Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2019; Medicare Shared Savings Program Requirements; Quality Payment Program; Medicaid Promoting Interoperability Program; Quality Payment Program-Extreme and Uncontrollable Circumstance Policy for the 2019 MIPS Payment Year; Provisions From the Medicare Shared Savings Program-Accountable Care Organizations-Pathways to Success; and Expanding the Use of Telehealth Services for the Treatment of Opioid Use Disorder Under the Substance Use-Disorder Prevention That Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act

AGENCY:

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

ACTION:

Final rules and interim final rule.

SUMMARY:

This major final rule addresses changes to the Medicare physician fee schedule (PFS) and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This final rule also finalizes policies included in the interim final rule with comment period in “Medicare Program; CY 2018 Updates to the Quality Payment Program; and Quality Payment Program: Extreme and Uncontrollable Circumstance Policy for the Transition Year” that address the extreme and uncontrollable circumstances MIPS eligible clinicians faced as a result of widespread catastrophic events affecting a region or locale in CY 2017, such as Hurricanes Irma, Harvey and Maria. In addition, this final rule addresses a subset of the changes to the Medicare Shared Savings Program for Accountable Care Organizations (ACOs) proposed in the August 2018 proposed rule “Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations—Pathways to Success”. This final rule also addresses certain other revisions designed to update program policies under the Shared Savings Program.

The interim final rule implements amendments made by the SUPPORT for Patients and Communities Act to the Medicare telehealth provisions in the Social Security Act and regarding permissible telehealth originating sites for purposes of treatment of a substance use disorder or a co-occurring mental health disorder for telehealth services furnished on or after July 1, 2019 to an individual with a substance use disorder diagnosis.

DATES:

Effective Dates: These regulations are effective on January 1, 2019, except for the following:

• Revisions to §§ 414.1415(b)(2) and (3), and 414.1420(b), (c)(2), and (3), which are effective January 1, 2020; and
• Amendments to Part 425, which are effective on December 31, 2018.

Applicability Date: The following provisions related to Section II.I. of this final rule, Evaluation and Management Services, are applicable beginning January 1, 2021: Implementation of a blended payment rate for E/M visits levels 2-4; Payment to adjust the base E/M visit rate(s) upward to account for visit complexity associated with non-procedural specialty care and primary care; Payment to adjust the base visit rate(s) upward to account for the additional resource costs when practitioners need to spend significantly more time with particular patients; and Flexible documentation requirements related to Medical Decision Making, Time or Current E/M visit documentation framework. The amendment to the definition of “low-volume criteria” at § 414.1305 is applicable at the start of the first Merit-based Incentive Payment System (MIPS) determination period for CY 2018 MIPS performance period.

Comment date: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on December 31, 2018.

ADDRESSES:

In commenting, please refer to file code CMS-1693-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-1693-IFC, P.O. Box 8010, 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-1693-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.

FOR FURTHER INFORMATION CONTACT:

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

Lindsey Baldwin, (410) 786-1694, and Emily Yoder, (410) 786-1804, for issues related to evaluation and management (E/M) payment, communication technology-based services and telehealth services.

Lindsey Baldwin, (410) 786-1694, for issues related to sections 2001(a) and 2005 of the SUPPORT for Patients and Communities Act.

Kathy Bryant, (410) 786-3448, for issues related to global surgery data collection.

Isadora Gil, (410) 786-4532, for issues related to payment rates for nonexcepted items and services furnished by nonexcepted off-campus provider-based departments of a hospital, and work relative value units (RVUs).

Ann Marshall, (410) 786-3059, for issues related to E/M documentation guidelines.

Geri Mondowney, (410) 786-1172, for issues related to potentially misvalued services, geographic price cost indices (GPCIs), and malpractice RVUs.

Donta Henson, (410) 786-1947, for issues related to geographic price cost indices (GPCIs).

Tourette Jackson, (410) 786-4735, for issues related to malpractice RVUs.

Patrick Sartini, (410) 786-9252, for issues related to radiologist assistants.

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

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

Edmund Kasaitis, (410) 786-0477, for issues related to reduction of wholesale acquisition cost (WAC)-based payment.

Marcie O'Reilly, (410) 786-9764, for issues related to the Potential Model for Radiation Therapy.

Sarah Harding, (410) 786-4001, or Craig Dobyski, (410) 786-4584, for issues related to aggregate reporting of applicable information for clinical laboratory fee schedule.

Amy Gruber, (410) 786-1542, or Glenn McGuirk, (410) 786-5723, for issues related to the ambulance fee schedule.

Corinne Axelrod, (410) 786-5620, for issues related to care management services and communication technology-based services in Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs).

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

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

Matthew Edgar, (410) 786-0698, for issues related to the physician self-referral law.

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

Benjamin Chin, (410) 786-0679, for inquiries related to Alternative Payment Models (APMs).

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

Elizabeth November, (410) 786-8084, for inquiries related to the Medicare Shared Savings Program [Pathways to Success].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary

II. Provisions of the Final Rule for PFS

A. Background

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

C. Determination of Malpractice Relative Value Units (RVUs)

D. Modernizing Medicare Physician Payment by Recognizing Communication Technology-Based Services and Interim Final Rule Expanding the Use of Telehealth Services for the Treatment of Opioid Use Disorder and Other Substance Use Disorders Under the Substance Use-Disorder Prevention That Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act

E. Potentially Misvalued Services Under the PFS

F. Radiologist Assistants

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

H. Valuation of Specific Codes

I. Evaluation & Management (E/M) Visits

J. Teaching Physician Documentation Requirements for Evaluation and Management Services

K. GPCI Comment Solicitation

L. Therapy Services

M. Part B Drugs: Application of an Add-On Percentage for Certain Wholesale Acquisition Cost (WAC)-Based Payments

N. Potential Model for Radiation Therapy

III. Other Provisions of the Final Rule

A. Clinical Laboratory Fee Schedule

B. Changes to the Regulations Associated With the Ambulance Fee Schedule

C. Payment for Care Management Services and Communication Technology-Based Services in Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)

D. Appropriate Use Criteria for Advanced Diagnostic Imaging Services

E. Medicaid Promoting Interoperability Program Requirements for Eligible Professionals

F. Medicare Shared Savings Program Quality Measures

G. Physician Self-Referral Law

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

I. CY 2019 Updates to the Quality Payment Program (Includes the Extreme and Uncontrollable Circumstances MIPS Eligible Clinicians Faced as a Result of Widespread Catastrophic Events Affecting a Region or Locale in CY 2017 IFC Policies)

IV. Requests for Information

V. Medicare Shared Savings Program; Accountable Care Organizations—Pathways to Success

VI. Collection of Information Requirements

VII. Regulatory Impact Analysis

Regulations Text

Appendix 1: Finalized MIPS Quality Measures

Appendix 2: Improvement Activities

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 http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Click on the link on the left side of the screen titled, “PFS Federal Regulations Notices” for a chronological list of PFS Federal Register and other related documents. For the CY 2019 PFS final rule, refer to item CMS-1693-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 2018 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 makes payment and policy changes under the Medicare PFS and implements certain provisions of the Bipartisan Budget Act of 2018 (Pub. L. 115-123, February 9, 2018) and the SUPPORT for Patients and Communities Act (Pub. L. 115-271, October 24, 2018) related to Medicare Part B payment, and except as specified otherwise, applicable to services furnished in CY 2019. This final rule also revises certain policies under the Medicare Shared Savings Program.

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 major final rule, we establish RVUs for CY 2019 for the PFS, and other Medicare Part B payment policies, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This final rule includes discussions regarding:

• Potentially Misvalued Codes.
• Communication Technology-Based Services.
• Provisions Expanding Telehealth Services for the Treatment of Opioid Use Disorder and Other Substance Use Disorders under the SUPPORT Act.
• Valuation of New, Revised, and Misvalued Codes.
• Payment Rates under the PFS for Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus Provider-Based Departments of a Hospital.
• Evaluation & Management (E/M) Visits.
• Therapy Services.
• Part B Drugs: Application of an Add-on Percentage for Certain Wholesale Acquisition Cost (WAC)-based Payments.
• Potential Model for Radiation Therapy.
• Clinical Laboratory Fee Schedule.
• Ambulance Fee Schedule—Provisions in the Bipartisan Budget Act of 2018.
• Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs).
• Appropriate Use Criteria for Advanced Diagnostic Imaging Services.
• Medicaid Promoting Interoperability Program Requirements for Eligible Professionals.
• Medicare Shared Savings Program Quality Measures.
• Physician Self-Referral Law.
• Physician Self-Referral Law: Annual Update to the List of CPT/HCPCS Codes.
• CY 2019 Updates to the Quality Payment Program (including the extreme and uncontrollable circumstances MIPS eligible clinicians faced as a result of widespread catastrophic events affecting a region or locale in CY 2017).
• Comments in response to the Request for Information on Promoting Interoperability and Electronic Healthcare Information Exchange through Possible Revisions to the CMS Patient Health and Safety Requirements for Hospitals and Other Medicare- and Medicaid-Participating Providers and Suppliers.
• Comments in response to the Request for Information on Price Transparency: Improving Beneficiary Access to Provider and Supplier Charge Information.

This rule also finalizes certain provisions from the “Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations—Pathways to Success” proposed rule that appeared in the August 17, 2018 Federal Register (83 FR 41786). Under the Medicare Shared Savings Program, providers of services and suppliers that participate in an ACO continue to receive traditional Medicare fee-for-service (FFS) payments under Parts A and B, but the ACO may be eligible to receive a shared savings payment if it meets specified quality and savings requirements. ACOs participating under a two-sided shared savings and shared losses model of the program may also be responsible for repaying shared losses if the Parts A and B FFS expenditures for their assigned beneficiaries exceed the ACO's historical benchmark. The revised policies for ACOs participating in the Medicare Shared Savings Program will ensure continuity of program participation for ACOs whose agreement periods expire on December 31, 2018 by allowing these ACOs the opportunity to elect a voluntary 6-month extension of their current agreement periods; supporting coordination of care across settings and strengthening beneficiary engagement; providing relief for ACOs impacted by extreme and uncontrollable circumstance in performance year 2018 and subsequent years; and promoting interoperable electronic health record technology among ACO providers/suppliers. We plan to address the remaining proposals from the August 2018 proposed rule (83 FR 41786) in a forthcoming second final rule.

2. Summary of Costs and Benefits

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

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

1. Overview

Practice expense (PE) is the portion of the resources used in furnishing a service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages, but excluding 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 Five-Year Review of Work Relative Value Units under the PFS and Proposed Changes to the Practice Expense Methodology CY 2007 PFS proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629).

Comment: Several commenters requested that CMS include pharmacists as active qualified health care providers for purposes of calculating physician PE direct costs. The commenters stated that pharmacists need to be included in the calculation of direct PE expenses as an element of the clinical labor variable relating to physicians' services. The commenter stated that pharmacists are key members of the healthcare team supporting the advent of digital medicine and telehealth services and suggested that pharmacists should be recognized as staff included in practice expense inputs.

Response: The direct PE input database contains the service-level costs in clinical labor based on the typical service furnished to Medicare beneficiaries. When these resource costs are typically incurred in furnishing services, we do not have any standing policies that would prohibit the inclusion of the costs in the direct PE input database used to develop PE RVUs for individual services, to the extent that inclusion of such costs would not lead to duplicative payments. Therefore, we welcome more detailed information regarding the typical clinical labor costs involving pharmacists for particular PFS services. We note, however, that in the case of many PFS services, especially care management services, certain elements of the services could be provided by clinicians other than the billing professionals, which could include services provided by pharmacists. As such, we encourage interested stakeholders to provide information through the RUC process or directly to us by February 10th prior to annual rulemaking about the inclusion of additional clinical labor costs for specific services described by HCPCS codes for which payment is made under the PFS, as opposed to clinical labor costs that may be typical only under certain circumstances.

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 2019 PFS Final Rule PE/HR” 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.

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

Response: We have previously identified several concerns regarding the underlying data used in determining PE RVUs in the CY 2014 PFS final rule with comment period (78 FR 74246 through 74247). While we continue to believe that the PPIS survey data are the best data currently available, we continue to seek the best broad based, auditable, routinely updated source of information regarding PE costs. To that end, we have engaged a contractor, the RAND Corporation, to explore the feasibility of updating the data used in the development of PE RVUs.

Comment: One commenter requested that CMS consider studying indirect PE associated with emergency departments including Emergency Medical Treatment & Labor Act (EMTALA)-mandated uncompensated care. The commenter stated that emergency physicians are not able to schedule their patients and therefore cannot maximize the use of staff and resources, and that there are costs associated with being open and having to pay shift differentials over nights, weekends, and holidays.

Response: We will take the information under consideration for future rulemaking.

For CY 2019, we have incorporated the available utilization data for two new specialties, each of which became a recognized Medicare specialty during 2017. These specialties are Hospitalists and Advanced Heart Failure and Transplant Cardiology. 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:

• Hospitalists from Emergency Medicine, and
• Advanced Heart Failure and Transplant Cardiology from Cardiology.

These updates are reflected in the “CY 2019 PFS Final Rule PE/HR” file available on the CMS website under the supporting data files 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 following is a summary of the public comments we received on our proposal to use proxy PE/HR values for these two new specialties.

Comment: One commenter stated that they supported the CMS proposal to crosswalk the Advanced Heart Failure and Transplant specialty to the cardiology PPIS data.

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

Comment: A few commenters wrote to detail their concerns with the current PE/HR assigned to home PT/INR monitoring services. Commenters stated that these services are provided by entities that are enrolled in Medicare as independent testing facilities because there is no other specialty category that currently describes these suppliers; however, home PT/INR monitoring services are fundamentally different in nature. Commenters stated that home PT/INR monitoring services tend to be more therapeutic than diagnostic in nature, typically utilize different staffing types, and have a different ratio of direct to indirect costs. The commenters encouraged CMS to consider home PT/INR monitoring as a distinct specialty from independent testing facilities and to survey suppliers to determine accurate indirect cost factors for these services, while using either the Pathology or All Physicians specialty as a proxy for PE/HR in the meantime. One commenter suggested that CMS should consider holding payments harmless for home PT/INR monitoring services while additional analysis is completed.

Response: We welcome suggestions from interested parties regarding new indirect PE surveys and the use of PE/HR proxies that could be considered for future rulemaking. Interested parties may wish to submit a physician specialty designation request per the instructions found in Pub. 100-04, Medicare Claims Processing Manual, Chapter 26, Section 10.8 (available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c26.pdf). This section of the Medicare Claims Processing Manual includes the criteria that CMS uses to evaluate physician specialty designation requests.

After consideration of the public comments, we are finalizing our proposal to use proxy PE/HR values for Hospitalists and Advanced Heart Failure and Transplant Cardiology as described above.

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 (see section II.B.2.b of this final rule). The general approach to developing the indirect portion of the PE RVUs is as follows:

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

(3) Facility and Nonfacility Costs

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

Comment: One commenter stated that it was not clear why the PE change would differ so greatly between the office and facility settings for CPT code 37227 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal stent placement(s) and atherectomy, includes angioplasty within the same vessel, when performed). The commenter stated that the facility PE RVU for this CPT code was proposed to decrease by 4.8 percent while the non-facility PE RVU was proposed to decrease by 10.6 percent, and the commenter could not understand how these payment rates were determined.

Response: As detailed above, 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. It is not unusual for facility and nonfacility RVUs for a CPT code to change at different rates from year to year, as the direct costs associated with the facility and nonfacility settings are typically distinct from one another. For a more detailed description of the PE RVU methodology, we refer readers to the CY 2007 PFS final rule with comment period (71 FR 69630 through 69643) and the CY 2010 PFS final rule with comment period (74 FR 61745 through 61746).

(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 2019 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. This file contains a table that illustrates the calculation of PE RVUs as described in this final rule for individual codes.

(a) Setup File

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

(b) Calculate the Direct Cost PE RVUs

Sum the costs of each direct input.

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

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

For CY 2019, we proposed to add 28 additional codes that we identified as low volume services to the list of codes for which we assign the expected specialty. Based on our own medical review and input from the RUC and from specialty societies, we proposed to assign the expected specialty for each code as indicated in Table 1. For each of these codes, only the professional component (reported with the -26 modifier) is nationally priced. The global and technical components are priced by the Medicare Administrative Contractors (MACs) which establish RVUs and payment amounts for these services. The list of codes that we proposed to add is displayed in Table 1.

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 2019 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

The following is a summary of the public comments we received on our proposal to update the list of expected specialty assignments for low volume services.

Comment: Several commenters supported the continued use of service-level overrides for low volume codes, and stated that they agreed with the addition of the proposed 28 codes to the list of expected specialties.

Response: We appreciate the support from the commenters.

Comment: Several commenters stated that CPT code 22857 (Total disc arthroplasty (artificial disc), anterior approach, including discectomy to prepare interspace (other than for decompression), single interspace, lumbar) was missing from the proposed list. These commenters requested that CMS include CPT code 22857 in the low utilization category and permanently assign it to the orthopaedic surgery specialty to maintain payment stability and minimize annual fluctuations.

Response: We agree with the commenters that CPT code 22857 qualifies as a low volume code, with an annual Medicare utilization of roughly 20 services. We agree with the commenters that assigning this code to the orthopaedic surgery specialty will help to maintain payment stability, and we are finalizing the addition of CPT code 22857 to the low volume services list.

Comment: One commenter stated that several of the proposed low volume services would be more accurately assigned to different expected specialties based on their practice patterns. The commenter stated that CPT codes 70557 and 70558 are intraoperative exams and are most often performed by neurosurgeons and that CPT code 74235 is a diagnostic radiology code rather than a gastroenterology code. The commenter stated that CPT code 75810 should be assigned to interventional radiology rather than diagnostic radiology, and that CPT codes 78282 and 79300 should be assigned to nuclear medicine rather than diagnostic radiology.

Response: We agree that these codes would be more accurately assigned to the expected specialties described by the commenter based on an examination of the claims data. We are finalizing changes in expected specialty to these six codes as described by the commenter.

Comment: One commenter stated that there are four codes that are still not included in the proposed CY 2019 low volume override list and recommended that the following low volume procedures be added to the override list with the indicated specialty assignment:

• Cardiac Surgery: CPT code 35812, and
• Thoracic Surgery: CPT codes 32654, 33025 and 33251

Response: We agree with the inclusion of CPT codes 32654 and 33251. These are services with very low annual utilization, and we are finalizing their addition to the low volume services list with the expected specialty as described by the commenter. We note that CPT code 33251 is already on the low volume services list with an expected specialty of Cardiac Surgery; we are finalizing a change to the Thoracic Surgery specialty as requested by the commenter. We are not finalizing the addition of CPT code 35812 to the list, as it does not appear to be a current CPT code. We are also not finalizing the addition of CPT code 33025 to the list, as the code had a utilization of more than 5,000 services in the most recent year of claims data, and this would not qualify as a low volume service under the criteria that we have previously finalized through rulemaking.

Comment: One commenter stated that the appropriate low volume overrides were not applied to a series of congenital/pediatric cardiac surgery codes. The commenter stated that each of these operations can only be performed by congenital heart surgeons classified as either cardiac or thoracic surgeons, and that they believe the malpractice RVUs had been improperly decreased as a result of the low volume service overrides not being applied.

Response: Each of the CPT codes identified by the commenter was already present on the low volume services list with an expected specialty assignment of either Cardiac Surgery or Thoracic Surgery. The shifts in malpractice RVUs identified by the commenter were a result of proposed policies associated with E/M visits. We refer readers to section II.I. of this final rule for additional details on these policies.

After consideration of the public comments, we are finalizing the addition of the proposed 28 codes to the low volume services list, with the expected specialty as proposed except where modified in response to comments. We are also finalizing the addition of CPT codes 32654 and 33251 to the list with an expected specialty of Thoracic Surgery as detailed previously.

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 for all PFS services for a specialty by adding the product of the adjusted indirect PE allocator for each service and the utilization data for that service.

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

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

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

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

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

The following is a summary of the public comments we received on the indirect practice cost indices.

Comment: Many commenters stated that they were opposed to the proposed significant shifts in the indirect practice cost indices at the specialty level. Commenters stated that the creation of a separate PE/HR rate for the E/M visits resulted in large unintended effects on specialties given the way that indirect PE is allocated, and that this was inconsistent with CMS' intent to maintain stability in payment. One commenter stated that the proposal to create a separate PE/HR rate for the E/M visits was based on statistically unsound methodology, had opaque analytics, and was not resource-based. Many commenters stated that the effects of the proposed changes to the indirect practice cost indices had not been sufficiently detailed in the proposed rule to allow for proper feedback from commenters. Commenters expressed concern that a reduction in payment due to shifts in the indirect PE allocation could affect patient access to critical services, such as but not limited to CPT codes 96360 (intravenous infusion, hydration; initial, 31 minutes to 1 hour), 96372 (therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular), 96374 (therapeutic, prophylactic or diagnostic injection IV push, single or initial substance/drug), 96375 (therapeutic, prophylactic or diagnostic injection; each additional sequential IV push of a new substance/drug), and HCPCS code G0416 (Surgical pathology, gross and microscopic examinations, for prostate needle biopsy, any method). A few commenters stated that the proposed indirect practice cost indices ignored statutory requirements that payments under the PFS must be resource based and failed to meet the transparency requirements of the Protecting Access to Medicare Act of 2014 (PAMA). Commenters urged CMS not to finalize the proposed changes to the indirect practice cost indices.

Response: The proposed changes in the indirect practice cost indices identified by the commenters were a result of proposed policies associated with E/M visits, and specifically the proposal to establish a separate specialty for E/M visits. We refer readers to section II.I. of this final rule for additional discussion of these policies.

Comment: One commenter stated that the level of detail in the CY 2019 PFS proposed rule was insufficient to comment on several aspects of the proposed changes in coding and payment related to office/outpatient E/M visits, which was a departure from past rules. The commenter specifically stated that there was insufficient information to model how the proposed changes in the office/outpatient E/M visit codes affected the indirect practice cost indices for all other services. Similarly, the commenter suggested that not enough information was provided to simulate the PFS ratesetting in a way that would isolate the impact of the proposed multiple procedure payment reduction (MPPR), in the proposed rates and associated estimates of specialty-level impact. The commenter requested that CMS provide additional technical information and files going forward to enable the commenter to better model proposed and future policies.

Response: We agree with commenters regarding the importance of transparency and the need for detailed information about proposed policies so that public commenters can provide a full and informed response. We also understand that there is merit to providing as much information as possible that would allow for complete reproduction of our proposed and final ratesetting methodologies. We also understand that the proposals related to office/outpatient E/M visits are of great importance to the medical community and represent a significant portion of spending under the PFS. We do not agree with the commenter that the level of detail provided in the proposed rule, including the data provided as publicly available download files, was insufficient for public comment due to the extensive documentation associated with the E/M policy proposals, or that it represented a departure from past practice. Over several years, we have invested significant resources in improving the transparency of the data we use in developing proposed and final PFS rates. We intend to maintain a focus on increasing transparency, and believe the commenters' concerns will help us understand the kind of information that can be most helpful to stakeholders interested in the underlying data sets. While we are not finalizing the MPPR element of the E/M proposal, we appreciate the commenter's interest in the use of code-level assumptions regarding proposed payment adjustments that are reflected in the discounts in the setup file, as discussed in section II.B.2.(5)(e) of this final rule.

(d) Calculate the Final PE RVUs

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

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

Comment: We received many comments regarding the ongoing decrease in the technical component of CPT code 76881 (Ultrasound, complete joint (i.e., joint space and peri-articular soft tissue structures) real-time with image documentation). Commenters stated that this procedure is essential for making appropriate diagnosis and managing patients with various rheumatologic conditions and musculoskeletal disorders. Commenters stated that cutting the reimbursement for the code would not only result in poor patient care but also increase total costs through the use of more expensive MRI procedures. Commenters also disagreed with the RUC's recommended direct PE inputs for CPT code 76881 from the CY 2018 rule cycle, citing concerns with the RUC's use of workforce data, and urged CMS not to make further reductions in payment.

Response: The comments regarding CPT code 76881 are out of scope, as we did not make any proposals involving this code for CY 2019. The reductions in payment described by the commenters for CPT code 76881 were finalized as part of the CY 2018 PFS final rule (82 FR 53058-53059), and are continuing to be phased in over time as part of the transition policy described above. 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 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.

• Crosswalk certain low volume physician specialties: Crosswalk the utilization of certain specialties with relatively low PFS utilization to the associated specialties.
• Physical therapy utilization: Crosswalk the utilization associated with all physical therapy services to the specialty of physical therapy.
• Identify professional and technical services not identified under the usual TC and 26 modifiers: Flag the services that are PC and TC services but do not use TC and 26 modifiers (for example, electrocardiograms). This flag associates the PC and TC with the associated global code for use in creating the indirect PE RVUs. For example, the professional service, CPT code 93010 (Electrocardiogram, routine ECG with at least 12 leads; interpretation and report only), is associated with the global service, CPT code 93000 (Electrocardiogram, routine ECG with at least 12 leads; with interpretation and report).
• Payment modifiers: Payment modifiers are accounted for in the creation of the file consistent with current payment policy as implemented in claims processing. For example, services billed with the assistant at surgery modifier are paid 16 percent of the PFS amount for that service; therefore, the utilization file is modified to only account for 16 percent of any service that contains the assistant at surgery modifier. Similarly, for those services to which volume adjustments are made to account for the payment modifiers, time adjustments are applied as well. For time adjustments to surgical services, the intraoperative portion in the work time file is used; where it is not present, the intraoperative percentage from the payment files used by contractors to process Medicare claims is used instead. Where neither is available, we use the payment adjustment ratio to adjust the time accordingly. Table 3 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 in this final rule.

price = price of the particular piece of equipment.

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

maintenance = factor for maintenance; 0.05.

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

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

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

Comment: A few commenters stated that equipment time associated with payment for diagnostic imaging services is not aligned with practice. The commenters disagreed with the CMS statement that certain highly technical equipment is less likely to be used during all of the preservice or postservice tasks performed by clinical labor staff, and stated that the CMS analysis of equipment time is not accurate based on their experience with imaging centers. Commenters stated that there are non-imaging functions that are required by CMS for payment, such as documentation requirements and the need for enrollment in Medicare by professionals, which add to their administrative burden and increase costs yet are underrepresented in the PE methodology. Commenters stated that they disagreed with how CMS defined room time as inconsistent with how imaging centers actually function, and indicated a preference for assigning equipment time based on the total technologist time.

Response: We disagree with the commenters regarding the equipment time assigned to highly technical equipment. We continue to believe that certain highly technical pieces of equipment and equipment rooms are less likely to be used during all of the preservice or postservice tasks performed by clinical labor staff on the day of the procedure 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).

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 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 do not believe that we have sufficient information at present to propose a variable maintenance factor for equipment cost per minute pricing. We continue to investigate potential avenues for determining equipment maintenance costs across a broad range of equipment items.

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 they were hopeful that the market-based research into equipment and supply pricing would result in a broad range, systematic data collection methodology that could be applied to collecting information on equipment maintenance costs.

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. With regards to the market-based study, the StrategyGen contractors were tasked with updating the commercial pricing of supplies and equipment, and did not include an investigation of equipment maintenance rates as part of their research.

