dosing level of oral buprenorphine, in part, because they tend to have a longer history of opioid abuse. Commenters suggested potential alternative dosages ranging from 12-20 mg. Several commenters suggested setting the typical maintenance dosage for oral buprenorphine at 16 mg per day. One commenter noted this dosage is supported by SAMHSA's Treatment Improvement Protocol (TIP) 63 (located at https://store.samhsa.gov/​system/​files/​sma18-5063fulldoc.pdf). In addition, while a few commenters stated that the 100 mg monthly dose for the extended-release buprenorphine injection was the appropriate maintenance dose, some commenters noted it would not adequately account for the first 2 months of treatment at the higher dose of 300 mg per month. Another commenter stated that there was Start Printed Page 62651evidence indicating certain patients would require longer treatment with the higher dose of the extended-release buprenorphine injection and that the FDA label instructions allowed consideration of increasing the maintenance dose to 300 mg monthly for patients in which the benefits outweigh the risk. One commenter stated that CMS would need to better define how the average maintenance dose was calculated in order to allow for comment on the methodology.

Response: We disagree with the commenter who stated that there was insufficient detail provided in the proposed rule in order to comment on the proposed average maintenance doses. As we described in the proposed rule, we identified the typical maintenance dose for each medication using the FDA-approved prescribing information or through a review of the published, preferably peer-reviewed, literature. We also included a reference in the proposed rule to each of the sources used to identify the typical maintenance doses.

We note that, as the HCPCS codes for the extended-release buprenorphine injection (that is, Q9991: Buprenorphine XR 100 mg or less and Q9992: Buprenorphine XR over 100 mg) have the same payment rate; therefore, we do not believe that it is necessary to establish a second typical maintenance dose to calculate the payment rate for this drug. However, we agree that the typical maintenance dosage for oral buprenorphine should be set higher than the proposed 10 mg. The range offered by commenters was between 12 mg and 20 mg, with a 16 mg per day dose receiving the most support. We also note that SAMHSA's TIP 63 and the FDA labeling support a target dosage of 16 mg for maintenance treatment.[55]

After consideration of the public comments, we are finalizing our proposal to use the typical maintenance dosages to calculate payment rates for the drug component of the weekly bundles (that is, a 100 mg daily dose for methadone, a 100 mg monthly dose for the extended-release buprenorphine injection, four rods each containing 74.2 mg of buprenorphine for the 6-month buprenorphine implant, and a 380 mg monthly dose for extended-release injectable naltrexone) except that the payment rate for the drug component of the oral buprenorphine bundle will be calculated using a typical maintenance dose of 16 mg daily, rather than a 10 mg dose.

i. Potential Drug Pricing Data Sources

Payment structures that are closely tailored to the provider's actual acquisition cost reduce the likelihood that a drug will be chosen primarily for a reason that is unrelated to the clinical care of the patient, such as the drug's profit margin for a provider. We proposed to estimate an OTP's costs for the drug component of the bundles based on available data regarding drug costs rather than a provider-specific cost-to-charge ratio or another more direct assessment of facility or industry-specific drug costs. OTPs do not currently report costs associated with their services to the Medicare program, and we did not believe that a cost-to-charge ratio based on such reported information could be available for a significant period of time. Furthermore, we explained that we are unaware of any industry-specific data that may be used to more accurately assess the prices at which OTPs acquire the medications used for OUD treatment. Therefore, we proposed to estimate an OTP's costs for the drugs used in MAT based on other available data sources, rather than applying a cost-to-charge ratio or another more direct assessment of drug acquisition cost; however, we also noted that we intended to continue to explore alternate ways to gather this information. As described in greater detail below, we proposed that the payment amounts for the drug component of the bundles be based on CMS pricing mechanisms currently in place. We solicited comment on other potential data sources for pricing OUD treatment medications either generally or specifically with respect to acquisition by OTPs. In the case of oral drugs that we proposed to include in the OTP bundled payments and for which we do not receive manufacturer-submitted ASP data, we explained that we were considering several potential approaches for determining the payment amounts for the drug component of the bundles. Although we did not propose a specific pricing mechanism, we solicited comments on several different approaches, and stated that we intended to develop a final policy for determining the payment amount for the drug component of the relevant bundles after considering the comments received.

In considering the payment amount for the drug component of each of the bundled payments that include a drug, we began by breaking the drugs into two categories based on their current coverage and payment by Medicare. First, we discussed the injectable and implantable drugs, which are generally covered and paid for under Medicare Part B, and then discussed the oral medications, which are generally covered and paid for under Medicare Part D.[56] Buprenorphine (injection), buprenorphine (implant), and naltrexone (injection) would fall into the former category and methadone and buprenorphine (oral) would fall into the latter category.

ii. Part B Drugs

Part B includes a limited drug benefit that encompasses drugs and biologicals described in section 1861(t) of the Act. Currently, covered Part B drugs fall into three general categories: Drugs furnished incident to a physician's services, drugs administered via a covered item of durable medical equipment, and other drugs specified by statute (generally in section 1861(s)(2) of the Act). Types of providers and suppliers that are paid for all or some of the Medicare-covered Part B drugs that they furnish include physicians, pharmacies, durable medical equipment suppliers, hospital outpatient departments, and end-stage renal disease (ESRD) facilities.

The majority of Part B drug expenditures are for drugs furnished incident to a physician's service. Drugs furnished incident to a physician's service are typically injectable drugs that are administered in a non-facility setting (covered under section 1861(s)(2)(A) of the Act) or in a hospital outpatient setting (covered under section 1861(s)(2)(B) of the Act). The statute (sections 1861(s)(2)(A) and 1861(s)(2)(B) of the Act) limits “incident to” services to drugs that are not usually self-administered; self-administered drugs, such as orally administered tablets and capsules are not paid for under the “incident to” provision. Payment for drugs furnished incident to a physician's service falls under section 1842(o) of the Act. In accordance with section 1842(o)(1)(C) of the Act, “incident to” drugs furnished in a non-facility setting are paid under the methodology in section 1847A of the Act. “Incident to” drugs furnished in a facility setting also are paid using the methodology in section 1847A of the Act when it has been incorporated under the relevant payment system (for Start Printed Page 62652example, the Hospital Outpatient Prospective Payment System (OPPS)).[57]

In most cases, payment using the methodology in section 1847A of the Act means payment is determined based on the ASP plus a statutorily-mandated 6 percent add-on. The payment for these drugs does not include costs for administering the drug to the patient (for example, by injection or infusion); payments for these physician and hospital services are made separately, and the payment amounts are determined under the PFS [58] and the OPPS, respectively. The ASP payment amount determined under section 1847A of the Act reflects a volume-weighted ASP for all NDCs that are assigned to a HCPCS code. The ASP is calculated quarterly using manufacturer-submitted data on sales to all purchasers (with limited exceptions as articulated in section 1847A(c)(2) of the Act, such as for sales at nominal charge and sales exempt from best price) with manufacturers' rebates, discounts, and price concessions reflected in the manufacturer's determination of ASP.

Although the Part B drug benefit is generally considered to be limited in scope, it includes many categories of drugs and encompasses a variety of care settings and payment methodologies. In addition to the “incident to” drugs described above, Part B also covers and pays for certain oral drugs with specific benefit categories defined under section 1861(s) of the Act, including certain oral anti-cancer drugs and certain oral antiemetic drugs. In accordance with section 1842(o)(1) of the Act or through incorporation under the relevant payment system as discussed above, most of these oral Part B drugs are also paid based on the ASP methodology described in section 1847A of the Act.

However, at times Part B drugs are paid based on wholesale acquisition cost (WAC) as authorized under section 1847A(c)(4) of the Act [59] or average manufacturer price (AMP)-based price substitutions as authorized under section 1847A(d) of the Act [60] . Also, in accordance with section 1842(o) of the Act, other payment methodologies may be applied to determine the payment amount for certain Part B drugs, for example, AWP-based payments (using current AWP) are made for influenza, pneumococcal pneumonia, and hepatitis B vaccines.[61] We also use current AWP to make payment under the OPPS for very new drugs without an ASP.[62] Contractors may also make independent payment amount determinations in situations where a national price is not available for physician and other supplier claims and for drugs that are specifically excluded from payment based on section 1847A of the Act (for example, radiopharmaceuticals as noted in section 303(h) of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) (Pub. L. 108-173, enacted December 8, 2003). In such cases, pricing may be determined based on compendia or invoices.[63]

While most Part B drugs are paid based on the ASP methodology, MedPAC has noted that the ASP methodology may encourage the use of more expensive drugs because the 6 percent add-on generates more revenue for more expensive drugs.[64] The ASP payment amount also does not vary based on the price an individual provider or supplier pays to acquire the drug. The statute does not identify a reason for the additional 6 percent add-on above ASP; however, as noted in the MedPAC report (and by sources cited in the report), the add-on is needed to account for handling and overhead costs and/or for additional mark-up in the distribution channels that are not captured in the manufacturer-reported ASP.[65]

We proposed to use the methodology in section 1847A of the Act (which bases most payments on ASP) to set the payment rates for the “incident to” drugs. However, we proposed to limit the payment amounts for “incident to” drugs to 100 percent of the volume-weighted ASP for a HCPCS code instead of 106 percent of the volume-weighted ASP for a HCPCS code. We explained our belief that limiting the add-on would incentivize the use of the most clinically appropriate drug for a given patient. In addition, we noted that it was our understanding that many OTPs purchase directly from drug manufacturers, thereby limiting the markup from distribution channels. We also proposed to use the same version of the quarterly manufacturer-submitted data used for calculating the most recently posted ASP data files in preparing the CY 2020 payment rates for OTPs. We noted that the quarterly ASP Drug Pricing Files include ASP plus 6 percent payment amounts.[66] Accordingly, we adjusted these amounts consistent with our proposal to limit the payment amounts for these drugs to 100 percent of the volume-weighted ASP for a HCPCS code. The proposed payment rates can be found in Table 15 of the CY 2020 PFS proposed rule (84 FR 40537). We proposed to codify the ASP payment methodology for the drug component of weekly bundles that include implantable or injectable medications at § 410.67(d)(2). We solicited public comment on the proposals, as well as on using alternative ASP-based payments to price these drugs, such as a rolling average of the past year's ASP payment rates.

We received several comments on our proposals regarding pricing of Part B drugs. The following is a summary of the comments received and our responses.

Comment: Several commenters expressed concern regarding the proposal to use the methodology in section 1847A of the Act (which bases most payments on ASP) to set the payment rates for the “incident to” drugs and to limit the payment amounts to 100 percent of the volume-weighted ASP for a code instead of 106 percent of the volume-weighted ASP for a code. (We note that a similar proposal for setting the payment rates for the oral OTP drugs follows and that several of the comments we received did not specifically reference which group of drugs they were addressing; therefore, we have included a discussion of these comments under both sections.) A few commenters supported the proposal, reasoning that ASP provides a transparent and public benchmark that would allow monitoring for unexpected and unnecessary price changes by manufacturers.

Several other commenters expressed concerns about the proposal to price the Part B injectable and implantable drugs used in the bundle using the ASP without the 6 percent add-on. Commenters noted that the add-on is a necessary part of the payment to account for items such as overhead costs and/or additional mark-ups in the traditional drug distribution channels that are not captured in the manufacturer-reported ASP. A few commenters stated that the 6 percent Start Printed Page 62653add-on would allow the OTP to recoup costs associated with rigorous storage and inventory tracking systems required by the DEA. These commenters also stated that the large OTPs, hospitals, and physician systems could skew ASP lower than the prices that smaller or rural OTPs could negotiate on their own. One commenter expressed concerns that OTPs might not be able to afford Part B drugs without the add-on to cover these costs, and suggested a cautious approach to ensure the success of these programs. A few commenters noted that the proposal to price Part B drugs using ASP without the 6 percent add-on would provide a disincentive for an OTP to utilize the most appropriate product for the patient in order to limit their cost of care. Some commenters objected to CMS' statement in the proposed rule that limiting the 6 percent add-on would incentivize the use of the most clinically appropriate drug for a given patient asserting that the 6 percent add-on does not provide an incentive to choose high-cost treatment inappropriately because physicians do not profit from administering Part B drugs under the ASP methodology. Several commenters also questioned CMS' legal authority to limit the payment amount for these drugs to 100 percent of the ASP.

Response: We thank the commenters for their feedback on our proposal to set the payment amounts for “incident to” drugs at 100 percent of the volume-weighted ASP. We agree that use of ASP provides a transparent and public benchmark for manufacturers' pricing as it reflects the manufacturers' actual sales prices to all purchasers (with limited exceptions) and is the only pricing methodology that includes off-invoice rebates and discounts as described in section 1847A(c)(3) of the Act. For this reason, we believe the ASP to be the most market-based approach to set drug prices for the OTP bundled payments.

As noted above, section 1834(w) of the Act grants the Secretary significant discretion to establish bundled payment rates for OUD treatment services. The statute does not dictate the use of any specific methodology, such as the methodology in section 1847A of the Act, in setting the payment rate for the drug component of the bundled payments. Therefore, we do not agree with the comments that indicated CMS has a legal obligation to include the 6 percent add-on when using ASP to determine the payment rate for the drug component of the bundled payments to OTPs for OUD treatment services.

As noted in the proposed rule, we understand that many OTPs purchase medications directly from drug manufacturers, thereby limiting the markup from distribution channels. We received this information during a routine informational industry call with OTP advocates in preparation for drafting the proposed rule. We also note that this fact was not challenged by any of the commenters. Furthermore, we do not believe the record-keeping or storage requirements noted are unique to OTPs. In fact, the selection of drugs purchased by most OTPs is quite limited, which theoretically limits the utility of third-parties, such as wholesalers, and their associated costs and increases the purchase volume for OTPs and accompanying manufacturer discounts. We believe that this situation could lend itself to an OTP drug channel for purchasing at discounted rates either directly or through the use of buying groups as is the standard in the pharmacy industry today. Furthermore, we remain concerned that certain providers will look to differential drug costs to determine which therapies to offer. As a result, we believe that our proposed approach of paying for “incident to” drugs based on ASP offers the most appropriate balance between ensuring OTPs receive appropriate reimbursement for their drug acquisition costs, while also preserving the incentive to use the most clinically appropriate drug for the treatment of individual beneficiaries.

After consideration of the public comments, we are finalizing our proposal to use the methodology in section 1847A of the Act (which bases most payments on ASP) to set the payment rates for the “incident to” drugs and to limit the payment amounts for these drugs to 100 percent of the volume-weighted ASP for a drug category or code. We are codifying this policy in the regulations at § 410.67(d)(2)(i)(A). However, we continue to be interested in feedback regarding drug acquisition costs for OTP providers, and in particular any drug acquisitions that exceed these rates after factoring in discounts, rebates, etc., and, if necessary, may revisit the payment methodology for “incident to” OTP drugs in future rulemaking to ensure that OTPs' drug acquisition costs are appropriately reimbursed.

iii. Oral Drugs

We proposed to use ASP-based payment, which would be determined based on ASP data that have been calculated consistent with the provisions in 42 CFR part 414, subpart 800, to set the payment rates for the oral product categories when we receive manufacturer-submitted ASP data for these drugs. We stated that we believe using the ASP pricing data for oral OTP drugs currently covered under Part D [67] would facilitate the computation of the estimated costs of these drugs. However, we acknowledged that we do not collect ASP pricing information under section 1927(b) of the Act for these drugs. We solicited public comment on whether manufacturers would be willing to submit ASP pricing data for OTP drugs currently covered under Part D on a voluntary basis.

We also proposed to limit the payment amounts for oral drugs to 100 percent of the volume-weighted ASP for a HCPCS code instead of 106 percent of the volume-weighted ASP for that HCPCS code. We explained our belief that limiting the 6 percent add-on would incentivize the use of the most clinically appropriate drug for a given patient. In addition, we explained our understanding that many OTPs purchase directly from drug manufacturers, thereby limiting the markup from distribution channels. We proposed to use the same version of the quarterly manufacturer-submitted data used for calculating the most recently posted ASP data files in preparing the CY 2020 payment rates for OTPs. We noted that the quarterly ASP Drug Pricing Files include ASP plus 6 percent payment amounts.[68] Accordingly, we would adjust these amounts consistent with our proposal to limit the payment amounts for these drugs to 100 percent of the volume-weighted ASP for a HCPCS code. The proposed payment rates were provided in Table 15 of the proposed rule. We proposed to codify the ASP payment methodology for the drug component of weekly bundles that include an oral medication at § 410.67(d)(2)(i)(B). We solicited public comment on these proposals, as well as on using alternative ASP-based payments to price these drugs, such as a rolling average of the past year's ASP payment rates.

In the event that we do not receive manufacturer-submitted ASP pricing data, we also considered several potential alternative pricing mechanisms to estimate the payment amounts for oral drugs typically paid for under Medicare Part D but that would become OTP drugs paid under Part B when used as part of MAT in an OTP. Start Printed Page 62654We did not propose a specific pricing mechanism for these drugs at this time, but solicited public comment on the following potential approaches for estimating the acquisition cost and payment amounts for these drugs and on alternative approaches. We noted that we would consider the comments received in developing our final policy for determining these drug prices.

Approach 1: The Methodology in Section 1847A of the Act

One approach for estimating the cost of the drugs that are currently covered under Part D and for which ASP data are not available would be to use the methodology in section 1847A of the Act. Please see above for a discussion of the payment methodology in section 1847A of the Act. Under the methodology in section 1847A of the Act, when ASP data are not available, this option would price drugs using, for example, WAC or invoice pricing.