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 2019. The interest rates are listed in Table 4.

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 2019 direct PE input database, which is available 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.

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.

Historically, the RUC has submitted a “PE worksheet” that details the recommended direct PE inputs for our use in developing PE RVUs. The format of the PE worksheet has varied over time and among the medical specialties developing the recommendations. These variations have made it difficult for both the RUC's development and our review of code values for individual codes. Beginning with its recommendations for CY 2019, the RUC has mandated the use of a new PE worksheet for purposes of their recommendation development process that standardizes the clinical labor tasks and assigns them a clinical labor activity code. We believe the RUC's use of the new PE worksheet in developing and submitting recommendations will help us to simplify and standardize the hundreds of different clinical labor tasks currently listed in our direct PE database. As we did for CY 2018, to facilitate rulemaking for CY 2019, 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 cross-walked to the new listing of clinical labor activity codes. These lists are available 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.

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. These RUC-reviewed codes do not currently have clinical labor time assigned for the “Confirm order, protocol exam” clinical labor task, and we do not have any reason to believe that the services being furnished by the clinical staff have changed, only the way in which this clinical labor time has been presented on the PE worksheets.

As a result, 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. If we had received RUC recommendations for codes that currently include clinical labor time for the “Confirm order, protocol exam” clinical labor task, we would have left the RUC-recommended clinical labor times unchanged, but there were no such codes reviewed for CY 2019. We note that there is no effect on the total clinical labor direct costs in these situations, since the same 3 minutes of clinical labor time is still being used in the calculation of PE RVUs.

The following is a summary of the public comments we received on our proposal 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 the aforementioned pattern in the RUC-recommended direct PE inputs.

Comment: Several commenters supported CMS' proposal and requested that these clinical labor refinements should be finalized wherever the refinement had been proposed. These commenters noted that there was no change in the total clinical labor direct costs in these situations and urged CMS to finalize the proposal.

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

Comment: Other commenters disagreed with the proposal. Commenters stated that the standard clinical labor time for the CA013 “Prepare room, equipment and supplies” activity has always been 2 minutes, and that the occasional assignment of additional clinical labor time in individual procedures has not changed this standard.

Response: We agree with the commenters that the standard clinical labor time for the CA013 activity code is 2 minutes. We noted in the proposed rule that 3 minutes has often traditionally been assigned for this clinical labor activity, and our proposal was intended to reflect this common practice pattern. In our table of direct PE refinements, we listed many of these clinical labor refinements using the refinement code “L1: Refined time to standard for this clinical labor task.” This was the incorrect refinement code to use in these situations, and we acknowledge that this was a technical error. The direct PE refinements would have more accurately employed the general refinement code “G1: See preamble text” instead. We wish to clarify that although we agree that the standard clinical labor time for the CA013 activity is 2 minutes, we continue to believe that 2 minutes would not be typical for many of the codes currently under discussion.

Comment: Commenters explained 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. In the old version of the PE worksheet, there was a clinical labor task named “Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist.” Commenters stated that this 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 is now divided into the CA007 and CA014 activity codes, with a standard of 1 minute for each activity. The commenters stated that they recognized that the proposal had no effect on the total clinical labor direct costs, but urged CMS not to finalize anyway due to concerns over inaccuracy and long term effects on the direct practice expense inputs across the PFS.

Response: We agree with the commenters that in situations where a CPT code under review had the old clinical labor task “Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist” on a prior version of the PE worksheet, and where that old clinical labor task was divided into the new CA007 and CA014 activity codes as described by the commenters, we will not finalize our proposed refinements to maintain 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, as we agree that the old clinical labor task is adequately accounted for by being divided into the new activity codes. In these cases, we will finalize the RUC-recommended 2 minutes of clinical labor time for the CA007 activity code and 1 minute for the CA014 activity code.

However, when reviewing the clinical labor for the reviewed codes affected by this issue, we found that several of the codes did not include the old clinical labor task “Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist” on a prior version of the PE worksheet. We also noted that several of the reviewed codes that contained the CA014 clinical labor activity code for “Confirm order, protocol exam” did not contain any clinical labor for the CA007 activity (“Review patient clinical extant information and questionnaire”). In these situations, we believe that it is more accurate to finalize our direct PE refinements 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 as proposed, since the rationale provided by the commenters does not appear to be the case. These codes do not appear to be an instance where the old clinical labor task was split into two new clinical labor activities. We do not understand how time assigned to an old clinical labor task could be divided between the CA007 and CA014 activity codes, as the commenters suggested, in situations where the code under review does not contain any clinical labor for the CA007 activity. 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, as these codes do not currently have clinical labor time assigned for the CA014 “Confirm order, protocol exam” clinical labor activity.

After consideration of the public comments, we are finalizing our proposal for the reviewed codes that did not include the old clinical labor task described above and do not contain any clinical labor for the CA007 clinical labor activity. We are therefore finalizing our proposal for CPT codes 27369, 38792, 76870, 77012, 77021, 92273, and 92274. We are not finalizing our proposal for the reviewed codes where we were able to determine that the old clinical labor task had been divided into the CA007 and CA014 activity codes as described by the commenters. We are therefore finalizing the RUC-recommended CA013 and CA014 clinical labor for CPT codes 76978, 76981, and 76982.

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 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 to codes with inputs reviewed prior to CY 2017. We also solicited comment on this separate pricing structure for scopes, scope video systems, and scope accessories, which we could consider proposing to apply to other codes in future rulemaking. 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 CY 2018 (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 is to create an administratively simple scheme that will be easier to maintain and help to reduce administrative burden. We look forward to receiving detailed recommendations from expert stakeholders regarding the scope equipment items that would be typically required for each scope category, as well as the proper pricing for each scope.

(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, and indicated our intention to address these changes in CY 2019 to incorporate feedback from expert stakeholders.

(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 2019

We understand that the RUC has convened a Scope Equipment Reorganization Workgroup that will be incorporating 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 proposed to delay proposals for any further changes to scope equipment until CY 2020 so that we can incorporate the feedback from the aforementioned workgroup. However, we proposed to update the price of the scope video system (ES031) from its current price of $33,391 to a price of $36,306 to reflect the addition of the LED light and miscellaneous small equipment associated with the system that falls below the threshold of individual equipment pricing as scope accessories, as we explained in detail in the CY 2018 PFS final rule (82 FR 52992 through 52993). We also proposed to update the name of the ES031 equipment item from “video system, endoscopy (processor, digital capture, monitor, printer, cart)” 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.

The following is a summary of the public comments we received on our proposals involving scopes and scope systems.

Comment: Several commenters supported the decision to delay proposals for any further changes to scope equipment until CY 2020 in order to incorporate the feedback from the RUC's Scope Equipment Reorganization Workgroup. One commenter thanked CMS for adding a scope category for multi-channeled flexible video scopes. A different commenter supported the proposal to increase the price of the scope video system (ES03l) from its current price of $33,391 to a price of $36,306 and also supported the proposed update to the name of the ES03l equipment item since the use of the scope video system is not limited to endoscopy procedures.

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

Comment: One commenter stated that they were concerned that the proposed pricing for both the scope video system (ES03l) and the stroboscopy system (ES065) are less than the true cost of the equipment items, and therefore do not accurately reimburse physicians for their direct overhead costs. The commenter stated that they had supplied more recent invoices for these equipment items, which should be taken into consideration for pricing, and reiterated their disagreement with the CMS proposal from the previous calendar year to create single scope equipment categories for all specialties, as scope equipment is not always comparable across specialties. A different commenter supplied invoices for several other scope equipment items and requested that CMS update the prices for these equipment codes and that the new pricing take effect for CY 2019.

Response: We continue to believe that any further changes to scope equipment, including invoice submissions to update scope pricing, should be delayed until CY 2020 so that we can incorporate the feedback from the RUC's Scope Equipment Reorganization Workgroup.

After consideration of the public comments, we are finalizing our scope proposals for CY 2019 without refinement.

c. Balloon Sinus Surgery Kit (SA106) Comment Solicitation

Several stakeholders contacted CMS with regard to the use of the kit, sinus surgery, balloon (maxillary, frontal, or sphenoid) (SA106) supply in CPT codes 31295 (Nasal/sinus endoscopy, surgical; with dilation of maxillary sinus ostium (e.g., balloon dilation), transnasal or via canine fossa), 31296 (Nasal/sinus endoscopy, surgical; with dilation of frontal sinus ostium (e.g., balloon dilation)), and 31297 (Nasal/sinus endoscopy, surgical; with dilation of sphenoid sinus ostium (e.g., balloon dilation)). The stakeholders stated that the price of the SA106 supply (currently $2,599.86) had decreased significantly since it was priced through rulemaking for CY 2011 (75 FR 73351 through 75532), and that the Medicare payment for these three CPT codes using the supply no longer seemed to be in proportion to what the kits cost. They also indicated that the same catheter could be used to treat multiple sinuses rather than being a disposable one-time use supply. The stakeholders stated that marketing firms and sales representatives are advertising these CPT codes as a method for generating additional profits due to the payment for the procedures exceeding the resources typically needed to furnish the services, and requested that CMS investigate the use of the SA106 supply in these codes.

When CPT codes 31295 through 31297 were initially reviewed during the CY 2011 and CY 2012 PFS rulemaking cycles (75 FR 73251, and 76 FR 73184 through 73186, respectively), we expressed our reservations about the pricing and the typical quantity of this supply item used in furnishing these services. The RUC recommended for the CY 2012 rulemaking cycle that CMS remove the balloon sinus surgery kit from each of these codes and implement separately billable alpha-numeric HCPCS codes to allow practitioners to be paid the cost of the disposable kits per patient encounter instead of per CPT code. We stated at the time, and we continue to believe, that this option presents a series of potential problems that we have addressed previously in the context of the broader challenges regarding our ability to price high cost disposable supply items. (For a discussion of this issue, we direct the reader to our discussion in the CY 2011 PFS final rule with comment period (75 FR 73251)). We stated at the time that since the balloon sinus surgery kits can be used when furnishing more than one service to the same beneficiary on the same day, we believed that it would be appropriate to include 0.5 balloon sinus surgery kits for each of the three codes, and we have maintained this 0.5 supply quantity when CPT codes 31295-31297 were recently reviewed again in CY 2018.

In light of the additional information supplied by the stakeholders, we solicited comments on two aspects of the use of the balloon sinus surgery kit (SA106) supply. First, we solicited comments on whether the 0.5 supply quantity of the balloon sinus surgery kit in CPT codes 31295-31297 would be typical for these procedures. We are concerned that the same kit can be used when furnishing more than one service to the same beneficiary on the same day, and that even the 0.5 supply quantity may be overstating the resources typically needed to furnish each service. Second, we solicited comments on the pricing of the balloon sinus surgery kit, given that we have received letters stating that the price has decreased since the initial pricing in the CY 2011 final rule. See Table 5 for the current component pricing of the balloon sinus surgery kit.

We are interested in any information regarding possible changes in the pricing for this kit or its individual components since the initial pricing we adopted in CY 2011. The following is a summary of the public comments we received on our comment solicitation regarding the balloon sinus surgery kit supply.

Comment: Several commenters stated that the variability inherent in the underlying patient anatomy makes it extremely difficult to reliably assign a fixed number of sinuses that can be dilated per balloon or establish a supply quantity that would constitute the typical case. These commenters urged CMS to create a separate HCPCS code for the balloon sinus surgery kit that would be billable based on the number of balloons used per patient.

Response: As we stated in the proposed rule, we continue to believe that this option presents a series of potential problems that we have addressed previously in the context of the broader challenges regarding our ability to maintain appropriate relativity while pricing high cost disposable supply items. For a discussion of this issue, we direct the reader to our discussion in the CY 2011 PFS final rule with comment period (75 FR 73251).

Comment: One commenter provided extensive information regarding the pricing and composition of the balloon sinus surgery kit. This commenter stated that the components of the supply kit have changed from those listed in Table 5, and that there are multiple different types of this kit available for purchase. The commenter stated that the total cost of the balloon sinus surgery kit varies by sinus dilated, whether navigation is used, and by manufacturer, with the average price of a basic kit costing $2,204 and the average price of the kit used for navigation costing $2,850, not including the navigation device itself. The commenter stated that the kit components should not be individually priced and that invoices could be made available upon request.

With regards to the number of sinus dilation procedures that typically can be performed per balloon, the commenter repeated that the variability inherent in the underlying patient anatomy makes it extremely difficult to assign a fixed number of sinuses that can be dilated per balloon. The commenter also urged CMS to consider a shift away from the current supply methodology and instead create a separate HCPCS code for the balloon sinus surgery kit which would be billable based on the number of balloons used per patient. The commenter stated that should CMS elect to preserve the current policy of assigning a fixed number of sinus dilations per kit, they recommended maintaining the current supply quantity that allows one kit for every two sinuses, as they were unable to find compelling evidence to support a more appropriate supply amount.

Response: We are particularly interested in the feedback suggesting that there may be multiple types of balloon sinus surgery kits that have different prices, and we would be interested in further information, including invoice submissions, on this subject for future rulemaking.

After consideration of the public comments, we are not finalizing any changes to the balloon sinus surgery kit (SA106) supply for CY 2019, outside of the market-based supply and equipment pricing update to the supply cost. We do not believe that we have sufficient information to finalize any other changes to the supply cost or supply quantity in the associated CPT codes at this point in time.

d. Technical Corrections to Direct PE Input Database and Supporting Files

Subsequent to the publication of the CY 2018 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 2019 final direct PE input database 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.

For CY 2019, we proposed to address the following inconsistencies:

• The RUC alerted us that there are 165 CPT codes billed with an office E/M code more than 50 percent of the time in the nonfacility setting that have more minimum multi-specialty visit supply packs (SA048) than post-operative visits included in the code's global period. This indicates that either the inclusion of office E/M services was not accounted for in the code's global period when these codes were initially reviewed by the PE Subcommittee, or that the PE Subcommittee initially approved a minimum multi-specialty visit supply pack for these codes without considering the resulting overlap of supplies between SA048 and the E/M supply pack (SA047). The RUC regarded these overlapping supply packs as a duplication, due to the fact that the quantity of the SA048 supply exceeded the number of postoperative visits, and requested that CMS remove the appropriate number of supply item SA048 from 165 codes. After reviewing the quantity of the SA048 supply pack included for the codes in question, we proposed to refine the quantity of minimum multi-specialty visit packs as displayed in Table 6.

In general, we proposed to align the number of minimum multi-specialty visit packs with the number of post-operative office visits included in these codes. We did not propose any supply pack quantity refinements for CPT codes 11100, 95974, or 95978 since they are being deleted for CY 2019. We also did not propose any supply pack quantity refinements for CPT codes 45300, 46500, 57150, 57160, 58100, 64405, 95970, or HCPCS code G0268 since these codes were reviewed by the RUC this year and their previous direct PE inputs will be superseded by the new direct PE inputs we establish through this rulemaking process for CY 2019.

Comment: One commenter stated that they supported this effort as it serves to remedy any discrepancies/errors that may be in the PFS related to postoperative visits and the required multi-specialty packs needed to render those visits.

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

Comment: One commenter stated that removal of the SA048 supply pack was inappropriate for CPT code 43200 (Esophagoscopy, flexible, transoral; diagnostic, including collection of specimen(s) by brushing or washing, when performed (separate procedure)) as it is required for the esophagoscopy procedure and the supply is included in the other codes in the family (CPT codes 43201-43233) as well as for the other GI endoscopy code families. The commenter requested that CMS not remove the SA048 supply from CPT code 43200.

Response: After reviewing the supply inputs for the group of codes identified by the commenter, we agree that it would not be consistent to remove the SA048 multi-specialty pack from CPT code 43200 while retaining the supply pack in CPT codes 43201-43233. As a result, we are not finalizing the removal of the SA048 multi-specialty pack from CPT code 43200. However, we note that many of the CPT codes in this range also contain SA048 supply packs without having any postoperative office visits included in their global periods. We believe that it may be more accurate to achieve consistency within this range of CPT codes by removing the SA048 supply pack from all of these codes, as opposed to adding the SA048 supply pack to CPT code 43200. In regard to this topic, stakeholders can always provide data to us if they believe the code is not bundled/valued/etc. correctly.

After consideration of the public comments, we are finalizing our proposal to align the number of minimum multi-specialty visit packs with the number of post-operative office visits included in these CPT codes listed in Table 6, with the exception of CPT code 43200 as detailed above.

A stakeholder notified us regarding a potential rank order anomaly in the direct PE inputs established for the Shaving of Epidermal or Dermal Lesions code family through PFS rulemaking for CY 2013. Three of these CPT codes describe benign shave removal of increasing lesion sizes: CPT code 11310 (Shaving of epidermal or dermal lesion, single lesion, face, ears, eyelids, nose, lips, mucous membrane; lesion diameter 0.5 cm or less), CPT code 11311 (Shaving of epidermal or dermal lesion, single lesion, face, ears, eyelids, nose, lips, mucous membrane; lesion diameter 0.6 to 1.0 cm), and CPT code 11312 (Shaving of epidermal or dermal lesion, single lesion, face, ears, eyelids, nose, lips, mucous membrane; lesion diameter 1.1 to 2.0 cm). Each of these codes has a progressively higher work RVU corresponding to the increasing lesion diameter, and the recommended direct PE inputs also increase progressively from CPT codes 11310 to 11311 to 11312. However, the nonfacility PE RVU we established for CPT code 11311 is lower than the nonfacility PE RVU for CPT code 11310, which the stakeholder suggested may represent a rank order anomaly.

We reviewed the direct PE inputs for CPT code 11311 and found that there were clerical inconsistencies in the data entry that resulted in the assignment of the lower nonfacility PE RVU for CPT code 11311. We proposed to revise the direct PE inputs to reflect the ones previously finalized through rulemaking for CPT code 11311.

Comment: One commenter agreed that a significant clerical error occurred after the RUC recommended its valuation of CPT code 11311 and its final acceptance by CMS. The commenter recommended that the direct PE inputs of CPT code 11310 be replicated for CPT code 11311 and submitted a table with recommended values.

Response: After reviewing this information, we found that the direct PE inputs requested by the commenter mostly, but do not entirely, match the direct PE inputs that CMS finalized through rulemaking for CY 2013. The commenter requested the inclusion of an additional SB007 (drape, sterile barrier 16in x 29in) supply and a SB011 (drape, sterile, fenestrated 16in x 29in) supply while leaving out a SK075 (skin marking pen, sterile (Skin Skribe)) supply, 3 SM022 (sanitizing cloth-wipe (surface, instruments, equipment)) supplies, and 4 SL463 (Aluminum Chloride 70%) supplies. Since we proposed to revise the direct PE inputs to match the ones previously finalized through rulemaking for CPT code 11311, we are not finalizing these five changes to the direct PE inputs requested by the commenter. In all other respects, the direct PE inputs recommended by the commenter matched the direct PE inputs previously finalized through rulemaking. We are therefore finalizing our proposal to revise the direct PE inputs to reflect the ones previously finalized in CY 2013 for CPT code 11311.

• In CY 2018, we inadvertently assigned too many minutes of clinical labor time for the “Obtain vital signs” task to three therapy codes, given that these codes are typically billed in multiple units and in conjunction with other therapy codes for the same patient on the same day, and we do not believe that it would be typical for clinical staff to obtain vital signs for each time a code is reported. The codes are: CPT code 97124 (Therapeutic procedure, 1 or more areas, each 15 minutes; massage, including effleurage, petrissage and/or tapotement (stroking, compression, percussion)); CPT code 97750 (Physical performance test or measurement (e.g., musculoskeletal, functional capacity), with written report, each 15 minutes); and CPT code 97755 (Assistive technology assessment (e.g., to restore, augment or compensate for existing function, optimize functional tasks and/or maximize environmental accessibility), direct one-on-one contact, with written report, each 15 minutes).

Therefore, we proposed to refine the “Obtain vital signs” clinical labor task for these three codes back to their previous times of 1 minute for CPT codes 97124 and 97750 and to 3 minutes for CPT code 97755. We also proposed to refine the equipment time for the table, mat, hi-lo, 6 x 8 platform (EF028) for CPT code 97124 to reflect the change in the clinical labor time.

Comment: Several commenters agreed with the CMS rationale for refining the clinical labor task times for each of these codes.

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

Comment: One commenter opposed the CMS proposal to refine the equipment time for the table, mat, hi-lo, 6 x 8 platform (EF028) for CPT code 97124 to reflect the change in the clinical labor time.

Response: We continue to believe that changes in clinical labor time should be matched with corresponding changes in equipment time. Since the commenter did not supply a rationale as to why the EF028 equipment time should not match the change in clinical labor time, we are finalizing our proposal to refine the “Obtain vital signs” clinical labor task for these three codes back to their previous times of 1 minute for CPT codes 97124 and 97750 and to 3 minutes for CPT code 97755.

We received a letter from a commenter alerting us to an anomaly in the direct PE inputs for CPT code 52000 (Cystourethroscopy (separate procedure)). The commenter stated that the inclusion of an endoscope disinfector, rigid or fiberoptic, w-cart equipment item (ES005) was inadvertently overlooked in the recommendations for CPT code 52000 when it was reviewed during PFS rulemaking for CY 2017, and that the equipment would be necessary for endoscope sterilization. The commenter requested that this piece of equipment should be added to the direct PE inputs for CPT code 52000.

After reviewing the direct PE inputs for this code, we agreed with the commenter and we proposed to add the endoscope disinfector (ES005) to CPT code 52000, and to add 22 minutes of equipment time for that item to match the equipment time of the other non-scope items included in this code.

Comment: One commenter supported the CMS proposal to add an endoscope disinfector to CPT code 52000 and to add 22 minutes of equipment time to match the equipment time of the other non-scope items included in the code. This commenter requested that this addition apply to all endoscopic urologic procedures that do not already include the endoscope disinfector.

Response: We do not agree that the endoscope disinfector should be added to all endoscopic urologic procedures that lacked the equipment, as the addition of this equipment to CPT code 52000 is a technical correction to address a specific anomaly with the recommendations for CPT code 52000 and not the implementation of a new policy. After consideration of the public comments, we are finalizing the addition of 22 minutes of equipment time for the endoscope disinfector (ES005) to CPT code 52000 as proposed.

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

Comment: A commenter stated that they had reviewed the CY 2019 Proposed Rule physician work time file and discovered an issue with 13 CPT codes that had incorrect work times. The commenter stated that these were technical errors in which the current work time values did not match what CMS had finalized through rulemaking, and the commenter requested that these services be corrected in the CY 2019 CMS work time file for the CY 2019 Final Rule.

Response: We agree with the commenter that some of these CPT codes are subject to technical corrections, while disagreeing with the commenter with regards to other CPT codes, as described in more detail below.

Listed in order, the commenter identified these issues:

Comment: For CPT code 15220 (Full thickness graft, free, including direct closure of donor site, scalp, arms, and/or legs; 20 sq cm or less), the commenter stated that their records showed CMS missing 15 min of positioning time from the Harvard study.

Response: We are not finalizing a change in the work time of this code at this time, as we were unable to verify the positioning time of CPT code 15220 as originally measured by the Harvard study.

Comment: For CPT code 22558 (Arthrodesis, anterior interbody technique, including minimal discectomy to prepare interspace (other than for decompression); lumbar), the commenter stated that the CMS work time file accidentally double counted postoperative visit time in the immediate postoperative time field.

Response: We agree with the commenter that this is subject to a technical correction, and we are finalizing an immediate postservice work time of 25 minutes for CPT code 22558.

Comment: For CPT code 43760 (Change of gastrostomy tube, percutaneous, without imaging or endoscopic guidance), the commenter stated that the code is being deleted for CY 2019 and should not appear in the work time file.

Response: We agree with the commenter, and we are finalizing the removal of this code from the work time file.

Comment: For CPT codes 61645 (Percutaneous arterial transluminal mechanical thrombectomy and/or infusion for thrombolysis, intracranial, any method, including diagnostic angiography, fluoroscopic guidance, catheter placement, and intraprocedural pharmacological thrombolytic injection(s)) and 61650 (Endovascular intracranial prolonged administration of pharmacologic agent(s) other than for thrombolysis, arterial, including catheter placement, diagnostic angiography, and imaging guidance; initial vascular territory), the commenter stated that CMS incorrectly applied 23 hour stay rule for these codes even though the RUC recommended these services as typically inpatient. The commenter stated that there are now available data to see that these CPT codes are done on an inpatient basis 98 percent and 86 percent of the time respectively.

Response: We do not believe that the work times of these codes are subject to a technical correction, as the work times finalized for these codes in the CY 2017 PFS final rule (81 FR 80307-08) were based on a disagreement in policy with the commenter and not a technical error.

Comment: For CPT code 91200 (Liver elastography, mechanically induced shear wave (e.g., vibration), without imaging, with interpretation and report), the commenter stated that the RUC recommended 5 minutes of immediate postservice work time, not 3 minutes, and that CMS had finalized the code without a time refinement. The commenter stated that the immediate postservice work time for CPT code 91200 should be 5 minutes in accordance with the RUC recommendations.

Response: We investigated the RUC recommendations from the April 2015 RUC meeting when CPT code 91200 was reviewed, and we found that the RUC recommended an immediate postservice work time of 3 minutes on the code family's cover sheet and the accompanying summary spreadsheet. Although the RUC may have intended to recommend an immediate postservice work time of 5 minutes for this code, we proposed and finalized an immediate postservice work time of 3 minutes for CPT code 91200 without receiving any comments on the issue. Therefore we are not finalizing any changes to the work time of CPT code 91200 at this time, which will remain 3 minutes.

Comment: For CPT codes 93281 (Programming device evaluation (in person) with iterative adjustment of the implantable device to test the function of the device and select optimal permanent programmed values with analysis, review and report by a physician or other qualified health care professional; multiple lead pacemaker system), 93284 (Programming device evaluation (in person) with iterative adjustment of the implantable device to test the function of the device and select optimal permanent programmed values with analysis, review and report by a physician or other qualified health care professional; multiple lead transvenous implantable defibrillator system), and 93286 (Peri-procedural device evaluation (in person) and programming of device system parameters before or after a surgery, procedure, or test with analysis, review and report by a physician or other qualified health care professional; single, dual, or multiple lead pacemaker system), the commenter stated that CMS has the wrong intraservice work times, despite the CY 2018 final rule indicating no time refinement for these codes.

Response: After reviewing the work times for these codes, we agree with the commenter and we are finalizing a technical correction to the intraservice work times as recommended.

Comment: For CPT code 97166 (Occupational therapy evaluation, moderate complexity), the commenter stated that the HCPAC recommended 15 min of immediate postservice work time, not 10 minutes, and that CMS had finalized the code without a time refinement.

Response: We investigated the RUC recommendations from the October 2015 RUC meeting when CPT code 97166 was reviewed, and we found that the HCPAC recommendations contained two different values for the immediately postservice work time. The written recommendations stated that the immediate postservice work time was recommended at 15 minutes, while the data on the summary spreadsheet stated that the immediate postservice work time was recommended at 10 minutes. Although there were two conflicting HCPAC recommendations for this code, we finalized in the CY 2017 PFS final rule (81 FR 80331) an immediate postservice work time of 10 minutes for CPT code 97166 without receiving any comments on the issue. Therefore we are not finalizing any changes to the work time of CPT code 97166 at this time.

Comment: For CPT code 33866 (Aortic hemiarch graft including isolation and control of the arch vessels, beveled open distal aortic anastomosis extending under one or more of the arch vessels, and total circulatory arrest or isolated cerebral perfusion (List separately in addition to code for primary procedure)), the commenter stated that the RUC recommendation was rescinded and that the code should be removed from the work time file.

Response: We disagree with the commenter, and we are not finalizing the removal of CPT code 33866 from the work time file; we refer readers to the code valuation section of this final rule for additional details regarding CPT code 33866.

Comment: For CPT code 96X11 (Psychological or neuropsychological test administration using single instrument, with interpretation and report by physician or other qualified health care professional and interactive feedback to the patient, family member(s), or caregivers(s), when performed), the commenter stated that the code is not being created for CY 2019 by the CPT Editorial Panel and should be removed from the work time file.

Response: We agree with the commenter and we are finalizing the removal of this code from the work time file.

Comment: For HCPCS code G0281 (Electrical stimulation, (unattended), to one or more areas, for chronic stage iii and stage iv pressure ulcers, arterial ulcers, diabetic ulcers, and venous stasis ulcers not demonstrating measurable signs of healing after 30 days of conventional care, as part of a therapy plan of care), the commenter stated that their records show an intraservice time for this code of 11 minutes and not 7 minutes as currently listed in the work time file.

Response: We disagree with the commenter. As we stated in the CY 2003 PFS final rule with comment period (67 FR 80014), the work, practice expense, and malpractice values G0281 are based on a crosswalk to CPT code 97014 (Application of a modality to 1 or more areas; electrical stimulation (unattended)), and the intraservice work time of CPT code 97014 remains 7 minutes.

Comment: Many commenters raised concerns about the use of the portable X-ray machine (EF041) equipment in CPT code 71045 (Radiologic examination, chest; single view). Commenters stated that the use of the portable X-ray machine in CPT code 71045 understated the price of the equipment typically used in the service, and that the default equipment utilization rate of 50 percent did not reflect the experience of portable X-ray suppliers. Commenters supplied an invoice for a Digital Radiography portable X-ray machine, which they stated would be typical for use in this procedure, along with data on the equipment utilization rate that suggested a utilization rate significantly lower than 50 percent would be typical. Commenters requested modifying the direct PE inputs for CPT code 71045 to include the use of the Digital Radiography portable X-ray machine at a distinctive utilization rate of approximately 22 percent, or alternatively, to use the same equipment as the other three codes in the Chest X-Ray code family (CPT codes 71046-71048) as direct PE inputs for CPT code 71045.

Response: We agree with the commenters and we are finalizing the replacement of the 9 minutes of equipment time for the portable X-ray machine (EF041) with 9 minutes of equipment time for a basic radiology room (EL012) for CPT code 71045. The equipment cost per minute of the basic radiology room (48.4 cents) is nearly identical to the equipment cost per minute of the proposed Digital Radiography portable X-ray machine (46.0 cents), and we believe that it would better serve the interests of relativity for CPT code 71045 to match the same equipment inputs as the rest of the Chest X-Ray code family. We previously updated the PE RVU of this code in the July 2018 Quarterly Update (CMS Change Request 10644) based on the same information previously supplied by the commenters, and due to a technical error, this update to the direct PE inputs of CPT code 71045 was not included in the CY 2019 PFS proposed rule. We are finalizing this technical correction to the direct PE inputs of CPT code 71045 for CY 2019.

Comment: One commenter stated that there was a typographical error in Attachment B of the proposed rule, which resulted in the misstatement of the total RVUs for CPT code 48554 (Transplantation of pancreatic allograft). The commenter recommended that we include 74.81 total RVUs for CPT code 48554 to correct the error of 73.70 total RVUs.

Response: We do not agree with the commenter that there was a typographical error in Addendum B for CPT code 48554, which appears to sum its component parts of the work RVU (37.80), PE RVU (27.72), and malpractice RVU (9.29) to the correct total RVU of 74.81.

We also received comments regarding a variety of subjects about which we did not make proposals for CY 2019. These included comments regarding: The level of physician supervision for CPT code 99091, the 7 percent reduction to the technical component of computed radiography services not performed using digital radiography, a request to migrate the RUC recommended RVU assignment of CPT code 77387 to HCPCS code G6017, a request that CMS not finalize the proposed changes in payment for the revascularization codes (CPT codes 37225-37231) that were a byproduct of the E/M proposals and the supply/equipment pricing update, a request that CMS should assign direct cost inputs and PE RVUs to several disposable negative pressure wound therapy codes (CPT codes 97607-97608), a disagreement with previous reductions in the payment rate for HCPCS code G0416 from past calendar years, a request for clarification regarding the facility PE RVUs for CPT code 99153, a request for CMS to provide additional reimbursement stability for vascular access services by increasing the work RVUs and direct PE inputs for these codes (CPT codes 36901-36909), and a request for CMS to study the possible effect of tariffs on the cost of imaging equipment manufactured overseas. These comments are considered out of scope for the CY 2019 PFS final rule, as we did not make any proposals on these issues in the CY 2019 PFS Proposed Rule. We will take the feedback from the commenters under consideration for future rulemaking.

After consideration of the public comments, we are finalizing technical corrections to the direct PE input database and supporting files as described above.

e. 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 2019, we proposed the following price updates for existing direct PE inputs.

We proposed to update the price of four supplies 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 2019 for these items instead of being phased in over 4 years. For the details of these proposed price updates, please refer to section II.H. of this final rule, Table 15: Invoices Received for Existing Direct PE Inputs.

(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, as added by PAMA, 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 has submitted a report with updated pricing recommendations for approximately 1300 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 FY 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 StrategyGen did not have market share for commercial products, then they used a weighted average (weighted by sample size) of the commercial price and GSA price for the RP. The impact of the GSA price may be nominal in some of these cases since it is proportionate to the commercial samples sizes.

3. Otherwise, if single price points existed from alternate supplier sites, the RP was the weighted average of the commercial price and the GSA price.

4. Finally, if no data were available for commercial products, the GSA average price was used as the RP; and when StrategyGen could find no market research for a particular piece of equipment or supply item, the current CMS prices were used as the RP.

After reviewing the StrategyGen report, we proposed to adopt the updated direct PE input prices for supplies and equipment as recommended by StrategyGen. For the reasons subsequently discussed, the GSA price was not incorporated into the calculation for the StrategyGen recommended prices printed in the proposed rule. The proposed recommended price was developed as follows:

Recommended CMS Price: The StrategyGen proposed recommended price was the researched-commercial price, when available. If not, the StrategyGen proposed recommended price was the current CMS price.

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 indicate 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 will 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, 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 fully implemented for CY 2022. An example of the proposed transition from the current to the fully-implemented new pricing is provided in Table 7.

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 time frame 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 were particularly interested in comments regarding the supply and equipment pricing for CPT codes 95165 and 95004 that are frequently used by the Allergy/Immunology specialty. The Allergy/Immunology specialty was disproportionately affected by the updated pricing, even with a 4-year phase-in. The direct PE costs for CPT code 95165 would go down from $8.43 to $8.17 as a result of the updated supply and equipment pricing information. This would result in the PE RVU for CPT code 96165 to decrease from 0.30 to 0.26. We are seeking feedback on the supply and equipment pricing for the affected codes typically performed by this specialty and whether the direct PE inputs should be reviewed along with the pricing. The full report from the contractor, including the updated supply and equipment pricing that we proposed to be implemented over the proposed 4-year transition period, will be made 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 following is a summary of the public comments we received on our proposals associated with the market research study to update the PFS direct PE inputs for supply and equipment pricing.

Comment: Many commenters were concerned with the transparency of the data used to calculate medical equipment and supply prices. The commenters were particularly concerned about the use of a subscription-based benchmark database as a source for pricing data. The commenters stated that without identification of the database and access to the precise data used in determining the pricing update, they would have no systematic way to evaluate pricing accuracy. In addition, these commenters were concerned that small physician practices are not well represented in benchmark databases, with the consequence that the proposed repricing did not reflect the typical price paid by smaller stakeholders. Commenters stated a general concern that any methodology that more heavily weighs larger physician groups, group purchasing organizations (GPOs), or even hospital contract pricing would result in pricing that is significantly depressed compared to the pricing that can be obtained by an individual practitioner. The commenters asserted that this has the potential to pressure the financial viability of smaller physician practices and to force lower cost non-facility procedures into hospital outpatient or inpatient sites of service.

Response: As to whether there is sufficient transparency to enable others to replicate and validate the proposed pricing, the StrategyGen contractors carried out a market research plan designed to estimate the typical discounted prices that physicians and other providers normally pay. The proprietary database of buyer reported pricing is one of the few sources of typical discounted price data available. Other potential sources of typical discounted pricing were other proprietary databases and the publicly available GSA pricing. For each item priced, the analysis from the contractors included research on as many as five current sources of prices: (1) A proprietary database of buyer reported pricing, (2) Prices reported by GSA, (3) Amazon Business, (4) Cardinal Healthcare, and (5) Vendors' and manufacturers' catalogs.

The proprietary database of buyer reported pricing offers three advantages: (1) It represents discounted prices as opposed to retail pricing, (2) It has the largest sample sizes to represent a wider range of pricing as opposed to single invoices, and (3) The database provides variety with respect to the purchaser's geographic location, purchasing method, procedure volume and other purchasing arrangements. We initially assumed that GSA also represents typical discounted pricing across regions with smaller sample sizes, but subsequently rejected GSA data because we did not believe that its prices were typically representative of commercially available pricing. As a result, GSA data were not used to calculate the StrategyGen recommended prices included in the proposed rule. Amazon Business and Cardinal Healthcare represent typical retail pricing, with smaller sample sizes. In addition, the StrategyGen contractors utilized vendors' and manufacturers' catalogs to identify publicly available pricing. Table 8 summarizes sources of online pricing and characteristics of each source:

The Buyers database provides the most accurate market pricing estimates that include market discounts for a range of buyer organizations. Its larger sample sizes provide more confidence that the proposed pricing is not skewed toward higher or lower pricing but toward the actual market price paid by purchasers.

The StrategyGen contractors chose not to include invoice research in the market research plan as there is already an existing process to modify Direct Practice Expense Input (DPEI) prices based on invoices. Additionally, the contractors determined that providing specific models and other identifying data with the researched prices would offer a broader and more consistent source of pricing data. We do not agree with the commenters that the updated supply and equipment prices will pressure the financial viability of smaller physician practices, as we believe that the larger sample sizes obtained by StrategyGen's research provide more accurate and more consistent pricing of actual market conditions than the single invoices that we have traditionally been reliant upon for pricing.

As to whether the proposed pricing is representative of prices available to small physician practices and non-facility practitioners generally, one of the objectives of the primary market research was to understand what kind of discounts are available to small physician practices similar to discounted pricing available to large health systems under GPOs. The market research plan included a series of questions to vendors designed to illuminate typical discounts they offer to large and small providers other than GPOs. This market research indicates that there are a variety of discount purchasing options available. Vendors indicated that both volume and timing can influence pricing discounts. Approximately 80 percent of respondents indicated that timing has some impact on the price of equipment, and about half of respondents indicated that timing had some impact on the price of supplies. Discussions with other subject matter experts also indicated that timing of purchase is an important factor in pricing. For example, the end of the sales cycle can drive discounts. Less than 10 percent of vendors indicated that these timing discounts may not be available to smaller practices outside of a GPO. The vendor research also indicated that other factors beyond “size and timing” influence discounted pricing, such as service agreements and bundled purchases.

Research indicates that service agreements often include discounts for equipment and supplies. For example, longer term service agreements generally result in larger discounts. However, some vendors indicated that the effect of service agreements was to reduce the size of the discounts, negatively impacting providers. This may be a difference in service agreement strategies across different vendors. Regardless, only 3 percent of respondents indicated that the availability of service agreement discounts was dependent on a GPO.

The vendors identified other factors that impact pricing decisions including:

• Market demand and competitive pricing;
• Contract renewal;
• Customer history and contract history; and
• Vendor considerations independent of the purchaser such as manufacturer and sales incentives, revenue goals, and new product releases.

In conclusion, while volume purchasing and GPOs can drive down prices for many large providers, these are not the only drivers of discounts for providers. A number of additional factors applicable to large, small, and non-facility practices may result in discounts for the buying organizations. We believe that the pricing update required looking at a broad range of data that was collected from different sources, which included pricing data from both large and small organizations. We note that not all private practices are small in nature, and we do not agree that it would be more accurate to obtain prices only from small practices as opposed to the broader data collection undertaken by the StrategyGen contractor.

Comment: Some commenters were concerned that the researched GSA price was incorporated into the recommended commercial price. These commenters expressed concern as to how the GSA price fit into the calculation of new recommended prices.

Response: We want to clarify how the GSA price was used in developing the new recommended DPEI prices for equipment and supplies. We regret the confusion on this issue, which was due to a technical error in the drafting of the language in the proposed rule. We wish to clarify that the GSA price was not used to calculate the StrategyGen recommended prices printed in the proposed rule. Our use of the GSA website to research supply and equipment pricing was found to have a number of limitations. Only suppliers that meet stringent qualifications and that complete a lengthy and detailed application process are eligible to participate in GSA Advantage, GSA's online shopping and ordering system. These requirements sharply curtail the number and type of suppliers whose products may be accessed on the GSA Advantage website. In addition, only products that are purchased by federal agencies or other qualified government entities are listed on the GSA Advantage website, which has the effect of eliminating a number of medical supplies and equipment that are reflected in the CMS DPEI codes. This limitation was especially acute when researching bundled codes for equipment rooms and lanes, and supply packs, kits, and trays. The GSA website does not record comparable bundled purchasing of medical equipment or supplies, so no GSA pricing could be recovered for products included in the bundled codes organized as rooms, lanes, packs, kits or trays. Finally, the prices listed on the GSA Advantage website are required to be the supplier's best offer, which may often be lower than prices that are available to non-governmental purchasers.

For these reasons, the GSA price was not incorporated into the calculation for the StrategyGen recommended prices printed in the proposed rule. The final recommended price for CY 2019 was the commercially researched price, if available. Otherwise the current CY 2018 CMS price remained in place as the CY 2019 CMS price.

Comment: Several commenters were concerned with the methodology used by StrategyGen to conduct market research to determine an updated price for medical equipment and supplies. There were significant concerns with the use of market research to supplement the current AMA/Specialty Society RVS Update Committee (RUC) process. A number of commenters stated that CMS should only use invoices supplied by the specialty society via the RUC process, and should not finalize the updated prices researched by the StrategyGen contractor.

Response: We determined that the most effective way to update the DPEI for CY 2019 was through comprehensive market research. The current RUC process has resulted in updates to many of the equipment and supply codes, but many of the prices in the CY 2018 DPEI are over a decade old, and a significant number date back to research conducted 15 years ago. Therefore, we requested a market research plan from the StrategyGen contractor designed to research current pricing to estimate the typical discounted prices that physicians and other providers normally pay.

The comprehensive market research plan to update DPEI equipment and supplies was designed to supplement the AMA RUC process, not replace it. The current RUC process, while indispensable, does not provide for comprehensive pricing updates. Under the current process, physicians and other providers voluntarily submit invoices for items to RUC for consideration, and after review, the RUC submits these invoices to us. This process results in inherent biases due to the limited number of items represented by submitted invoices and due to the voluntary selection of reported invoices.

The StrategyGen market research plan examined up to five online sources of current prices for each item of equipment or supply researched, including: (1) A proprietary database of buyer reported pricing, (2) Prices offered on GSA (Note: This data was subsequently excluded from the recommended 2019 CMS prices), (3) Amazon Business, (4) Cardinal Healthcare, and (5) Vendors' and manufacturers' catalogs. Each of these sources contains nationally reported vendor and buyer pricing data. The research plan also included vendor interviews to clarify the variety of discount programs available to physicians and other providers.

The comprehensive research plan for the 2019 DPEI required researching approximately 2,000 supply and equipment codes. Qualitative and potentially quantitative research to include all the specialty societies impacted by the DPEI updates was beyond the resources and time allocated to this update. The market research plan did include a physician panel with specialists and a general practitioner to review the reasonableness of the researched data. In addition, the regulatory process remains available to all specialty societies to comment on the recommended prices. We encouraged interested stakeholders to continue to provide feedback on supply and equipment pricing, including the submission of invoices, throughout the 4-year pricing transition.

Comment: Several commenters stated that there is an inherent bias to prioritizing the medical equipment and supplies based on spending and code utilization. These commenters stated that any attempt to accurately price items in the supply and equipment list should devote equal effort to each item of equipment or supply and should not devote additional attention to the most utilized codes. These commenters stated that using utilization data as the primary driver for identifying supply and equipment items to review suggests that there may have been specific intent to lower the cost of high utilization items, perhaps to the detriment of pricing accuracy. In addition, there was concern that some underutilized codes were not researched.

Response: To control for potential research bias, the StrategyGen market research team used an identical online methodology to research commercial pricing data for each of the supply and equipment codes, regardless of the code's prioritization. The prioritization of high-utilization supply and equipment codes was not designed to reduce prices for these codes.

The prioritization of supply and equipment codes was designed to facilitate understanding and validation of the researched commercial prices for these items. Surveying other market entities, including vendors, as opposed to buyers, was used to more precisely identify the range of commercial pricing and factors impacting those prices. For example, additional priority research included a physician panel that reviewed the researched commercial prices for reasonableness. The prioritization of research for certain codes did not change the recommended commercial prices.

In addition, limited time and resources required prioritizing the codes based on use. We recognize that a few medical supply and equipment codes do not have updated recommended prices, and we continue to welcome the submission of updated pricing information from stakeholders for these and other codes.

Comment: Many commenters were supportive of the proposal to use a 4-year pricing transition. Commenters agreed with using the transition period as an opportunity for specialty societies and other stakeholders to continue to evaluate the new pricing and submit invoices and other pricing data as needed. Commenters who disagreed with the use of the 4-year pricing transition also requested that CMS not finalize the proposal. One commenter stated that CMS should phase in the new prices for equipment and supplies during a shorter transition period than the proposed 4-year transition, and suggested a 2-year transition instead.

Response: Our proposal was intended to minimize any potential disruptive effects during the proposed transition period, and 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. Updating the pricing of direct PE inputs for supplies and equipment over a longer time frame will allow more opportunities for public comment and submission of additional, applicable data.

Comment: Several commenters stated that CMS should consider delaying implementation of this proposal until there could be a more thorough and adequate review of the inputs and give medical societies and/or practices more time to gather invoices in order to determine if the proposed pricing is accurate. Some commenters similarly requested that the 4-year pricing transition should begin in CY 2020 to provide stakeholders with additional time to evaluate the approach used by StrategyGen. A few commenters stated that they would prefer a delay of more than 1 year before implementation began.

Response: We disagree with the commenters that delaying the implementation of the pricing updates for a year or longer would lead to more accurate pricing. We believe that our proposal to update the pricing of direct PE inputs for supplies and equipment over a 4 year-transition already allows many opportunities for public comment and the submission of additional, applicable data. We welcomed feedback from commenters on the proposed updated supply and equipment pricing, including the submission of additional invoices for consideration, and many commenters provided detailed feedback regarding the pricing of individual supply and equipment items. We note that we received feedback from commenters on approximately 65 individual supply and equipment codes, which is roughly 3 percent of the total number of items we proposed to update. We also note that commenters did not identify an alternative source for pricing information outside of the sources employed by the StrategyGen contractors, with commenters largely suggesting that we should continue to rely on invoice submissions included along with the review of individual codes via the RUC process.

We continue to believe that a delay in implementation would be unlikely to result in more accurate pricing information. Therefore, we are finalizing the 4-year pricing transition, beginning in CY 2019. We look forward to working with commenters over the 4-year transition for assistance in identifying individual supply and equipment codes that may require additional research into their pricing. As a reminder, to be included in a given year's proposed rule, we generally need to receive invoices by the same February 10th deadline used 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 for the following year.

Comment: Many commenters addressed the proper pricing of some multi-component items, including supply kits, packs, and trays as well as some items of equipment. Several commenters noted some of the proposed prices for supply and equipment items that contain multiple components may not accurately reflect all the components, while other commenters noted that some of the components could be improperly priced. Commenters expressed concerns that some equipment may not possess precise components that are necessary for a specific procedure.

Response: Using the information provided by these commenters, the StrategyGen contractors re-examined the pricing of the multi-component supply and equipment items that had been identified. In some instances, the additional research confirmed some commenters' concerns, as the contractors found that a limited set of these multi-item supply and equipment kits required further clarification of components. For example, an item within a kit, pack, or tray may have had an updated component, resulting in a mispriced item within that kit. To further clarify the prices of these kits, the kits were broken into their most basic components and priced individually. The total price of the kit was determined by adding the specific item prices together. If one of the items within a kit was misidentified, it resulted in an incorrect price of the entire kit.

For example, a review of the recommended price for the “Antigens, multi” (SH007) supply code identified the need to add pricing data for additional antigens and to refine the unit of measurement used in calculating the price. For SH007, additional antigens were added and data analyzed for 1 milliliter vials of two allergy antigens. The first antigen is an allergy antigen for pollen and mites and contains antigens for Timothy, Birch, Ragweed, Cocklebur, MarshElde, and the mites Dermatophagoides pteronyssinus and Dermatophagoides farina. The second antigen is an allergy antigen for mold and cats and contains antigens for Alternaria, Helminth, Hormoden, Penicillium, and Fel d1. To determine the price of the allergy antigen, the StrategyGen contractor researched each component of the antigen separately and averaged the price of the separate vials as the recommended price to arrive at an updated recommended price of $8.96.

In instances related to equipment, an item may have been improperly priced because a specific component was omitted but the items priced could perform the requisite task. An example of this occurred in the pricing of the “SRS System, SBRT” (ER083) equipment item where the equipment priced would retrofit a system to perform SBRT procedures, but pricing did not include the linear accelerator. When re-examining this specific medical equipment, we ensured it was a linear accelerator with SBRT capabilities and arrived at an updated recommended price of $2,973,721.83.

We reexamined the recommended price of each multi-component item cited by a commenter. Table 9 at the conclusion of this section lists the supply and equipment codes with price changes based on feedback from the commenters and the resulting additional research into pricing.

Comment: Several commenters questioned the prices of certain supply codes based on their conclusion that the quantity of the items priced was inaccurate. Depending on the type of supply, a number of different units of measurement are used to set prices for DPEI supply codes. Commenters stated that StrategyGen had used the incorrect unit of measurement in their recommended prices, and identified specific supply codes where they believed these errors had taken place.

Response: In each instance in which a commenter questioned the accuracy of a DPEI code's recommended price based on a concern about the unit quantity of the item priced, the StrategyGen contractor conducted further research of the item and its price with special attention to ensuring that the recommended price was based on the clarified unit of measure. The price assigned to a given code may be for a single item, a kit, a tray, or it may be based on a per test or per ml basis. For example, the price for the SG055 supply is for a single sterile 4in x 4in gauze sponge; whereas the price for SG056 is for a tray/pack of 10 sterile 4in x 4in gauze sponges. In other situations, such as the “Embedding Mold” (SL060) supply, the price for a package of multiple molds was reported instead of the price of a single embedding mold. After consideration of comments received and additional price research, we have updated the recommended prices for a number of relevant supply codes identified by the commenters. Table 9 at the conclusion of this section lists the supply and equipment codes with price changes based on feedback from the commenters and the resulting additional research into pricing.

Comment: Several commenters addressed the subject of the proper pricing for certain items of medical supply and equipment. These commenters requested these specific CMS codes be reviewed again to ensure the correct items were being researched and priced accordingly.

Response: 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. An example of such clarification occurred with the “Covered Stent (Viabahn, Gore)” (SD254) supply, which encompasses a wide range of stents, with varying sizes and other qualities. In other cases, such as the “Patient Worn Telemetry System” (EQ340) equipment, an inpatient unit was originally priced as opposed to an outpatient unit. After an extensive review and validation process, we updated our recommended prices for a number of supply and equipment codes. Table 9 at the conclusion of this section lists the supply and equipment codes with price changes based on feedback from the commenters and the resulting additional research into pricing.

Comment: Several commenters expressed concerns with the proposed prices for individual supply and equipment codes, and recommended that the price of these codes remain unchanged until additional research can be conducted.

Response: The StrategyGen contractor investigated the accuracy of components or features included in an item by researching the identity of the item based on the description contained in the item's supply or equipment code, as well as the identity of any item's prices in submitted invoices. Additional research into approximately half a dozen supply/equipment codes failed to produce reliable product data sufficient to calculate a recommended price. To price these equipment and supply items accurately, we believe additional information is required. Therefore, we will continue to use the current CMS price for these supply and equipment items pending additional research and analysis. We welcome the submission of updated pricing information regarding these supply and equipment items through submission of valid invoices from commenters and other stakeholders. These supply and equipment codes are also listed in Table 9 at the conclusion of this section.

Comment: A few commenters stated that CMS should ensure that the direct practice expenses for HCPCS codes G6001-G6015 are applied consistent with the directives of the Patient Access and Medicare Protection Act (PAMPA) (Pub. L. 114-115) and the Bipartisan Budget Act (BBA) of 2018 (Pub. L. 115-123). Commenters stated that Congress established via statute that the direct PE inputs for these radiation treatment delivery services furnished in CY 2017, CY 2018, and CY 2019 shall be the same as such inputs as established for these services in CY 2016. These commenters stated that the proposed changes to the PE RVUs for HCPCS codes G6001-G6015 were directly opposed to current law, and that CMS should revisit its analysis to ensure that the direct PE inputs are consistent with those used in 2016 as required by Congress.

Response: We disagree with the commenters that the proposed direct PE inputs for HCPCS codes G6001-G6015 were not applied consistent with the directives established in the PAMPA and the BBA. The statute at section 1848(b)(11) of the Act (as added by the PAMPA and amended) specifies that the code definitions, work RVUs, and direct inputs for the practice expense RVUs for these services shall be the same as such definitions, units, and inputs for such services for the fee schedule established for services furnished in CY 2016. We did not propose to change the code definitions, work relative value units, or direct practice expense inputs from those established for CY 2016. We proposed to update the pricing of those same supply and equipment inputs as part of the market-based study of commercial pricing undertaken by the contractor, which was not a subject addressed by the statutory provisions concerning HCPCS codes G6001-G6015. We did not propose changes to the direct practice expense inputs for these services. We simply proposed to update pricing for these inputs; and to adopt the same prices for these supplies and equipment across the PFS for all codes that include them. We note that we estimate that the overall effect of incorporating the new prices in calculating the payment rates for these services results in higher overall RVUs for these services, on the whole, than the potential alternative of relying exclusively on pricing from prior years.