Approach 2: Medicare Part D Prescription Drug Plan Finder Data

On January 28, 2005, we issued the “Medicare Program; Medicare Prescription Drug Benefit” final rule (70 FR 4194) which implemented the Medicare voluntary prescription drug benefit, as enacted by section 101 of the MMA. Beginning on January 1, 2006, a prescription drug benefit program was available to beneficiaries with much broader drug coverage than was previously provided under Part B to include: Brand-name prescription drugs and biologicals, generic drugs, biosimilars, vaccines, and medical supplies associated with the injection of insulin.[69] This prescription drug benefit is offered to Medicare beneficiaries through Medicare Advantage Drug Plans (MA-PDs) and stand-alone Prescription Drug Plans (PDPs). The prescription drug benefit under Medicare Part D is administered based on the “negotiated prices” of covered Part D drugs. Under § 423.100 of the Part D regulations, the negotiated price of a Part D drug equals the amount paid by the Part D sponsor (or its pharmacy benefit manager) to the pharmacy at the point-of-sale for that drug. Typically, these Part D “negotiated prices” are based on AWP minus a percentage for brand drugs or either the maximum allowable cost, which is based on proprietary methodologies used to establish the same payment for therapeutically equivalent products marketed by multiple labelers with different AWPs, or the Generic Effective Rate, which guarantees aggregate minimum reimbursement (for example, AWP-85 percent). The negotiated price under Part D also includes a dispensing fee (for example, $1-$2), which is added to the cost of the drug.

Many of the beneficiaries who choose to enroll in Part D drug plans must pay premiums, deductibles, and copayments/co-insurance. The Medicare Prescription Drug Plan Finder is an online tool available at http://www.medicare.gov. This web tool allows beneficiaries to make informed choices about enrolling in Part D plans by comparing the plans' benefit packages, premiums, formularies, pharmacies, and pricing data. PDPs and MA-PDs are required to submit this information to CMS for posting on the Medicare Drug Plan Finder. The database structure provides the drug pricing and pharmacy network information necessary to accurately communicate plan information in a comparative format. The Medicare Prescription Drug Plan Finder displays information on pharmacies that are contracted to participate in the sponsors' network as either retail or mail order pharmacies.

Another approach for estimating the cost of the drugs that are currently covered under Part D and for which ASP data are not available would be to use data retrieved from the online Medicare Prescription Drug Plan Finder. For example, the Part D drug prices for each drug used by an OTP as part of MAT could be estimated based on a national average price charged by all Part D plans and their network pharmacies. However, the prices listed in the Medicare Prescription Drug Plan Finder generally reflect the prices that are negotiated by larger buying groups, as larger pharmacies often have significant buying power and smaller pharmacies generally contract with a pharmacy services administrative organization (PSAO). As a result, we indicated that our primary concern with this pricing approach is that such prices may fail to reflect the drug prices that smaller OTP facilities may pay in acquiring these drugs and could therefore disadvantage these facilities. We explained that if we were to select this pricing approach for oral drugs for which ASP data are not available, we would anticipate setting the pricing for these drugs using the most recent Medicare Prescription Drug Plan Finder data available at the drafting of this CY 2020 PFS final rule. We noted that, for the Part B ESRD prospective payment system (PPS) outlier calculation, which provides ESRD facilities with additional payment in situations where the costs for treating patients exceed an established threshold under the ESRD PPS, we chose to adopt the ASP methodology in section 1847A of the Act, and the other pricing methodologies under section 1847A of the Act, as appropriate, when ASP data are not available, to price the renal dialysis drugs and biological products that were or would have been separately billable under Part B prior to implementation of the ESRD PPS,[70] and the national average drug prices based on the Medicare Prescription Drug Plan Finder as the data source for pricing the renal dialysis drugs or biological products that were or would have been separately covered under Part D prior to implementation of the ESRD PPS.[71]

In the proposed rule, we stated that we believe all of the MAT drugs proposed for inclusion in the OTP benefit that are currently covered under Part D have clinical treatment indications beyond MAT such as for the treatment of pain.[72] These drugs will continue to be covered under Part D for these other indications. Buprenorphine will continue to be covered under Part D for MAT as well. Consequently, Part D pricing information should continue to be available for these drugs and could be used in the computation of payment under the approach discussed above.

Because, by law, methadone used in MAT cannot be dispensed by a pharmacy, it is not currently considered a Part D drug when used for MAT. Methadone used for this purpose can be dispensed only through an OTP certified by SAMHSA. However, methadone dispensed for pain may be considered a Part D drug and can be dispensed by a pharmacy. Accordingly, we also solicited comment on the applicability of Part D payment rates for methadone dispensed by a pharmacy to methadone dispensed by an OTP for MAT.

Approach 3: Wholesale Acquisition Cost (WAC)

Another approach for estimating the cost of the oral drugs that we proposed to include as part of the bundled payments, but for which ASP data are not available, would be to use WAC. Section 1847A(c)(6)(B) of the Act defines WAC as the manufacturer's list price for the drug to wholesalers or direct purchasers in the U.S., not including prompt pay or other discounts, rebates, or reductions in price, for the most recent month for Start Printed Page 62655which the information is available, as reported in wholesale price guides or other publications of drug pricing data. As noted above in the discussion of Part B drugs, WAC is used as the basis for pricing some Part B drugs; for example, it is used when it is less than ASP in the case of single source drugs (section 1847A(b)(4) of the Act) and in cases where ASP is unavailable during the first quarter of sales (section 1847A(c)(4) of the Act).

Because WAC is the manufacturer's list price to wholesalers, we noted that we believe it is more reflective of the price paid by the end user than the AWP. As a result, we believe that this pricing mechanism would be consistent with pricing that currently occurs for drugs that are separately billable under Part B. However, we have concerns about the fact that WAC does not include prompt pay or other discounts, rebates, or reductions in price. We noted that if we were to select this option to estimate the cost of certain drugs, we would develop pricing using the most recent data files available at the time of drafting this CY 2020 PFS final rule.

Approach 4: National Average Drug Acquisition Cost (NADAC)

Another approach for estimating the cost of the oral drugs that we proposed to include as part of the bundled payments, but for which ASP data are not available, would be to use Medicaid's NADAC survey. This survey provides another national drug pricing benchmark. CMS conducts surveys of retail community pharmacy prices, including drug ingredient costs, to develop the NADAC pricing benchmark. The NADAC was designed to create a national benchmark that is reflective of the prices paid by retail community pharmacies to acquire prescription and over-the-counter covered outpatient drugs and is available for consideration by states to assist with their individual pharmacy payment policies.

State Medicaid agencies reimburse pharmacy providers for prescribed covered outpatient drugs dispensed to Medicaid beneficiaries. The reimbursement formula consists of two parts: (1) Drug ingredient costs; and (2) a professional dispensing fee. In a final rule with comment period titled “Medicaid Program; Covered Outpatient Drugs,” which appeared in the February 1, 2016 Federal Register (81 FR 5169), we revised the methodology that state Medicaid programs use to determine drug ingredient costs, establishing an Actual Acquisition Cost (AAC) based determination, as opposed to a determination based on estimated acquisition costs (EAC). AAC is defined at 42 CFR 447.502 as the agency's determination of the pharmacy providers' actual prices paid to acquire drugs marketed or sold by specific manufacturers. As explained in the Covered Outpatient Drugs final rule with comment period (81 FR 5175), we believe shifting from an EAC to an AAC based determination of ingredient costs is more consistent with the dictates of section 1902(a)(30)(A) of the Act. In 2010, a working group within the National Association of State Medicaid Directors (NASMD) recommended the establishment of a single national pricing benchmark based on average drug acquisition costs. Pricing metrics based on actual drug purchase prices provide greater accuracy and transparency in how drug prices are established and are more resistant to manipulation. The NASMD requested that CMS coordinate, develop, and support this benchmark.

Section 1927(f) of the Act provides, in part, that CMS may contract with a vendor to conduct monthly surveys with respect to prices for covered outpatient drugs dispensed by retail community pharmacies. We entered into a contract with Myers & Stauffer, LLC to perform a monthly nationwide retail price survey of retail community pharmacy covered outpatient drug prices (CMS-10241, OMB 0938-1041) and to provide states with weekly updates on pricing files, that is, the NADAC files. The NADAC survey process focuses on drug ingredient costs for retail community pharmacies. The survey collects acquisition costs for covered outpatient drugs purchased by retail pharmacies, which include invoice prices from independent and chain retail community pharmacies. The survey data provide information that CMS uses to assure compliance with federal requirements. In the proposed rule, we explained that we believe NADAC data could be used to set the prices for the oral drugs furnished by OTPs for which ASP data are not available. Survey data on invoice prices provide the closest pricing metric to ASP that we are aware of. However, we also noted that similar to the other available pricing metrics, we have concerns about the applicability of retail pharmacy prices to the acquisition costs available to OTPs since we have no evidence to suggest that these entities would be able to acquire drugs at a similar price point. We noted that if we were to select this option to estimate the cost of certain drugs, we would develop pricing using the most recent data files available at the time of drafting this CY 2020 PFS final rule.

Alternative Methadone Pricing: TRICARE

We also considered an approach for estimating the cost of methadone using the amount calculated by TRICARE. As discussed above in this section of this final rule, the TRICARE rates for medications used in OTPs to treat OUD are spelled out in the 2016 TRICARE final rule (81 FR 61068); in the regulations at 32 CFR 199.14(a)(2)(ix); and in Chapter 7, Section 5 and Chapter 1, Section 15 of the TRICARE Reimbursement Manual 6010.61-M, April 1, 2015.

In the 2016 TRICARE final rule, DOD established separate payment methodologies for OTPs based on the particular medication being administered for treatment.[73] Based on TRICARE's review of industry billing practices, the initial weekly bundled rate for administration of methadone included a daily drug cost of $3, which is subject to an update factor.[74]

We noted that this option would only be applicable for methadone because TRICARE has developed a FFS payment methodology for buprenorphine and naltrexone.[75] In the 2016 TRICARE final rule, the DOD stated that the payments for buprenorphine and naltrexone are more variable in dosage and frequency for both the drug and non-drug services.[76] Accordingly, TRICARE pays for drugs listed on Medicare's Part B ASP files, such as the injectable and implantable versions of buprenorphine using the ASP; drugs not appearing on the Medicare ASP file, such as oral buprenorphine, are priced at the lesser of billed charges or 95 percent of the AWP.[77]

We stated that we believed that pricing methadone consistent with the TRICARE payment rate could provide a reasonable payment amount for methadone when ASP data are not available. As DOD noted in the 2016 TRICARE final rule, “a number of commenters indicated that they believed the rates DOD proposed for OTPs' services are near market rates and are acceptable.” [78]

We proposed to codify this proposal to apply an alternative approach for determining the payment rate for oral drugs only if ASP data are not available in § 410.67(d)(2)(i)(B). We solicited Start Printed Page 62656public comment on the potential alternative approaches for estimating the cost of oral drugs that we proposed to include as part of the bundled payments but for which ASP data are not available, including any other alternate sources of data to estimate the cost of these oral MAT drugs. Payment rates based on these different options were set forth in Table 14 of the proposed rule. We stated that we would consider the comments received on these different approaches when deciding on the approach that we would use to determine the payment rates for oral drugs in the CY 2020 PFS final rule. We also solicited public comment on any other potential data sources for estimating the provider acquisition costs of OTP drugs currently paid under either Part B or Part D.

We received several comments on our proposals regarding pricing of oral drugs. The following is a summary of the comments received and our responses.

Comment: Several commenters submitted comments on the proposal to use ASP-based payment to set the payment rates for the oral product categories when we receive manufacturer-submitted ASP data for these drugs and to limit the payment amounts for oral drugs to 100 percent of the volume-weighted ASP instead of 106 percent of the volume-weighted ASP. (We note that a similar proposal for the injectable and implantable Part B drugs is discussed above and that several of the comments we received did not specifically reference which group of drugs they were concerning; therefore, we have included a discussion of these comments under both sections.) A few commenters supported the proposal, reasoning that ASP provides a transparent and public benchmark that would allow monitoring for unexpected and unnecessary price changes by manufacturers; and a couple of commenters encouraged us to require manufacturers to report these data.

Several other commenters expressed concerns about the proposal to price the oral drugs used in the bundle using the ASP without the 6 percent add-on. Commenters stated that the add-on is a necessary part of the payment to account for things such as overhead costs and/or additional mark-ups in the traditional drug distribution channels that are not captured in the manufacturer-reported ASP. A few commenters stated that the 6 percent add-on would allow the OTP to recoup costs associated with rigorous storage and inventory tracking systems required by the DEA. These commenters also stated that large OTPs, hospitals, and physician systems could skew ASP lower than the prices that smaller or rural OTPs could negotiate on their own. One commenter expressed concerns that OTPs might not be able to afford the oral drugs used in MAT without the add-on to cover these costs, and suggested that the Administration should be overly cautious to ensure success of these programs. Some commenters expressed concerns that this proposal would provide a disincentive for an OTP to utilize the most appropriate product for the patient to limit their cost of care. Several commenters also questioned CMS' legal authority to limit the payment amount for these drugs to 100 percent of the ASP.

Response: We thank the commenters for their feedback on our proposal to use ASP-based payment to set the payment rates for the oral product categories when we receive manufacturer-submitted ASP data for these drugs and to limit the payment amounts for oral drugs to 100 percent of the volume-weighted ASP instead of 106 percent of the volume-weighted ASP. We agree that use of ASP provides a transparent and public benchmark for manufacturers' pricing as it reflects the manufacturers' actual sales prices to all purchasers (with limited exceptions) and is the only pricing methodology that includes off-invoice rebates and discounts as described in section 1847A(c)(3) of the Act. For this reason, we believe the ASP to be the most market-based approach to set drug prices for the OTP benefit.

As noted above, section 1834(w) of the Act grants the Secretary considerable discretion to establish bundled payment rates for OUD treatment services. The statute does not dictate use of any specific methodology, such as the methodology in section 1847A of the Act, in setting these payments. We used our discretion, granted by the Act, in proposing to modify the methodology in section 1847A of the Act to set payments to OTPs for oral drugs for which ASP data are available. Therefore, we do not agree with the comments that indicated CMS has a legal obligation to include the 6 percent add—when using ASP to determine payments to OTPs for oral drugs.

As noted in the proposed rule, we understand that many OTPs purchase medications directly from drug manufacturers, thereby limiting the markup from distribution channels. We received this information during a routine informational industry call with OTP advocates in preparation for drafting the proposed rule. We also note that this fact was not challenged by any of the commenters. Furthermore, we do not believe the record-keeping or storage requirements noted are unique to OTPs. In fact, the selection of drugs purchased by most OTPs is quite limited, which theoretically limits the utility of third-parties, such as wholesalers, and their associated costs and increases the purchase volume for OTPs and accompanying manufacturer discounts. We believe that this situation could lend itself to an OTP drug channel for purchasing at discounted rates either directly or through the use of buying groups as is the standard in the pharmacy industry today. Furthermore, we remain concerned that certain providers will look to differential drug costs to determine which therapies to offer. As a result, we believe that our proposed approach of paying for oral drugs based on ASP, when available, offers an appropriate balance between ensuring OTPs receive appropriate reimbursement for their drug acquisition costs, while also preserving the incentive to use the most clinically appropriate drug for the treatment of individual beneficiaries.

After consideration of the public comments, we are finalizing our proposal to use ASP-based payment to set the payment rates for the oral drugs and to limit the payment amounts for these drugs to 100 percent of the volume-weighted ASP when it is available. However, we continue to be interested in feedback regarding drug acquisition costs for OTP providers, and in particular any drug acquisitions that exceed these rates after factoring in discounts, rebates, etc., and if necessary, may revisit the payment methodology for oral OTP drugs in future rulemaking to ensure that OTPs' drug acquisition costs are appropriately reimbursed.

Comment: A few commenters submitted comments on the potential pricing mechanisms described in the proposed rule to estimate the payment amounts for oral OTP drugs in the event that we do not receive manufacturer-submitted ASP pricing data. Some commenters supported establishing payments based on current Medicare law and practice, such as the rates provided under Part D, for other oral drugs. Another commenter advised against using methods such as AWP and WAC as these options can be manipulated by the manufacturers. This commenter also noted that NADAC and the Medicare Plan Finder prices may not be relevant to all OTP medications as they are retail-based price measures and OTPs are providers. One commenter suggested use of the methodology in section 1847A of the Start Printed Page 62657Act, which would generally default to WAC-based payment if ASP is not reported. One commenter generally opposed the use of TRICARE rates, while another specifically stated that the current TRICARE payment rate for methadone, as presented in the proposed rule, is fair and should be used as a reference price for Medicare.

Response: We agree with commenters that using current programmatic pricing mechanisms where available is preferable to a pricing methodology that is novel and unproven. As oral buprenorphine used for OUD is currently dispensed by retail pharmacies, we believe that a retail-based pricing method may be most relevant to this drug product and more reflective of actual costs than a list price. As noted above, the NADAC survey collects acquisition costs for covered outpatient drugs purchased by retail pharmacies, which include invoice prices from independent and chain retail community pharmacies. Pricing metrics based on actual drug purchase prices provide greater accuracy and transparency in how drug prices are established and are more resistant to manipulation. As the NADAC survey data on invoice prices provide the closest pricing metric to ASP that we are aware of, we believe, at this time, that NADAC data would be the best pricing benchmark to set the prices for non-methadone oral drugs (that is, currently only the oral buprenorphine products) furnished by OTPs for which ASP data are not available. We further agree that retail pricing benchmarks, such as NADAC and Part D Plan Finder data, may not be particularly relevant for methadone, because methadone is not dispensed by retail pharmacies for this indication and its use for OUD is limited to OTPs. As a result, we believe that use of the TRICARE rate for methadone, when ASP data are not available, is currently the most applicable reference price for Medicare payment of methadone used in the OTP setting.

After consideration of the public comments, we are finalizing our proposal to use ASP-based payment to set the payment rates for the oral product categories when we receive manufacturer-submitted ASP data for these drugs and to limit the payment amounts for oral drugs to 100 percent of the volume-weighted ASP. We have used the same version of the quarterly manufacturer-submitted data used for calculating the most recently posted ASP data files to determine the CY 2020 payment rates for OTPs. When ASP data are not available for the oral drugs used in OTPs, we are finalizing a policy under which we will use the TRICARE rate to set the payment for the drug component of the methadone bundle, and NADAC data to set the payment for the drug component of the oral buprenorphine bundle. Payment rates for these drugs are provided in Table 18. We note that, for purposes of determining payment for CY 2020, we were able to calculate an ASP for methadone using manufacturer reported data. However, we did not receive ASP data from any of the buprenorphine oral manufacturers. Therefore, the drug component of the oral buprenorphine weekly bundle will be priced using NADAC survey data. We are finalizing this payment methodology for the oral drugs at § 410.67(d)(2)(i)(B).