After consideration of the public comments, we are finalizing 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. However, while we are adopting most of the prices for supplies and equipment as recommended by StrategyGen and included in the proposed rule, in response to the initial feedback provided by the commenters, we are finalizing changes to the proposed pricing of approximately 60 supply and equipment codes as detailed in Table 9:

The 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 2019 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

To maintain relativity between the clinical labor, supplies, and equipment portions of the PE methodology, we believe that the rates for the clinical labor staff should also be updated along with the updated pricing for supplies and equipment. We solicited public comment regarding whether to update the clinical labor wages used in developing PE RVUs in future calendar years during the 4-year pricing transition for supplies and equipment, or whether it would be more appropriate to update the clinical labor wages at a later date following the conclusion of the transition for supplies and equipment, for example, to avoid other potentially large shifts in PE RVUs during the 4-year pricing transition period.

The following is a summary of the public comments we received on our comment solicitation regarding whether to update of the rates for the clinical labor staff types during the 4-year pricing transition for supplies and equipment.

Comment: Most commenters were supportive of the idea of updating the clinical labor wages during the 4-year pricing transition for supplies and equipment. Several commenters requested that the updated pricing for clinical labor should continue to be based on Bureau of Labor Statistics wage data and remain open for public comment from interested commenters through the rulemaking process. One commenter supported updating the prices for the clinical labor staff types and stated that they had convened an expert physician panel that suggested that the clinical labor costs for radiation therapists and nurses are up to 33 percent higher than what is currently included in the CMS database. A few commenters did not support updating clinical labor wages during the 4-year pricing transition for supplies and equipment, in one case stating that the clinical labor pricing should be updated after the pricing transition for supplies and equipment was complete, and in another case stating that CMS should not make any changes to clinical labor costs for the foreseeable future.

Response: We will take this information into account for future rulemaking on the subject of whether or not to update the clinical labor wages used in future calendar years alongside the 4-year pricing transition for supplies and equipment.

(2) Breast Biopsy Software (EQ370)

Following the publication of the CY 2018 PFS final rule, a stakeholder contacted us and requested that we update the price for the Breast Biopsy software (EQ370) equipment. This equipment item currently lacks a price in the direct PE database, and when an invoice for the Breast Biopsy software was first submitted during CY 2014 PFS rulemaking, we stated that this item served clinical functions similar to other items already included in the Magnetic Resonance (MR) room equipment package (EL008) included in the same CPT codes under review. Therefore, we did not create new direct PE inputs for this equipment item (78 FR 74344 through 74345). The stakeholder suggested that this software is used to subtract the imaging raw data series from the MRI Scanner, reformat the images in multiple planes to allow accurate targeting of the lesion to be biopsied, identify the location of a fiducial marker on the patient's skin, and then target the location of the enhancing lesion to be biopsied. The stakeholder requested that EQ370 be renamed as “Breast MRI computer aided detection and biopsy guidance software” and added to existing CPT codes 19085 (Biopsy, breast, with placement of breast localization device(s) (e.g., clip, metallic pellet), when performed, and imaging of the biopsy specimen, when performed, percutaneous; first lesion, including magnetic resonance guidance), 19086 (Biopsy, breast, with placement of breast localization device(s) (e.g., clip, metallic pellet), when performed, and imaging of the biopsy specimen, when performed, percutaneous; each additional lesion, including magnetic resonance guidance), 19287 (Placement of breast localization device(s) (e.g., clip, metallic pellet, wire/needle, radioactive seeds), percutaneous; first lesion, including magnetic resonance guidance), and 19288 (Placement of breast localization device(s) (e.g., clip, metallic pellet, wire/needle, radioactive seeds), percutaneous; each additional lesion, including magnetic resonance guidance), as well as adding the equipment to two newly created MR breast codes with CAD, CPT codes 77048 (Magnetic resonance imaging, breast, without and with contrast material(s), including computer-aided detection (CAD-real time lesion detection, characterization and pharmacokinetic analysis) when performed; unilateral) and 77049 (Magnetic resonance imaging, breast, without and with contrast material(s), including computer-aided detection (CAD-real time lesion detection, characterization and pharmacokinetic analysis) when performed; bilateral). The stakeholder supplied an invoice with a purchase price of $52,275 for the equipment.

After reviewing the use of the Breast Biopsy software (EQ370) equipment in these six codes, we did not propose to update the price or add the software to these procedures. As we stated in the CY 2014 PFS final rule with comment period (78 FR 74345), we continue to believe that equipment item EQ370 serves clinical functions similar to other items already included in the MR room equipment package (EL008), and that it would be duplicative to include this Breast Biopsy software as a separate direct PE input. We also note that the RUC recommendations for the new CPT codes 77048 and 77049 do not include EQ370 in the recommended equipment for these procedures, and we do not have any reason to believe that the inclusion of additional Breast Biopsy software beyond what is already contained in the MR room equipment package would be typical. However, we will update the name of the EQ370 equipment item from “Breast Biopsy software” to the requested “Breast MRI computer aided detection and biopsy guidance software” to help better describe the equipment in question.

The following is a summary of the public comments we received on our proposal not to update the price of the Breast Biopsy software or add the software to the listed procedures.

Comment: Several commenters stated that CAD or biopsy software is not part of any standard MRI room package available for purchase, and that these are different equipment items sold by different vendors. One commenter requested that CMS clarify the equipment items that make up the MR room (EL008) in order to verify whether or not legitimate duplication exists with the Breast Biopsy software. Another commenter stated that the new CAD Software equipment (ED058) in CPT codes 77048 and 77049 is actually synonymous with the “breast biopsy software” (EQ370). This commenter stated that there had been a lack of consistency in identifying the equipment item between the breast biopsy codes and the MR breast codes, and requested updating the price of the equipment item consistent with the submitted invoices.

Response: In response to the comment requesting that CMS clarify the equipment items that make up the MR room (EL008), we can state that the MR room contains a 1.5T MR Scanner as well as coils, NV array, torso array, shoulder, wrist, extremity, dual array, power injector, and a computer workstation.

After consideration of the public comments, we are finalizing our proposal not to update the price of the Breast Biopsy software (EQ370). However, we note that in light of the information supplied by the commenter that the new CAD Software equipment (ED058) is actually synonymous with the Breast Biopsy software (EQ370), we had already proposed to include this equipment in CPT codes 77048 and 77049. We are finalizing the inclusion of the new CAD Software equipment (ED058) in these procedures, and we are finalizing an update in the price of the CAD Software to $43,308.12. This is based on a submitted invoice from the commenters which contained a price of $52,725 as averaged together with additional invoices for the same CAD Software equipment researched by the StrategyGen contractor. We are also finalizing the replacement of the time assigned to the EQ370 Breast Biopsy software in CPT codes 19085, 19086, 19287, and 19288 with an equal amount of time assigned to the new ED058 CAD Software equipment. Finally, due to the continued confusion and lack of price for the EQ370 equipment item, and due to its redundancy with the new ED058 equipment code, we are deleting EQ370.

(3) Invoice Submission

We routinely accept public submission of invoices as part of our process for developing payment rates for new, revised, and potentially misvalued codes. Often these invoices are submitted in conjunction with the RUC-recommended values for the codes. For CY 2019, 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.

(4) 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 2019, we proposed to continue with the second year of the transition of this adjustment to the standard process for allocating indirect PE.

We received no comments specific to our proposal to continue with the 2nd year of the transition to the standard process for allocating indirect PE. Therefore, we are finalizing our proposal to proceed with the second year of implementing an alternative methodology for the allocation of indirect PE for some office-based services.

C. Determination of Malpractice Relative Value Units (RVUs)

1. Overview

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

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

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

In CY 2017, we finalized the 8th GPCI update, which reflected updated MP premium data. We did not propose to use the updated MP premium data to propose updates for CY 2017 to the specialty risk factors used in the calculation of MP RVUs because it was inconsistent with the policy we previously finalized in the CY 2016 PFS final rule with comment period. That is, we indicated that the specialty-specific risk factors would continue to be updated through notice and comment rulemaking every 5 years using updated premium data, but would remain unchanged between the 5-year reviews. However, we solicited comment on whether we should consider doing so, perhaps as early as for CY 2018, prior to the fourth review and update of MP RVUs that must occur no later than CY 2020. After consideration of the comments received, we stated in the CY 2017 PFS final rule that we would consider the possibility of using the updated MP data to update the specialty risk factors used in the calculation of the MP RVUs prior to the next 5-year update in future rulemaking (81 FR 80191 through 80192).

In the CY 2018 PFS proposed rule, we proposed to use the updated MP data to update the specialty risk factors used in calculation of the MP RVUs prior to the next 5-year update (CY 2020). However, in the CY 2018 PFS final rule (82 FR 53000 through 53006), after consideration of the comments received and some differences we observed in the descriptions on the raw rate filings as compared to how those data were categorized to conform with the CMS specialties, we did not finalize our proposal to use the updated MP data. We are required to review, and if necessary, adjust the MP RVUs by CY 2020. We appreciate the feedback provided by commenters in response to the CY 2018 PFS proposed rule.

In the CY 2019 PFS proposed rule, we solicited additional comment regarding the next MP RVU update which must occur by CY 2020. Specifically, we solicited comment on how we might improve the way that specialties in the state-level raw rate filings data are crosswalked for categorization into CMS specialty codes, which are used to develop the specialty-level risk factors and the MP RVUs.

We received a few comments in response to the comment solicitation, and we appreciate the commenters' feedback and input. We will consider the suggestions and information received for future rulemaking, and in particular for the CY 2020 statutorily required update to MP RVUs.

D. Modernizing Medicare Physician Payment by Recognizing Communication Technology-Based Services

The health care community uses the term “telehealth” broadly to refer to medical services furnished via communication technology. Under current PFS payment rules, Medicare routinely pays for many of these kinds of services. This includes some kinds of remote patient monitoring (either as separate services or as parts of bundled services), interpretations of diagnostic tests when furnished remotely and, under conditions specified in section 1834(m) of the Act, services that would otherwise be furnished in person but are instead furnished via real-time, interactive communication technology. Over the past several years, we have also established several PFS policies to explicitly pay for non-face-to-face services included as part of ongoing care management.

Although all of the kinds of services stated above might be called “telehealth” by patients, other payers and health care providers, we have generally used the term “Medicare telehealth services” to refer to the subset of services defined in section 1834(m) of the Act. Section 1834(m) of the Act defines Medicare telehealth services and specifies the payment amounts and circumstances under which Medicare makes payment for a discrete set of services, all of which must ordinarily be furnished in-person, when they are instead furnished using interactive, real-time telecommunication technology. Section 1834(m)(4)(F)(i) of the Act enumerates certain Medicare telehealth services and section 1834(m)(4)(F)(ii) of the Act allows the Secretary to specify additional Medicare telehealth services using an annual process to add or delete services from the Medicare telehealth list. Section 1834(m)(4)(C) of the Act limits the scope of Medicare telehealth services for which payment may be made to those furnished to a beneficiary who is located in certain types of originating sites in certain, mostly rural, areas. Section 1834(m)(1) of the Act permits only physicians and certain other types of practitioners to furnish and be paid for Medicare telehealth services. Although section 1834(m)(4)(F)(ii) of the Act grants the Secretary the authority to add services to, and delete services from, the list of telehealth services based on the established annual process, it does not provide any authority to change the limitations relating to geography, patient setting, or type of furnishing practitioner because these requirements are specified in statute. However, we note that sections 50302, 50324, and 50325 of the Bipartisan Budget Act of 2018 (BBA 18) (Pub. L. 115-123) have modified or removed the limitations relating to geography and patient setting for certain telehealth services, including for certain home dialysis end-stage renal disease-related services, services furnished by practitioners in certain Accountable Care Organizations, and acute stroke-related services, respectively.

In the CY 2018 PFS proposed rule (82 FR 53012), we solicited information from the public regarding ways that we might further expand access to telehealth services within the current statutory authority and pay appropriately for services that take full advantage of communication technologies. Commenters were very supportive of CMS expanding access to these kinds of services. Many commenters noted that Medicare payment for telehealth services is restricted by statute, but encouraged CMS to recognize and support technological developments in healthcare.

We believe that the provisions in section 1834(m) of the Act apply particularly to the kinds of professional services explicitly enumerated in the statutory provisions, like professional consultations, office visits, and office psychiatry services. Generally, the services we have added to the telehealth list are similar to these kinds of services. As has long been the case, certain other kinds of services that are furnished remotely using communications technology are not considered “Medicare telehealth services” and are not subject to the restrictions articulated in section 1834(m) of the Act. This is true for services that were routinely paid separately prior to the enactment of the provisions in section 1834(m) of the Act and do not usually include patient interaction (such as remote interpretation of diagnostic imaging tests), and for services that were not discretely defined or separately paid for at the time of enactment and that do include patient interaction (such as chronic care management services).

As we considered the concerns expressed by commenters about the statutory restrictions on Medicare telehealth services, we recognized that the concerns were not limited to the barriers to payment for remotely furnished services like those described by the office visit codes. The commenters also expressed concerns pertaining to the limitations on appropriate payment for evolving physicians' services that are inherently furnished via communication technology, especially as technology and its uses have evolved in the decades since the Medicare telehealth services statutory provision was enacted.

In recent years, we have sought to recognize significant changes in health care practice, especially innovations in the active management and ongoing care of chronically ill patients, and have relied on the medical community to identify and define discrete physicians' services through the CPT Editorial Panel (82 FR 53163). In response to our comment solicitation on Medicare telehealth services in the CY 2018 PFS proposed rule (82 FR 53012), commenters provided many suggestions for how CMS could expand access to telehealth services within the current statutory authority and pay appropriately for services that take full advantage of communication technologies, such as waiving portions of the statutory restrictions using demonstration authority. After considering those comments we recognized that concerns regarding the provisions in section 1834(m) of the Act may have been limiting the degree to which the medical community developed coding for new kinds of services that inherently utilize communication technology. We have come to believe that section 1834(m) of the Act does not apply to all kinds of physicians' services whereby a medical professional interacts with a patient via remote communication technology. Instead, we believe that section 1834(m) of the Act applies to a discrete set of physicians' services that ordinarily involve, and are defined, coded, and paid for as if they were furnished during an in-person encounter between a patient and a health care professional.

For CY 2019, we aimed to increase access for Medicare beneficiaries to physicians' services that are routinely furnished via communication technology by clearly recognizing a discrete set of services that are defined by and inherently involve the use of communication technology. Accordingly, we made several proposals for modernizing Medicare physician payment for communication technology-based services, described below. These services will not be subject to the limitations on Medicare telehealth services in section 1834(m) of the Act because, as we have explained, we do not consider them to be Medicare telehealth services; instead, they will be paid under the PFS like other physicians' services. Additionally, we note that in furnishing these services, practitioners need to comply with any applicable privacy and security laws, including the HIPAA Privacy Rule.

1. Brief Communication Technology-Based Service, e.g. Virtual Check-In (HCPCS Code G2012)

The traditional office visit codes describe a broad range of physicians' services. Historically, we have considered any routine non-face-to-face communication that takes place before or after an in-person visit to be bundled into the payment for the visit itself. In recent years, we have recognized payment disparities that arise when the amount of non-face-to-face work for certain kinds of patients is disproportionately higher than for others, and created coding and separate payment to recognize care management services such as chronic care management and behavioral health integration services (81 FR 80226). We now recognize that advances in communication technology have changed patients' and practitioners' expectations regarding the quantity and quality of information that can be conveyed via communication technology. From the ubiquity of synchronous, audio/video applications to the increased use of patient-facing health portals, a broader range of services can be furnished by health care professionals via communication technology as compared to 20 years ago.

Among these services are the kinds of brief check-in services furnished using communication technology that are used to evaluate whether or not an office visit or other service is warranted. When these kinds of check-in services are furnished prior to an office visit, then we would currently consider them to be bundled into the payment for the resulting visit, such as through an evaluation and management (E/M) visit code. However, in cases where the check-in service does not lead to an office visit, then there is no office visit with which the check-in service can be bundled. To the extent that these kinds of check-ins become more effective at addressing patient concerns and needs using evolving technology, we believe that the overall payment implications of considering the services to be broadly bundled becomes more problematic. This is especially true in a resource-based relative value payment system. Effectively, the better practitioners are in leveraging technology to furnish effective check-ins that mitigate the need for potentially unnecessary office visits, the fewer billable services they furnish. Given the evolving technological landscape, we believe this creates incentives that are inconsistent with current trends in medical practice and potentially undermines payment accuracy.

Therefore, we proposed to pay separately, beginning January 1, 2019, for a newly defined type of physicians' service furnished using communication technology. We stated this service would be billable when a physician or other qualified health care professional has a brief non-face-to-face check-in with a patient via communication technology, to assess whether the patient's condition necessitates an office visit. We understand that the kind of communication technology used to furnish these kinds of services has broadened over time and has enhanced the capacity for medical professionals to care for patients. We solicited comment on what types of communication technology are utilized by physicians or other qualified health care professionals in furnishing these services, including whether audio-only telephone interactions are sufficient compared to interactions that are enhanced with video or other kinds of data transmission.

The following discussion summarizes particular definitions and billing rules for these services, as proposed, and more detailed comments we received regarding these aspects of the proposal. Our responses below include information regarding the service definitions and billing requirements applicable for CY 2019.

Comment: Many commenters supported the proposal to pay for these kinds of services. Many commenters offered specific suggestions regarding the service definitions and associated billing rules, which we describe in detail below. Several commenters urged CMS to take a cautious approach in paying for these services, given concerns these commenters stated regarding potential overutilization, while some noted that potential overutilization would be mitigated by Medicare's requirements for the visit to be reasonable and medically necessary/appropriate. Specific aspects of these comments are detailed below.

Response: Based on the broad support for the proposal, we are creating coding and finalizing our proposal to make separate payment for this service. We note that in the proposed rule we referred to this service as HCPCS code GVCI1, which was a placeholder code. The code will be described as HCPCS code G2012 (Brief communication technology-based service, e.g. virtual check-in, by a physician or other qualified health care professional who can report evaluation and management services, provided to an established patient, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 5-10 minutes of medical discussion).

We appreciate commenters' concerns regarding the potential for overutilization of these services. We plan to monitor utilization with the intention of determining whether changes, such as a frequency limitation on the use of this code, are warranted. We would consider proposing such changes in future rulemaking. We note that, like all other physicians' services billed under the PFS, each of these services must be medically reasonable and necessary to be paid by Medicare.

Comment: Many commenters suggested that we not be overly prescriptive regarding the types of communication technology that are utilized by physicians or other qualified health care professionals in furnishing these services. The commenters noted that technology is evolving at a rapid pace and would require us to have to update our policies frequently. Several commenters suggested that we permit the use of email and Electronic Health Record (EHR) patient portals to qualify. A few commenters stated that audio-visual communication is ideal. Others acknowledged that not all patients have the same level of connectivity and therefore recommended allowing audio-only communication.

Response: We are persuaded by the comments advising us not to be overly prescriptive about the technology that is used, and are finalizing allowing audio-only real-time telephone interactions in addition to synchronous, two-way audio interactions that are enhanced with video or other kinds of data transmission. We note that telephone calls that involve only clinical staff could not be billed using HCPCS code G2012 since the code explicitly describes (and requires) direct interaction between the patient and the billing practitioner.

We further proposed that in instances when the brief communication technology-based service originates from a related E/M service provided within the previous 7 days by the same physician or other qualified health care professional, that this service would be considered bundled into that previous E/M service and would not be separately billable, which is consistent with code descriptor language for CPT code 99441 (Telephone evaluation and management service by a physician or other qualified health care professional who may report evaluation and management services provided to an established patient, parent, or guardian not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 5-10 minutes of medical discussion), on which this service is partially modeled. We proposed that in instances when the brief communication technology-based service leads to an E/M service with the same physician or other qualified health care professional, this service would be considered bundled into the pre- or post-visit time of the associated E/M service, and therefore, would not be separately billable. We also noted that this service could be used as part of a treatment regimen for opioid use disorders and other substance use disorders to assess whether the patient's condition requires an office visit.

We proposed pricing this distinct service at a rate lower than current E/M in-person visits to reflect the low work time and intensity and to account for the resource costs and efficiencies associated with the use of communication technology. We expect that these services will be initiated by the patient, especially since many beneficiaries would be financially liable for sharing in the cost of these services. For the same reason, we believe it is important for patients to consent to receiving these services. Therefore, we specifically solicited comment on whether we should require, for example, verbal consent that will be noted in the medical record for each service.

Comment: Many commenters stated that it would be burdensome to obtain consent from the patient prior to each occurrence of this service. Some commenters suggested that the patient be informed through the use of a service agreement which could be signed once and kept on file. Several commenters expressed concern about the cost to beneficiaries, especially since they may have previously received this service without financial liability, and therefore recommended requiring verbal consent that is documented in the medical record.

Response: We understand the potential burden regarding obtaining consent for each occurrence of this service. However, we are persuaded by those commenters who suggest that unexpected cost to beneficiaries would be particularly problematic. We note that under our current policy for several types of care management services, verbal consent is required to be obtained and documented in the medical record. The consent policy was implemented, in part, based on feedback we received from practitioners reporting the care management services, to alleviate burdens of alternative approaches, such as requirements for written consent or completion of particular forms. Consequently, we believe the same requirement could be applied here, without imposition of significant burden. We are finalizing requiring verbal consent that is noted in the medical record for each billed service.

We also proposed that this service can only be furnished for established patients because we believe that the practitioner needs to have an existing relationship with the patient, and therefore, basic knowledge of the patient's medical condition and needs, in order to perform this service.

Comment: Many commenters were supportive of our proposal to limit this service to established patients, while several commenters noted that there would be instances when it would be appropriate to bill this service for new patients. MedPAC noted particular concern regarding potential increases in volume that are not related to ongoing, informed patient care. A few commenters requested that CMS clarify that established patients include those patients who have been seen by a practitioner within the same group practice.

Response: After considering the comments, we are finalizing our proposal to limit this service to established patients, given the concern expressed by commenters regarding the degree to which these services can be furnished without familiarity and experience with individual patients, and in light of MedPAC's concerns regarding increases in utilization that are not related to ongoing, informed patient care. In response to the request for clarification about what constitutes an established patient, we defer to CPT's definition of this term. CPT defines an established patient as one who has received professional services from the physician or qualified health care professional or another physician or qualified health care professional of the exact same specialty and subspecialty who belongs to the same group practice, within the past 3 years. We also emphasize that payment for this service would not preclude a physician or other qualified health care professional from having communication via phone or other modalities with any patient, new or existing, for a variety of reasons. We believe that much of the pre- and post- work associated with, and included in the valuation of existing in-person services that are paid under the PFS can include some types of interactions with patients that are not in-person.

We did not propose to apply a frequency limit on the use of this code by the same practitioner with the same patient, but we want to ensure that this code is appropriately utilized for circumstances when a patient needs a brief non-face-to-face check-in to assess whether an office visit is necessary. We solicited comment on whether it would be clinically appropriate to apply a frequency limitation on the use of this code by the same practitioner with the same patient, and on what would be a reasonable frequency limitation.

Comment: Many commenters were opposed to creating a frequency limitation, suggesting we wait and monitor utilization. Others noted that it could be clinically appropriate to utilize this service multiple times in a week. A few commenters stated that this service could be utilized in behavioral health treatment, and cited an example of assessing suicidal risk, in which case they suggested the frequency should not be limited since routine virtual check-ins would be clinically warranted in some cases. Some commenters suggested a frequency limit of three times per week whereas others suggested a limit of once per week.

Response: After considering these comments, we are not implementing a frequency limitation for CY 2019. However, we plan to monitor utilization with the intention of determining whether such a limitation is warranted. In that case, we would consider proposing a limitation in future rulemaking. We note that, like all other physicians' services billed under the PFS, each of these services must be medically reasonable and necessary to be paid by Medicare.

We also solicited comment on the timeframes under which this service would be separately billable compared to when it would be bundled. We believe the general construct of bundling the services that lead directly to a billable visit is important, but we are concerned that establishing strict timeframes may create unintended consequences regarding scheduling of care. For example, we do not want to bundle only the services that occur within 24 hours of a visit only to see a significant number of visits occurring at 25 hours after the initial service. In order to mitigate these incentives, we solicited comment on whether we should consider broadening the window of time and/or circumstances in which this service should be bundled into the subsequent related visit. We noted that these services, like any other physicians' service, must be medically reasonable and necessary in order to be paid by Medicare.

Comment: Several commenters suggested that we remove the language in the code descriptor that states “or soonest available appointment.” A few commenters suggested we extend the timeframe to 48 hours following the virtual check-in, while others suggested it would be reasonable to expand the limit to 14 days before and 72 hours after the service. Several commenters stated concerns that it might be difficult to document that a subsequent visit was not the “soonest available appointment.” Several commenters expressed concern about the potential for overutilization of this code.

Response: We agree with commenters that urged caution regarding overutilization of this service and believe that the language stating, `or soonest available appointment' in the code description may serve to reduce potential perverse payment incentives to delay seeing patients to ensure payment for this code. We appreciate the concerns regarding potential difficulty in proving that a particular visit was not the “soonest available.” We agree that in each individual case, it might be challenging to prove whether or not other appointments were available prior to the visit, especially since beneficiary convenience is also presumably a factor for when appointments are scheduled. However, we believe that, as written, the code description could help to guard against the potential for abuse that would be present if we instead adopted a purely time-based window for bundling of this service. We also believe that “soonest available appointment” might allow for clinically appropriate flexibility. Therefore, after consideration of the public comments, we are finalizing the code descriptor for HCPCS code G2012 as proposed. However, we plan to monitor this service with the intention of determining whether changes are necessary to the timeframes under which this service would be separately billable compared to when it would be bundled. We would consider any such changes in future rulemaking.

We solicited comment on how clinicians could best document the medical necessity of this service, consistent with documentation requirements necessary to demonstrate the medical necessity of any service under the PFS.

Comment: A few commenters stated that documentation for this service should be consistent with the requirements for an in-person encounter and requested appropriate documentation requirements to ensure that the check-in is fully incorporated into the individual's medical history. Other commenters urged us not to be overly prescriptive.

Response: We appreciate the commenters' input. We do not want to impose undue administrative burden likely to discourage appropriate provision of these services, and are therefore not requiring any service-specific documentation requirements for this service. We note again that these services, like any other physicians' service, must be medically reasonable and necessary in order to be paid by Medicare.

Comment: Several commenters stated that the proposed payment rate would be inadequate for modalities that are both audio- and visual-capable, whereas others stated that the proposed valuation was appropriate. One commenter suggested we create a second code for a virtual check-in that only utilizes synchronous audio/video technology, with a higher reimbursement rate associated with the increased complexity of technology.

Response: As discussed in section II.H of this final rule, we are finalizing the valuation for HCPCS code G2012 as proposed. We believe this valuation reflects the work time and intensity of the service relative to other PFS services and accounts for the resource costs and efficiencies associated with the use of communication technology. We recognize that the valuation of this service is relatively modest, especially compared to in-person services, however, we believe that the proposed valuation accurately reflects the resources involved in furnishing this service. We plan to monitor the utilization of this code and note that we routinely address recommended changes in values for codes paid under the PFS.

Comment: A few commenters requested that CMS allow licensed physical therapists to furnish these services. Additionally, a few commenters requested that we allow other clinical staff, such as registered nurses, to furnish this service.

Response: We are finalizing maintaining this code as part of the set of codes that is only reportable by those that can furnish E/M services. We believe this is appropriate since the service describes a check-in directly with the billing practitioner to assess whether an office visit is needed. We agree that similar check-ins provided by nurses and other clinical staff can be important aspects of coordinated patient care. We note that these kinds of non-face-to-face services by other medical professionals and clinical staff continue to be included in the RVUs for other codes, including those that describe E/M visits, and for procedures with global periods. We also note that non-face-to-face services provided by clinical staff can be explicitly and separately paid for as part of several care management services, many of which we have introduced over the past several years. However, this service is meant to describe, and account for the resources involved, when the billing practitioner directly furnishes the virtual check-in.

Comment: Several commenters requested that CMS waive the beneficiary co-payment for this service.

Response: We appreciate the commenters' request; however, we do not have the statutory authority to make specific changes to the requirements regarding beneficiary cost sharing for this service.

In summary, we are creating coding and finalizing our proposal to make separate payment for brief communication technology-based services. The code will be described as G2012 (Brief communication technology-based service, e.g. virtual check-in, by a physician or other qualified health care professional who can report evaluation and management services, provided to an established patient, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 5-10 minutes of medical discussion). We are finalizing allowing real-time audio-only telephone interactions in addition to synchronous, two-way audio interactions that are enhanced with video or other kinds of data transmission. We are finalizing our proposal to limit this service to established patients.

We are finalizing that if the service originates from a related E/M service provided within the previous 7 days by the same physician or other qualified health care professional, that this service would be considered bundled into that previous E/M service and would not be separately billable. In instances when the service leads to an E/M service with the same physician or other qualified health care professional, we are finalizing that this service would be considered bundled into the pre- or post-visit time of the associated E/M service, and therefore, would not be separately billable. We plan to monitor this service with the intention of determining whether changes are necessary to the timeframes under which this service would be separately billable compared to when it would be bundled. We would consider any such changes in future rulemaking.

We are finalizing requiring verbal consent from beneficiaries that is noted in the medical record for each service. We are not implementing a frequency limitation for CY 2019, however, we plan to monitor utilization with the intention of determining whether such a limitation is warranted. In that case, we would consider that for future rulemaking.

We are finalizing the valuation for HCPCS code G2012 as proposed. We will monitor the utilization of this code and consider any potential adjustments to billing rules or valuation for this service through future rulemaking. We note that cost sharing for these services will apply.

For details related to developing utilization estimates for this service, see section VII. of this final rule, Regulatory Impact Analysis. For additional details related to valuation of this service, see section II.H. of this final rule, Valuation of Specific Codes.

2. Remote Evaluation of Pre-Recorded Patient Information (HCPCS Code G2010)

Stakeholders have requested that CMS make separate Medicare payment when a physician uses recorded video and/or images captured by a patient in order to evaluate a patient's condition. These services involve what is referred to under section 1834(m) of the Act as “store-and-forward” communication technology that provides for the “asynchronous transmission of health care information.” We noted in the proposed rule that we believe these services involve pre-recorded patient-generated still or video images. Other types of patient-generated information, such as information from heart rate monitors or other devices that collect patient health marker data, could potentially be reported with CPT codes that describe remote patient monitoring (83 FR 35724). Under section 1834(m) of the Act, payment for telehealth services furnished using such store-and-forward technology is permitted only under federal telemedicine demonstration programs conducted in Alaska or Hawaii, and these telehealth services remain subject to the other statutory restrictions governing Medicare telehealth services. However, much like the brief communication technology-based service (“virtual check-in service”) that we are finalizing in this rule as described previously, this remote evaluation service would not be a substitute for an in-person service currently separately payable under the PFS. As such, this remote evaluation service is distinct from the telehealth services described under section 1834(m) of the Act. Effective January 1, 2019, we proposed to create specific coding that describes the remote professional evaluation of patient-transmitted information conducted via pre-recorded “store and forward” video or image technology. Because this service would not be considered a Medicare telehealth service, it would not be subject to the geographic and other restrictions on telehealth services under section 1834(m) of the Act; and the proposed valuation reflects the resource costs associated with furnishing services utilizing communication technology.

Also like the virtual check-in service we are finalizing as described previously, this service would be used to determine whether or not an office visit or other service is warranted. When the remote evaluation of pre-recorded patient-submitted images and/or video results in an in-person E/M office visit with the same physician or qualified health care professional, we proposed that this remote service will be considered bundled into that office visit and therefore not be separately billable. We further proposed that in instances when the remote service originates from a related E/M service provided within the previous 7 days by the same physician or qualified health care professional that this service will be considered bundled into that previous E/M service and not be separately billable. In summary, we proposed this service to be a stand-alone service that could be separately billed to the extent that there is no resulting E/M office visit and there is no related E/M office visit within the previous 7 days of the remote service being furnished. We believe the coding and separate payment for this service is consistent with the progression of technology and its impact on the practice of medicine in recent years, and would result in increased access to services for Medicare beneficiaries. We note that in the proposed rule we referred to this service as HCPCS code GRAS1, which was a placeholder code. The code for this service is G2010 (Remote evaluation of recorded video and/or images submitted by an established patient (e.g., store and forward), including interpretation with follow-up with the patient within 24 business hours, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment). We solicited comment as to whether these services should be limited to established patients; or whether there are certain cases, like dermatological or ophthalmological services, where it might be appropriate for a new patient to receive these services. For example, when a patient seeks care for a specific skin condition from a dermatologist with whom she does not have a prior relationship, and part of the inquiry is an assessment of whether the patient needs an in-person visit, the patient could share, and the dermatologist could remotely evaluate, pre-recorded information. We also noted that this service is distinct from the virtual check-in service described previously in that this service involves the practitioner's evaluation of a patient-generated still or video image transmitted by the patient, and the subsequent communication of the practitioner's response to the patient; while the virtual check-in service describes a service that occurs in real time and does not involve the asynchronous transmission of any recorded image.

The following discussion summarizes particular definitions and billing rules we proposed for this service and the more detailed comments we received regarding these aspects of the proposal. Our responses below include information regarding the service definitions and billing requirements applicable for 2019. We additionally address comments we received regarding whether these services should be limited to established patients; or whether there are certain cases, like dermatological or ophthalmological services, where it might be appropriate for a new patient to receive these services.

Comment: Several commenters were supportive of the proposal to pay for these kinds of services. Several commenters urged CMS to take a cautious approach in paying for these services, given concerns these commenters expressed regarding potential overutilization.

Response: We appreciate the many thoughtful comments regarding this proposal. Based on our review of the comments received, especially the broad support for the proposal, we are creating coding and finalizing our proposal to make separate payment for this service. The code will be described as G2010 (Remote evaluation of recorded video and/or images submitted by an established patient (e.g., store and forward), including interpretation with follow-up with the patient within 24 business hours, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment).

We appreciate commenters' concerns regarding the potential for overutilization of these services. We plan to monitor utilization. We note that, like all other physicians' services billed under the PFS, each of these services must be medically reasonable and necessary to be paid by Medicare.

Comment: Many commenters supported allowing this service to be furnished to new patients, noting that an established relationship is not required for the practitioner to remotely evaluate an image or video to consider whether an office visit or other service is warranted, particularly in dermatology and ophthalmology. One commenter stated that allowing new patients to receive this service would also be of value in urology, as it would provide a way to assess patients with conditions such as hematuria (that is, blood in the urine) in a timely manner. The AMA and other commenters urged CMS to limit these services to established patients. The AMA also suggested that, at some point before a physician or practitioner furnishes a virtual service, the clinician (or another clinician with whom the furnishing clinician has a cross-coverage agreement in place) should conduct a face-to-face examination (either in-person or via telehealth) with the patient, noting that the existence of a valid patient-physician relationship ensures that the treating physician or qualified health professional meets a threshold standard of care, enhances care coordination/continuity of care, and ensures that patients are afforded advance notice of when the relationship is being established and that such a patient-initiated service may result in out-of-pocket expenses including deductibles and co-insurance, and additionally serves to minimize the potential for program integrity concerns.

Response: We are persuaded by comments urging us to permit separate payment for these services only for established patients. Since this service is furnished directly by the billing practitioner, we believe it should be furnished in the context of an existing patient-clinician relationship. Therefore, we are finalizing the reporting and billing of HCPCS code G2010 only for established patients.

Comment: Many commenters stated that it would be burdensome to obtain consent from the patient prior to each occurrence of this service. Some commenters suggested that the patient could be informed through the use of a service agreement which could be signed once and kept on file. Several commenters expressed concern about the cost to beneficiaries and therefore recommended requiring verbal consent that is documented in the medical record.

Response: As noted previously regarding HCPCS code G2012, we believe it is important for patients to consent to receive these services, especially since many beneficiaries would be financially liable for sharing in the cost of these services. We understand the potential burden regarding obtaining consent for each occurrence of this service. However, we are persuaded by those commenters who suggest that unexpected cost to beneficiaries would be particularly problematic. We are finalizing requiring beneficiary consent that could be verbal or written, including electronic confirmation that is noted in the medical record for each billed service for HCPCS code G2010.

We acknowledge that verbal consent could be obtained using more than one communication modality, especially since this service is initiated by the patient and involves submission of an image or video. Therefore, we do not intend to include the word “verbal” in the descriptor for the code that describes this services, since “verbal” could imply written or electronic consent.

Comment: Several commenters stated that the proposed payment rate is too low, citing that it is below market compared to the rate many asynchronous telemedicine companies pay their contracted/employed physician staff, and noted that new patients in particular require more resources, whereas others stated that the proposed valuation was appropriate. One commenter suggested that CMS should encourage clinicians to recommend that patients have virtual or in-person visits if the clinician has concerns about the quality of the pre-recorded patient information, such as still or video images.

Response: As discussed in section II.H. of this final rule, we are finalizing the valuation for HCPCS code G2010 as proposed. As stated previously regarding the valuation of the brief communication technology-based service code, HCPCS code G2012, we believe that the proposed valuation accurately reflects the resources involved in furnishing this service. We will monitor the utilization of this code and consider any potential adjustments to billing rules or valuation for this service through future rulemaking.

Comment: A few commenters requested that CMS clarify that the “verbal follow-up” that occurs after the billing practitioner evaluates the images or video submitted by the patient may take place via any mode of communication, including secure text messaging, phone call, or live/asynchronous video chat, so as not to restrict a clinician's interaction with patients. One commenter suggested that CMS should encourage clinicians to recommend that patients have a face-to-face visit (in-person or via telehealth) if the clinician has concerns about the quality of the pre-recorded patient information, such as still or video images.

Response: We are finalizing that the follow-up could take place via phone call, audio/video communication, secure text messaging, email, or patient portal communication and note that accordingly, we do not intend to include the word “verbal” in the code descriptor. We note that any such communications must be compliant with HIPAA and other relevant laws. Additionally, we agree that in instances in which the quality of the pre-recorded information submitted by a patient is insufficient for the clinician to assess whether an office visit or other medical service is warranted, the clinician could not fully furnish a remote evaluation service and, therefore, could not bill for the service. We anticipate that in such a circumstance, the clinician would attempt other methods of communication with the patient to either obtain sufficient images to enable a remote evaluation service or suggest other appropriate alternatives.

Comment: Several commenters suggested that we remove the language in the code descriptor for this service that states “or soonest available appointment,” and stated that it might be difficult to document that a subsequent visit was not the “soonest available appointment.”

Response: As noted previously regarding similar comments on HCPCS code G2012, we appreciate the concerns regarding potential difficulty in proving that a particular visit was not the “soonest available.” We agree that in each individual case, it might be challenging to prove whether or not other appointments were available prior to the visit, especially since beneficiary convenience is also presumably a factor in when appointments are scheduled. However, we believe that, as written, the code description would guard against the potential for abuse that would be present if we instead adopted a purely time-based window for bundling of this service. Therefore, in response to the comments, we are finalizing retaining this language in the code descriptor for HCPCS code G2010 as proposed. However, we plan to monitor this service with the intention of determining if changes are necessary to the timeframes under which this service would be separately billable compared to when it would be bundled. We would consider any such changes in future rulemaking.

Comment: A few commenters suggested that CMS consider inclusion of email/messaging or questionnaires/assessments that do not include an image or other visual item in the scope of this code.

Response: The scope of this service is limited to the evaluation of pre-recorded video and/or images. We note that there is separate coding under the PFS for several types of formal assessments, such as CPT code 96160 (Administration of patient-focused health risk assessment instrument (e.g., health hazard appraisal) with scoring and documentation, per standardized instrument), many of which can be reported when the form is completed by the patient and submitted using remote communication technology for subsequent evaluation by the clinician. Additionally, behavioral health assessments are included in coding and payment for the behavioral health integration services that were finalized for separate payment beginning in CY 2017.

In summary, we are creating coding and finalizing our proposal to make separate payment for remote evaluation of recorded video and/or images submitted by the patient. The code will be described as G2010 (Remote evaluation of recorded video and/or images submitted by an established patient (e.g., store and forward), including interpretation with follow-up with the patient within 24 business hours, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment). We are finalizing that HCPCS code G2010 may be billed only for established patients. We are finalizing that the follow-up with the patient could take place via phone call, audio/video communication, secure text messaging, email, or patient portal communication.

When the review of the patient-submitted image and/or video results in an in-person E/M office visit with the same physician or qualified health care professional, we are finalizing that this remote service will be considered bundled into that office visit and therefore will not be separately billable. We are further finalizing that in instances when the remote service originates from a related E/M service provided within the previous 7 days by the same physician or qualified health care professional that this service will be considered bundled into that previous E/M service and also will not be separately billable.

We are finalizing requiring beneficiary consent that could be verbal or written, including electronic confirmation that is noted in the medical record for each billed service for HCPCS code G2010.

We are finalizing the valuation for HCPCS code G2010 as proposed. We will monitor utilization of this code and consider any potential adjustments to billing rules or valuation of this service through future rulemaking. We note that cost sharing for these services will apply.

For details related to our utilization estimates for this service, see section VII. of this final rule, Regulatory Impact Analysis. For further discussion related to valuation of this service, please see the section II.H. of this final rule, Valuation of Specific Codes.

3. Interprofessional Internet Consultation (CPT Codes 99451, 99452, 99446, 99447, 99448, and 99449)

As part of our standard rulemaking process, we received recommendations from the RUC to assist in establishing values for six CPT codes that describe interprofessional consultations. In 2013, CMS received recommendations from the RUC for CPT codes 99446 (Interprofessional telephone/internet assessment and management service provided by a consultative physician including a verbal and written report to the patient's treating/requesting physician or other qualified health care professional; 5-10 minutes of medical consultative discussion and review), 99447 (Interprofessional telephone/internet assessment and management service provided by a consultative physician including a verbal and written report to the patient's treating/requesting physician or other qualified health care professional; 11-20 minutes of medical consultative discussion and review), 99448 (Interprofessional telephone/internet assessment and management service provided by a consultative physician including a verbal and written report to the patient's treating/requesting physician or other qualified health care professional; 21-30 minutes of medical consultative discussion and review), and 99449 (Interprofessional telephone/internet assessment and management service provided by a consultative physician including a verbal and written report to the patient's treating/requesting physician or other qualified health care professional; 31 minutes or more of medical consultative discussion and review). CMS declined to adopt these codes for separate payment, stating in the CY 2014 PFS final rule with comment period that these kinds of services are considered bundled (78 FR 74343). For CY 2019, the CPT Editorial Panel created two new codes to describe additional consultative services, including a code describing the work of the treating physician when initiating a consult, and the RUC recommended valuation for new codes, CPT codes 99452 (Interprofessional telephone/internet/electronic health record referral service(s) provided by a treating/requesting physician or qualified health care professional, 30 minutes) and 99451 (Interprofessional telephone/internet/electronic health record assessment and management service provided by a consultative physician including a written report to the patient's treating/requesting physician or other qualified health care professional, 5 or more minutes of medical consultative time). The RUC also reaffirmed their prior recommendations for the existing CPT codes. The six codes describe assessment and management services conducted through telephone, internet, or electronic health record consultations furnished when a patient's treating physician or other qualified healthcare professional requests the opinion and/or treatment advice of a consulting physician or qualified healthcare professional with specific specialty expertise to assist with the diagnosis and/or management of the patient's problem without the need for the patient's face-to-face contact with the consulting physician or qualified healthcare professional. Currently, the resource costs associated with seeking or providing such a consultation are considered bundled, which in practical terms means that specialist input is often sought through scheduling a separate visit for the patient when a phone or internet-based interaction between the treating practitioner and the consulting practitioner would have been sufficient. We believe that proposing payment for these interprofessional consultations performed via communications technology such as telephone or internet is consistent with our ongoing efforts to recognize and reflect medical practice trends in primary care and patient-centered care management within the PFS.

Beginning in the CY 2012 PFS proposed rule (76 FR 42793), we have recognized the changing focus in medical practice toward managing patients' chronic conditions, many of which particularly challenge the Medicare population, including heart disease, diabetes, respiratory disease, breast cancer, allergies, Alzheimer's disease, and factors associated with obesity. We have expressed concerns that the current E/M coding does not adequately reflect the changes that have occurred in medical practice, and the activities and resource costs associated with the treatment of these complex patients in the primary care setting. In the years since 2012, we have acknowledged the shift in medical practice away from an episodic treatment-based approach to one that involves comprehensive patient-centered care management, and have taken steps through rulemaking to better reflect that approach in payment under the PFS. In CY 2013, we established new codes to pay separately for transitional care management (TCM) services. Next, we finalized new coding and separate payment beginning in CY 2015 for chronic care management (CCM) services provided by clinical staff (81 FR 80226). In the CY 2017 PFS final rule, we established separate payment for complex CCM services, an add-on code to the visit during which CCM is initiated to reflect the work of the billing practitioner in assessing the beneficiary and establishing the CCM care plan, and established separate payment for Behavioral Health Integration (BHI) services (81 FR 80226 through 80227).

As part of this shift in medical practice, and with the proliferation of team-based approaches to care that are often facilitated by electronic medical record technology, we believe that making separate payment for interprofessional consultations undertaken for the benefit of treating a patient will contribute to payment accuracy for primary care and care management services. We proposed separate payment for these services, discussed in section II.H. of this final rule, Valuation of Specific Codes.

Although we proposed to make separate payment for these services because we believe they describe resource costs directly associated with seeking a consultation for the benefit of the beneficiary, we do have concerns about how these services can be distinguished from activities undertaken for the benefit of the practitioner, such as information shared as a professional courtesy or as continuing education. We do not believe that those examples will constitute a service directly attributable to a single Medicare beneficiary, and therefore neither the Medicare program nor the beneficiary should be responsible for those costs. We therefore solicited comment on our assumption that these are separately identifiable services, and the extent to which they can be distinguished from similar services that are nonetheless primarily for the benefit of the practitioner. We noted that there are program integrity concerns around making separate payment for these interprofessional consultation services, including around CMS's or its contractors' ability to evaluate whether an interprofessional consultation is reasonable and necessary under the particular circumstances. As the beneficiary would be liable for any cost sharing associated with these services, we also sought comment on the necessity of requiring patient consent for these, and whether than consent should be written or verbal. We solicited comment on how best to minimize potential program integrity issues, and noted we were particularly interested in information on whether these types of services are paid separately by private payers and if so, what controls or limitations private payers have put in place to ensure these services are billed appropriately.

The following is a summary of the comments we received regarding how best to minimize potential program integrity issues.

Comment: Almost all commenters were very supportive of CMS proposing separate payment for these services. Commenters pointed out that these are discrete physician services undertaken for the benefit of the patient, and easily distinguished from consultations undertaken for the edification of the practitioner. One commenter stated as medical care moves toward more comprehensive patient-centered care management, frequent consultation with multiple specialists is necessary. Under the current model this means separate visits for the patients that are costly and inconvenient. Internet-based consultations between the treating practitioner and the consulting specialists provide appropriate, convenient and cost effective alternatives. Commenters were clear that, by not making separate payment for these services, CMS would not be accurately paying for the work of both the treating and consulting physicians in a consultative scenario.

Many commenters provided helpful responses to CMS' request for information on how to minimize program integrity concerns for these services. A few commenters provided suggestions as to how CMS could verify the medical necessity of the consultation, including verifying that the treating and consulting physician were of different medical specialties, requiring patient identifiers and documentation of how the interaction improved patient care, defining a time period under which an E/M visit and an Interprofessional Consultation cannot both be billed for the same diagnosis, and creating frequency limitations on billing. Others suggested that the treating physician must document that they acted on the recommendation of the consulting physician prior to billing for CPT code 99452. Commenters had a number of suggestions for items that CMS should require, including that Interprofessional Consultations should consist of focused questions that are answerable solely from information in the EMR; that they be answered in 3 business days; and that the consulting physician should restate the question in their response, provide recommendations for evaluation, management, and/or ongoing monitoring, provide a rationale for recommendations, and provide recommendations for contingencies. Other commenters suggested that CMS could make separate payment contingent upon whether the underlying condition was urgent or related to critical care and that the consultation helped avoid transfer or interruption of care or that internal expertise was sought and was not available. Many commenters also encouraged CMS to avoid imposing overly restrictive documentation requirements. One commenter stated that, due to potential program integrity concerns, these services should be subject to the Medicare telehealth restrictions on beneficiary location and site of service. Another commenter recommended that CMS delay implementation until the program integrity concerns have been addressed. Other commenters encouraged CMS to monitor utilization for abuse.

Response: We thank commenters for their support and additional information on the ways in which these services are distinct physician services. We note that because these services are inherently non face-to-face (the patient need not be present in order for the service to be furnished in its entirety), they would not be considered as potential Medicare telehealth services under section 1834(m) of the Act. We appreciate the wealth of information and suggestions from commenters; however, we also agree with the many commenters who pointed out that adding many additional billing requirements may inhibit uptake for these services. As we note below, we are requiring documentation of verbal patient consent to receive these services, and are adopting existing CPT prefatory language. We plan to monitor utilization of these services and will consider making refinements to billing rules, documentation requirements or claims edits, including those suggested by commenters, through future rulemaking as necessary.

Comment: Many commenters suggested that CMS limit or eliminate beneficiary cost sharing for these services to obviate the question of patient consent entirely.

Response: Under current statute, we do not have the authority to change the requirements for the beneficiary cost sharing for these services.

Additionally, since these codes describe services that are furnished without the beneficiary being present, we proposed to require the treating practitioner to obtain verbal beneficiary consent in advance of these services, which would be documented by the treating practitioner in the patient's medical record, similar to the conditions of payment associated with separately billable care management services under the PFS. Obtaining advance beneficiary consent includes ensuring that the patient is aware of applicable cost sharing.

The following is a summary of the comments we received regarding whether to require the treating practitioner to obtain verbal beneficiary consent in advance of these services, which would be documented by the treating practitioner in the medical record similar to the conditions of payment associated with the care management services under the PFS, as well as comments on other aspects of this proposal.

Comment: Many commenters stated that verbal patient consent was an appropriate safeguard against unnecessary utilization, while others disagreed, stating that the requirement to obtain consent may cause unnecessary burden in cases where the patient is unresponsive or the need for the interprofessional consultation is urgent such as in a critical care or emergency setting. Other commenters stated that a single blanket patient consent to receive interprofessional consultation services would be preferable to minimize the need to obtain consent for each of what may be multiple consultations. One commenter questioned whether the consulting physician would need to verify that the beneficiary had consented, given that only the treating physician is in contact with the beneficiary.

Response: We understand the potential burden regarding obtaining consent. However, we believe that it is important for beneficiaries to consent to the service and thus be notified of their cost-sharing obligations. We note that under our current policy for several care management services, consent is required to be documented in the medical record. That policy was implemented, in part, based on feedback we received from practitioners reporting the care management services, to alleviate burdens of alternative approaches. Consequently, we believe the same requirement could be applied here, without imposition of significant burden.

We are finalizing that the patient's verbal consent is required, and that consent must be noted in the medical record for each service, consistent with the policy we are finalizing for the brief communication technology-based services (HCPCS code G2012) as noted above, as well as with the patient consent policies in place for care management services, under the PFS.

Comment: Commenters requested that CMS clarify whether billing for these services is limited to physicians or if other healthcare practitioners, such as nurses or physical therapists, may bill for these services as well.

Response: We appreciate commenters' request for clarification. We believe that billing of these services should be limited to those practitioners that can independently bill Medicare for E/M visits, as interprofessional consultations are primarily for the ongoing evaluation and management of the patient, including collaborative medical decision making among practitioners. We are therefore not finalizing any expansion of these services beyond their current scope.

Comment: A few commenters requested that CMS adopt CPT prefatory language for these services as is CMS' longstanding practice when adopting most new CPT coding.

Response: We agree with the commenters and confirm that we will be adopting existing CPT prefatory language regarding these services.

In summary, we are finalizing separate payment for CPT codes 99451, 99452, 99446, 99447, 99448, and 99449 describing Interprofessional consultations. We are finalizing a policy to require the patient's verbal consent that is noted in the medical record for each interprofessional consultation service. We note that cost sharing will apply for these services. These interprofessional services may be billed only by practitioners that can bill Medicare independently for E/M services.

For further discussion related to the valuation of these services, please see section II.H. of this final rule, Valuation of Specific Codes.

4. Medicare Telehealth Services Under Section 1834(m) of the Act

a. Billing and 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).

b. 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 telehealth services. Our review of these requests includes an assessment of whether the service is accurately described by the corresponding code when furnished via telehealth and whether the use of a telecommunications system to furnish the service produces demonstrated clinical benefit to the patient. Submitted evidence should include both a description of relevant clinical studies that demonstrate the service furnished by telehealth to a Medicare beneficiary improves the diagnosis or treatment of an illness or injury or improves the functioning of a malformed body part, including dates and findings, and a list and copies of published peer reviewed articles relevant to the service when furnished via telehealth. Our evidentiary standard of clinical benefit does not include minor or incidental benefits.

Some examples of clinical benefit include the following:

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

The list of telehealth services, including the proposed additions described later in this section, is included in the Downloads section to this proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.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, 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. To be considered during PFS rulemaking for CY 2020, requests to add services to the list of Medicare telehealth services must be submitted and received by February 10, 2019. 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.

c. Submitted Requests To Add Services to the List of Telehealth Services for CY 2019

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 received several requests in CY 2017 to add various services as Medicare telehealth services effective for CY 2019. The following presents a discussion of these requests, and our proposals for additions to the CY 2019 telehealth list. Of the requests received, we found that two services were sufficiently similar to services currently on the telehealth list to be added on a Category 1 basis. Therefore, we proposed to add the following services to the telehealth list on a Category 1 basis for CY 2019:

• HCPCS codes G0513 and G0514 (Prolonged preventive service(s) (beyond the typical service time of the primary procedure), in the office or other outpatient setting requiring direct patient contact beyond the usual service; first 30 minutes (list separately in addition to code for preventive service) and (Prolonged preventive service(s) (beyond the typical service time of the primary procedure), in the office or other outpatient setting requiring direct patient contact beyond the usual service; each additional 30 minutes (list separately in addition to code G0513 for additional 30 minutes of preventive service).