(b) Non-Drug Component

To price the non-drug component of the bundled payments, we proposed to use a crosswalk to the non-drug component of the TRICARE weekly bundled rate for services furnished when a patient is prescribed methadone. As described above, in 2016, TRICARE finalized a weekly bundled rate for administration of methadone that included a daily drug cost of $3, along with a $15 per day cost for non-drug services (that is, the costs related to the intake/assessment, drug dispensing and screening and integrated psychosocial and medical treatment and supportive services). The daily projected per diem cost ($18/day) was converted to a weekly rate of $126 ($18/day × 7 days) (81 FR 61079). TRICARE updates the weekly bundled methadone rate for OTPs annually using the Medicare update factor used for other mental health care services rendered under TRICARE (that is, the Inpatient Prospective Payment System update factor) (81 FR 61079). The updated amount for CY 2019 is $133.15 (of which $22.19 is the methadone cost and the remainder, $110.96, is for the non-drug services).[79] In the proposed rule, we stated that we believed using the TRICARE weekly bundled rate would be a reasonable approach to setting the payment rate for the non-drug component of the bundled payments to OTPs, particularly given the time constraints in developing a payment methodology prior to the January 1, 2020 effective date of this new Medicare benefit category. The TRICARE rate is an established national payment rate that was established through notice and comment rulemaking. As a result, OTPs and other interested parties had an opportunity to present information regarding the costs of these services. Furthermore, the TRICARE rate describes a generally similar bundle of services to those services that are included in the definition of OUD treatment services in section 1861(jjj)(1) of the Act. We recognized that there are differences in the patient population for TRICARE compared with the Medicare beneficiary population. However, as OTP services have not previously been covered by Medicare, we noted that it is not clear what impact, if any, these differences would have on the cost of the services included in the non-drug component of the bundled payments. We proposed to codify the methodology for determining the payment rate for the non-drug component of the bundled payments using the TRICARE weekly rate for non-drug services at § 410.67(d)(2). As part of the proposal, we noted that we would plan to monitor utilization of non-drug services by Medicare beneficiaries and, if needed, would consider in future rulemaking ways we could tailor the TRICARE payment rate for these non-drug services to the Medicare population, including dually eligible beneficiaries.

Because the TRICARE payment rate for the non-drug services included in its weekly bundled rate for methadone reflects the daily administration of methadone, as part of our proposed approach we indicated that we would adjust the TRICARE payment rate for non-drug services for most of the other bundled payments to more accurately reflect the cost of administering the other drugs used in MAT. For the oral buprenorphine bundled payment, we proposed to retain the same amount as the rate for the methadone bundled payment based on an assumption that this drug is also being dispensed daily. We stated that we understood that patients who have stabilized may be given 7-14 day supplies of oral buprenorphine at a time, but for the purposes of developing the proposed rates, we proposed to value this service to include daily drug dispensing to account for cases where daily drug dispensing is occurring. For the injectable drugs (buprenorphine and naltrexone), we proposed to subtract from the non-drug component, an amount that is comparable to the dispensing fees paid by several state Medicaid programs ($10.50) for a week of daily dispensing of methadone. This adjustment would account for the fact that these injectable drugs are not oral drugs that are dispensed daily; we proposed that we would then instead add the fee that Medicare pays for the Start Printed Page 62658administration of an injection (which is currently $16.94 under the CY 2019 non-facility Medicare payment rate for CPT code 96372). We proposed to update the amount of this adjustment annually using the same methodology that we were proposing to use to update the non-drug component of the bundled payments.

Similarly, we proposed that the payment rates for the non-drug component of the codes for the weekly bundled payments for buprenorphine implants would be adjusted to add an amount for insertion and/or removal of the implants based on a direct crosswalk to the non-facility payment rates under the Medicare PFS for the insertion, removal, or insertion and removal of these implants, which describe the physician work, PE, and malpractice costs associated with these procedures, and to remove the costs of daily drug dispensing (determined based on the dispensing fees paid by several state Medicaid programs for a week of daily dispensing of methadone, currently $10.50). For the code describing implant insertion, we proposed that we would use a crosswalk to the rate for HCPCS code G0516 (Insertion of non-biodegradable drug delivery implants, 4 or more (services for subdermal rod implant)); for the code describing implant removal, we proposed that we would use a crosswalk to the rate for HCPCS code G0517 (Removal of non-biodegradable drug delivery implants, 4 or more (services for subdermal implants)); and for the code describing implant insertion and removal, we proposed that we would use a crosswalk to the rate for HCPCS code G0518 (Removal with reinsertion, non-biodegradable drug delivery implants, 4 or more (services for subdermal implants)). We note that in the proposed rule, we inadvertently misstated the amounts for HCPCS codes G0516, G0517, and G0518. The correct amounts for HCPCS codes G0516, G0517, and G0518 under the CY 2019 non-facility Medicare payment rate are $246.15, $265.61, and $465.26, respectively.

To determine the payment rates for the code describing a non-drug bundled payment, we proposed to use a crosswalk to the reimbursement rate for the non-drug services included in the TRICARE weekly bundled rate for administration of methadone, adjusted to subtract the cost of methadone dispensing (using an amount that is comparable to the dispensing fees paid by several state Medicaid programs for a week of daily dispensing of methadone, which is currently $10.50).

We proposed that the payment rate for the add-on code for each additional 30 minutes of counseling or group or individual therapy would be based on 30 minutes of substance use counseling and valued based on a crosswalk to the rates set by state Medicaid programs for similar services.

We received a number of public comments on our proposed payment rates for the non-drug component of the bundled payment and the add-on code for additional counseling or therapy services. The following is a summary of the comments we received and our responses.

Comment: Many commenters stated that the proposed rate for the non-drug component of the bundled payment was insufficient. A few commenters expressed concern that establishing a Medicare rate that is lower than the rates set by some state Medicaid programs would destabilize the market. Some commenters recommended that the single full week TRICARE payment rate should be the floor used to pay for a basic Medicare OTP benefit assuming a similar level of service and that any additional services, such as extra counseling and/or therapy visits, should be reimbursed outside of the bundle, as CMS proposed for counseling sessions above the basic benefit and stated that if additional services are added to the basic benefit, the bundled payment should increase to reflect the additional services. Some commenters stated that the proposed rate reflects a market rate that is significantly discounted, noting that it is benchmarked on an insurance industry practice rooted in stigma and limited resources and expressed concern that it may inadvertently limit access to care at a time when the opioid overdose epidemic continues to cause significant mortality. Additionally, a few commenters noted that the TRICARE rate reflects the average cost of care for the typical TRICARE patient, but that they believed Medicare patients would generally require more services. A few commenters noted that the only difference between OTPs and office-based OUD treatment is the means of regulation and medication offered, and that therefore, the different settings should not be cause to pay differentially. Some commenters encouraged CMS to adjust the payment rates to account for severity of illness. Several commenters stated that the proposed rate for counseling is too low, which would make it difficult for providers to employ qualified practitioners. Several commenters urged CMS to use a building block methodology, which sums the Medicare payment rates for similar services furnished in the non-facility setting, to calculate the payment rate for the non-drug component.

Response: After consideration of the public comments, we are finalizing a payment rate for the non-drug component that is calculated based on a building block methodology using the Medicare payment rates for similar services furnished in the non-facility setting. We note that we considered a variety of different rates, including TRICARE and Medicaid, and decided ultimately to use Medicare rates for similar services. We appreciate commenters' feedback about the TRICARE rate, including the concern that it reflects an average cost of care for the TRICARE patient population, and note that by finalizing payment rates using the established rates for similar services under Medicare, we believe these rates will be more reflective of the resource costs involved in furnishing services to the Medicare patient population. We also acknowledge that establishing a methodology under which Medicare payments would be less than those made by state Medicaid programs could create unnecessary barriers to access to care. Additionally, we recognize that a differential in payment OUD treatment services furnished by OTPs and OUD treatment furnished in the office setting may set up a disparity that could disadvantage OTPs.

The services that are included in the non-drug component of the weekly bundles are the same services that are included in the TRICARE rate, which are individual therapy, group therapy, substance use counseling, and toxicology testing. Therefore, we believe that a reasonable alternative approach is to finalize payment rates for the non-drug component of the bundled payments for CY 2020 that are determined using a building block methodology under which the payment rate for the same set of non-drug services is based on established rates for similar services under the Medicare PFS (non-facility rates), the Medicare CLFS, and state Medicaid programs.

Specifically, the payment rate we are finalizing for the non-drug component reflects the Medicare payment rates for the following codes as reference codes for the services that are included in the TRICARE rate, (individual therapy, group therapy, substance use counseling, and toxicology testing): CPT code 90832 (Psychotherapy, 30 minutes with patient), in CY 2019 is currently assigned a non-facility rate of $68.47 under the PFS; CPT code 90853 (Group psychotherapy (other than of a multiple-family group)), which in CY 2019 is assigned a non-facility rate of $27.39 Start Printed Page 62659under the PFS; HCPCS code G0396 (Alcohol and/or substance (other than tobacco) abuse structured assessment (e.g., audit, dast), and brief intervention 15 to 30 minutes), which in CY 2019 is assigned a non-facility rate of $30.94 under the PFS when furnished by nonphysician practitioners (NPPs), as we believe this is a more accurate reflection of the practitioner type who would be furnishing substance use counseling in an OTP; CPT code 80305 (Drug test(s), presumptive, any number of drug classes, any number of devices or procedures; capable of being read by direct optical observation only (e.g., utilizing immunoassay [e.g., dipsticks, cups, cards, or cartridges]), includes sample validation when performed, per date of service), which in CY 2019 is assigned a rate of $12.60 under the CLFS, and which we will prorate to account for two tests per month in the base bundled payment; and HCPCS code G0480 (Drug test(s), definitive, utilizing (1) drug identification methods able to identify individual drugs and distinguish between structural isomers (but not necessarily stereoisomers), including, but not limited to gc/ms (any type, single or tandem) and lc/ms (any type, single or tandem and excluding immunoassays (e.g., ia, eia, elisa, emit, fpia) and enzymatic methods (e.g., alcohol dehydrogenase)), (2) stable isotope or other universally recognized internal standards in all samples (e.g., to control for matrix effects, interferences and variations in signal strength), and (3) method or drug-specific calibration and matrix-matched quality control material (e.g., to control for instrument variations and mass spectral drift); qualitative or quantitative, all sources, includes specimen validity testing, per day; 1-7 drug class(es), including metabolite(s) if performed), which in CY 2019 is assigned a rate of $114.43 under the CLFS, and which we will prorate to account for one test per month in the base bundled payment, as discussed previously. The sum of these amounts is $161.71.

We are also finalizing our proposal to adjust the non-drug component rate to account for different administration and dispensing costs of the drug that is used in the episode of care (either oral, injectable, or implantable). We note that in calculating the proposed rates, the TRICARE weekly bundled rate included administration of oral drugs, which we then adjusted accordingly for the other bundled payments by subtracting the amount for dispensing oral drugs and adding a different amount to account for administration of the injectable and implantable drugs. We are finalizing the rate we proposed for dispensing oral drugs using an approximation of the average dispensing fees under state Medicaid programs, which is $10.50, since there is no Medicare Part B rate for oral MAT drugs. For the injectable drugs (buprenorphine and naltrexone), we proposed to subtract from the non-drug component an amount that is comparable to the dispensing fees paid by several state Medicaid programs ($10.50) for a week of daily dispensing of methadone, and to add the Medicare non-facility rate for administration of an injection. This adjustment was necessary to account for the fact that the TRICARE rate includes oral dispensing fees, whereas these injectable drugs are not oral drugs that are dispensed daily. However, because we are adopting a building block methodology in final rule to determine the payment rate for the non-drug component of the weekly bundles, it is no longer necessary to subtract the oral dispensing fee; however, as we proposed, we will include the Medicare non-facility rate for administration of an injection in our determination of the payment rate for the non-drug component for weekly bundles that include injectable drugs. We are finalizing the rate we proposed for administration of an injection, based on CPT code 96372 (Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular) as a reference code, is $16.94.

For the codes describing the insertion, removal, or insertion and removal of the buprenorphine implants, we proposed to adjust the non-drug component payment rate to remove the cost of daily administration of an oral drug and by adding the Medicare non-facility payment rate for the insertion, removal, or insertion and removal of the implants, respectively. Again, removal of the cost of daily administration of an oral drug is no longer necessary under our building block methodology; but, we are finalizing our proposal to include the rates for the insertion, removal, or insertion and removal of the buprenorphine implants, as applicable. The reference codes, which we proposed and are finalizing are: HCPCS codes G0516 (Insertion of non-biodegradable drug delivery implants, 4 or more (services for subdermal rod implant)), which in CY 2019 is assigned a non-facility rate of $246.15. G0517 (Removal of non-biodegradable drug delivery implants, 4 or more (services for subdermal implants)), which in CY 2019 is assigned a non-facility rate of $265.61 under the PFS, and G0518 (Removal with reinsertion, non-biodegradable drug delivery implants, 4 or more (services for subdermal implants)), which in CY 2019 is assigned a non-facility rate of $465.26 under the PFS. Under the building block methodology we are adopting in this final rule, the total non-drug component payment for the non-drug bundle is $161.71, the total non-drug component payment for oral drugs is $172.21, the total non-drug component payment for the injectable drugs is $178.65, the total non-drug component payment for the buprenorphine implant insertion is $407.86, the total non-drug component payment for the buprenorphine implant removal is $427.32, and the total non-drug component payment for the buprenorphine implant insertion and removal is $626.97. See Table 18 for a full listing of the final payment rates that we are establishing in this final rule, which reflect the sum of the drug component and non-drug component for each bundled payment. We believe the rates we are finalizing are reflective of an average case, but we recognize that the number of services furnished for patients who have stabilized and are in the maintenance phase of treatment, may be significantly less. However, we note that while the reference codes listed above were considered for the purpose of valuation of the non-drug component of the weekly bundled payments, it is not a requirement for billing these codes (HCPCS codes G2067-G2075) that all of the services described by these reference codes would necessarily be furnished during each week that the bundled payment is billed. Rather, the threshold to bill for the bundled payment is that at least one service in the bundle is furnished during that week, which could be administration of the drug, individual therapy, group therapy, substance use counseling, or toxicology testing.

In response to commenters who stated that the proposed rate for the counseling add-on code was too low, we note that we are finalizing a rate of $30.94, which is based on the CY 2019 PFS non-facility rate for HCPCS code G0396 (Alcohol and/or substance (other than tobacco) abuse structured assessment (e.g., audit, dast), and brief intervention 15 to 30 minutes), when furnished by NPPs, and is higher than the proposed amount for this add-on code. Additionally, we believe that the availability of this add-on code will allow OTPs to receive reimbursement for additional counseling services furnished to patients with more needs, thereby accounting for varying levels of severity of illness. We will be Start Printed Page 62660monitoring the claims data to ensure that use of this add-on code is not being abused.

i. Medication Not Otherwise Specified

In the proposed rule, we stated that we would expect the non-drug component for the medication not otherwise specified bundled payment (HCPCS code G2075) to be consistent with the pricing methodology for the other bundled payments and therefore, to be based on a crosswalk to the TRICARE rate, adjusted for any applicable administration and dispensing fees. For example, for oral medications, we would use the rate for the non-drug services included in the TRICARE methadone bundle, based on an assumption that the drug is also being dispensed daily. For the injectable medications, we similarly stated that we would adjust the TRICARE payment rate for non-drug services using the same methodology we proposed for the bundled payments with injectable medications (to subtract an amount for daily dispensing and add the non-facility Medicare payment rate for administration of the injection). For implantable medications, we stated that we would also use the same methodology we proposed for the bundled payments with implantable medications, with the same crosswalked non-facility Medicare payment rates (for insertion, removal, and insertion and removal). We solicited comments on how the price of the non-drug component of such bundled payments should be determined, in particular the dispensing and/or administration fees, including whether the methodology we proposed for determining the payment rate for the non-drug component of an episode of care that includes a new opioid agonist and antagonist medication (which is based on whether the drug is oral, injectable, or implantable) would be appropriate to use for these new drugs.

We did not receive any comments on our proposal relating to pricing the non-drug component for medication not otherwise specified bundled payments. Consistent with our original proposal, we intend to determine the payment for the non-drug component of the medication not otherwise specified bundle based on whether the drug is oral, injectable, or implantable. However, this payment would be determined using the building block payment methodology that we are adopting in this final rule to determine the non-drug component of the bundled payments for medications that have the same mode of administration.

(c) Partial Episode of Care

For the codes describing partial episodes for methadone and oral buprenorphine, we proposed that the payment rates for the non-drug component would be calculated by taking one half of the payment rate for the non-drug component for the corresponding weekly bundles. We chose one half as the best approximation of the median cost of the services furnished during a partial episode consistent with our proposal to make a partial episode bundled payment when the majority of services described in a beneficiary's treatment plan are not furnished during a specific episode of care. However, we solicited comment on other methods that could be used to calculate these payment rates. We proposed that the payment rates for the drug component of these partial episode bundles would be calculated by taking one half of the payment rate for the drug component of the corresponding weekly bundles.

For the codes describing partial episodes for injectable buprenorphine and naltrexone, we proposed that the payment rates for the drug component would be the same as the payment rate for the drug component of the full weekly bundle so that the OTP would be reimbursed for the cost of the drug that is given at the start of the episode. For the non-drug component, we proposed that the payment rate would be calculated as follows: The TRICARE non-drug component payment rate ($110.96), adjusted to remove the cost of daily administration of an oral drug ($10.50), then divided by two; that amount would be added to the fee that Medicare pays for the administration of an injection (which is currently $16.94 under the CY 2019 non-facility Medicare payment rate for CPT code 96372).

For the codes describing partial episodes for the buprenorphine implant insertion, removal, and insertion and removal, we proposed that the payment rates for the drug component would be the same as the payment rate for the corresponding weekly bundle. For the non-drug component, we proposed that the payment rate would be calculated as follows: The TRICARE non-drug component payment rate ($110.96), adjusted to remove the cost of daily administration of an oral drug ($10.50), then divided by two; that amount would be added to the Medicare non-facility payment rate for the insertion, removal, or insertion and removal of the implants, respectively (based on the non-facility rates for HCPCS codes G0516, G0517, and G0518, which are currently $246.15, $265.61, and $465.26, respectively).

For the code describing a non-drug partial episode of care, we proposed that the payment rate would be calculated by taking one half of the payment rate for the corresponding weekly bundle.

We proposed that the payment rate for the code describing partial episodes for a medication not otherwise specified would be calculated based on whether the medication is oral, injectable or implantable, following the methodology described above for the corresponding type of partial episode. We solicited comments on how partial episodes of care using new drugs with a novel mechanism of action (that is, non-opioid agonist and/or antagonist treatment medications) should be priced. For example, we could use the same approach described previously for pricing new opioid agonist and antagonist medications not otherwise specified, which is to follow the methodology based on whether the drug is oral, injectable or implantable.

We did not receive comments on our proposed methodology for determining payment rates for partial episodes. However, as discussed above, after consideration of the public comments, we are not finalizing our proposal to create partial episodes at this time, and thus will not be finalizing our proposed methodology for pricing partial episodes.

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(8) Place of Service (POS) Code for Services Furnished at OTPs

In the proposed rule, we explained that we would be creating a new POS code specific to OTPs since there are no existing POS codes that specifically describe OTPs. We indicated that claims for OTP services would include this place of service code. We also noted that POS codes are available for use by all payers. We did not propose to make any differential payment based on the use of this new POS code.

The following is a summary of the comments we received regarding the discussion of creating a new POS and our responses.

Comment: Several commenters supported the plan to create a new POS code that would specifically describe OTPs. A few commenters stated that if non-OTP pharmacies were to dispense MAT drugs covered by an OTP bundle, it is not clear how the OTP POS code will be transmitted to Part D plans or pharmacies so that they will know whether an enrollee is also enrolled in an OTP. Another commenter stated that while POS codes currently distinguish inpatient from outpatient OUD treatment, they do not distinguish between a Medicare-enrolled OTP and a non-Medicare-enrolled OTP and recommended that CMS should consider multiple value sets for POS codes to help retail pharmacies dispense prescriptions and process claims appropriately.

Response: We have created a new place of service code, which will be described as Place of Service code 58 (Non-residential Opioid Treatment Facility—a location that provides treatment for OUD on an ambulatory basis. Services include methadone and other forms of MAT). We expect that POS code 58 will be noted on claims Start Printed Page 62663submitted for the HCPCS G codes describing OTP services. Additionally, we note that the G codes describing the OTP bundled payments and add-on codes can only be billed by OTPs and cannot be billed by other providers. We note that POS codes are not specific to Medicare use and may be used by other payers.

In response to the comments about non-OTP pharmacies dispensing MAT drugs included in an OTP bundle, we encourage pharmacies and prescribing OTPs be in close communication in order to ensure proper billing procedures are followed and to prevent duplicative payments. The presence of POS code 58 on retail pharmacy claims will not mean that the pharmacy should process MAT claims any differently than they do now. We appreciate the suggestion to create multiple value sets for POS codes, and will take that under consideration.

c. Duplicative Payments Under Parts B or D

Section 1834(w)(1) of the Act, added by section 2005(c) of the SUPPORT Act, requires the Secretary to ensure, as determined appropriate by the Secretary, that no duplicative payments are made under Part B or Part D for items and services furnished by an OTP. In the proposed rule, we noted that many of the individual items or services provided by OTPs that would be included in the bundled payment rates under the proposed policies may also be appropriately available to beneficiaries through other Medicare benefits. Although we recognized the potential for significant program integrity concerns when similar items or services are payable under separate Medicare benefits, we also stated that we believe it is important that any efforts to prevent duplicative payments not inadvertently restrict Medicare beneficiaries' access to other Medicare benefits even for the time period they are being treated by an OTP. For example, a beneficiary receiving counseling or therapy as part of an OTP bundle of services may also be receiving medically reasonable and necessary counseling or therapy as part of a physician's service during the same time period. Similarly, there could be circumstances where Medicare beneficiaries with OUD could receive treatment and/or medication from non-OTP entities that would not result in duplicative payments, presuming that both the OTP and the other entity appropriately furnished separate medically-necessary services or items. Consequently, we explained that we do not believe that provision of the same kinds of services by both an OTP and a separate provider or supplier would itself constitute a duplicative payment.

We explained our belief that duplicative payments would result from the submission of claims to Medicare leading to payment for drugs furnished to a Medicare beneficiary and the associated dispensing fees on a certain date of service to both an OTP and another provider or supplier under a different benefit. In these circumstances, we would consider only one of the claims to be paid for appropriately. Accordingly, for purposes of implementing section 1834(w)(1) of the Act, we proposed to consider payment for medications delivered, administered or dispensed to the beneficiary as part of the OTP bundled payment to be a duplicative payment if delivery, administration or dispensing of the same medications was also separately paid under Medicare Parts B or D. We proposed to codify this policy at § 410.67(d)(4). We acknowledged that some OTPs may negotiate arrangements whereby community pharmacies supply MAT-related medications to OTPs. However, we stated that if the OTP provides medically-necessary MAT-related medications as part of an episode of care, we would expect the OTP to take measures to ensure that there is no claim for payment for these drugs other than as part of the OTP bundled payment. For example, the MAT drugs billed by an OTP as part of a bundled payment should not be reported to or paid under a Part D plan. We stated that we expect that OTPs will take reasonable steps to ensure that the items and services furnished under their care are not reported or billed under a different Medicare benefit. We also noted that CMS intends to monitor for duplicative payments, and would take appropriate action as needed when such duplicative payments are identified. Therefore, we proposed that in cases where a payment for drugs used as part of an OTP's treatment plan is identified as being a duplicative payment because the same costs were paid under a different Medicare benefit, CMS will generally recoup the duplicative payment made to the OTP as the OTP would be in the best position to know whether or not the drug that is included as part of the beneficiary's treatment plan is furnished by the OTP or by another provider or supplier given that the OTP is responsible for managing the beneficiary's overall OUD treatment. We proposed to codify this policy at § 410.67(d)(4). We noted that this general approach would not preclude CMS or other auditors from conducting appropriate oversight of duplicative payments made to the other provider or suppliers, particularly in cases of fraud and/or abuse.

We received a few comments on our proposed policy to address duplicative payments. The following is a summary of the comments we received and our responses.

Comment: A few commenters supported the proposal that the OTP should be accountable for ensuring duplicative payments are not made on the basis that OTPs are in the best position to know whether a drug included in the patient's treatment plan is furnished by the OTP.

Response: We thank the commenters for their feedback and support.

Comment: One commenter stated that the new Medicare bundled payments to OTPs should not impact payment for MAT prescriptions rightfully transmitted to a retail pharmacy unless the prescription is from an OTP. The commenter stated that having to determine whether a MAT drug presented to a retail pharmacy should be covered under the new Part B OTP bundle or Part D could introduce a delay in access to treatment. The commenter stated that retail pharmacies should continue to process any MAT prescription under Part D, as they do today. The commenter also stated that prescribers who administer implantable or injectable MAT drugs outside of a SAMHSA-certified OTP would continue to bill these drugs to Part B. Additionally, the commenter questioned if the Medicare bundled payments to OTPs will include MAT drugs that are prescribed within an OTP by a licensed prescriber, but dispensed outside of it.

Response: With regard to the commenter's question concerning MAT drugs prescribed within an OTP but dispensed outside of it, there is no issue of duplicative payment if the OTP has an arrangement with the pharmacy whereby CMS pays the OTP a bundled payment rate and the OTP reimburses the pharmacy through an independent arrangement (in which case the pharmacy would not bill the Part D plan, as it would be reimbursed by the OTP). However, if such an arrangement does not exist, and the pharmacy intends to submit a Part D claim, then the OTP should not bill for an episode of care that includes a drug component but instead should bill for a non-drug episode of care (HCPCS code G2074). Similarly, we note that if the drug administration for a Part B MAT drug occurs outside the OTP and the OTP is not also billing for a weekly bundle that includes that Part B drug, then the administering provider can bill Part B.Start Printed Page 62664

Comment: One commenter stated that while they agree with our proposal to recoup duplicative payments from OTPs, CMS should monitor for any unintended impacts to access or other challenges that may result. The commenter stated that CMS must not create a situation in which beneficiaries cannot access needed care because they are receiving OUD treatment through an OTP bundle.

Response: We have explicitly acknowledged that we do not believe a beneficiary receiving the same kinds of services from both an OTP and another provider or supplier would necessarily constitute a duplicative payment. We reiterate, however, that we do have an expectation that OTPs will take reasonable steps to ensure that the items and services furnished under their care are not reported or billed under a different Medicare benefit. For example, OTPs could actively coordinate care and facilitate information exchange between other prescribers, dispensers and plans who prescribe, administer, dispense, or pay for medications for OUD treatment. We also note that OTPs and other health care providers must comply with all applicable laws and regulations, such as the Health Insurance Portability and Accountability Act and the Substance Abuse Confidentiality Regulations (42 CFR part 2). We intend to conduct monitoring to ensure that our policies regarding duplicative payment do not have any such unintended consequences as described by the commenter.

Comment: A few commenters stated that drugs dispensed outside the OTP should not be included in the OTP bundle. One commenter stated that community pharmacies currently face challenges in knowing whether a prescription is from an inpatient OTP or whether the inpatient OTP is prescribing outpatient therapy for a patient who is being discharged. The commenter stated that the best way to avoid duplicate payments from occurring is to limit the OTP bundled payment to drugs dispensed by an OTP facility; similarly the commenter stated that if take-home medications are included in the OTP bundle, they should also be dispensed by the OTP.

Response: We disagree that only medications provided at the OTP should be included in the bundled payment. As indicated above, we are aware that some OTPs have arrangements with pharmacies whereby the OTP reimburses the pharmacy through an independent arrangement. In this case, it is appropriate for the OTP to bill for the weekly bundled payment that corresponds to the medication provided to the beneficiary. We also note that if questions arise regarding the purpose of the prescription, as described by the commenter, the pharmacy should contact the prescribing OTP for any necessary clarifications.

Comment: A few commenters stated that more information is needed to better understand how CMS will monitor and protect against duplicative billing/payment. The commenters recommended that CMS update the guidance in the Medicare Program Integrity Manual to better outline the process through which duplicative payments will be monitored and corrected.

Response: We will consider issuing further guidance either through future rulemaking or subregulatory guidance, as suggested.

Comment: One commenter disagreed that OTPs should be financially accountable for duplicative payments. The commenter stated that OTPs may not have access to prescribing information for every physician or clinician the beneficiary sees outside of the OTP, nor do reporting mechanisms exist for this information in order for OTPs to quickly and efficiently review prior to engaging patients in time-sensitive deployment of OUD treatment.

Response: We reiterate that we have explicitly acknowledged that we do not believe that payments for the same kinds of services from both an OTP and a separate provider or supplier would necessarily result in a duplicative payment. We also emphasize that we have narrowly defined duplicative payment to involve only those circumstances where medications that are delivered, administered or dispensed to a beneficiary are paid as part of the OTP bundled payment, and where the delivery, administration or dispensing of the same medications (that is, same drug, dosage and formulation) is also separately paid under Medicare Part B or Part D for the same beneficiary with the same date of service. As noted earlier, we do not intend to prevent the appropriate billing under Medicare Part B or Part D for individual items or services that could be provided by OTPs as part of an episode of care and included in the bundled payment rate, but that may also be appropriately available to beneficiaries through other Medicare benefits.

Comment: One commenter supported the proposal to hold OTPs accountable for duplicative payments, but stated that CMS should issue a non-enforcement or hold harmless grace period for CY 2020 for audits and other consequences such as Star Ratings related to the new OUD treatment services benefit.

Response: We appreciate the feedback and note that section 1834(w)(1) of the Act expressly requires that we take steps to ensure that no duplicative payments are made. Moreover, as explained above, we have narrowly defined duplicative payment, so we do not believe that a grace period would be necessary for CY 2020.

After consideration of the public comments, we clarifying that our final policy on duplicative payments refers to payment for the same medication for the same beneficiary on the same date of service. Thus we are finalizing our proposal that in cases where a payment for drugs used as part of an OTP's treatment plan is identified as being a duplicative payment because a claim for the same medications for the same beneficiary on the same date of service was paid under a different Medicare benefit, CMS will generally recoup the duplicative payment made to the OTP. We have updated the text at § 410.67(d)(5) to reflect this clarification.

d. Cost Sharing

Section 2005(c) of the SUPPORT Act amended section 1833(a)(1) of the Act, relating to payment of Part B services, by adding a new subparagraph (CC), which specifies with respect to OUD treatment services furnished by an OTP during an episode of care that the amount paid shall be equal to the amount payable under section 1834(w) of the Act less any copayment required as specified by the Secretary. Section 1834(w) of the Act, which was also added by section 2005(c) of the SUPPORT Act, requires that the Secretary pay an amount that is equal to 100 percent of a bundled payment under this part for OUD treatment services. Given these two provisions, we believe that there is flexibility for CMS to set the copayment amount for OTP services either at zero or at an amount above zero. Therefore, we proposed to set the copayment at zero for a time-limited duration (for example, for the duration of the national opioid crisis), as we believe this would minimize barriers to patient access to OUD treatment services. Setting the copayment at zero would also ensure OTP providers receive the full Medicare payment amount for Medicare beneficiaries if secondary payers are not available or do not pay the copayment, especially for those dually eligible for Medicare and Medicaid.[80] We solicited Start Printed Page 62665public comment on our proposal to set the copayment at zero for a time-limited duration, such as for the duration of the national opioid crisis, and any other metrics CMS might consider using to determine when to start requiring a copayment. In developing our approach, we also considered other alternatives, such as setting the copayment at a fixed fee calculated based on 20 percent of the payment rate for the bundle, consistent with the standard copayment requirement for other Part B services, or applying a flat dollar copayment amount similar to TRICARE's copayment; however, we recognized that setting the copayment for OUD services at an amount greater than zero could create a barrier to access to treatment for many beneficiaries. We proposed to codify the proposed copayment amount of zero at § 410.67(e). We solicited feedback on our proposal to set the copayment amount for OTP services at zero, and on the alternatives considered, including whether we should consider any of these alternatives for CY 2020 or future years.

Separately, we noted that the Part B deductible would apply for OUD treatment services, as mandated for all Part B services by section 1833(b) of the Act.

We received public comments on the proposals related to cost sharing for the bundled payments for OUD treatment services. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported the proposal to set the copayment at zero for a time limited duration. A few commenters encouraged CMS to consider setting the copayment at zero permanently, noting that individuals who require the services of an OTP will have difficulty making copayments for a variety of reasons, regardless of whether there is an opioid epidemic across the nation. One commenter noted that if a patient received OUD treatment services outside of an OTP, they would pay 20 percent Part B coinsurance under Medicare at other health care settings or Part D plan cost sharing for any pharmacy-dispensed prescription drugs which may disadvantage other established Medicare provider types. This commenter also noted that OTPs may not be available to patients in all geographic localities, which would seem to be unfair.

Response: We appreciate the support for our proposal. After consideration of the public comments, we are finalizing our proposal to set the copayment at zero for a time limited duration, as we believe this would minimize barriers to patient access to OUD treatment services. Setting the copayment at zero also ensures OTPs receive the full Medicare payment amount for Medicare beneficiaries if secondary payers are not available or do not pay the copayment, especially for those beneficiaries who are dually eligible for Medicare and Medicaid. However, as we explained in the proposed rule, we are interested in setting the copayment at zero for a time limited duration (for example, until such time as the Secretary does not renew the national public health emergency declaration for the continued consequence of the opioid crisis affecting our nation), and intend to address the copayment in future rulemaking at such a time we deem appropriate. Although we appreciate the concern that OUD treatment services furnished in other settings require beneficiary cost sharing, we believe it is important, especially in light of the opioid epidemic, to minimize barriers to patient access to OUD treatment services in such instances that we are able to and note that section 2005 of the SUPPORT Act does not provide authority to waive cost sharing for OUD treatment services furnished in other settings.

Comment: One commenter requested that OTPs be allowed to receive Medicare bad debt payments for any uncollected Part B deductible payments, noting that OTP providers are unlikely to be successful in collecting deductibles for many patients in this population. Another commenter expressed concern that the application of the Part B deductible to OUD treatment services furnished by OTPs might particularly affect dually eligible beneficiaries currently receiving OTP care as they are likely to visit an OTP provider in January, before they hit their annual Part B deductible. This could put them in the position of owing over $100 in January.

Response: We note that bad debts arising from covered services paid under a reasonable charge-based methodology or a fee schedule are not reimbursable under the Medicare program (42 CFR 413.89(i)). Additionally, we note that the majority of dually eligible individuals are Qualified Medicare Beneficiaries (QMBs), a program in which Medicaid covers the Medicare Part A (if any) and Part B premiums and other Medicare cost-sharing. States may pay for deductibles, coinsurance, and copayments for Medicare services furnished by Medicare providers to QMBs to the extent consistent with the Medicaid State Plan. States have the option to reduce or eliminate the state's Medicare cost sharing payments by adopting policies that limit payment to the lesser of (a) the Medicare cost sharing amount, or (b) the difference between the Medicare payment and the Medicaid rate for the service, consistent with the methodology identified in the state plan. When Medicaid rates are lower this can result in the provider receiving reduced or even no payment for the deductible. Regardless of the amount paid by the state for the deductible, coinsurance, and copayments, sections 1848(g)(3) and 1866(a)(1)(A) of the Act prohibit Medicare providers from billing QMBs for Medicare Parts A and B cost sharing amounts. States may also choose to cover Medicare cost-sharing for certain other full-benefit dually eligible individuals.

As discussed in more detail below, once a provider is enrolled in Medicare, Medicare will crossover the deductible portion of the claim to state Medicaid agencies, and the state will adjudicate the claim. However, as noted above, states often use different HCPCS billing codes for OTP services than Medicare does; in these cases, we note that the state's claims processing system may reject the claim and will notify the provider, who can re-code and resubmit the claim directly to the state.

In summary, we are finalizing our proposal to set the copayment for OUD treatment services furnished by OTPs at zero for a time limited duration, as we believe this would minimize barriers to patient access to OUD treatment services. We are codifying this beneficiary cost-sharing amount at § 410.67(e).