We found that the services described by HCPCS codes G0513 and G0514 are sufficiently similar to office visits currently on the telehealth list. We believe that all the components of this service can be furnished via interactive telecommunications technology. Additionally, we believe that adding these services to the telehealth list will make it administratively easier for practitioners who report these services in connection with a preventive service that is furnished via telehealth, as both the base code and the add-on code would be reported with the telehealth place of service.

We also received requests to add services to the telehealth list that do not meet our criteria for Medicare telehealth services. We did not propose to add to the Medicare telehealth services list the following procedures for chronic care remote physiologic monitoring, interprofessional internet consultation, and initial hospital care; or to change the requirements for subsequent hospital care or subsequent nursing facility care, for the reasons noted in the paragraphs that follow.

(1) Chronic Care Remote Physiologic Monitoring (CPT Codes 99453, 99454, and 99457)

• CPT code 99453 (Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; set-up and patient education on use of equipment).
• CPT code 99454 (Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; device(s) supply with daily recording(s) or programmed alert(s) transmission, each 30 days).
• CPT code 99457 (Remote physiologic monitoring treatment management services, 20 minutes or more of clinical staff/physician/other qualified healthcare professional time in a calendar month requiring interactive communication with the patient/caregiver during the month).

In the CY 2016 PFS final rule with comment period (80 FR 71064), we responded to a request to add CPT code 99490 (Chronic care management services, at least 20 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month, with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; comprehensive care plan established, implemented, revised, or monitored) to the Medicare telehealth list. We discussed that the services described by CPT code 99490 can be furnished without the beneficiary's face-to-face presence and using any number of non-face-to-face means of communication. We stated that it was therefore unnecessary to add that service to the list of Medicare telehealth services. Similarly, CPT codes 99453, 99454, and 99457 describe services that are inherently non face-to-face. As discussed in section II.H. of this final rule, Valuation of Specific Codes, we instead proposed to adopt CPT codes 99453, 99454, and 99457 for payment under the PFS. Because these codes describe services that are inherently non face-to-face, we do not consider them Medicare telehealth services under section 1834(m) of the Act; therefore, we did not propose to add them to the list of Medicare telehealth services.

(2) Interprofessional Internet Consultation (CPT Codes 99451and 99452)

• CPT code 99452 (Interprofessional telephone/internet/electronic health record referral service(s) provided by a treating/requesting physician or qualified health care professional, 30 minutes).
• CPT code 99451 (Interprofessional telephone/internet/electronic health record assessment and management service provided by a consultative physician including a written report to the patient's treating/requesting physician or other qualified health care professional, 5 or more minutes of medical consultative time).

As discussed in section II.H. of this final rule, Valuation of Specific Codes, we proposed to adopt CPT codes 99452 and 99451 for payment under the PFS as these are distinct services furnished via communication technology. Because these codes describe services that are inherently non face-to-face, we do not consider them as Medicare telehealth services under section 1834(m) of the Act; therefore we did not propose to add them to the list of Medicare telehealth services for CY 2019.

(3) Initial Hospital Care Services (CPT Codes 99221-99223)

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

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

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

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

Therefore, we did not propose to add the initial hospital care services to the list of Medicare telehealth services for CY 2019.

(4) Subsequent Hospital Care Services (CPT Codes 99231-99233)

• CPT code 99231 (Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: A problem focused interval history; A problem focused examination; Medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is stable, recovering or improving. Typically, 15 minutes are spent at the bedside and on the patient's hospital floor or unit.).
• CPT code 99232 (Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: An expanded problem focused interval history; an expanded problem focused examination; medical decision making of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Typically, 25 minutes are spent at the bedside and on the patient's hospital floor or unit.).
• CPT code 99233 (Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: A detailed interval history; a detailed examination; Medical decision making of high complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is unstable or has developed a significant complication or a significant new problem. Typically, 35 minutes are spent at the bedside and on the patient's hospital floor or unit.).

CPT codes 99231-99233 are currently on the list of Medicare telehealth services, but can only be billed via telehealth once every 3 days. The requester requested that we remove the frequency limitation. We stated in the CY 2011 PFS final rule with comment period (75 FR 73316) that, although we still believed the potential acuity of hospital inpatients is greater than those patients likely to receive Medicare telehealth services that were on the list at that time, we also believed that it would be appropriate to permit some subsequent hospital care services to be furnished through telehealth in order to ensure that hospitalized patients have frequent encounters with their admitting practitioner. We also noted that we continue to believe that the majority of these visits should be in-person to facilitate the comprehensive, coordinated, and personal care that medically volatile, acutely ill patients require on an ongoing basis. Because of our concerns regarding the potential acuity of hospital inpatients, we finalized the addition of CPT codes 99231-99233 to the list of Medicare telehealth services, but limited the provision of these subsequent hospital care services through telehealth to once every 3 days. We continue to believe that admitting practitioners should continue to make appropriate in-person visits to all patients who need such care during their hospitalization. Our concerns and position on the provision of subsequent hospital care services via telehealth have not changed. Therefore, we did not propose to remove the frequency limitation on these codes.

(5) Subsequent Nursing Facility Care Services (CPT Codes 99307-99310)

• CPT code 99307 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: A problem focused interval history; A problem focused examination; Straightforward medical decision making. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is stable, recovering, or improving. Typically, 10 minutes are spent at the bedside and on the patient's facility floor or unit.).
• CPT code 99308 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: An expanded problem focused interval history; an expanded problem focused examination; Medical decision making of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Typically, 15 minutes are spent at the bedside and on the patient's facility floor or unit.).
• CPT code 99309 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: A detailed interval history; a detailed examination; Medical decision making of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient has developed a significant complication or a significant new problem. Typically, 25 minutes are spent at the bedside and on the patient's facility floor or unit.).
• CPT code 99310 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: A comprehensive interval history; a comprehensive examination; Medical decision making of high complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. The patient may be unstable or may have developed a significant new problem requiring immediate physician attention. Typically, 35 minutes are spent at the bedside and on the patient's facility floor or unit.).

CPT codes 99307-99310 are currently on the list of Medicare telehealth services, but can only be billed via telehealth once every 30 days. The requester requested that we remove the frequency limitation when these services are provided for psychiatric care. We stated in the CY 2011 PFS final rule with comment period (75 FR 73317) that we believed it would be appropriate to permit some subsequent nursing facility care services to be furnished through telehealth to ensure that complex nursing facility patients have frequent encounters with their admitting practitioner, but because of our concerns regarding the potential acuity and complexity of SNF inpatients, we limited the provision of subsequent nursing facility care services furnished through telehealth to once every 30 days. Since these codes are used to report care for patients with a variety of diagnoses, including psychiatric diagnoses, we do not think it would be appropriate to remove the frequency limitation only for certain diagnoses. The services described by these CPT codes are essentially the same service, regardless of the patient's diagnosis. We also continue to have concerns regarding the potential acuity and complexity of SNF inpatients, and therefore, we did not propose to remove the frequency limitation for subsequent nursing facility care services in CY 2019.

In summary, we proposed to add the following codes to the list of Medicare telehealth services beginning in CY 2019 on a category 1 basis:

• HCPCS code G0513 (Prolonged preventive service(s) (beyond the typical service time of the primary procedure), in the office or other outpatient setting requiring direct patient contact beyond the usual service; first 30 minutes (list separately in addition to code for preventive service).
• HCPCS code G0514 (Prolonged preventive service(s) (beyond the typical service time of the primary procedure), in the office or other outpatient setting requiring direct patient contact beyond the usual service; each additional 30 minutes (list separately in addition to code G0513 for additional 30 minutes of preventive service).

Comment: Commenters were unanimously supportive of our proposal to add HCPCS codes G0513 and G0514 to the Medicare telehealth list. A few commenters noted they were disappointed that we did not propose to add the initial hospital care codes to the telehealth list and that we did not propose to lift the frequency limitation on the subsequent hospital care and subsequent nursing facility care codes.

Response: We are finalizing adding HCPCS codes G0513 and G0514 to the Medicare telehealth list. We are not adding the initial hospital care codes to the telehealth list and we are not removing the frequency limitations on the subsequent hospital care and subsequent nursing facility care codes for the reasons noted above.

Comment: Several commenters suggested that CMS conduct a pilot or demonstration program to evaluate the clinical benefit of physical therapists, occupational therapists, and speech-language pathologists furnishing telehealth services to Medicare beneficiaries in states that permit such services, noting that this would improve beneficiary access to therapy services, and help to inform policymakers as they consider whether to recognize such healthcare professionals as authorized providers of telehealth under the Social Security Act.

Response: While we did not include any proposals on this topic in the proposed rule, we reiterate our commitment to expanding access to telehealth services consistent with statutory authority, and paying appropriately for services that maximize telecommunications technology. Regarding the possibility of a model or demonstration, we will consider the comments as we develop new models through the Center for Medicare and Medicaid Innovation. We note that we would need to determine whether such a model or demonstration would meet the statutory requirements, which generally require that the test be expected to reduce Medicare expenditures and preserve or enhance the quality of care for beneficiaries.

5. Expanding the Use of Telehealth Under the Bipartisan Budget Act of 2018

a. Expanding Access to Home Dialysis Therapy Under the Bipartisan Budget Act of 2018

Section 50302 of the BBA of 2018 amended sections 1881(b)(3) and 1834(m) of the Act to allow an individual determined to have end-stage renal disease receiving home dialysis to choose to receive certain monthly end-stage renal disease-related (ESRD-related) clinical assessments via telehealth on or after January 1, 2019. The new section 1881(b)(3)(B)(ii) of the Act requires that such an individual must receive a face-to-face visit, without the use of telehealth, at least monthly in the case of the initial 3 months of home dialysis and at least once every 3 consecutive months after the initial 3 months.

As added by section 50302(b)(1) of the BBA of 2018, subclauses (IX) and (X) of section 1834(m)(4)(C)(ii) of the Act include a renal dialysis facility and the home of an individual as telehealth originating sites but only for the purposes of the monthly ESRD-related clinical assessments furnished through telehealth provided under section 1881(b)(3)(B) of the Act. Section 50302(b)(1) of the BBA of 2018, also added a new section 1834(m)(5) of the Act which provides that the geographic requirements for telehealth services under section 1834(m)(4)(C)(i) of the Act do not apply to telehealth services furnished on or after January 1, 2019 for purposes of the monthly ESRD-related clinical assessments where the originating site is a hospital-based or critical access hospital-based renal dialysis center, a renal dialysis facility, or the home of an individual. Section 50302(b)(2) of the BBA of 2018 amended section 1834(m)(2)(B)(ii) of the Act to require that no originating site facility fee is to be paid if the home of the individual is the originating site.

Our current regulation at § 410.78 specifies the conditions that must be met in order for Medicare Part B to pay for covered telehealth services included on the telehealth list when furnished by an interactive telecommunications system. In accordance with the new subclauses (IX) and (X) of section 1834(m)(4)(C)(ii) of the Act, we proposed to revise our regulation at § 410.78(b)(3) to add a renal dialysis facility and the home of an individual as Medicare telehealth originating sites, but only for purposes of the home dialysis monthly ESRD-related clinical assessment in section 1881(b)(3)(B) of the Act. We proposed to amend § 414.65(b)(3) to reflect the requirement in section 1834(m)(2)(B)(ii) of the Act that there is no originating site facility fee paid when the originating site for these services is the patient's home. Additionally, we proposed to add new § 410.78(b)(4)(iv)(A), to reflect the provision in section 1834(m)(5) of the Act, added by section 50302 of the BBA of 2018, specifying that the geographic requirements described in section 1834(m)(4)(C)(i) of the Act do not apply with respect to telehealth services furnished on or after January 1, 2019, in originating sites that are hospital-based or critical access hospital-based renal dialysis centers, renal dialysis facilities, or the patient's home, respectively under sections 1834(m)(4)(C)(ii)(VI), (IX) and (X) of the Act, for purposes of section 1881(b)(3)(B) of the Act.

Commenters supported our proposals to revise the regulation text at §§ 410.78 and 414.65 to implement the requirements of section 50302 of the BBA of 2018 for expanding access to home dialysis therapy through telehealth. We are finalizing these regulation text changes as proposed.

b. Expanding the Use of Telehealth for Individuals With Stroke Under the Bipartisan Budget Act of 2018

Section 50325 of the BBA of 2018 amended section 1834(m) of the Act by adding a new paragraph (6) that provides special rules for telehealth services furnished on or after January 1, 2019, for purposes of diagnosis, evaluation, or treatment of symptoms of an acute stroke (acute stroke telehealth services), as determined by the Secretary. Specifically, section 1834(m)(6)(A) of the Act removes the restrictions on the geographic locations and the types of originating sites where acute stroke telehealth services can be furnished. Section 1834(m)(6)(B) of the Act specifies that acute stroke telehealth services can be furnished in any hospital, critical access hospital, mobile stroke units (as defined by the Secretary), or any other site determined appropriate by the Secretary, in addition to the current eligible telehealth originating sites. Section 1834(m)(6)(C) of the Act limits payment of an originating site facility fee to acute stroke telehealth services furnished in sites that meet the usual telehealth restrictions under section 1834(m)(4)(C) of the Act.

To implement these requirements, we proposed to create a new modifier that would be used to identify acute stroke telehealth services. The practitioner and, as appropriate, the originating site, would append this modifier when clinically appropriate to the HCPCS code when billing for an acute stroke telehealth service or an originating site facility fee, respectively. We note that section 50325 of the BBA of 2018 did not amend section 1834(m)(4)(F) of the Act, which limits the scope of telehealth services to those on the Medicare telehealth list. Practitioners would be responsible for assessing whether it would be clinically appropriate to use this modifier with codes from the Medicare telehealth list. By billing with this modifier, practitioners would be indicating that the codes billed were used to furnish telehealth services for diagnosis, evaluation, or treatment of symptoms of an acute stroke. We believe that the adoption of a service level modifier is the least administratively burdensome means of implementing this provision for practitioners, while also allowing CMS to easily track and analyze utilization of these services.

In accordance with section 1834(m)(6)(B) of the Act, as added by section 50325 of the BBA of 2018, we also proposed to revise § 410.78(b)(3) to add mobile stroke unit as a permissible originating site for acute stroke telehealth services. We proposed to define a mobile stroke unit as a mobile unit that furnishes services to diagnose, evaluate, and/or treat symptoms of an acute stroke and solicited comment on this definition, as well as additional information on how these units are used in current medical practice. We therefore proposed that mobile stroke units and the current eligible telehealth originating sites, which include hospitals and critical access hospitals as specified in section 1834(m)(6)(B) of the Act, but excluding renal dialysis facilities and patient homes because they are only allowable originating sites for purposes of home dialysis monthly ESRD-related clinical assessments in section 1881(b)(3)(B) of the Act, would be permissible originating sites for acute stroke telehealth services.

We also solicited comment on other possible appropriate originating sites for telehealth services furnished for the diagnosis, evaluation, or treatment of symptoms of an acute stroke. Any additional sites would be adopted through future rulemaking. As required under section 1834(m)(6)(C) of the Act, the originating site facility fee would not apply in instances where the originating site does not meet the originating site type and geographic requirements under section 1834(m)(4)(C) of the Act. Additionally, we proposed to add § 410.78 (b)(4)(iv)(B) to specify that the requirements in section 1834(m)(4)(C) of the Act do not apply with respect to telehealth services furnished on or after January 1, 2019, for purposes of diagnosis, evaluation, or treatment of symptoms of an acute stroke.

Comment: Commenters supported the expansions to Medicare telehealth. The majority of commenters agreed with our proposed definition of a mobile stroke unit. However, the AMA suggested that CMS specify in the definition that a mobile stroke unit must include a computed tomographic (CT) scanner and a telehealth (audio and video) connection or an in-person physician who is able to interpret the CT scan and prescribe an intravenous thrombolysis and also have a qualified health professional who is able to administer an intravenous thrombolysis if the physician interpreting the CT scan and prescribing the treatment does so via telehealth. The AMA also suggested that CMS add as an originating site Emergency Medical Service (EMS) transports equipped with a telehealth connection to stroke specialists in order to provide faster national access to patients who require an accurate stroke diagnosis and decision about eligibility for intravenous or endovascular therapy, and to determine where to take them (such as a primary stroke or comprehensive stroke center). One commenter urged CMS to distinguish between a mobile stroke unit and a standard ambulance that is equipped with telemedicine capability and to establish separate payment for each, noting that a telemedicine consult on a mobile stroke unit may involve much greater complexity and critical care treatment than on a standard ambulance that is equipped with telemedicine capability. Another commenter recommended that CMS require specially trained paramedics who can evaluate an acute ischemic stroke patient based on national standards.

Response: We are finalizing the changes to the regulation text and the definition of a mobile stroke unit as proposed without modification. We believe that clinicians are in the best position to make decisions about what equipment and professional support are required in furnishing these services. We plan to monitor utilization of these services and will consider making refinements, including those suggested by commenters, through future rulemaking as necessary. We would welcome additional information to help us understand the merits of the commenters' suggestions, including those regarding specific equipment and staffing requirements for mobile stroke units.

In summary, we are finalizing a new modifier that will be used to identify acute stroke telehealth services. The practitioner and, as appropriate, the originating site, will append this modifier to the HCPCS code as clinically appropriate when billing for an acute stroke telehealth service or an originating site facility fee, respectively. We are finalizing the regulation text changes at §§ 410.78 and 414.65 as proposed to implement the requirements of section 50325 of the BBA of 2018 for acute stroke telehealth services. Mobile stroke units, with the definition as proposed, and the current eligible telehealth originating sites, which include hospitals and critical access hospitals, but exclude renal dialysis facilities and patient homes because they are originating sites only for purposes of home dialysis monthly ESRD-related clinical assessments in section 1881(b)(3)(B) of the Act, will be permissible originating sites for acute stroke telehealth services.

6. Requirements of the Substance Use-Disorder Prevention That Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act

a. Expanding Medicare Telehealth Services for the Treatment of Opioid Use Disorder and Other Substance Use Disorders—Interim Final Rule With Comment Period

Section 2001(a) of the SUPPORT for Patients and Communities Act (Pub. L. 115-271, October 24, 2018) (the SUPPORT Act) makes several revisions to section 1834(m) of the Act. First, it removes the originating site geographic requirements under section 1834(m)(4)(C)(i) for telehealth services furnished on or after July 1, 2019 for the purpose of treating individuals diagnosed with a substance use disorder or a co-occurring mental health disorder, as determined by the Secretary, at an originating site described in section 1834(m)(4)(C)(ii) of the Act, other than an originating site described in subclause (IX) of section 1834(m)(4)(C)(ii) of the Act. The site described in subclause (IX) of section 1834(m)(4)(C)(ii) of the Act is a renal dialysis facility, which is only an allowable originating site for purposes of home dialysis monthly ESRD-related clinical assessments in section 1881(b)(3)(B) of the Act. It also adds the home of an individual as a permissible originating site for these telehealth services. Section 2001(a) of the SUPPORT Act for Patients and Communities Act additionally amends 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. Section 2001(b) of the SUPPORT for Patients and Communities Act grants the Secretary specific authority to implement the amendments made by section 2001(a) through an interim final rule.

Under the authority of section 2001(b) of the SUPPORT for Patients and Communities Act, we are issuing an interim final rule with comment period to implement the requirements of section 2001(a) of the SUPPORT for Patients and Communities Act. In accordance with section 1834(m)(2)(B)(ii)(X) of the Act, as amended by section 2001(a) of the SUPPORT for Patients and Communities Act, we are revising § 410.78(b)(3) on an interim final basis, by adding § 410.78(b)(3)(xii), which adds the home of an individual as a permissible originating site for telehealth services furnished on or after July 1, 2019 to individuals with a substance use disorder diagnosis for purposes of treatment of a substance use disorder or a co-occurring mental health disorder. We are amending § 414.65(b)(3) on an interim final basis to reflect the requirement in section 1834(m)(2)(B)(ii) of the Act that there is no originating site facility fee paid when the originating site for these services is the individual's home. Additionally, we are adding § 410.78(b)(4)(iv)(C) on an interim final basis to specify that the geographic requirements in section 1834(m)(4)(C)(i) of the Act do not apply for telehealth services furnished on or after July 1, 2019, to individuals with a substance use disorder diagnosis for purposes of treatment of a substance use disorder or a co-occurring mental health disorder at an originating site other than a renal dialysis facility.

We note that section 2001 of the SUPPORT for Patients and Communities Act did not amend section 1834(m)(4)(F) of the Act, which limits the scope of telehealth services to those on the Medicare telehealth list. Practitioners would be responsible for assessing whether individuals have a substance use disorder diagnosis and whether it would be clinically appropriate to furnish telehealth services for the treatment of the individual's substance use disorder or a co-occurring mental health disorder. By billing codes on the Medicare telehealth list with the telehealth place of service code, practitioners would be indicating that the codes billed were used to furnish telehealth services to individuals with a substance use disorder diagnosis for the purpose of treating the substance use disorder or a co-occurring mental health disorder. We note that we may issue additional subregulatory guidance in the future for billing these telehealth services.

We note that there is a 60-day period following publication of this interim final rule for the public to comment on these interim final amendments to our regulations. We invite public comment on our policies to implement section 2001 of the SUPPORT for Patients and Communities Act.

b. Medicare Payment for Certain Services Furnished by Opioid Treatment Programs (OTPs)—Request for Information

Section 2005 of the SUPPORT Act establishes a new Medicare benefit category for opioid use disorder treatment services furnished by OTPs under Medicare Part B, beginning on or after January 1, 2020. This provision requires that opioid use disorder treatment services would include FDA-approved opioid agonist and antagonist treatment medications, the dispensing and administration of such medications (if applicable), substance use disorder counseling, individual and group therapy, toxicology testing, and other services determined appropriate (but in no event to include meals and transportation). The provision defines OTPs as those that enroll in Medicare and are certified by the Substance Abuse and Mental Health Services Administration (SAMHSA), accredited by a SAMHSA-approved entity, and meeting additional conditions as the Secretary finds necessary to ensure the health and safety of individuals being furnished services under these programs and the effective and efficient furnishing of such services.

We note that there is a 60-day period for the public to comment on the provisions of the interim final rule described previously to implement section 2001 of the SUPPORT for Patients and Communities Act. During that same comment period, we are requesting information regarding services furnished by OTPs, payments for these services, and additional conditions for Medicare participation for OTPs that stakeholders believe may be useful for us to consider for future rulemaking to implement this new Medicare benefit category.

7. Modifying § 414.65 Regarding List of Telehealth Services

In the CY 2015 PFS final rule with comment period, we finalized a proposal to change our regulation at § 410.78(b) by deleting the description of the individual services for which Medicare payment can be made when furnished via telehealth, noting that we revised § 410.78(f) to indicate that a list of Medicare telehealth codes and descriptors is available on the CMS website (79 FR 67602). In accordance with that change, we proposed a technical revision to also delete the description of individual services and exceptions for Medicare payment for telehealth services in § 414.65, by amending § 414.65(a) to note that Medicare payment for telehealth services is addressed in § 410.78 and by deleting § 414.65(a)(1).

Comment: Commenters were supportive of CMS making a technical revision to delete the description of individual services and exceptions for Medicare payment for telehealth services in § 414.65.

Response: We are finalizing the technical revision to § 414.65 as proposed.

8. Comment Solicitation on Creating a Bundled Episode of Care for Management and Counseling Treatment for Substance Use Disorders

There is an evidence base that suggests that routine counseling, either associated with medication assisted treatment (MAT) or on its own, can increase the effectiveness of treatment for substance use disorders (SUDs). According to a study in the Journal of Substance Abuse Treatment, patients treated with a combination of web-based counseling as part of a substance abuse treatment program demonstrated increased treatment adherence and satisfaction. The federal guidelines for opioid treatment programs describe that MAT and wrap-around psychosocial and support services can include the following services: Physical exam and assessment; psychosocial assessment; treatment planning; counseling; medication management; drug administration; comprehensive care management and supportive services; care coordination; management of care transitions; individual and family support services; and health promotion (https://store.samhsa.gov/shin/content/PEP15-FEDGUIDEOTP/PEP15-FEDGUIDEOTP.pdf). Creating separate payment for a bundled episode of care for components of MAT such as management and counseling treatment for substance use disorders (SUD), including opioid use disorder, treatment planning, and medication management or observing drug dosing for treatment of SUDs under the PFS could provide opportunities to better leverage services furnished with communication technology while expanding access to treatment for SUDs.

We also believe making separate payment for a bundled episode of care for management and counseling for SUDs could be effective in preventing the need for more acute services. For example, according to the Healthcare Cost and Utilization Project, Medicare pays for one-third of opioid-related hospital stays, and Medicare has seen the largest annual increase in the number of these stays over the past 2 decades. We believe that separate payment for a bundled episode of care could help avoid such hospital admissions by supporting access to management and counseling services that could be important in preventing hospital admissions and other acute care events.

As indicated earlier, we considered whether it would be appropriate to develop a separate bundled payment for an episode of care for treatment of SUDs. We solicited public comment on whether such a bundled episode-based payment would be beneficial to improve access, quality and efficiency for SUD treatment. Further, we solicited public comment on developing coding and payment for a bundled episode of care for treatment for SUDs that could include overall treatment management, any necessary counseling, and components of a MAT program such as treatment planning, medication management, and observation of drug dosing. Specifically, we solicited public comments related to what assumptions we might make about the typical number of counseling sessions as well as the duration of the service period, which types of practitioners could furnish these services, and what components of MAT could be included in the bundled episode of care. We were interested in stakeholder feedback regarding how to define and value this bundle and what conditions of payment should be attached. Additionally, we solicited comment on whether the concept of a global period, similar to the currently existing global periods for surgical procedures, might be applicable to treatment for SUDs.

We also solicited comment on whether the counseling portion and other MAT components could also be provided by qualified practitioners “incident to” the services of the billing physician who will administer or prescribe any necessary medications and manage the overall care, as well as supervise any other counselors participating in the treatment, similar to the structure of the Behavioral Health Integration codes which include services provided by other members of the care team under the direction of the billing practitioner on an “incident to” basis (81 FR 80231). We welcomed comments on potentially creating a bundled episode of care for management and counseling treatment for SUDs, which we will consider for future rulemaking.

Comment: We received several comments with detailed information on this topic. Some commenters expressed concern that the format of a bundled episode of care may fail to take into account the wide variability in patient needs for treatment of SUDs, especially given the chronic nature of SUDs, which like other chronic diseases, typically involves ongoing treatment without a definitive end point. Some commenters additionally noted that a global period would not lend itself to treatment of SUDs, because the treatment is not an acute intervention like surgery; rather, patients with SUDs may require increasing and decreasing access to care, depending on their progress in treatment.

Response: We thank the commenters for all of the information submitted and will consider this feedback for future rulemaking. We agree with commenters and understand that there is wide variability in patient needs for treatment of SUDs, and that unlike surgical global periods, ongoing treatment is often necessary in the treatment of SUDs. While we do not necessarily believe these characteristics preclude payment bundles and/or global periods, we do understand they would need to be taken into account. We reiterate that our intention as we consider these issues for future rulemaking is to increase access to necessary care, and that any potential bundled payment would be developed in consideration of these comments.