4. Adjustments to Bundled Payment Rates for OUD Treatment Services

The costs of providing OUD treatment services will likely vary over time and depending on the geographic location where the services are furnished. Below we discuss our proposed adjustments to the bundled payment rates to account for these factors.Start Printed Page 62666

a. Locality Adjustment

Section 1834(w)(2) of the Act, as added by section 2005(c) of the SUPPORT Act provides that the Secretary may implement the bundled payment for OUD treatment services furnished by OTPs through one or more bundles based on the type of medications, the frequency of services, the scope of services furnished, characteristics of the individuals furnished such services, or other factors as the Secretary determines appropriate. The cost for the provision of OUD treatment services, like many other healthcare services covered by Medicare, will likely vary across the country based upon the differing cost in a given geographic locality. To account for such geographic cost differences in the provision of services, in a number of payment systems, Medicare routinely applies geographic locality adjustments to the payment rates for particular services. Because we believe OUD treatment services furnished by OTPs will also be subject to varying cost based upon the geographic locality where the services are furnished, in the proposed rule we proposed to apply a geographic locality adjustment to the bundled payment rate for OUD treatment services. We discussed our proposed approach with respect to both the drug component (which reflects payment for the drug) and the non-drug component (which reflects payment for all other services furnished to the beneficiary by the OTP, such as drug administration, counseling, toxicology testing, etc.) of the bundled payment.

(1) Drug Component

Because our proposed approaches for pricing the MAT drugs included in the bundles all reflected national pricing, and because there is no GAF applied to the payment of Part B drugs under the ASP methodology, we did not believe that it would be necessary to adjust the drug component of the bundled payment rates for OTP services based upon geographic locality. Therefore, we proposed not to apply a geographic locality adjustment to the drug component of the bundled payment rate for OTP services. We did not receive any comments on this proposal and are finalizing as proposed not to make any geographic adjustment to the drug component of the bundled payment rates.

(2) Non-Drug Component

Unlike the national pricing of drugs, the costs for the services included in the non-drug component of the OTP bundled payment for OUD treatment services are not constant across all geographic localities. For example, OTPs' costs for rent or employee wages could vary significantly across different localities and could potentially result in disparate costs for the services included in the non-drug component of OUD treatment services. Because the costs of furnishing the services included in the non-drug component of the OTP bundled payment for OUD treatment services will vary based upon the geographic locality in which the services are provided, in the proposed rule we stated that we believed it would be appropriate to apply a geographic locality adjustment to the non-drug component of the bundled payments. We believed that the geographic variation in the cost of the non-drug services provided by OTPs would be similar to the geographic variation in the cost of services furnished in physician offices. Therefore, to account for the differential costs of OUD treatment services across the country, we proposed to adjust the non-drug component of the bundled payment rates for OUD treatment services using an approach similar to the established methodology used to geographically adjust payments under the PFS based upon the location where the service is furnished. The PFS currently provides for an adjustment to the payment for PFS services based upon the fee schedule area in which the service is provided through the use of Geographic Practice Cost Indices (GPCIs), which measure the relative cost differences among localities compared to the national average for each of the three fee schedule components (work, PE, and malpractice).

Although we proposed to adjust the non-drug component of the payments for OUD treatment services using an approach similar to the established methodology used to adjust PFS payment for geographic locality, because GPCIs provide for the application of geographic locality adjustments to the three distinct components of PFS services, and we proposed the OTP bundled payment as a flat rate payment for all OUD treatment services furnished during an episode of care, we explained that a single factor would be required to apply the geographic locality adjustment to the non-drug component of the OTP bundled payment rate. Therefore, to apply a geographic locality adjustment to the non-drug component of the OTP bundled payment for OUD treatment services through a single factor, we proposed to use the Geographic Adjustment Factor (GAF) at § 414.26. Specifically, we proposed to use the GAF to adjust the payment for the non-drug component of the OTP bundled payment to reflect the costs of furnishing the non-drug component of OUD treatment services in each of the PFS fee schedule areas. The GAF is calculated using the GPCIs under the PFS, and is used to account for cost differences in furnishing physicians' services in differing geographic localities. The GAF is calculated for each fee schedule area as the weighted composite of all three GPCIs (work, PE, and malpractice) for that given locality using the national GPCI cost share weights. In developing the proposal, we also considered geographically adjusting the payment for the non-drug component of the OTP bundled payment using only the PE GPCI value for each fee schedule area. However, because the non-drug component of OUD treatment services is comprised of work, PE, and malpractice expenses, we proposed using the GAF as we believe the weighted composite of all three GPCIs reflected in the GAF would be the more appropriate GAF to reflect geographic variations in the cost to OTPs of furnishing OUD treatment services.

The GAF, which is determined under § 414.26, is discussed earlier in section II.D.1. of this final rule and the specific GAF values for each payment locality are posted in Addendum D to this final rule. In developing the proposed geographic locality adjustment for the non-drug component of the OUD treatment services payment rate, we also considered other potential locality adjustments, such as the Inpatient Prospective Payment System (IPPS) hospital wage index. However, we proposed using the GAF as we believed the services provided in an OTP more closely resemble the services provided at a physician office than the services provided in other settings, such as inpatient hospitals. We proposed to codify using the GAF to adjust the non-drug component of the OTP bundled payments to reflect the cost differences in furnishing these services in differing geographic localities at § 410.67(d)(3)(ii). We solicited public comment on the proposal to adjust the non-drug component of the OTP bundled payments for geographic variations in the costs of furnishing OUD treatment services using the GAF. We also solicited comments on any factors, other than the GAF, that could be used to make this payment adjustment.

Additionally, we noted that the majority of OTPs operate in urban localities. In light of this fact, we Start Printed Page 62667explained that we were interested in receiving information on whether rural areas have appropriate access to treatment for OUD. We were particularly interested in any potential limitations on access to care for OUD in rural areas and whether there are additional adjustments to the proposed bundled payments that should be made to account for the costs incurred by OTPs in furnishing OUD treatment services in rural areas. We solicited comment for future consideration on this issue and potential solutions we could consider adopting to address this potential issue through future rulemaking.

We received a few comments on the proposed locality adjustment. The following is a summary of the comments we received and our responses.

Comment: One commenter supported using the GAF to geographically adjust the non-drug component of the bundled payment.

Response: We thank the commenter for their support and feedback.

Comment: One commenter stated that CMS should create a 17 percent rural add-on payment to be applied to the bundled payment rate in low-population density areas where it is difficult to find doctors, nurses, and counselors to treat OUD patients. The commenter noted that Medicare provides a 17 percent rural add-on for inpatient psychiatric facilities which often treat substance abuse cases.

Response: We appreciate the suggestion and may consider whether to propose a rural add-on payment in future rulemaking. In the interim, we note that the current Medicare PFS locality structure contains 34 states with a statewide payment locality, which means that, in these states, the geographic adjustment is the same in all areas, whether urban or rural, thus reducing rural/urban payment differentials within a state. We intend to monitor this issue, and as previously stated, may revisit the issue of a rural add-on payment in the future.

After consideration of the public comments, we are finalizing our proposal to adjust the non-drug component of the OTP bundled payments using the GAF in § 410.67(d)(4)(ii). Additionally, although we did not explicitly address the application of a geographic adjustment in the context of the add-on payment adjustments for non-drug services in the proposed rule, we believe that the same logic regarding the differential costs for those services would apply and should be recognized. As such, we are also finalizing that the add-on payment adjustments for non-drug services will be geographically adjusted as described above.

b. Annual Update

Section 1834(w)(3) of the Act, as added by section 2005(c) of the SUPPORT Act, requires that the Secretary provide an update each year to the OTP bundled payment rates. To fulfill this statutory requirement, we proposed to apply a blended annual update, comprised of distinct updates for the drug and non-drug components of the bundled payment rates, to account for the differing rate of growth in the prices of drugs relative to other services. We proposed that this blended annual update for the OTP bundled payment rates would first apply for determining the CY 2021 OTP bundled payment rates. The specific details of the proposed updates for the drug and non-drug components respectively are discussed in this section.

(1) Drug Component

As stated above, we proposed to establish the pricing of the drug component of the OTP bundled payment rates for OUD treatment services based on CMS pricing mechanisms currently in place. To recognize the potential change in costs of the drugs used in MAT from year to year and to fulfill the requirement to provide an annual update to the OTP bundled payment rates, we proposed to update the payment for the drug component based upon the changes in drug costs reported under the pricing mechanism used to establish the pricing of the drug component of the applicable bundled payment rate, as discussed earlier. For example, if we were to price the drug component of the bundled payment rate for episodes of care using ASP data, the pricing of the drug component for these OTP bundled payments would be updated using the most recently available ASP data at the time of ratesetting for the applicable calendar year. In the proposed rule, we also discussed a number of alternative data sources that could be used to price oral drugs in the drug component of OTP bundled payments in cases when we do not receive manufacturer-submitted ASP pricing data. As an example, if we were to use NADAC data, as discussed as one of the alternatives, to determine the payment for the drug component of the bundled payment for oral drugs in cases when we do not have manufacturer-submitted ASP pricing data, this payment rate would be updated using the most recently available NADAC data at the time of ratesetting for the applicable calendar year.

In developing the proposal to annually update the pricing of the drug component of the OUD treatment services payment rate, we also considered other methodologies, including applying a single uniform update factor to the drug and non-drug components of the proposed payment rates. We ultimately determined not to propose the use of a single uniform update factor, because we believed that it was important to apply an annual update to the payment rates that recognizes the differing rate of growth of drug costs compared to the rate of growth in the cost of the other services. In addition, we also considered annually updating the pricing of the drug component of the OUD treatment services payment rate via an established update factor such as the Producer Price Index (PPI) for chemicals and allied products, analgesics (WPU06380202). The PPI for chemicals and allied products, analgesics is a subset of the PPI produced by the Bureau of Labor Statistics (BLS), which measures the average change over time in the selling prices received by domestic producers for their output. Ultimately we decided against proposing to update the pricing of the drug component of the OUD treatment services payment rate via an established update factor such as the PPI in favor of our proposed approach because we believed the proposed approach would update the pricing of the drug component of the OUD treatment services payment rate in the manner that would be most familiar to stakeholders. We solicited public comment on the proposed approach to updating the drug component of the bundled payment rates. We also solicited comment on possible alternate methodologies for updating the drug component of the payment rate for OUD treatment services, such as use of the PPI for chemicals and allied products, analgesics.

We did not receive any comments on the proposed approach to update the drug component of the bundled payment rates, and are finalizing our proposal to use the most recently available data from the applicable pricing mechanism finalized for drug pricing, as described above, to annually update the drug component of the bundled payment. We are codifying this policy at § 410.67(d)(2)(i), which provides that the payment for the drug component of episodes of care will be determined using the most recent data available at the time of ratesetting for the applicable calendar year.Start Printed Page 62668

(2) Non-Drug Component

To account for the potential changing costs of the services included in the non-drug component of the bundled payment rates for OUD treatment services, we proposed to update the non-drug component of the bundled payment for OUD treatment services based upon the Medicare Economic Index (MEI). The MEI is defined in section 1842(i)(3) of the Act and the methodology for computing the MEI is described in § 405.504(d). The MEI is used to update the payment rates for physician services under section 1842(b)(3) of the Act, which states that prevailing charge levels beginning after June 30, 1973, may not exceed the level from the previous year except to the extent that the Secretary finds, on the basis of appropriate economic index data, that such a higher level is justified by year-to-year economic changes. The MEI is a fixed-weight input price index that reflects the physicians' own time and the physicians' PEs, with an adjustment for the change in economy-wide, private nonfarm business multifactor productivity. The method for calculating the MEI was last revised in the CY 2014 PFS final rule with comment period (78 FR 74264). In developing the proposed update factor for the non-drug component of the OUD treatment services payment rate, we also considered other potential update factors, such as the BLS Consumer Price Index for All Items for Urban Consumers (CPI-U) (Bureau of Labor Statistics #CUUR0000SA0 (https://www.bls.gov/​cpi/​data.htm) and the IPPS hospital market basket reduced by the multifactor productivity adjustment. The CPI-U is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. However, we concluded that a healthcare-specific update factor, such as the MEI, would be more appropriate for OTPs than the CPI-U, which measures general inflation, as the MEI would more accurately reflect the change in the prices of goods and services included in the non-drug component of the OTP bundled payments.

Similarly, we believed the MEI would be more appropriate than the IPPS market basket to update the non-drug component of the bundled payment rates as the services provided by an OTP more closely resemble the services provided at a physician office than the services provided by an inpatient hospital. Accordingly, we proposed to update the payment amount for the non-drug component of each of the bundled payment rates for OUD treatment services furnished by OTPs based upon the most recently available historical annual growth in the MEI available at the time of rulemaking. We proposed to codify this proposal at § 410.67(d)(3)(iii).

We received one comment on the annual update for the non-drug component of the bundled payment rate. The following is a summary of the comment we received and our response.

Comment: One commenter disagreed with using the MEI to increase the non-drug component payment and stated that the MEI focuses more narrowly on physician practices. The commenter stated that an OTP's cost structures are more similar to hospital outpatient departments than physician offices. The commenter stated that over time, updating rates by the MEI, which closely mirrors general inflation, will create access to care issues as federal and state mandated OTP costs grow faster than Medicare reimbursements. The commenter also stated that TRICARE utilizes the IPPS annual update factor and if CMS' goal is to align payment with the TRICARE model, it should act consistently and also adopt its annual adjustment policy.

Response: We clarify that CMS' goal is not to align payment with the TRICARE model. As indicated above, section 1834(w)(2) of the Act provides that the Secretary may consider the rates paid to OTPs for comparable services under Medicaid or under TRICARE. As we discussed in the CY 2020 PFS proposed rule, we considered payments for those comparable services in the development of our payment rates. However, we note that we also solicited comment on the scope of private payer OTP coverage and the payment rates private payers have established for OTPs furnishing comparable OUD treatment services for consideration.

We appreciate the commenter's concern about using the MEI to update the non-drug component of the OTP bundled payment rate. Ideally, we would develop a market basket that reflects the detailed cost structures of OTP facilities; however, these data are not currently available. Therefore, we have to use a price index that best approximates the cost of the medical services being provided by the OTP facilities. Although TRICARE uses the IPPS annual update factor, we believe the MEI is a more appropriate index to use to update the non-drug component of the OTP bundled payment rate based on both conceptual and compositional reasons.

From a conceptual standpoint, we believe physicians' services furnished in the office setting more closely align to the OUD treatment services furnished by OTPs as they both encompass minimally invasive medical care such as assessment, counseling, and administering of medications. The MEI measures the market price changes in the inputs used to furnish physicians' services, and represents both the medical and non-medical costs associated with providing this care. In contrast, hospitals engage in complex inpatient and outpatient medical services, such as surgical procedures and emergency room trauma, which are significantly different to the services furnished in OTP facilities. The IPPS market basket reflects these complex services and the non-medical costs associated with managing these large facilities, such as non-medical labor-related services (including but not limited to legal, accounting, financial, and installation and maintenance repair services), which account for almost 25 percent of the IPPS market basket.

From a compositional standpoint, the MEI more closely aligns with the services associated with the OTP payment system. In particular, the MEI does not reflect drug costs (which will be updated separately for OTPs, as discussed previously) as these costs are not reimbursed under the Medicare PFS, for which the MEI was originally developed. The IPPS market basket, however, is an operating market basket that reflects drug costs because these costs are included in the IPPS operating base payment rate. Additionally, the MEI includes PE associated with all operations, including any capital or leasing costs. The IPPS market basket, on the other hand, excludes capital costs because under the IPPS, capital costs are reimbursed separately and the IPPS capital payment rates are updated using the IPPS capital market basket, which reflects the complex capital acquisition and financing methods of IPPS hospitals. Finally, the MEI reflects an adjustment for expected productivity improvements associated with the provision of care (the MEI uses the change in economy-wide private non-farm business multifactor productivity), which, given the similarity in the nature of services furnished in the physician office and OTP settings, OTPs would also be anticipated to be able to achieve. The IPPS market basket does not include a productivity adjustment as that adjustment is applied separately as part of the payment rate update. These compositional differences account for many of the differences between the growth rates of the MEI and the IPPS market basket that the commenter identified as a concern. Because the Start Printed Page 62669differences in growth rates between the IPPS market basket and the MEI are due to these compositional differences, we disagree with the commenter that there is a concern with using the MEI to update the non-drug component of the bundled payment rates. That is, we believe the MEI is an appropriate price index to serve as a proxy for changes in market costs associated with providing OTP services, as it reflects both the medical and non-medical costs of providing noninvasive medical care in a non-inpatient facility.

After consideration of the public comments, we are finalizing the proposal to update the non-drug component of the bundled payment for OUD treatment services based upon the MEI. These policies are codified in § 410.67(d)(4)(iii). Additionally, although we did not explicitly address the application of the annual update to the add-on payment adjustments for non-drug services in the proposed rule, we believe that the same logic regarding the potential changing costs of the services included in the non-drug component of the bundled payment rates is applicable. As such, we are finalizing that the add-on payment adjustments for non-drug services will be subject to the annual update as described above.

In addition to comments on our proposals and the related issues on which we specifically requested public input, we received a number of other public comments related to our implementation of this new Medicare benefit for OUD treatment services furnished in an OTP. Several comments focused on various aspects of how the OTP proposals intersect with Medicaid, those beneficiaries dually eligible for Medicare and Medicaid, Medicare Advantage, and certain requirements related to compliance, quality measurement, and Electronic Health Records. While these issues were not addressed specifically in the proposed rule, we believe it is important to clarify how the OTP policies interface with existing policies under these other programs. The following is a summary of the comments we received and our responses.

Comment: Most commenters expressed concerns that in the states that currently cover OTP services under Medicaid, the transition from Medicaid to Medicare as primary payer for those OTP services for dually eligible individuals could result in disruptions to dually eligible individuals' OTP treatment, as well as for OTP providers. Several commenters noted the tight timeframes for OTP providers to enroll in Medicare. For those OTPs currently serving dually eligible individuals under Medicaid, any enrollment backlog may create cash flow problems for these providers, as Medicaid is the payer of last resort, which normally means Medicaid stops paying for a benefit once Medicare starts to cover it. They also noted that the timing of the final regulation would result in less than 60 days to implement needed changes to billing systems. Commenters requested flexibilities during this transition, including a transition period in which OTP providers could still bill Medicaid, with well-publicized transition timelines for a grace period during which improperly submitted claims could be corrected.

Response: We appreciate the concerns expressed by commenters. As discussed in more detail below, Medicaid must pay for OTP services for dually eligible individuals if the service is covered by the Medicaid state plan and the OTP provider is enrolled in Medicaid and not yet enrolled in Medicare.

We will issue guidance to states on strategies to promote continuity of care for dually eligible individuals during this transition period while upholding their responsibilities under Medicaid as the payer of last resort. We will remind states that Medicaid must pay for services delivered to these beneficiaries by OTP providers who are not yet enrolled in Medicare. Recognizing that many OTP providers may not yet be enrolled in Medicare on January 1, 2020, we will recommend that states not impose systems edits to automatically reject claims, (under the assumption that the OTP is Medicare-enrolled and therefore Medicare is the appropriate primary payer for the dually eligible individual) for OTP services furnished to dually eligible individuals at the start of the year. We will encourage states to reach out to their Medicaid-enrolled OTP providers to advise them to enroll as quickly as possible in Medicare. To support continuity of care, we will ask states to offer OTPs options during the interim until Medicare approves the provider enrollment, including billing Medicaid for payment (with the understanding that Medicaid will later recoup the Medicaid payments made, back to the effective date of Medicare provider enrollment, and the provider will bill Medicare instead for those claims), or to hold claims and bill Medicare once the OTP provider is Medicare-enrolled. As requested by the commenters, we will also include in our outreach to OTP providers information about these transition options.

Comment: One commenter who supported a transition period requested that the transition period be extended in cases where OTP providers need to be credentialed and contract with a large number of Medicare Advantage plans, or when Medicaid Managed Care Organizations are involved in covering the Medicare cost-sharing. Commenters noted that unlike Medicare, where there is a single provider enrollment process, it will take significantly longer for OTP providers to become network providers with multiple Medicare Advantage plans, potentially delaying their ability to provide services to dually eligible enrollees of those plans.

Response: We share the concern around ensuring continuity of care for dually eligible individuals who are currently obtaining treatment from an OTP provider through Medicaid and are enrolled in a Medicare Advantage managed care plan. The factors impacting transition are different in Medicare Advantage from those discussed below for Original Medicare. Under section 1852(a) of the Act and 42 CFR 422.100, Medicare Advantage (MA) plans must cover the Medicare OTP benefit because it is a Part B benefit. MA plans may meet this obligation by contracting with OTP providers or making other arrangements with non-contracted OTP providers. Under current MA program requirements, MA plans may furnish OTP access for their enrollees either by establishing direct contracts with OTPs or by arranging access on a non-contract basis. If an MA plan furnishes access to OTPs by contracting with one or more OTPs the MA plan is not necessarily required to contract with all OTP providers in the area, but must ensure that the contracts with OTPs it does have furnish sufficient access and availability to OTP services for its enrollees and are also consistent with the community pattern of care based on the service area where the MA plan is being offered. If an MA plan allows its enrollees to obtain OTP services on a non-contract basis the MA plan must ensure that its enrollees are able to access OTP services that are available within the community pattern of care. (see § 422.112). If a dually eligible individual enrolled in the plan is currently in treatment with an OTP provider with which the plan does not contract, the plan should create a transition process under which the individual can continue to see their current OTP provider while the plan works with the individual to transition to a network provider. Allowing the individual to continue to see their current provider during this transition will ensure continuity of care for this vulnerable population.

Comment: One commenter specifically requested that dually Start Printed Page 62670eligible individuals receiving services from an OTP provider not enrolled in Medicare be able to continue to receive treatment from that provider, and further requested this apply to dually eligible individuals not yet in treatment but who have no Medicare OTP providers in their area.

Response: As noted above, Medicaid must still cover OTP services for dually eligible individuals whose provider is not yet enrolled in Medicare. This flexibility promotes continuity of care for dually eligible individuals already receiving OTP services under Medicaid now, as well as providing beneficiaries access to Medicaid-enrolled OTP providers when there are no Medicare-enrolled OTP providers in their area.

Comment: Some commenters requested clarification on how OTP providers would bill for dually eligible individuals once Medicare starts covering these services on January 1, 2020, including the process for the Part B deductible to be paid by Medicaid.

Response: Once Medicare starts covering OTP services, a Medicare-enrolled OTP provider would bill Medicare for OUD treatment services furnished to dually eligible individuals under Original Medicare. For Original Medicare, if the dually eligible beneficiary has not yet met their annual Medicare Part B deductible, Medicare will automatically “crossover” the claim to Medicaid to adjudicate for payment of the deductible. In addition, please see responses to comments below for a discussion of the process when a state is using different billing codes than Medicare, and when an OTP provider is not yet enrolled in Medicare.

For OTP providers serving dually eligible individuals enrolled in Medicare Advantage, there is no automated crossover process. For cost sharing applicable to the OTP benefit under the MA plan, MA plans are required by § 422.504(g)(1) to specify in their contracts with providers that such dually eligible enrollees will not be held liable for Medicare Part A and Part B cost sharing when the State is responsible for paying such amounts, and to inform providers of Medicare and Medicaid benefits, and rules for enrollees eligible for Medicare and Medicaid. We understand most MA plans have not entered into coordination of benefit agreements with state Medicaid agencies. In these instances, the MA plan would not have any means to forward claims for cost sharing directly to state Medicaid programs for payment; and so an OTP provider would need to bill Medicaid directly for the cost sharing that the provider may not collect from the enrollee; this may also mean that the OTP provider has to re-code the claim if the state uses different billing codes than the Medicare Advantage plan uses.

Comment: One commenter specifically requested that the timeframe for state Medicaid agencies to update their respective fee schedules match the Medicare payment methodology to prevent denials when Medicare sends the crossover claim to Medicaid for the deductible.

Response: State Medicaid programs often use different codes and pay differently than Medicare. There is no requirement to match the Medicare payment methodology, but states do need to be able to process claims for the beneficiary's cost-sharing liability for most dually eligible individuals. If the state uses different billing codes, its claims processing system may initially deny the crossover claim, and send a remittance advice to the provider notifying the provider of the denial. The OTP provider should then re-code the claim using the Medicaid billing codes and resubmit to Medicaid for processing.

Comment: A few commenters suggested that CMS offer an expedited process for receiving a Medicare denial, to provide Medicaid with proof that Medicare will not cover the OTP services. A few other commenters also suggested CMS make available an up-to-date-listing of Medicare enrolled OTP providers in each state.

Response: We agree it is important to support OTP providers and states by providing the information needed to facilitate the process for an OTP provider to bill Medicaid for services furnished to a dually eligible individual, when that is permitted. Medicaid will often accept a Medicare claims denial as proof that Medicare will not cover the service, and will process the claim for Medicaid coverage. However, Medicare can only process a claim from a Medicare-enrolled provider, and thus can only issue a claims denial to a Medicare-enrolled provider.

As we note in our response to a prior comment, Medicaid must pay for OUD treatment services furnished by an OTP to a dually eligible individual when the service is covered by the Medicaid state plan and the OTP provider is enrolled in Medicaid, but is not enrolled in Medicare. We agree with the suggestion to make publicly-available and update a list of Medicare-enrolled OTP providers so OTPs and states have evidence that a given provider is not Medicare-enrolled. We anticipate this information will also have value for Medicare beneficiaries seeking OUD treatment services in OTPs. We also note that states already have access to the CMS Provider Enrollment, Chain, and Ownership System (PECOS) provider enrollment system, and can confirm provider enrollment or lack thereof through queries to that system.

Comment: Several commenters expressed concern about the intersection of Medicaid's “Upper Payment Limit” (UPL) policy with the proposed Medicare payment rates for OTP services. The commenters noted that most states that cover OTP services have payment rates that are higher than the proposed Medicare payment rates, and expressed a concern that Medicaid's UPL policy requires Medicaid rates to be lower than Medicare's. Commenters noted that unless Medicare significantly increases its proposed rates, state Medicaid agencies would be forced to lower theirs to comply with the UPL. Commenters requested that CMS increase the Medicare rates for services furnished by OTPs to exceed the Medicaid rate in every state, or not apply the UPL requirements to the Medicaid OTP services.

Response: We appreciate the concern expressed by the commenters. However, the UPL requirements do not directly impact payment rates for individual services such as the OUD treatment services furnished by OTPs in the way commenters describe, and states have policy options to address UPL-related concerns. As background, state Medicaid agencies can opt to cover OTP services under the Medicaid clinic benefit or the Medicaid rehabilitation benefit. The Medicaid clinic benefit is subject to a UPL based on estimated Medicare payments, but states demonstrate compliance with this requirement at an aggregate level across the range of services covered under the clinic benefit as a whole for a given year. States are not required to set Medicaid payment lower than Medicare at a service or code-level basis. Within the UPL requirements, states have significant flexibility in how they may pay for individual services or codes or make payments to clinics that specialize in providing certain types of care. As a result, states offering OTP services under the clinic benefit would not be required to reduce their payment rates to be less than Medicare for OTP services. We will issue guidance reminding states that the UPL policy for the clinic benefit applies at the aggregate level, and will work with states to determine how to comply with the UPL if they currently cover OTP under the clinic benefit. For states that offer OTP services under the rehabilitation benefit, we note there is no UPL for that benefit, so the Medicare Start Printed Page 62671payment rate for OTP services does not impact Medicaid payment for those states. As a result, there is no need to adjust the Medicare payment rates for OUD treatment services furnished by OTPs that we are adopting in this final rule to address this concern.

Comment: One commenter suggested CMS provide guidance to states on what the Medicare OTP benefit does and does not cover, to facilitate Medicaid covering specific OTP services for dually eligible individuals that Medicare does not cover.

Response: We acknowledge that states may have a more expansive benefit for services provided by OTPs than Medicare's, and that in those situations, states may continue to cover specific OTP services that Medicare does not. To support a smooth transition, we will provide guidance to states to describe the Medicare OTP benefit and remind them that Medicaid may still cover specific OTP services not covered under the Medicare OTP benefit.

Comment: Several commenters suggested that CMS conduct significant outreach on coordination of benefits; that is, how Medicare will be primary payer and Medicaid will be secondary payer for dually eligible individuals. One commenter further suggested that OTP providers should receive training and technology to facilitate screening patients for Medicare, as well as Medicaid, eligibility and enrollment.

Response: We agree with the need for significant outreach to OTP providers regarding coordination of benefits, and are collaborating with SAMHSA—which certifies OTP providers—to do so. We will explore options around providing technical assistance on connecting eligible clients to Medicare and Medicaid coverage.

Comment: One commenter suggested that as part of supporting the transition from Medicaid to Medicare coverage of OTP services, CMS issue guidance to remind states to continue transportation coverage for full benefit dually eligible individuals receiving services under the Medicare OTP benefit.

Response: As noted elsewhere, Medicare is the primary payer for services that are payable by both Medicare and Medicaid. However, Medicare has a limited non-emergency ambulance transportation benefit. If a full benefit dually eligible individual is obtaining a Medicaid-coverable benefit for which Medicare is the primary payer, the state must assure, in certain circumstances, transportation to the medical service (in the limited instances in which Medicaid does not cover a service Medicare covers, it is optional for states to cover transportation). As a result, when states cover OTP services, and when the applicable criteria are met, Medicaid must assure non-emergency medical transportation for full benefit dually eligible individuals obtaining Medicare-covered OTP services.

Comment: Several commenters supported the proposal to initially set the copayment for OTP services zero, but requested that this policy be made permanent for dually eligible individuals.

Response: We will consider issues on future copayment rates, and on keeping the zero copayment for dually eligible individuals, as part of any future rulemaking on the cost-sharing requirements for the benefit as a whole.

Comment: A commenter raised concerns regarding the January 1, 2020 implementation date for the OTP benefit due to implementation barriers. The commenter stated that MAOs need final payment codes, payment information and clarity regarding any benefit caps or other benefit limits. The commenter further stated that MAOs need additional time to finalize contracting systems and to develop operational details for the benefit.

Response: Although we understand the concern, we do not plan to delay the implementation of this benefit due to the acute need for the OUD treatment services furnished by OTPs. We will work closely with MAOs to ensure timely implementation of this benefit. Plans must provide enrollees with a level of access to Medicare-covered OTP services that is consistent with prevailing community patterns of care in the areas where the network is being offered (§ 422.112(a)(10)). We note that, for CY 2020, Medicare Advantage plans may contract with an OTP provider so long as the requirements for such providers (such as licensure, certification, and other qualifications, etc.) under Titles XVIII and XI of the Act are met. Allowing the individual to continue to see their current provider during this transition will ensure continuity of care for this vulnerable population.

Comment: One commenter recommended that CMS issue a non-enforcement or “hold harmless” grace period against plans for Part B vs. Part D determinations for 2020, with respect to audits and other consequences such as Star Ratings related to the new OUD treatment services benefit.

Response: We do not believe it is appropriate for CMS to issue a “hold harmless” period regarding the implementation of the new OTP benefit. As we have noted in other responses, we believe there is an urgency in making this benefit available to people struggling with opioid use disorder. CMS will work closely with organizations to ensure a smooth implementation of this benefit. With regard to the Part B versus Part D determination, we remind Medicare Advantage plans that § 422.112(b)(7) requires plans that also cover Part D drugs to coordinate coverage and have a process in place to ensure provision of the covered drug to an enrollee in a timely fashion. CMS clarifies that buprenorphine prescribed by DATA 2000 providers outside of OTPs can continue to be covered under Part D. The DATA 2000 and OTP programs are designed to meet the needs of those needing opioid dependency treatment in different ways. Therefore, because buprenorphine is still covered under Part D when furnished outside an OTP, sponsors should not need to implement new point of service Part B versus Part D pharmacy edits for a buprenorphine claim. In addition, any substantive changes to the Star Ratings measure specifications must be adopted through rulemaking per §§ 422.164 and 423.184.

Comment: A commenter recommended that CMS delay the implementation of the OTP benefit until January 1, 2021, because MA plans did not have an opportunity to account for the new benefit in their 2020 year bids.

Response: In the CY 2020 Call Letter released April 1, 2019 available at the following web link: https://www.cms.gov/​Medicare/​Health-Plans/​MedicareAdvtgSpecRateStats/​Downloads/​Announcement2020.pdf, CMS issued guidance to MAOs regarding section 2005 of the SUPPORT Act and implementing the OTP benefit. In the Call Letter, CMS reminded plans that opioid use disorder treatment services furnished by OTPs would be covered as a Medicare Part B benefit beginning January 1, 2020. We also stated that MA organizations should prepare their bids using available information and reiterated that MA plans must provide all medically necessary Part A and Part B covered services to enrollees consistent with section 1852 of the Act and the regulations in part 422. As such, MA plans were given the opportunity to account for the new benefit in their 2020 bids and did so when bids were submitted on June 3, 2019.

Comment: A commenter expressed concerns that there may be insufficient number of OTPs available in 2020 who are SAMSHA accredited with a Medicare provider agreement to contract with MA plans.

Response: We note that MA plans will be required to furnish access to OTP Start Printed Page 62672services consistent with what is available to Original Medicare beneficiaries residing in the same geographic area. (see § 422.112) While OTPs will currently not be a specialty included in our evaluation of MA networks, all plan covered services must be furnished consistent with community patterns of care (see § 422.112(a)(10)). This means that a plan's enrollees, who are receiving services from an OTP, cannot be required to travel significantly farther than the distance Original Medicare beneficiaries are required to travel in order to access services from the OTP. MA plans are not required to furnish transportation to the OTP facilities as part of the OTP benefit. However, MA plans can furnish transportation to health care services as a supplemental benefit. In addition, as noted elsewhere, Medicaid must assure, in certain circumstances, non-emergency transportation for a dually eligible individual to obtain a Medicaid-coverable benefit for which Medicare is primary payer.

Comment: A commenter stated that, in order to administer this new benefit, guidance is needed on which services must be covered by an MA plan without cost-sharing and the timelines for coverage without cost-sharing (for example, no more than 12 months of active treatment). The commenter further stated that since OUD treatment is complex and can vary from patient to patient, it is important that plans understand whether there should be no cost-sharing on all components or if there are specific nuances in how to apply the requirement.

Response: MA plans can offer the OTP benefit consistent with the bids which were submitted for CY 2020, including proposed cost-sharing. We note that MA plans must assure that, in instances in which they impose cost-sharing for the OTP benefit, providers do not bill a Qualified Medicare Beneficiary for such cost-sharing. (see § 422.504(g)(1).)

Comment: A commenter requested clarification as to whether OTPs will be billing Medicare Part B—that is, the FFS Medicare program—for services furnished to Medicare Advantage enrollees.

Response: No. OTPs that furnish Medicare covered medically necessary services to MA enrollees will be paid by the enrollees' MA plans. MA plans are required to furnish or cover all benefits that are covered by Medicare Part A and Part B, excluding hospice, for their enrollees. As previously noted, MA plans are required to contract with, or arrange on a non-contract basis for, enrollee access to medically necessary OTP services consistent with the community pattern of care. MA plans may have direct contracts with OTPs in which they negotiate the terms and conditions of payment for the Medicare-covered services furnished by the OTP. An OTP treating an MA enrollee that does not have a contract with the enrollee's MA plan should contact the MA plan to confirm coverage and payment.

Comment: A commenter requested additional information about CMS' expectations of how the OTP benefit will be made available to Medicare Advantage enrollees.

Response: In the CY 2020 Call Letter released on April 1, 2019, CMS issued guidance to MA organizations regarding section 2005 of the SUPPORT Act and implementing the OTP benefit. In the CY 2020 Call Letter, CMS reminded plans that opioid use disorder treatment services furnished by OTPs would be covered as a Medicare Part B benefit by plans beginning January 1, 2020. We also stated that MA organizations should prepare their bids using available information and reiterated that MA plans must provide all medically necessary Part A and Part B covered services to enrollees consistent with section 1852 of the Act and the regulations in part 422 .

For dually eligible individuals who may already be receiving OTP services through Medicaid, MA plans should ensure continuity of care for their enrollees any time there is a transition from a non-contracted to a contracted provider. In addition, as noted above, MA plans must assure that in instances in which they impose cost-sharing on the OTP benefit, providers do not bill a Qualified Medicare Beneficiary for such cost-sharing.