We note that there is a 60-day period for the public to comment on the interim final telehealth policies and revisions to our regulations we are adopting to implement statutory amendments to section 1834(m) of the Act that expand access to telehealth services used to treat substance use disorders. During that same comment period, we are requesting additional information from stakeholders and the public that we might consider for future rulemaking regarding payment structure and amounts for SUD treatment that account for ongoing treatment and wide variability in patient needs for treatment of SUDs while improving access to necessary care.

Additionally, we invited public comment and suggestions for regulatory and subregulatory changes to help prevent opioid use disorder and improve access to treatment under the Medicare program. We solicited comment on methods for identifying non-opioid alternatives for pain treatment and management, along with identifying barriers that may inhibit access to these non-opioid alternatives including barriers related to payment or coverage. Consistent with our “Patients Over Paperwork” Initiative, we were interested in suggestions to improve existing requirements to more effectively address the opioid epidemic.

Comment: We received several comments with detailed information on this topic.

Response: We thank the commenters for all of the information submitted and will consider this for future rulemaking.

9. 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 2018 is $25.76. The MEI increase for 2019 is 1.5 percent and is based on the most recent historical update of the MEI through 2018Q2 (2.0 percent), and the most recent historical multifactor productivity adjustment (MFP) through calendar year 2017 (0.5 percent). Therefore, for CY 2019, the payment amount for HCPCS code Q3014 (Telehealth originating site facility fee) is 80 percent of the lesser of the actual charge or $26.15. The Medicare telehealth originating site facility fee and the MEI increase by the applicable time period is shown in Table 10.

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

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

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

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

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

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 2019 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 there have been changes in physician work due to one or more of the following: Technique, knowledge and technology, patient population, site-of-service, length of hospital stay, and work time.
• An anomalous relationship between the code being proposed for review and other codes.
• Evidence that technology has changed physician work.
• Analysis of other data on time and effort measures, such as operating room logs or national and other representative databases.
• Evidence that incorrect assumptions were made in the previous valuation of the service, such as a misleading vignette, survey, or flawed crosswalk assumptions in a previous evaluation.
• Prices for certain high cost supplies or other direct PE inputs that are used to determine PE RVUs are inaccurate and do not reflect current information.
• Analyses of work time, work RVU, or direct PE inputs using other data sources (for example, 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 one submission that nominated several high-volume codes for review under the potentially misvalued code initiative. In its request, the submitter noted a systemic overvaluation of work RVUs in certain procedures and tests based “on a number of Government Accountability Office (GAO) and the Medicare Payment Advisory Commission (MedPAC) reports, media reports regarding time inflation of specific services, and the January 19, 2017 Urban Institute report for CMS.” The submitter suggested that the times CMS assumes in estimating work RVUs are inaccurate for procedures, especially due to substantial overestimates of preservice and postservice time, including follow-up inpatient and outpatient visits that do not take place. According to the submitter, the time estimates for tests and some other procedures are primarily overstated as part of the intraservice time. Furthermore, the submitter stated that previous RUC reviews of these services did not result in reductions in valuation that adequately reflected reductions in surveyed times.

Based on these analyses, the submitter requested that the codes listed in Table 11 be prioritized for review under the potentially misvalued code initiative.

Another submitter requested that CPT codes 92992 (Atrial septectomy or septostomy; transvenous method, balloon (e.g., Rashkind type) (includes cardiac catheterization)) and 92993 (Atrial septectomy or septostomy; blade method (Park septostomy) (includes cardiac catheterization)) be reviewed under the potentially misvalued code initiative in order to establish national RVU values for these services under the MPFS. These codes are currently priced by the Medicare Administrative Contractors (MACs).

We received several comments with regard to the nomination of several high-volume codes for review under the potentially misvalued code initiative.

Comment: One commenter stated that specific details of the nomination of the seven high-volume codes were not provided in the CY 2019 PFS proposed rule. Several other commenters, including the RUC, expressed concern that the source of the nomination of the seven high-volume codes and its entire nomination letter was not made available. These commenters requested that CMS provide greater transparency and publicly provide all nomination requests identifying potentially misvalued codes.

Response: We believe that we summarized the contents of the public nomination letter and provided the rationale in the CY 2019 PFS proposed rule with enough detail for commenters to comment substantively and provide supporting documentation or data to rebut the suggestion that these codes are potentially misvalued. We recognize the importance of transparency and note that under the public nomination process that was established in CY 2012 rulemaking, the first opportunity for the public to nominate codes was during the 60-day comment period for the CY 2012 final rule with comment period; therefore, public nominations were received via submission to www.regulations.gov. In the CY 2015 final rule with comment period (79 FR 67606 through 67608), we finalized a modified process for identifying potentially misvalued codes (fully effective in CY 2017), where we established a new deadline of February 10th for receipt of public nominations for potentially misvalued codes to be considered for inclusion in the proposed rule. Although stakeholders often include public nominations of misvalued codes for consideration in a subsequent year's rulemaking as part of their comments on a current year's proposed rule, the public and stakeholders may nominate potentially misvalued codes for review by submitting the code with supporting documentation to CMS by February 10th of each year. In the future, public nominations that CMS receives by the February 10th deadline will be made available in the form of a public use file with the proposed rule, in the downloads section on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/. We remind submitters that any information that might be considered proprietary or confidential should not be included. Additionally, we have included the submission that nominated these high-volume codes for review as potentially misvalued as a public use file for the CY 2019 PFS final rule.

Comment: One commenter stated that because CMS did not include these publicly nominated codes in Table 13 of the proposed rule, it does not appear that CMS has agreed with the commenter on the need to revisit these codes. Another commenter stated that CMS did not provide guidance on whether these nominated codes would be considered for revaluation or retained at their current value.

Response: We clarify that the codes for which we received public nominations as potentially misvalued were not included in Table 13 of the proposed rule because that table contains a list of codes for which we proposed work RVUs for CY 2019 (the list does not include codes for which we received nominations discussed in the proposed rule for consideration as potentially misvalued). As previously indicated, in the proposed rule we publish the list of codes nominated as potentially misvalued, which allows the public the opportunity to comment on these codes; then, in the final rule, we finalize our list of potentially misvalued codes. No new valuations were proposed for these codes in the CY 2019 PFS proposed rule. Any revaluation of these codes would be proposed in future rulemaking.

Comment: One commenter stated that the codes in Table 8 in the proposed rule and their respective code families should be prioritized for review as potentially misvalued. The commenter suggested revisiting two recent efforts funded by CMS, reports by Urban Institute and RAND Corporation (https://www.urban.org/sites/default/files/publication/87771/2001123-collecting-empirical-physician-time-data-piloting-approach-for-validating-work-relative-value-units_1.pdf, and, https://www.rand.org/content/dam/rand/pubs/research_reports/RR600/RR662/RAND_RR662.pdf), for prioritization of codes for review to expand the misvalued codes initiative list. The commenter referenced a June 2018 MedPAC report that stated that CMS' review of potentially misvalued codes has not addressed services that account for a substantial share of fee schedule spending and is hampered by the lack of current, accurate, and objective data on clinician work time and practice expenses. Consequently, according to the MedPAC report, work RVUs for procedures, imaging, and tests are systemically overvalued relative to other services, such as ambulatory evaluation and management (E/M) services.

Response: We appreciate the commenters' recommendations for expanding the misvalued codes list. We will consider whether to address these suggestions in future rulemaking.

Comment: One commenter recommended that additional research be conducted on the analytic products available that could be used to create transparency into the RUC process and allow for greater external participation in misvalued cost evaluation. The commenter also stated that CMS should reconsider reliance on the RUC altogether given the inherent conflicts of interest in the RUC-based process.

Response: We acknowledge that the RUC provides critically important information that factors into our review process. However, our review of recommended work RVUs and time inputs is also informed by review of various alternate sources of information, in addition to the RUC. Examples of these alternate sources of information include information provided by other public commenters, Medicare claims data, comparative databases, medical literature, as well as consultation with other physicians and healthcare professionals within CMS and the federal government. We also reiterate that we continue to be open to reviewing additional and supplemental sources of data furnished by stakeholders, and providing such information to CMS is not limited to the public nomination process for potentially misvalued codes. We encourage stakeholders to continue to provide such information for our consideration in establishing work RVUs.

Comment: One commenter stated concerns with CMS' use of a non-relative measuring approach for the seven codes nominated for review when generally the RUC-valued and CMS-approved codes are based on the concept of relativity. The commenter stated that using such an inconsistent approach on select codes will potentially cause disruption and instability in code valuations. The commenter also stated that determining reimbursement in value-based care delivery models must rely on the carefully cultivated RUC process for fairness and accountability.

Response: We are unclear about the commenter's claim that CMS is using a non-relative measuring approach for the seven high volume codes that have been nominated as potentially misvalued. We did not propose a valuation for the nominated codes, nor did we propose to use a non-relative measuring approach. Rather, as part of our statutory obligation to identify and review potentially misvalued codes, we implemented an annual process whereby the public can nominate potentially misvalued codes with supporting documentation; we then publish the list of nominated codes and the public has the opportunity to comment on these nominations. We continue to maintain that adjustments to work RVUs should be based on the resources involved with each procedure or service, and reiterate that our review of work RVUs and time inputs utilizes information from various resources, including the RUC. We continue to seek information on the best sources of objective, routinely-updated, auditable, and robust data regarding the resource costs of furnishing PFS services.

Comment: Several commenters stated that CPT codes 27130 and 27447 should not be considered potentially misvalued and do not warrant any further action because the current valuation for the codes was established after review by the RUC and CMS in 2013, and since that time there are no new data to indicate a change in the work of performing the procedure or the number of post-operative follow up visits. Another commenter stated that CMS should not subject professions to code valuations and analysis so frequently, and that doing so calls into question the validity of the RUC process in the first place.

Response: We do not agree that recent review of a code should preclude it from being considered as potentially misvalued, nor that it calls into question the validity of the RUC process. We have a responsibility to identify and review potentially misvalued codes, and believe there is value in consistent and routine review of high-volume services, particularly considering that a minor adjustment to the work RVU of a high-volume code may have a significant dollar impact. We also note that review of high-volume services does not need to be predicated on the suspicion of overvaluation.

Comment: One commenter stated that if CMS decides to reexamine these nominated codes in the future, then the agency should provide ample opportunity for public comments, and in the event of such review, CMS should consider supplemental sources of information, including hospital anesthesia time in addition to any RUC recommendations in order to support accurate valuations of these procedures.

Response: Any revaluations of these codes would be undertaken through notice and comment rulemaking. Notice and comment rulemaking provides for an open process whereby we welcome input from all interested parties, and we encourage commenters to provide feedback including supplemental sources of information regarding potentially misvalued codes, as well as input on our annual proposed valuations.

Comment: One commenter disagreed that CPT codes 43239 and 45385 are misvalued and stated that while the Urban Institute report provides insights into potential flaws in the RUC survey process, it should not be considered proof that these codes are overvalued. The commenter stated that these code valuations were recently revised, and the RUC survey responses from gastroenterologists informed revisions to the work RVUs for both services. The commenter stated that for CPT code 43239, CMS finalized work RVUs that were less than the RUC's recommended work RVUs, and for CPT code 45385, CMS finalized the RUC-recommended work RVUs, which were lower than the work RVUs prior to reevaluation. Therefore, the commenter stated that CMS should reject the nominations of these codes as potentially misvalued.

Response: We note that the nomination referenced the Urban Institute report as only one of the sources regarding the issue of time inflation of specific services. Additionally, as previously indicated, we do not agree that recent review of a code should preclude it from being considered as potentially misvalued. We believe there is value in consistent and routine review of high-volume services, particularly considering that a minor adjustment to the work RVU of a high-volume code may have a significant dollar impact. Therefore, we do not agree that we should reject nominations of these codes as potentially misvalued because they were previously reviewed and refinements were made.

Comment: A few commenters stated that the current work RVU valuation of 0.85 for CPT code 70450 is inadequate. The commenters stated that the level of effort associated with CPT code 70450 increased between the time the code was originally valued and the 2012 survey, and this increase continued through 2016. The commenters stated that over time, advances in technology led to many more images being created than existed historically. The commenters also stated that volume acquisitions, a CT scan technique that allows for multiple two-dimensional images, has resulted in thinner reconstructions and effortless multiplanar reformats, and other technological advancements have increased the amount of professional work associated with interpreting a non-contrast head CT and should be considered in the work RVU. The commenters expressed concern that the nomination by a single entity threatens the integrity of how physician services are valued generally.

Response: We disagree with the commenter that a nomination by a single entity threatens the integrity of how physician services are valued generally, and reiterate that a public nomination process was established through rulemaking as a way for the public and stakeholders to nominate potentially misvalued codes for consideration. Any future proposed valuations of specific codes are open for public comment, and we encourage stakeholders to submit data that would indicate that the current valuation is insufficient.

Comment: One commenter stated that with regard to CPT code 70450, the times prior to survey were CMS/other times and were not subdivided into pre-service, intra-service, and post-service categories. Therefore, the commenter stated that drawing comparisons between prior RUC database times and the surveyed times is invalid because the source of the prior RUC database times are unknown and completely different from the surveyed times. The commenter also stated that selecting as potentially misvalued only certain CPT codes that have undergone the RUC process with validated surveys is not a rational approach because if the times assumed based on the RUC approved survey data are invalid for these codes, they should be invalid for the entire fee schedule so that consistent methodology is applied to all CPT codes.

Response: We typically rely on RUC survey values because we believe they are the closest to accurate values, as they are the best data available in some cases. Although we do not agree that we should not consider comparisons of RUC database times to the newly surveyed times as described by the commenter, on a case-by-case basis we can consider the existence of previous inaccuracies. However, we also note that previous valuations established based on those inaccuracies would also indicate that the payments would have been inaccurate as well. The goal of the identification and review of potentially misvalued services is to facilitate accurate payment for PFS services. We also disagree with the commenter's characterization that selecting codes that have undergone the RUC process with validated surveys is not rational, and note that just because a code has been reviewed by the RUC does not preclude it from being identified and/or publically nominated as potentially misvalued.

Comment: With regard to CPT codes 93000 and 93306, one commenter stated that while the Urban Institute report concludes that the intraservice time to interpret an electrocardiogram is 6 seconds, practitioners who furnish the service do not believe it is possible to completely interpret a study so quickly. The commenter expressed concern about the large emphasis placed on service time by CMS and some stakeholders when it comes to valuation. The commenter suggested that frequent reviews of long-established mature services like electrocardiography and echocardiography will produce two outcomes—the inputs will remain the same or circumstances at some point will align such that it appears they take less time, which will open the window for payers to try to reduce payment for services that have not actually changed, and eventually these reductive re-valuations produce underpayment. A few commenters stated that CPT code 93306 was recently reviewed and valued in CY 2018. One commenter stated that the current valuation is reflective of numerous accreditation body requirements that were implemented since the service was last valued in 2007, which increased the work required per study. The commenter stated that the Urban Institute report should not be considered proof that the CPT code is overvalued, and given the recent RUC review of this service, CMS' acceptance of the RUC recommendation, and no change in the physician work of performing the service in the past year, this code should not be included in the potentially misvalued codes list.

Response: We reiterate that it is our practice to consider all elements of the relative work when we are reviewing and determining work RVU valuations. Additionally, our review of recommended work RVUs and time inputs generally includes review of various sources such as information provided by the RUC, and other public commenters, medical literature, and comparative databases. As previously stated, we believe there is great value in consistent and routine review of high-volume services. Additionally, as previously indicated, we do not agree that recent review of a code should preclude it from being considered as potentially misvalued, and therefore, do not agree that CMS should not include a code in the list of potentially misvalued services because it was previously reviewed.

Comment: One commenter disagreed that the time allocated to CPT code 93306 is overstated. The commenter stated that the Intersocietal Accreditation Commission for Echocardiography Guidelines regarding time standards indicated that more time is necessary from patient encounter to departure than is stipulated in the CMS time file. The commenter also stated there is more and more information being gathered with the introduction of technology that is labor and time intensive. The commenter suggested that if anything is revised, CMS times should be increased, not decreased.

Response: We reiterate that we are interested in receiving resource-based data from stakeholders and not just the RUC and we encourage stakeholders to submit data that would indicate that the current valuations are insufficient.

Although we appreciate the comments that were received regarding the seven high-volume codes, we believe that the nominator presented some concerns that have merit, such as the observation that in many cases time is reduced substantially but the work RVU only minimally, which results in an implied increase in the intensity of work that does not appear to be valid, and ultimately creates work intensity anomalies that are difficult to defend, and further review of these high-volume codes is the best way to determine the validity of the concerns articulated by the submitter. Therefore, we are adding CPT codes 27130, 27447, 43239, 45385, 70450, 93000, and 93306 to the list of potentially misvalued codes and anticipate reviewing recommendations from the RUC and other stakeholders. We reiterate that we do not believe that the inclusion of a code on a potentially misvalued code list necessarily means that a particular code is misvalued. Instead, the list is intended to prioritize codes to be reviewed under the misvalued code initiative.

In addition to comments on the nomination of the seven high-volume codes, we also received comments on the nomination of two contractor-priced codes for review under the potentially misvalued code initiative.

Comment: We received a few comments with regard to CPT codes 92992 and 92993, which were requested for review under the potentially misvalued code initiative in order to establish national RVU values for these services under the PFS. One of the commenters, the RUC, stated that these contractor-priced services, which are typically performed on children, would be discussed at the October 2018 Relativity Assessment Workgroup meeting.

Response: We appreciate the information from the RUC on their plans to discuss these codes. Given the plans by the RUC to consider CPT codes 92992 and 92993 we will wait for the RUC's review and will not add these codes to the list of potentially misvalued codes.

b. Update on the Global Surgery Data Collection

Payment for postoperative care is currently bundled within 10 or 90 days after many surgical procedures. Historically, we have not collected data on how many postoperative visits are actually performed during the global period. Section 523 of the MACRA added a new paragraph 1848(c)(8) to the Act, and section 1848(c)(8)(B) required CMS to use notice and comment rulemaking to implement a process to collect data on the number and level of postoperative visits and use these data to assess the accuracy of global surgical package valuation. In the CY 2017 PFS final rule, we adopted a policy to collect postoperative visit data. Beginning July 1, 2017, we required practitioners in groups with 10 or more practitioners in nine states (Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon, and Rhode Island) to use the no-pay CPT code 99024 (Postoperative follow-up visit, normally included in the surgical package, to indicate that an E/M service was performed during a postoperative period for a reason(s) related to the original procedure) to report postoperative visits. Practitioners who only practice in groups with fewer than 10 practitioners are exempted from required reporting, but are encouraged to report if feasible. The 293 procedures for which reporting is required are those furnished by more than 100 practitioners, and either are nationally furnished more than 10,000 times annually or have more than $10 million in annual allowed charges. A list of the procedures for which reporting is required is updated annually to reflect any coding changes and is posted on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-.html.

In these nine states, from July 1, 2017 through December 31, 2017, there were 990,581 postoperative visits reported using CPT code 99024. Of the 32,573 practitioners who furnished at least one of the 293 procedures during this period and who, based on Tax Identification Numbers in claims data, were likely to meet the practice size threshold, only 45 percent reported one or more visit using CPT code 99024 during this 6-month period. The share of practitioners who reported any CPT code 99024 claims varied by specialty. Among surgical oncology, hand surgery, and orthopedic surgeons, reporting rates were 92, 90, and 87 percent, respectively. In contrast, the reporting rate for emergency medicine physicians was 4 percent.

Among 10-day global procedures performed from July 1, 2017 through December 31, 2017, where it is possible to clearly match postoperative visits to specific procedures, only 4 percent had one or more matched visit reported with CPT code 99024. The percentage of 10-day global procedures with a matched visit reported with CPT code 99024 varied by specialty. Among procedures with 10-day global periods performed by hand surgeons, critical care, and obstetrics/gynecology, 44, 36, and 23 percent, respectively, of procedures had a matched visit reported using CPT code 99024. In contrast, less than 5 percent of 10-day global procedures performed by many other specialties had a matched visit reported using CPT code 99024. Among 90-day global procedures performed from July 1, 2017 through December 31, 2017, where it is possible to clearly match postoperative visits to specific procedures, 67 percent had one or more matched visits reported using CPT code 99024.

In the CY 2019 PFS proposed rule, we suggested one potential explanation for these findings is that many practitioners are not consistently reporting postoperative visits using CPT code 99024. We sought comment on how to encourage reporting to ensure the validity of the data without imposing undue burden. Specifically, we sought comment on whether we need to do more to make practitioners aware of their obligation and whether we should consider implementing an enforcement mechanism.

We sought comment on several other issues. Given the very small number of postoperative visits reported using CPT code 99024 during 10-day global periods, we sought comment on whether or not it might be reasonable to assume that many visits included in the valuation of 10-day global packages are not being furnished, or whether there are alternative explanations for what could be a significant level of underreporting of postoperative visits. Alternatively, we sought comment on whether it is possible that some or all of the postoperative visits are occurring after the global period ends and are, therefore, reported and paid separately.

We sought comment on whether we should consider requiring use of modifiers -54 and -55 in cases where the surgeon does not expect to perform the postoperative visits, regardless of whether or not the transfer of care is formalized. We also sought comment on the best approach to 10-day global codes for which the preliminary data suggest that postoperative visits are rarely performed by the practitioner reporting the global code and whether we should consider changing the global period and reviewing the code valuation.

The following is a summary of the comments we received on collecting data on global surgery and reporting.

Comment: The majority of commenters, including the RUC, noted that more time was needed for physicians to become aware of reporting and prepare for reporting. Moreover, they opposed implementing an enforcement mechanism, but supported more efforts by CMS to make physicians aware of the requirement. A few commenters objected to reporting and noted that CMS had complied with the statute. MedPAC, which supported converting all 10- and 90-day global codes to 0-day global codes and revaluing these codes as 0-day codes, suggested that these findings are consistent with the OIG's three studies that showed post-operative visits were not occurring at the rate that we estimated. MedPAC noted support for converting all codes with 10- and 90-day global periods to 0-day global codes and revaluing these codes as 0-day codes, most other commenters were opposed to creating 0-day global services out of 10-day global services. Of those who commented on reporting of post-operative visits, most suggested that improving reporting of these visits is essential if the data is to be used to improve the accuracy of the existing codes.

Response: We will evaluate the public comments received and consider whether to propose action at a future date. For the comment calling for additional efforts to make physicians aware of the requirement, we sent a letter describing the requirement to practitioners who are required to report in the 9 affected states and we plan to send another such letter to these practitioners. We will also consider other actions to make sure affected practitioners are aware of the requirement.

F. Radiologist Assistants

In accordance with § 410.32(b)(3), except as otherwise provided, all diagnostic X-ray and other diagnostic tests covered under section 1861(s)(3) of the Act and payable under the PFS must be furnished under at least a general level of physician supervision as defined in paragraph (b)(3)(i) of that regulation. In addition, some of these tests require either direct or personal supervision as defined in paragraphs (b)(3)(ii) or (iii) of § 410.32, respectively. We list the required minimum physician supervision level for each diagnostic X-ray and other diagnostic test service along with the codes and relative values for these services in the PFS Relative Value File, which is posted on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Relative-Value-Files.html. For most diagnostic imaging procedures, this required physician supervision level applies only to the technical component (TC) of the procedure.

In response to the Request for Information on CMS Flexibilities and Efficiencies (RFI) that was issued in the CY 2018 PFS proposed rule (82 FR 34172 through 34173), many commenters recommended that we revise the physician supervision requirements at § 410.32(b) for diagnostic tests with a focus on those that are typically furnished by a radiologist assistant (RA) under the supervision of a physician. Specifically, the commenters stated that all diagnostic tests, when performed by RAs, can be furnished under direct supervision rather than personal supervision of a physician, and that we should revise the Medicare supervision requirements so that when RAs conduct diagnostic imaging tests that would otherwise require personal supervision, they only need to do so under direct supervision. In addition to increasing efficiency, stakeholders suggested that the current supervision requirements for certain diagnostic imaging services unduly restrict RAs from conducting tests that they are permitted to do under current law in many states.

After consideration of these comments on the RFI, as well as information provided by stakeholders, we proposed to revise our regulations to specify that all diagnostic imaging tests may be furnished under the direct supervision of a physician when performed by an RA in accordance with state law and state scope of practice rules. Stakeholders representing the radiology community have provided us with information showing that the RA designation includes registered radiologist assistants (RRAs) who are certified by The American Registry of Radiologic Technologists, and radiology practitioner assistants (RPAs) who are certified by the Certification Board for Radiology Practitioner Assistants. We proposed to revise our regulation at § 410.32 to add a new paragraph (b)(4) to state that diagnostic tests performed by an RRA or an RPA require only a direct level of physician supervision, when permitted by state law and state scope of practice regulations. We noted that for diagnostic imaging tests requiring a general level of physician supervision, this proposal would not change the level of physician supervision to direct supervision. Otherwise, the diagnostic imaging tests must be performed as specified elsewhere under § 410.32(b). We based this proposal on recommendations from the practitioner community that included specific recommendations on how to implement the change. Representatives of the practitioner community submitted information on the education and clinical experience of RAs, which we took into consideration in determining whether the proposal would pose a significant risk to patient safety, and we determined that it would not. In addition, we considered information provided by stakeholders that indicated that 28 states have statutes or regulations that recognize RAs, and these states have general or direct supervision requirements for RAs.

Comment: Many commenters supported our proposed changes to the regulations and stated that they agreed that diagnostic tests performed by RAs be performed under at most direct supervision rather than personal supervision where permitted by state law and state scope of practice regulations. According to these commenters, the change would allow for greater efficiency, improved patient access, more dedicated time with patients, increased quality of care, and increased patient satisfaction.

Response: We appreciate the comments received in support of this proposal. As discussed in the proposed rule, for diagnostic imaging tests requiring a general level of physician supervision, we are not changing the level of physician supervision to direct supervision. Otherwise, the diagnostic imaging tests must be performed as specified elsewhere under § 410.32(b). In order to provide further clarity, we are modifying the regulation to clarify that diagnostic tests performed by an RRA who is certified and registered by the American Registry of Radiologic Technologists or an RPA who is certified by the Certification Board for Radiology Practitioner Assistants, and that would otherwise require a personal level of supervision as specified in § 410.32(b)(3), may be furnished under a direct level of physician supervision to the extent permitted by state law and state scope of practice regulations.

Comment: Many commenters requested that CMS ensure that the proposed policy be effective January 1, 2019 by providing any necessary administrative guidance. Many commenters requested that CMS clarify in its final regulation that all services within the RA scope of practice, including procedures, may be performed under direct supervision.

Response: In implementing these changes to the regulation, we will be updating guidance contained in Pub. 100-04, Medicare Claims Processing Manual, Chapter 23 (available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/Pub100_23.html). Medicare supervision rules are only directly applicable to diagnostic tests, not procedures. We note that for procedures provided by auxiliary personnel (such as a radiologist assistant) incident to the services of the billing physician or practitioner, Medicare generally requires direct supervision in accordance with the regulation at § 410.26(b)(5).

Comment: One commenter suggested that CMS require verbal assurances to patients as to the credentials of the health care professional conducting the procedure, when the procedure is performed by an RA. The commenter stated that requiring this verbal assurance will minimize confusion about who the physician is when there are multiple individuals furnishing the procedure.