Comment: A commenter asks that CMS not allow MA plans to utilize prior authorization (PA) or step therapy for treatment of opioid withdrawal symptoms.

Response: MA plans may use step therapy for Part B drugs when medically appropriate and consistent with the requirements in § 422.136. We also note that when an MA plan processes a coverage request that involves prior authorization or other utilization management requirements, such as step therapy for Part B drugs, the plan's determination on whether to grant approval of a service or a drug for an enrollee constitutes an organization determination under part 422, subpart M, and is subject to appeal. Specifically, as described at § 422.568, the MA organization must notify the enrollee of its determination as expeditiously as the enrollee's health condition requires. CMS is considering strategies we can use to monitor the implementation of the OTP benefit by MA plans and any issues that may impede access to medically necessary treatment of opioid use disorder, including what data might be available to evaluate plan performance.

Comment: A commenter questioned how MA-PD and Prescription Drug Plan sponsors will know what beneficiaries are eligible for this benefit. The commenter proposes that an option would be to provide an indicator in the CMS Medicare Advantage and Prescription Drug data System (MARx), with start and end dates, for beneficiary eligibility for OTP services.

Response: All beneficiaries needing treatment for opioid addiction are eligible for this benefit. We appreciate the data suggestion and will take it into consideration in our on-going implementation of the OTP benefit.

Comment: A commenter questioned how Medicare's managed care plan partners are supposed to reflect the use of this new benefit in their required data submissions.

Response: We will furnish guidance to MA organizations and cost plans on this topic at a later date.

Comment: A commenter requested that since OTPs are currently providing OUD services to Medicare beneficiaries, and that the provider enrollment process would not start until the new Part B benefit is available (January 1, 2020), will CMS allow for payments to OTPs for services delivered in the 30 days prior to their successful enrollment.

Response: As we noted in a previous response, MA plans cannot contract or furnish the Part B OTP services through any OTP that is SAMSHA accredited if that OTP has not yet enrolled in Medicare but the MA plan may cover or furnish services provided by such a provider as a supplemental benefit (§ 422.204(b)(3). Allowing the individual to continue to see their current provider during this transition will ensure continuity of care for this vulnerable population. Furthermore, in some situations, the MA plan may be required by § 422.112(a)(3) to provide out-of-network access for the OTP benefit and we remind MA organizations of their obligations under part 422 regulations to furnish all Part A and Part B benefits, excluding hospice, to their enrollees.

Comment: A commenter noted that the Annual Notice of Change and Evidence of Coverage (ANOC and EOC) documents can play an essential role in updating beneficiaries as to new benefits, but the timing for Start Printed Page 62673implementation of the OTP benefit in 2020 makes this impractical, and instead suggested that CMS undertake a robust public education campaign aimed directly at beneficiaries.

Response: The SUPPORT Act became law in October 2018 and CMS issued guidance to MA organizations in the CY 2020 Draft Call Letter (issued in January 2019) and the CY 2020 Final Call Letter (issued in April 2019) about the requirement to cover the OTP benefit, so MA organizations had sufficient time to plan to include the necessary information in ANOCs and EOCs for 2020. Medicare Advantage plans are required to include the new OTP benefit in their 2020 ANOC/EOC. We are also implementing a comprehensive education campaign regarding the new OTP benefit. Our public education campaign will feature CMS information channels, education resources and outreach leveraging media/stakeholder networks to raise awareness and engage Medicare beneficiaries. Specifically it will include earned media (for example, drop-in article for local/community newspapers), social media (for example, tweets and Facebook posts), beneficiary publications, and outreach to beneficiary partners including State Health Insurance Assistance Programs (SHIPs) across the country, in addition to information available from 1-800-MEDICARE and our consumer website, http://www.medicare.gov.

Comment: One commenter requested more information about the compliance criteria, quality metrics, and electronic health record (EHR) requirements that will be used to evaluate OTPs, and whether OTPs will be subject to the requirements of the Quality Payment Program.

Response: We did not propose any compliance criteria, quality metrics, or EHR requirements for OTPs. As OTPs are not one of the eligible clinician types for the Quality Payment Program, they are not able to participate in MIPS or to be a Qualifying APM Participant (QP). However, OTPs may be able to participate in a Center for Medicare and Medicaid Innovation payment model, depending on the eligible participants identified for that specific model, and then would be subject to the requirements of that specific model, which could include quality or EHR-related requirements.

After a thorough review of the above policy considerations reflected in the public comments we received, we are finalizing the proposed provisions to implement the new OTP benefit under section 2005 of the SUPPORT Act, with modifications as described above, at § 410.67, part 489 and part 498.

H. Bundled Payments Under the PFS for Substance Use Disorders

1. Background and Provision

In the CY 2019 PFS proposed rule (83 FR 35730), we solicited comment on creating a bundled episode of care payment for management and counseling treatment for substance use disorders. We received approximately 50 comments on this topic, most of which were supportive of creating a separate bundled payment for these services. Some commenters recommended focusing the bundle on services related to medication assisted treatment (MAT) used in treatment for opioid use disorder (OUD). Several commenters also recommended that we establish higher payment amounts for patients with more complex needs who require more intensive services and management, and also expressed concern that an episode of care that limited the duration of treatment would not be conducive to treating OUD, given the chronic nature of this disorder. Other commenters recommended that we establish separate bundled payments for treatment of substance use disorders that does, and does not, involve MAT.

In response to the public comments, we proposed to establish bundled payments for the overall treatment of OUD, including management, care coordination, psychotherapy, and counseling activities. We noted that, if a patient's treatment involves MAT, this bundled payment would not include payment for the medication itself. Billing and payment for medications under Medicare Part B or Part D would remain unchanged. Additionally, payment for medically necessary toxicology testing would not be included in the proposed OUD bundle, and would continue to be billed separately under the Clinical Lab Fee Schedule. We also proposed to implement the new Medicare Part B benefit added by section 2005 of the SUPPORT Act for coverage of certain services furnished by Opioid Treatment Programs (OTPs) beginning in CY 2020. We believe the bundled payment under the PFS for OUD treatment described below will create an avenue for physicians and other health professionals to bill for a bundle of services that is similar to the new bundled OUD treatment services benefit, but not furnished by an OTP. By creating a separate bundled payment for these services under the PFS, we hope to incentivize increased provision of counseling and care coordination for patients with OUD in the office setting, thereby expanding access to OUD care. We note that use of these codes is limited to only beneficiaries diagnosed with OUD; however, we may consider other potential bundles describing services for other substance use disorders in future rulemaking.

To implement this new bundled payment, we proposed to create two HCPCS G-codes to describe monthly bundles of services that include overall management, care coordination, individual and group psychotherapy and counseling for office-based OUD treatment. Although we considered proposing weekly-reported codes to describe a bundle of services that would align with the proposed OTP bundle, we believe that monthly-reported codes will better align with the practice and billing of other types of care management services furnished in office settings and billed under the PFS (for example, behavioral health integration (BHI) services). We believe monthly-reported codes would be less administratively burdensome for practitioners, and more likely to be consistent with care management and prescribing patterns in the office setting (as compared with an OTP) given the increased use of long-acting MAT drugs (such as injectable naltrexone or implanted buprenorphine) in the office setting compared to the OTP setting. We note that these codes should not be billed for beneficiaries who are receiving treatment at an OTP, as we believe that would be duplicative since the bundled payments made to OTPs cover similar services for the treatment of OUD. Based on feedback we received through the comment solicitation, we proposed to create a code to describe the initial month of treatment, which would include intake activities and development of a treatment plan, as well as assessments to aid in development of the treatment plan in addition to care coordination, individual therapy, group therapy, and counseling; a code to describe subsequent months of treatment including care coordination, individual therapy, group therapy, and counseling; and an add-on code that could be billed in circumstances when effective treatment requires additional resources for a particular patient that substantially exceed the resources included in the base codes. In other words, the add-on code would address extraordinary circumstances that are not contemplated by the bundled code. We acknowledge that the course of treatment for OUD is variable, and in some instances, the first several months of treatment may be more resource intensive. We solicited comment on whether we should consider creating a separately billable Start Printed Page 62674code or codes to describe additional resources involved in furnishing OUD treatment-related services after the first month, for example, when substantial revisions to the treatment plan are needed, and what resource inputs we might consider in setting values for such codes.

We believe that, in general, bundled payments create incentives to provide efficient care by mitigating incentives tied to volume of services furnished, and that these incentives can be undermined by creating separate billing mechanisms to account for higher resource costs for particular patients. However, we share some of the concerns raised by commenters that an OUD bundle should not inadvertently limit the appropriate amount of OUD care furnished to patients with varying medical needs. In consideration of this concern, we proposed to create an add-on code to make appropriate payment for additional resource costs in order to mitigate the risks that the bundled OUD payment might limit clinically-indicated patient care for patients that require significantly more care than is in the range of what is typical for the kinds of care described by the base codes. However, we are also interested in comments regarding ways we might better stratify the coding for OUD treatment to reflect the varying needs of patients (based on complexity or frequency of services, for example) while maintaining the full advantage of the bundled payment, including increased efficiency and flexibility in furnishing care.

We anticipate that these services would often be billed by addiction specialty practitioners, but note that these codes are not limited to any particular physician or nonphysician practitioner (NPP) specialty. Additionally, unlike the codes that describe care furnished using the psychiatric collaborative care model (CPT codes 99492, 99493, and 99494), which require consultation with a psychiatric consultant, we did not propose to require consultation with a specialist as a condition of payment for these codes, but we note that consultation with a specialist could be counted toward the minutes required for billing HCPCS codes G2086, G2087, and G2088.

The codes and descriptors for the services are:

  • HCPCS code G2086: Office-based treatment for opioid use disorder, including development of the treatment plan, care coordination, individual therapy and group therapy and counseling; at least 70 minutes in the first calendar month.
  • HCPCS code G2087: Office-based treatment for opioid use disorder, including care coordination, individual therapy and group therapy and counseling; at least 60 minutes in a subsequent calendar month.
  • HCPCS code G2088: Office-based treatment for opioid use disorder, including care coordination, individual therapy and group therapy and counseling; each additional 30 minutes beyond the first 120 minutes (List separately in addition to code for primary procedure).

For the purposes of valuation for HCPCS codes G2086 and G2087, we are assuming two individual psychotherapy sessions per month and four group psychotherapy sessions per month; however, we understand that the number of therapy and counseling sessions furnished per month will vary among patients and also fluctuate over time based on the individual patient's needs. Consistent with the methodology for pricing other services under the PFS, HCPCS codes G2086, G2087, and G2088 are valued based on what we believe to be a typical case, and we understand that based on variability in patient needs, some patients will require more resources, and some fewer. In order to maintain the advantages inherent in developing a payment bundle, we proposed that the add-on code (HCPCS code G2088) can only be billed when the total time spent by the billing professional and the clinical staff furnishing the OUD treatment services described by the base code exceeds double the minimum amount of service time required to bill the base code for the month. We believe it is appropriate to limit billing of the add-on code to situations where medically necessary OUD treatment services for a particular patient exceed twice the minimum service time for the base code because, as noted above, the add-on code is intended to address extraordinary situations where effective treatment requires additional resources that substantially exceed the resources included in the base codes. For example, the needs of a particular patient in a month may be unusually acute, well beyond the needs of the typical patient; or there may be some months when psychosocial stressors arise that were unforeseen at the time the treatment plan was developed, but warrant additional or more intensive therapy services for the patient. We proposed that when the time requirement is met, HCPCS code G2088 could be billed as an add-on code during the initial month or subsequent months of OUD treatment. Practitioners should document the medical necessity for the use of the add-on code in the patient's medical record. We solicited comment on the proposal.

We proposed to value HCPCS codes G2086, G2087, and G2088 using a building block methodology that sums the work RVUs and direct PE inputs from codes that describe the component services we believe would be typical, consistent with the approach we have previously used in valuing monthly care management services that include face-to-face services within the payment. For HCPCS code G2086, we developed proposed inputs using a crosswalk to CPT code 99492 (Initial psychiatric collaborative care management, first 70 minutes in the first calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements: Outreach to and engagement in treatment of a patient directed by the treating physician or other qualified health care professional; initial assessment of the patient, including administration of validated rating scales, with the development of an individualized treatment plan; review by the psychiatric consultant with modifications of the plan if recommended; entering patient in a registry and tracking patient follow-up and progress using the registry, with appropriate documentation, and participation in weekly caseload consultation with the psychiatric consultant; and provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies.), which is assigned a work RVU of 1.70, plus CPT code 90832 (Psychotherapy, 30 minutes with patient), which is assigned a work RVU of 1.50 (assuming two over the course of the month), and CPT code 90853 (Group psychotherapy (other than of a multiple-family group)), which is assigned a work RVU of 0.59 (assuming four over the course of a month), for a work RVU of 7.06. The required minimum number of minutes described in HCPCS code G2086 is also based on a crosswalk to CPT code 99492. Additionally, for HCPCS code G2086, we proposed to use a crosswalk to the direct PE inputs associated with CPT code 99492, CPT code 90832 (times two), and CPT code 90853 (times four). We believe that the work and PE described by these crosswalk codes is analogous to the services described in HCPCS code G2086 because HCPCS code G2086 includes similar care Start Printed Page 62675coordination activities as described in CPT code 99492 and bundles in the psychotherapy services described in CPT codes 90832 and 90853.

We proposed to value HCPCS code G2087 using a crosswalk to CPT code 99493 (Subsequent psychiatric collaborative care management, first 60 minutes in a subsequent month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements: tracking patient follow-up and progress using the registry, with appropriate documentation; participation in weekly caseload consultation with the psychiatric consultant; ongoing collaboration with and coordination of the patient's mental health care with the treating physician or other qualified health care professional and any other treating mental health providers; additional review of progress and recommendations for changes in treatment, as indicated, including medications, based on recommendations provided by the psychiatric consultant; provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies; monitoring of patient outcomes using validated rating scales; and relapse prevention planning with patients as they achieve remission of symptoms and/or other treatment goals and are prepared for discharge from active treatment), which is assigned a work RVU of 1.53, plus CPT code 90832, which is assigned a work RVU of 1.50 (assuming two over the course of the month), and CPT code 90853, which is assigned a work RVU of 0.59 (assuming four over the course of a month), for a work RVU of 6.89. The required minimum number of minutes described in HCPCS code G2087 is also based on a crosswalk to CPT codes 99493. For HCPCS code G2087, we proposed to use a crosswalk to the direct PE inputs associated with CPT code 99493, CPT code 90832 (times two), and CPT code 90853 (times four). We believe that the work and PE described by these crosswalk codes is analogous to the services described in HCPCS code G2087 because HCPCS code G2087 includes similar care coordination activities as described in CPT code 99493 and bundles in the psychotherapy services described in CPT codes 90832 and 90853.

We proposed to value HCPCS code G2088 using a crosswalk to CPT code 99494 (Initial or subsequent psychiatric collaborative care management, each additional 30 minutes in a calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional (List separately in addition to code for primary procedure)), which is assigned a work RVU of 0.82. The required minimum number of minutes described in HCPCS code G2087 is also based on a crosswalk to CPT codes 99493. For HCPCS code G2088, we proposed to use a crosswalk to the direct PE inputs associated with CPT code 99494. We believe that the work and PE described by this crosswalk code is analogous to the services described in HCPCS code G2088 because HCPCS code G2088 includes similar care coordination activities as described in CPT code 99494.

We understand that many beneficiaries with OUD have comorbidities and may require medically-necessary psychotherapy services for other behavioral health conditions. In order to avoid duplicative billing, we proposed that, when furnished to treat OUD, CPT codes 90832, 90834, 90837, and 90853 may not be reported by the same practitioner for the same beneficiary in the same month as HCPCS codes G2086, G2087, and G2088. We solicited comments on the proposal.

We proposed that practitioners reporting the OUD bundle must furnish a separately reportable initiating visit in association with the onset of OUD treatment, since the bundle requires a level of care coordination that cannot be effective without appropriate evaluation of the patient's needs. This is similar to the requirements for chronic care management (CCM) services (CPT codes 99487, 99489, 99490, and 99491) and BHI services (CPT codes 99484, 99492, 99493, and 99494) finalized in the CY 2017 PFS final rule (81 FR 80239). The initiating visit would establish the beneficiary's relationship with the billing practitioner, ensure the billing practitioner assesses the beneficiary to determine clinical appropriateness of MAT in cases where MAT is being furnished, and provide an opportunity to obtain beneficiary consent to receive care management services (as discussed further below). We proposed that the same services that can serve as the initiating visit for CCM services and BHI services can serve as the initiating visit for the services described by HCPCS codes G2086-G2088. For new patients or patients not seen by the practitioner within a year prior to the commencement of CCM services and BHI services, the billing practitioner must initiate the service during a “comprehensive” E/M visit (levels 2 through 5 E/M visits), annual wellness visit (AWV) or initial preventive physical exam (IPPE). The face-to-face visit included in transitional care management (TCM) services (CPT codes 99495 and 99496) also qualifies as a “comprehensive” visit for CCM and BHI initiation. We proposed that these visits could similarly serve as the initiating visit for OUD services.

We proposed that the counseling, therapy, and care coordination described in the OUD treatment codes could be provided by professionals who are qualified to provide the services under state law and within their scope of practice “incident to” the services of the billing physician or other practitioner. We also proposed that the billing clinician would manage the patient's overall care, as well as supervise any other individuals participating in the treatment, similar to the structure of the BHI codes describing the psychiatric collaborative care model finalized in the CY 2017 PFS final rule (81 FR 80229), in which services are reported by a treating physician or other qualified health care professional and include the services of the treating physician or other qualified health care professional, as well as the services of other professionals who furnish services incident to the services of the treating physician or other qualified health care professional. Additionally, we proposed to add these codes to the list of designated care management services for which we allow general supervision of the non-face-to-face portion of the required services. Consistent with policies for other separately billable care management services under the PFS, because these proposed OUD treatment bundles include non-face-to-face care management components, we proposed that the billing practitioner or clinical staff must document in the beneficiary's medical record that they obtained the beneficiary's consent to receive the services, and that, as part of the consent, they informed the beneficiary that there is cost sharing associated with these services, including potential deductible and coinsurance amounts, for both in-person and non-face-to-face services that are provided.

We proposed to allow any of the individual therapy, group therapy and counseling services included in HCPCS codes G2086, G2087, and G2088 to be furnished via telehealth, as clinically appropriate, in order to increase access to care for beneficiaries. As discussed in section II.F. of this final rule regarding Start Printed Page 62676Telehealth Services, like certain other non-face-to-face PFS services, the components of HCPCS codes G2086 through G2088 describing care coordination are commonly furnished remotely using telecommunications technology, and do not require the patient to be present in-person with the practitioner when they are furnished. As such, these services are not considered telehealth services for purposes of Medicare, and we do not need to consider whether the non-face-to-face aspects of HCPCS codes G2086 through G2088 are similar to other telehealth services. If the non-face-to-face components of HCPCS codes G2086 through G2088 were separately billable, they would not need to be on the Medicare telehealth list to be covered and paid in the same way as services delivered without the use of telecommunications technology.

Section 2001(a) of the SUPPORT Act amended section 1834(m) of the Act, adding a new paragraph (7) that removes the geographic limitations for telehealth services furnished on or after July 1, 2019, to an individual with a substance use disorder (SUD) diagnosis for purposes of treatment of such disorder or co-occurring mental health disorder. The new paragraph at section 1834(m)(7) of the Act also allows telehealth services for treatment of a diagnosed SUD or co-occurring mental health disorder to be furnished to individuals at any telehealth originating site (other than a renal dialysis facility), including in a patient's home. As discussed in section II.F. of this final rule, Telehealth Services, we proposed to add HCPCS codes G2086, G2087, and G2088 to the list of Medicare Telehealth services. Because certain required services (such as individual psychotherapy or group psychotherapy services) that are included in the proposed OUD bundled payment codes would be furnished to treat a diagnosed SUD, and would ordinarily require a face-to-face encounter, they could be furnished more broadly as telehealth services as permitted under section 1834(m)(7) of the Act.

For these services described above (HCPCS codes G2086, G2087, and G2088), we solicited comment on how these potential codes, descriptors, and payment rates align with state Medicaid coding and payment rates for the purposes of state payment of cost sharing for Medicare-Medicaid dually eligible individuals. Additionally, we understand that treatment for OUD can vary, and that MAT alone has demonstrated efficacy. In cases where a medication such as buprenorphine or naltrexone is used to treat OUD alone, without therapy or counseling, we note that existing applicable codes can be used to furnishing and bill for that care (for example, using E/M visits, in lieu of billing the bundled OUD codes proposed here).

As discussed in section II.G. of this final rule, Medicare Coverage for Certain Services Furnished by Opioid Treatment Programs, we proposed to set the copayment at zero for OUD services furnished by an OTP, given the flexibility in section 1834(w)(1) of the Act for us to set the copayment amount for OTP services either at zero or at an amount above zero. We note that we do not have the statutory authority to eliminate the deductible and coinsurance requirements for the bundled OUD treatment services under the PFS. We acknowledge the potential impact of coinsurance on patient health care decisions and intend to monitor its impact if these proposals were to be finalized.

Finally, we recognize that historically, the CPT Editorial Panel has frequently created CPT codes describing services that we originally established using G-codes and adopted them through the CPT Editorial Panel process. We note that we would consider using any newly available CPT coding to describe services similar to those described here in future rulemaking, as early as CY 2021. We would consider and adopt any such CPT codes through subsequent rulemaking.

Additionally, we understand that in some cases, OUD can first become apparent to practitioners in the emergency department setting. We recognize that there is not specific coding that describes diagnosis of OUD or the initiation of, or referral for, MAT in the emergency department setting. We solicited comment on the use of MAT in the emergency department setting, including initiation of MAT and the potential for either referral or follow-up care, as well as the potential for administration of long-acting MAT agents in this setting, in order to better understand typical practice patterns to help inform whether we should consider making separate payment for such services in future rulemaking. We solicited feedback from stakeholders and the public on other potential bundles describing services for other substance use disorders for our consideration in future rulemaking.

We received public comments on the proposed bundled payments under the PFS for substance use disorders. The following is a summary of the comments we received and our responses.

Comment: Many commenters expressed support for this proposal and a few noted that the PFS bundle would provide an opportunity to increase access to OUD treatment for beneficiaries who live in areas without an OTP, but also encouraged CMS to seek opportunities to more closely align the benefit across OTP and PFS settings before it is introduced and to monitor for any unintended responses to payment incentives, noting differences in the number of psychotherapy sessions included.

Response: We agree with the commenters regarding the importance of alignment in these services when furnished in different settings and note that we are finalizing several changes to the coding and payment for services furnished in an OTP (see section II.G of this final rule), which we believe more closely align the payments made by Medicare for OUD services across settings. For example, we are finalizing using a building block methodology to calculate the payment rate for the OTP bundled payments using Medicare rates, including the rates for CPT codes 90832 and 90853, which were also used to calculate the payment rates HCPCS codes G2086, G2087, and G2088. Additionally, we are finalizing an adjustment to the OTP bundled payments to account for intake activities, similar to activities included in HCPCS code G2086, which describes the initial month of treatment. In response to the comments related to monitoring for unintended responses to payment incentives, we note that we will be monitoring utilization of HCPCS codes G2086, G2087, and G2088 and their interaction with other services, as well as the codes describing bundled payments for services furnished at OTPs.

Comment: A few commenters commended CMS on several aspects of this proposal and urged that the proposed codes and valuations be finalized, and also recommended that CMS consider establishing bundled payment amounts that recognize services for different levels of patient need and different types of practice arrangements, including consultation with specialists.

Response: We thank the commenters for their statements of support. We are finalizing the payment amounts for HCPCS codes G2086, G2087, and G2088 as proposed. We also appreciate the commenters' views on coding for these services, and will consider whether it would be appropriate to create codes describing different levels of patient need and different practice arrangements for possible future rulemaking.Start Printed Page 62677

Comment: A few commenters recommended that CMS adjust the payment methodology for these services to account for patient complexity/severity using the American Society of Addiction Medicine (ASAM) Criteria or other equivalent criteria and to account for different types of practice arrangements and emerging technologies. These commenters also recommended that we lower the threshold for billing the add-on code to allow it to be billed when the OUD treatment services described by the base code exceeds 125-150 percent of the minimum time required to bill the base code for the month. Additionally, the commenters recommended that CMS urge health care practitioners to consult with physician addiction specialists, as appropriate, when treating patients with moderate to severe OUD.

Response: After considering public comments, we are finalizing our proposal without modification that HCPCS code G2088 can be billed when the total time spent by the billing professional and the clinical staff furnishing the OUD treatment services described by the base code exceeds double the minimum amount of service time required to bill the base code for the month. We continue to believe it is appropriate to limit billing of the add-on code to situations where medically necessary OUD treatment services for a particular patient exceed twice the minimum service time for the base code because, as noted above, the add-on code is intended to address extraordinary situations where effective treatment requires additional resources that substantially exceed the resources included in the base codes. Additionally, we agree with the commenter's recommendation that practitioners furnishing OUD treatment services should consult with addiction specialists, as clinically appropriate.

Comment: Many commenters requested that CMS allow additional psychotherapy services to be furnished for patients receiving treatment for OUD or another SUD. A few commenters expressed concern that a practitioner would not be able to bill separately for psychotherapy services furnished to beneficiaries with OUD and a co-occurring mental health condition, noting that in rural areas there may not be enough behavioral health providers for a patient to be seen by separate practitioners for SUD and mental health diagnoses.

Response: It is not our intention to limit access to medically necessary services through the creation of bundled payment for OUD treatment services. We clarify that while the psychotherapy services described by CPT codes 90832 (Psychotherapy, 30 minutes with patient), 90834 (Psychotherapy, 45 minutes with patient), 90837 (Psychotherapy, 60 minutes with patient), and 90853 (Group psychotherapy (other than of a multiple-family group)) cannot be reported by the same practitioner for the same beneficiary in the same month as the codes describing this bundled episode of care, practitioners can bill for additional psychotherapy furnished for the treatment of OUD using the add-on code (HCPCS code G2088). In cases where psychotherapy services are furnished for co-occurring diagnoses, any of the psychotherapy codes could be billed, as medically reasonable and necessary. We note that practitioners should determine which of the patient's diagnoses they are treating is the primary one being treated during that session in order to decide whether it is appropriate to bill separately for psychotherapy services furnished for co-occurring diagnoses. After reflecting on these and other comments, we also believe it is important to modify our proposal to establish a requirement that at least one psychotherapy service must be furnished in order to bill for HCPCS codes G2086 or G2087. Since the new G codes incorporate the resource costs involved in furnishing psychotherapy services into the payment rate, we believe it is appropriate that a minimum of at least one psychotherapy service be furnished in order to bill for HCPCS codes G2086 or G2087. We note that not all OUD treatment necessarily require provision of regular psychotherapy services for all patients, for example for patients receiving MAT over a long period of time. In these cases, we note that existing coding describing care management services (CPT codes 99484, 99492, 99493, and 99494) and E/M services can be billed for treatment of substance use disorders, including OUD, so we do not believe that this requirement will inhibit access to OUD services.

Comment: A few commenters expressed concern that the proposed G codes will inappropriately limit access to a variety of evidence-based, non-opioid pain management therapies.

Response: We note that the proposed bundled payment codes would not preclude practitioners from furnishing or billing for other non-opioid pain management treatments.

In summary, after consideration of the comments, we are finalizing HCPCS codes G2086, G2087, and G2088 with modifications to establish a requirement that at least one psychotherapy service must be furnished in order to bill for HCPCS codes G2086 or G2087. We are clarifying that practitioners can bill for additional psychotherapy furnished for the treatment of OUD using the add-on code (HCPCS code G2088) and, in cases where psychotherapy services furnished are furnished for co-occurring diagnoses, for any of the psychotherapy codes, as medically reasonable and necessary.

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

In the CY 2018 PFS final rule (82 FR 53169 through 53180), we established payment for General Care Management (CCM) services using HCPCS G0511 which is an RHC and FQHC-specific G code for at least 20 minutes of CCM, complex CCM, or general behavioral health services. Payment for this code is currently set at the average of the non-facility, non-geographically adjusted payment rates for CPT codes 99490, 99487, 99491, and 99484. The types of chronic conditions that are eligible for care management services include mental health or behavioral health conditions, including substance use disorders.

In the CY 2018 PFS final rule with comment period (82 FR 53169 through 53180), we also established payment for psychiatric Collaborative Care Services (CoCM) using HCPCS code G0512, which is an RHC and FQHC specific G-code for at least 70 minutes in the first calendar month, and at least 60 minutes in subsequent calendar months of psychiatric CoCM services. Payment for this code is set at the average of the non-facility, non-geographically adjusted rates for CPT codes 99492 and 99493. The psychiatric CoCM model of care may be used to treat patients with any behavioral health condition that is being treated by the billing practitioner, including substance use disorders.

RHCs and FQHCs can also bill for individual psychotherapy services using CPT codes 90791, 90792, 90832, 90834, 90837, 90839, or 90845, which are billable visits under the RHC all-inclusive rate (AIR) and FQHC Prospective Payment System (PPS) when furnished by an RHC or FQHC practitioner. If a qualified mental health service is furnished on the same day as a qualified primary care service, the RHC or FQHC can bill for 2 visits.

RHCs and FQHCs are engaged primarily in providing services that are furnished typically in a physician's office or an outpatient clinic. As a result of the bundled payment under the PFS for OUD treatment furnished by physicians, we reviewed the applicability of RHCs and FQHCs Start Printed Page 62678furnishing and billing for similar services. Specifically, we considered establishing a new RHC and FQHC specific G code for OUD treatment with the payment rate set at the average of the non-facility, non-geographically adjusted payment rates for G2086 and G2087, beginning on January 1, 2020. The requirements to bill the services would be similar to the requirements under the PFS for G2086 and G2087, including that an initiating visit with a primary care practitioner must occur within one year before OUD services begin, and that consent be obtained before services are furnished.

However, because RHCs and FQHCs that choose to furnish OUD services can continue to report these individual codes when treating OUD, and can also offer their patients comprehensive care coordination services using HCPCS codes G0511 and G0512, we stated that we did not believe that adding a new and separate code to report a bundle of OUD services was necessary. Therefore, we did not propose to add a new G code for a bundle of OUD services.

We received public comments on our decision not to add a new G code for a bundle of OUD services furnished by RHCs and FQHCs. The following is a summary of the comments we received and our responses.

Comment: Commenters requested that we create a new G code for RHCs and FQHCs to bill for a bundle of OUD services. None of these comments were from an RHC or FQHC or a representative of RHCs or FQHCs.

Response: As we have noted, RHCs and FQHCs that provide OUD services to their patients can bill for individual psychotherapy services using a range of CPT codes that are billable visits under the RHC all-inclusive rate (AIR) and FQHC Prospective Payment System (PPS) when furnished by an RHC or FQHC practitioner. These codes can be billed on the same day as a qualified primary care visit, and RHCs and FQHCs can also bill for care management services and receive a payment in addition to their AIR or PPS payment. We did not receive any comments that lead us to conclude that a separate G code for RHCs and FQHCs to bill for OUD services is necessary, or any comments on how such a code would not be duplicative of existing billing mechanisms.

After considering the comments, we are finalizing our proposal not to establish a separate G code for OUD payments to RHCs and FQHCs. If we become aware that a separate code would be beneficial to RHCs and FQHCs that choose to furnish these services, we will again consider this.

I. Physician Supervision for Physician Assistant (PA) Services

1. Background

Section 4072(e) of the Omnibus Budget Reconciliation Act of 1986 (Pub. L. 99-509, October 21, 1986), added section 1861(s)(2)(K)(i) of the Act to establish a benefit for services furnished by a physician assistant (PA) under the supervision of a physician. We have interpreted this physician supervision requirement in the regulation at § 410.74(a)(2)(iv) to require PA services to be furnished under the general supervision of a physician. This general supervision requirement was based upon another longstanding regulation at § 410.32(b)(3)(i) that defines three levels of supervision for diagnostic tests, which are general, direct and personal supervision. Of these three supervision levels, general supervision is the most lenient. Specifically, the general supervision requirement means that PA services must be furnished under a physician's overall direction and control, but the physician's presence is not required during the performance of PA services.

In the CY 2018 PFS proposed rule (82 FR 34172 through 34173), we published a request for information (RFI) on CMS flexibilities and efficiencies. In response to this RFI, commenters including PA stakeholders informed us about recent changes in the practice of medicine for PAs, particularly regarding physician supervision. These commenters also reached out separately to CMS with their concerns. They stated that PAs are now practicing more autonomously, like nurse practitioners (NPs) and clinical nurse specialists (CNSs), as members of medical teams that often consist of physicians, nonphysician practitioners (NPPs) and other allied health professionals. This changed approach to the delivery of health care services involving PAs has resulted in changes to scope of practice laws in some states for PAs regarding physician supervision. According to these commenters, some states have already updated their requirements for PAs related to physician supervision, some states have made changes and are now silent about their physician supervision requirements, while other states have not yet changed their PA scope of practice in terms of their physician supervision requirements. Overall, these commenters believe that as states continue to make changes to their physician supervision requirements for PAs, the Medicare requirement for general supervision of PA services may become increasingly out of step with current medical practice, imposing a more stringent standard than state laws governing physician supervision of PA services. Furthermore, as currently defined, stakeholders have suggested that the supervision requirement is often misinterpreted or misunderstood in a manner that restricts PAs' ability to practice to the full extent of their education and expertise. The stakeholders have suggested that the current regulatory definition of physician supervision as it applies to PAs could inappropriately restrict the practice of PAs in delivering their professional services to the Medicare population.

We note that we have understood our current policy to require general physician supervision for PA services to fulfill the statutory physician supervision requirement; and we believe that general physician supervision gives PAs flexibility to furnish their professional services without the need for a physician's physical presence or availability. Nonetheless, we appreciate the concerns articulated by stakeholders. To more fully understand the current landscape for medical practice involving PA services and how the current regulatory definition may be problematic, we invited public comments on specific examples of changes in state law and state scope of practice rules that enable PAs to practice more broadly such that those rules are in tension with the Medicare requirement for general physician supervision of PA services that has been in place since the inception of the PA benefit category under Medicare law.

Given the commenters' understanding of ongoing changes underway to the state scope of practice laws regarding physician supervision of PA services, commenters on our CY 2018 RFI have requested that CMS reconsider its interpretation of the statutory requirement that PA services must be furnished under the supervision of a physician to allow PAs to operate similarly to NPs and CNSs, who are required by section 1861(s)(2)(K)(ii) of the Act to furnish their services “in collaboration” with a physician. In general, we have interpreted collaboration for this purpose at §§ 410.75(c)(3) and 410.76(c)(3) of our regulations to mean a process in which an NP or CNS (respectively) works with one or more physicians to deliver health care services within the scope of the practitioner's expertise, with medical direction and appropriate supervision as provided by state law in which the services are performed. The commenters stated that allowing PA services to be furnished using such a collaborative Start Printed Page 62679process would offer PAs the flexibility necessary to deliver services more effectively under today's health care system in accordance with the scope of practice in the state(s) where they practice, rather than being limited by the system that was in place when PA services were first covered under Medicare Part B over 30 years ago.

2. Summary of Proposal and Final Provisions

After considering the comments we received on the RFI, as well as information we received regarding the scope of practice laws in some states regarding supervision requirements for PAs, we proposed to revise the regulation at § 410.74 that establishes physician supervision requirements for PAs. Specifically, we proposed to revise § 410.74(a)(2) to provide that the statutory physician supervision requirement for PA services at section 1861(s)(2)(K)(i) of the Act would be met when a PA furnishes their services in accordance with state law and state scope of practice rules for PAs in the state in which the services are furnished, with medical direction and appropriate supervision as required by state law in which the services are performed. In the absence of state law governing physician supervision of PA services, the physician supervision required by Medicare for PA services would be evidenced by documentation in the medical record of the PA's approach to working with physicians in furnishing their services. Consistent with current rules, such documentation would need to be available to CMS, upon request. This