Response: We believe such a requirement would be unwarranted and overly restrictive. We do not generally require practitioners to provide such assurances to Medicare beneficiaries, nor did we propose such a requirement in the proposed rule.

Comment: Several commenters suggested that CMS should operationalize the proposal starting January 1, 2019 by using a radiologist supervision indicator to recognize the RA under direct supervision rather than personal supervision when they provide Medicare services under their state scope of practice. These commenters requested the creation of a new supervision indicator that would be applied to specific codes and would indicate that the procedure may be performed under the direct supervision of a radiologist when performed by an RRA who is certified by The American Registry of Radiologic Technologists, and an RPA who is certified by the Certification Board for Radiology Practitioner Assistants.

Response: Our approach to effectuating this policy change was based on recommendations we received from the practitioner community. Under this approach, we allow for direct supervision for tests performed in part by an RA, which avoids the need to identify which CPT codes would be appropriate for inclusion under a new indicator. We believe our approach offers the most flexibility, ease of implementation, and subsequently reduces burden for billing practitioners and radiologist assistants.

After consideration of the public comments received, we are finalizing, with refinements for further clarity, our proposed revisions to § 410.32, by adding a new paragraph (b)(4) that states that diagnostic tests that are performed by a registered radiologist assistant (RRA) who is certified and registered by the American Registry of Radiologic Technologists or a radiology practitioner assistant (RPA) who is certified by the Certification Board for Radiology Practitioner Assistants, and that would otherwise require a personal level of supervision as specified in paragraph (3), may be furnished under a direct level of physician supervision to the extent permitted by state law and state scope of practice regulations.

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

1. Background

Sections 1833(t)(1)(B)(v) and (t)(21) of the Act require that certain items and services furnished by certain off-campus provider-based departments (PBDs) (collectively referenced here as nonexcepted items and services furnished by nonexcepted off-campus PBDs) shall not be considered covered outpatient department (OPD) services for purposes of payment under the Hospital Outpatient Prospective Payment System (OPPS), and payment for those nonexcepted items and services furnished on or after January 1, 2017 shall be made under the applicable payment system under Medicare Part B if the requirements for such payment are otherwise met. These requirements were enacted in section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74, enacted November 2, 2015).

In the CY 2017 OPPS/Ambulatory Surgical Center (ASC) final rule with comment period (81 FR 79699 through 79719), we established several policies and provisions to define the scope of nonexcepted items and services in nonexcepted off-campus PBDs. We also finalized the PFS as the applicable payment system for most nonexcepted items and services furnished by nonexcepted off-campus PBDs. At the same time, we issued an interim final rule with comment period (81 FR 79720 through 79729) in which we established payment policies under the PFS for nonexcepted items and services furnished on or after January 1, 2017. In the following paragraphs, we summarize the policies that we adopted for CY 2017 and CY 2018. We also summarize proposals for CY 2019, respond to public comments, and finalize payment policies for CY 2019. For issues related to the excepted status of off-campus PBDs or the excepted status of items and services, please see the CY 2019 OPPS/ASC final rule.

2. Payment Mechanism

In establishing the PFS as the applicable payment system for most nonexcepted items and services in nonexcepted off-campus PBDs under sections 1833(t)(1)(B)(v) and (t)(21) of the Act, we recognized that there was no technological capability, at least in the near term, to allow off-campus PBDs to bill under the PFS for those nonexcepted items and services. Off-campus PBDs bill under the OPPS for their services on an institutional claim, while physicians and other suppliers bill under the PFS on a practitioner claim. The two systems that process these different types of claims, the Fiscal Intermediary Standard System (FISS) and the Multi-Carrier System (MCS) system, respectively, were not designed to accept or process claims of a different type. To permit an off-campus PBD to bill directly under a different payment system than the OPPS would have required significant changes to these complex systems as well as other systems involved in the processing of Medicare Part B claims. Consequently, we proposed and finalized a policy for CY 2017 and CY 2018 in which nonexcepted off-campus PBDs continue to bill for nonexcepted items and services on the institutional claim utilizing a new claim line modifier “PN” to indicate that an item or service is a nonexcepted item or service.

We implemented requirements under section 1833(t)(1)(B) of the Act for CY 2017 and CY 2018 by applying an overall downward scaling factor, called the PFS Relativity Adjuster to payments for nonexcepted items and services furnished in nonexcepted off-campus PBDs. The PFS Relativity Adjuster generally reflects the average (weighted by claim line volume times rate) of the site-specific rate under the PFS compared to the rate under the OPPS (weighted by claim line volume times rate) for nonexcepted items and services furnished in nonexcepted off-campus PBDs. As we have discussed extensively in prior rulemaking (81 FR 97920 through 97929 and 82 FR 53021), we established a new set of site-specific payment rates under the PFS that reflect the relative resource cost of furnishing the technical component (TC) of services furnished in nonexcepted off-campus PBDs. For the majority of HCPCS codes, these rates are based on either (1) the difference between the PFS nonfacility payment rate and the PFS facility rate, (2) the TC, or (3) in instances where payment would have been made only to the facility or to the physician, the full nonfacility rate. The PFS Relativity Adjuster refers to the percentage of the OPPS payment amount paid under the PFS for a nonexcepted item or service to the nonexcepted off-campus PBD.

To operationalize the PFS Relativity Adjuster as a mechanism to pay for nonexcepted items and services furnished by nonexcepted off-campus PBDs, we adopted the packaging payment rates and multiple procedure payment reduction (MPPR) percentage that applies under the OPPS. We also incorporated the claims processing logic that is used for payments under the OPPS for comprehensive Ambulatory Payment Classifications (C-APCs), conditionally and unconditionally packaged items and services, and major procedures. As we noted in the CY 2017 PFS final rule (82 FR 53024), we believe that this maintains the integrity of the cost-specific relativity of current payments under the OPPS compared with those under the PFS.

In CY 2017, we implemented a PFS Relativity Adjuster of 50 percent of the OPPS rate for nonexcepted items and services furnished in nonexcepted off-campus PBDs. For a detailed explanation of how we developed the PFS Relativity Adjuster of 50 percent for CY 2017, including assumptions and exclusions, we refer readers to the CY 2017 OPPS/ASC interim final rule with comment period (81 FR 79720 through 79729). Beginning for CY 2018, we adopted a PFS Relativity Adjuster of 40 percent of the OPPS rate. For a detailed explanation of how we developed the PFS Relativity Adjuster of 40 percent, we refer readers to the CY 2018 PFS final rule (82 FR 53019 through 53042). A brief overview of the general approach we took for CY 2018 and how it differs from the proposal for CY 2019 appears in this section.

3. The PFS Relativity Adjuster

The PFS Relativity Adjuster reflects the overall relativity of the applicable payment rate for nonexcepted items and services furnished in nonexcepted off-campus PBDs under the PFS compared with the rate under the OPPS. To develop the PFS Relativity Adjuster for CY 2017, we did not have all of the claims data needed to identify the mix of items and services that would be billed using the “PN” modifier. Instead, we analyzed hospital outpatient claims data from January 1 through August 25, 2016, that contained the “PO” modifier, which was a new mandatory reporting requirement for CY 2016 for claims that were billed by an off-campus department of a hospital. We limited our analysis to those claims billed on the 13X Type of Bill because those claims were used for Medicare Part B billing under the OPPS. We then identified the 25 most frequently billed major codes that were billed by claim line; that is, items and services that were separately payable or conditionally packaged. Specifically, we restricted our analysis to codes with OPPS status indicators (SI) “J1”, “J2”, “Q1”, “Q2”, “Q3”, “S”, “T”, or “V”. The most frequently billed service with the “PO” modifier in CY 2016 was described by HCPCS code G0463 (Hospital outpatient clinic visit for the assessment and management of a patient), which, in CY 2016, was paid under APC 5012 at a rate of $102.12; the total number of claim lines for this service was approximately 6.7 million as of August 2016. Under the PFS, there are 10 CPT codes describing different levels of office visits for new and established payments. We compared the payment rate under OPPS for HCPCS code G0463 ($102.12) to the average of the difference between the nonfacility and facility rates for CPT code 99213 (Level III office visit for an established patient) and CPT code 99214 (Level IV office visit for an established patient) in CY 2016 and found that the relative payment difference was approximately 22 percent. We did not include HCPCS code G0463 in our calculation of the PFS Relativity Adjuster for CY 2017 because we were concerned that there was no single, directly comparable code under the PFS. As we stated in the CY 2017 PFS final rule (81 FR 79723), we wanted to mitigate the risk of underestimating the overall relativity between the PFS and OPPS rates. From the remaining top 24 most frequently billed codes, we excluded HCPCS code 36591 (Collection of blood specimen from a completely implantable venous access device) because, under PFS policies, the service was only separately payable under the PFS when no other code was on the claim. We also removed HCPCS code G0009 (Administration of Pneumococcal Vaccine) because there was no payment for this code under the PFS. For the remaining top 22 codes furnished with the “PO” modifier in CY 2016, the average (weighted by claim line volume times rate) of the nonfacility payment rate estimate for the PFS compared to the estimate for the OPPS was 45 percent. We indicated that, because of our inability to estimate the effect of the packaging difference between the OPPS and the PFS, we would assume a 5 percentage point adjustment upward from the calculated amount of 45 percent; therefore, we established the PFS Relativity Adjuster of 50 percent for CY 2017.

In establishing the PFS Relativity Adjuster for CY 2018, we still did not have claims data for items and services furnished reported with a “PN” modifier. However, we updated the list of the 25 most frequently billed HCPCS codes using an entire year (CY 2016) of claims data for services submitted with a “PO” modifier and we updated the corresponding utilization weights for the codes used in the analysis. The order and composition of the top 25 separately payable HCPCS codes, based on the full year of claims from CY 2016 submitted with the “PO” modifier, changed minimally from the codes we used in our original analysis for the CY 2017 OPPS/ASC interim final rule with comment period. For a detailed list of the HCPCS codes we used in calculating the CY 2017 PFS Relativity Adjuster and the CY 2018 PFS Relativity Adjuster, we refer readers to the CY 2018 PFS final rule (82 FR 53030 through 53031). As noted earlier, in establishing the PFS Relativity Adjuster of 50 percent for CY 2017, we did not include in the weighted average code comparison, the relative rate for the most frequently billed service furnished in off-campus PBDs, HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient), in part to ensure that we were not underestimating the overall relativity between the PFS and the OPPS. In contrast, in the CY 2018 PFS final rule, we stated that our objective for CY 2018 was to ensure that we did not overestimate the appropriate overall payment relativity, and that the payment made to nonexcepted off-campus PBDs better aligned with the services that are most frequently furnished in the setting. Therefore, in addition to using updated claims data, we revised the PFS Relativity Adjuster to incorporate the relative payment rate for HCPCS code G0463 into our analysis. We followed all other exclusions and assumptions that were made in calculating the CY 2017 PFS Relativity Adjuster. Our analysis resulted in a 35 percent relative difference in payment rates. Similar to our stated rationale in the CY 2017 PFS final rule, we increased the PFS Relativity Adjuster to 40 percent, acknowledging the difficulty of estimating the effect of the packaging differences between the OPPS and the PFS.

4. Payment Policies for CY 2019

In prior rulemaking, we stated our expectation that our general approach of adjusting OPPS payments using a single scaling factor, the PFS Relativity Adjuster, would continue to be an appropriate payment mechanism to implement provisions of section 603 of the Bipartisan Budget Act of 2015, and would remain in place until we are able to establish code-specific reductions that represent the TC of services furnished under the PFS or until we are able to implement system changes needed to enable nonexcepted off-campus PBDs to bill for nonexcepted items and services under the PFS directly (82 FR 53029). As we continue to explore alternative options related to requirements under section 1833(t)(21)(C) of the Act, we believed that this overall approach is still appropriate, and we are finalizing our proposal to continue to allow nonexcepted off-campus PBDs to bill for nonexcepted items and services on an institutional claim using a “PN” modifier until we identify a workable alternative mechanism to improve payment accuracy.

We made several adjustments to our methodology for calculating the PFS Relativity Adjuster for CY 2019. Most importantly, we had access to a full year of claims data from CY 2017 for services submitted with the “PN” modifier. Incorporating these data allows us to improve the accuracy of the PFS Relativity Adjuster by accounting for the specific mix of nonexcepted items and services furnished in nonexcepted off-campus PBDs. In analyzing the CY 2017 claims data, we identified just under 2,000 unique OPPS HCPCS/OPPS status indicator (SI) code pairs reported in CY 2017 with status indicators “J1”, “J2”, “Q1”, “Q2”, “Q3”, “S”, “T”, or “V”. The data reinforce our previous observation that the single most frequently reported service furnished in nonexcepted off-campus PBDs is HCPCS code G0463. Approximately half of all claim lines for separately payable or conditionally packaged services furnished by nonexcepted off-campus PBDs included HCPCS code G0463 in CY 2017, representing over 30 percent of total Medicare payments for separately payable or conditionally packaged services. The top 30 HCPCS/SI code combinations accounted for over 80 percent of all claim lines and approximately 70 percent of Medicare payments for services that are separately billable or conditionally packaged. In contrast with prior analyses, we also looked at claims units, which reflect HCPCS/SI code combinations that are billed more than once on a claim line. Certain HCPCS codes are much more frequently billed in multiple units than others. The largest differences between the number of claim lines and the number of claims units are for injections and immunizations, which are not typically separately payable or conditionally packaged under the OPPS. For instance, HCPCS code Q9967 (Low osmolar contrast material, 300-399 mg/ml iodine concentration, per ml) was reported in 12,268 claim lines, but 1,168,393 times (claims units) in the aggregate. HCPCS code Q9967 has an OPPS status indicator of “N”, meaning that there is no separate payment under OPPS (items and services are packaged into APC rates). To calculate the PFS Relativity Adjuster using the full range of claims data submitted with a “PN” modifier in CY 2017, we first established site-specific rates under the PFS that reflect the TC of items and services furnished by nonexcepted off-campus PBDs in CY 2017. These HCPCS-level rates reflect our best current estimate of the amount that would have been paid for the service in the office setting under the PFS for practice expenses (PEs) not associated with the professional component (PC) of the service. As discussed in prior rulemaking (81 FR 79720 through 79729), we believe the most appropriate code-level comparison would reflect the TC of each HCPCS code under the PFS. However, we do not currently calculate a separate TC rate for all HCPCS codes under the PFS—only for those for which the PC and TC of the service are distinct and can be separately billed by two different practitioners or other suppliers under the PFS. For most of the remainder of services that do not have a separately payable TC under the PFS, we estimated the site-specific rate as (1) the difference between the PFS nonfacility rate and the PFS facility rate, or (2) in instances where payment would have been made only to the facility or only to the physician, the full nonfacility rate. As with the PFS rates that we developed when calculating the PFS Relativity Adjuster for CY 2017 and CY 2018, there were large code-level differences between the applicable PFS rate and the OPPS rate.

In calculating the proposed PFS Relativity Adjuster for CY 2019, we employed the same fundamental methodology that we used to calculate the PFS Relativity Adjuster for CY 2017 and CY 2018. We began by limiting our analysis to the items and services billed in CY 2017 with a “PN” modifier that are separately payable or conditionally packaged under the OPPS (status indicator = “J1”, “J2”, “Q1”, “Q2”, “Q3”, “S”, “T”, or “V”) and compared the rates for these codes under the OPPS with the site-specific rates under the PFS. Next, we imputed PFS rates for a limited number of items and services that are separately payable or conditionally packaged under the OPPS but are contractor priced under the PFS. We also imputed PFS rates for some HCPCS codes that are not separately payable under the OPPS (SI = “N”), but are separately payable under the PFS. This includes items and services with an indicator status of “X” under the PFS, which are statutorily excluded from payment under the PFS, but may be paid under a different fee schedule, such as the Clinical Lab Fee Schedule (CLFS). We summed the HCPCS-level rates under the PFS across all nonexcepted items and services, weighted by the number of HCPCS code claims units for each service. Next, we calculated the sum of the HCPCS-level OPPS rate for items and services that are separately payable or conditionally packaged, also weighted by the number of HCPCS code claims units. We compared the weighted sum of the site-specific PFS rate with the weighted sum of the OPPS rate for items and services reported in CY 2017 and we found that our updated analysis supports maintaining a PFS Relativity Adjuster of 40 percent. In view of this analysis, we proposed to continue applying a PFS Relativity Adjuster of 40 percent for CY 2019. Moreover, we proposed to maintain this PFS Relativity Adjuster for future years until updated data or other considerations indicate that an alternative adjuster or a change to our approach is warranted, which we will then propose through notice and comment rulemaking. We discuss some of our ongoing data analyses and future plans regarding implementation of section 603 of the Bipartisan Budget Act of 2015 in this section.

Comment: Several commenters were disappointed that CMS did not provide the same level of detail regarding the data and methodology used in calculating the PFS Relativity Adjuster for CY 2019 as we had in prior rulemaking (CY 2017 and CY 2018). In particular, these commenters noted that we had previously included specific HCPCS codes that comprised the top 25 reported, the number of claims lines for each HCPCS code, and the associated PFS payment rates we used to estimate the appropriate adjuster. Some commenters maintained that the lack of specific HCPCS codes and associated PFS payment rates prevented them from replicating our analysis and commenting on the merits of maintaining the 40 percent PFS Relativity Adjuster.

Response: We understand and appreciate commenters' interest in replicating our analysis using the full set of claims data and PFS payment rates we used to conduct our analysis. However, we do not agree that commenters were not able to conduct their own analysis for purposes of evaluating our proposal. The principal data sources in the analysis are the OPPS CY 2017 rates, the CY 2017 PFS rates, and institutional claims data for items and services furnished in CY 2017 that included the “PN” modifier, which are publicly available resources. We did not receive specific inquiries indicating that commenters tried to reproduce our results using these data sources (or other data sources), nor did we receive any specific alternatives for consideration. As we noted in the proposed rule, the methodological aspects of our proposed PFS Relativity Adjuster calculation for CY 2019 differ from the calculation for CY 2017 and CY 2018 by the following two adjustments: (1) Development of site specific technical-equivalent rates under the PFS for all HCPCS codes reported on a claim with the “PN” modifier in CY 2017; and (2) the addition of OPPS SI “N” claims data to the PFS component of the PFS Relativity Adjuster equation to reflect items and services that are packaged under OPPS but paid separately under the PFS. We imputed certain PFS rates, such as for codes that are contractor priced under the PFS, because those would be paid at the contractor price if the claim had been submitted in a freestanding office. We remind commenters that adding PFS rates to the analysis, where such rates would not have otherwise been included, has the effect of increasing the PFS Relativity Adjuster since the aggregate PFS payment amount increases relative to the aggregate OPPS payment amount. Nonetheless, we appreciate the commenters' interest in validating the results of our analysis. For the convenience of commenters wishing to conduct analysis of differences in payment rates between off-campus PBDs and freestanding offices for similar services, we are providing a public use file (PUF), available on the CMS website under the “downloads” section for this final rule containing the CY 2017 PFS technical-equivalent payment rates for all HCPCS codes reported on an institutional claim with the “PN” modifier, as well as the OPPS payment rate and the number of claims units by OPPS SI (see https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched).

Comment: Commenters posed specific questions about our PFS Relativity Adjuster calculations and requested that CMS provide additional detail about the calendar year we used for OPPS and PFS rates, the specific HCPCS codes for which we imputed PFS rates, our rationale for weighting the data using claims units instead of claims lines, and if our analysis accounted for the more extensive packaging that occurs under the OPPS compared with the PFS.

Response: Although we addressed much, if not all, of the information requested by these commenters in the discussion of our methodology in the proposed rule, we provide the following summary, along with additional detail on specific aspects of our analysis to respond explicitly to commenters' questions. We began our analysis to identify the proposed CY 2019 PFS Relativity Adjuster by examining a full year of claims data for services furnished in CY 2017 that were reported on an institutional claim form and appended with the “PN” modifier. Because claims processed through the institutional setting are adjudicated based on the OPPS SI, our unit of analysis was the number of claims units at the HCPCS/SI code level. We used claim units instead of claim lines because this metric accounts for instances when a HCPCS code is reported multiple times on the same claim line. We made this methodological change in formulating our proposal for CY 2019 in large part to address commenters' concerns from prior years that our calculations may underrepresent PFS payment for HCPCS codes that would have been paid multiple times under the PFS if they were reported separately. For the majority of HCPCS/SI code combinations that were reported with the “PN” modifier, there is little difference between the number of claim lines and claim units. However, because more units are separately paid under the PFS than under the OPPS, using claims units rather than claims lines yielded a slightly higher PFS Relativity Adjuster.

For CY 2019, our proposed PFS Relativity Adjuster was based on all HCPCS codes that were submitted on an institutional claim form in CY 2017, appended with the “PN” modifier in order to improve the accuracy of the overall payment comparison using the best data available regarding the actual mix of services furnished in nonexcepted off-campus PBDs. In contrast, for CYs 2017 and 2018, we used only a subset of claims from CY 2016 because of known limitations regarding the data available at the time. In particular, the data from CY 2016 were based on claims that were appended with the “PO” modifier, which was a new reporting requirement for CY 2016. Although the “PO” modifier allowed us to distinguish items and services furnished in off-campus PBDs in CY 2016, it did not allow us to distinguish between excepted and nonexcepted off-campus PBDs. The “PN” modifier, which was a new reporting requirement for CY 2017, allows us to make the distinction between excepted and nonexcepted off-campus PBDs.

In updating our analysis for calculating the proposed PFS Relativity Adjuster for CY 2019 to include all HCPCS codes that were reported on an institutional claim with the “PN” modifier, we also extended to all HCPCS codes our earlier logic with regard to calculating the site specific rates that represent the technical-equivalent of the resource costs of furnishing a service under the PFS. This amount, as we discussed in the proposed rule, generally reflected: (1) The difference between the PFS nonfacility payment rate and the PFS facility rate; (2) the TC; or (3) in instances where payment would have been made only to the facility or only to the physician, the full nonfacility rate. Applying the same logic to the fuller range of HCPCS codes, we developed site specific rates for all HCPCS codes that are nationally priced under the PFS and we referred to them as the technical-equivalent rates.

To continue with our analysis, we combined the CY 2017 OPPS rates at the HCPCS code level with the CY 2017 claims data representing nonexcepted items and services furnished in nonexcepted off-campus PBDs. Next, we added the technical-equivalent PFS rates for each HCPCS code, calculated using the approach described above. For both the OPPS and the PFS portions of the PFS Relativity Adjuster calculations, we weighted our analysis of HCPCS/SI code combinations by the number of claims units. For the OPPS component of the calculation, we restricted our analysis to HCPCS/SI code combinations that had OPPS SI indicators “J1”, “J2”, “Q1”, “Q2”, “Q3”, “S”, “T”, or “V”, which are separately payable or conditionally packaged codes under the OPPS. We multiplied the number of claims units for each HCPCS/SI code combination by the OPPS rate for each HCPCS/SI code combination and summed across the weighted rates. To calculate the PFS component of the PFS Relativity Adjuster, we used the same OPPS/SI code combinations, but we also included claims for HCPCS codes with OPPS SI “N”, which indicates that, under the OPPS, payment for these services is packaged into payment for other services. We multiplied the number of claims units for each HCPCS/SI code combination by the technical-equivalent PFS rate for each HCPCS code and summed across the HCPCS/SI code combinations. We believe that adding weighted rates for HCPCS codes with OPPS SI “N” to the PFS allows us to better adjust, although imprecisely, for the packaging under the OPPS of nonexcepted items and services for which separate payment would typically be made under the PFS in the office setting. Although we did not conduct code-level analysis to estimate packaging under the OPPS, we believe that the combination of using the full range of claims data for nonexcepted items and services furnished in nonexcepted off-campus PBDs, using claim units rather than claim lines to weight rates on both the OPPS and PFS, and adding PFS rates for HCPCS codes with OPPS status indicator “N” is an improved approach to the PFS Relativity Adjuster that better accounts for OPPS packaging policies.

To increase the precision of our analysis, we imputed payment rates under the PFS for certain HCPCS codes for which payment is based on rates other than national PFS pricing. For services that are contractor-priced under the PFS, as indicated by a PFS status indicator of “C”, we applied the national median allowed charge for these services in CY 2017. For a limited number of other services, where appropriate, we incorporated rates from the applicable fee schedule under which the service may have been paid if furnished in a freestanding office. For instance, HCPCS codes with a PFS status indicator of either “X” (service is statutorily excluded for payment under PFS) or “E” (service is excluded from payment under PFS by regulation), may be paid under the CLFS or the National Limitation Amount (NLA). The imputed values that we used, both from contractor priced codes and other fee schedules, are included in the data file that will be posted with this final rule, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

Although there remains a certain level of imprecision inherent in our analysis, we believe the margin of error is relatively small and would likely affect the PFS and OPPS amounts similarly. For instance, we did not take into account the several MPPRs that would reduce payment on the PFS side when multiple codes are billed together. In many cases, these codes are packaged under the OPPS, so not including the PFS MPPRs in our analysis has the effect of increasing the PFS component of the calculation by a marginal amount. Likewise, we recognize that because of existing packaging rules under the OPPS, there is likely to be underreporting of codes on institutional claims for which the hospital does not receive separate payment, but for which the practitioner might receive separate payment if furnished in a freestanding office and reported on a professional claim form. This would effectively reduce the PFS Relativity Adjuster, but only to the extent hospitals are not appropriately reporting furnished items and services.

Comment: Many commenters expressed that the appropriate point of comparison for PFS technical-equivalent rates is the full nonfacility rate rather than the difference between the nonfacility rate and the facility rate. The commenters stated that since hospitals, like freestanding offices, incur both direct and indirect costs when services are furnished in nonexcepted off-campus PBDs, the difference between the nonfacility rate and the facility rate does not appropriately account for indirect costs incurred by the facility.

Response: We believe the commenters misunderstood the methodology for allocating direct and indirect costs as part of the PFS ratesetting process. Under the PFS algorithm for allocating indirect costs, nonfacility PFS rates include indirect PE that is directly related to the resources associated with the professional portion of the service alone. In other words, this is the indirect PE that is also paid by Medicare to professionals like physicians when they report services in the hospital setting. In addition to these indirect PE RVUs, nonfacility PFS rates include indirect PE RVUs allocated based on the direct PE inputs. We believe these indirect costs, those associated with provision of the technical aspects of the service alone, are analogous to those incurred by facilities when professionals furnish services there. To be clear, even when the total nonfacility rates are reduced by the facility rates, there are remaining PE RVUs that result from both direct inputs and indirect allocations under the established PFS methodology. We agree with the commenters that nonexcepted off-campus PBDs incur indirect costs, but we believe our calculation for the technical-equivalent PFS rates includes the relative resource costs of indirect expenses involved in furnishing the services. We also note that CMS makes corresponding payments under the PFS at the facility rate for nonexcepted items and services furnished in nonexcepted off-campus PBD settings, meaning that CMS is already paying for some of the indirect expenses associated with the PCs of the service. If CMS were to use the full nonfacility PE RVUs as the basis for comparing PFS rates to OPPS rates, we would effectively be paying twice for a portion of indirect costs, once under the PFS for the PC of services and again through the PFS Relativity Adjusted payment under the OPPS to off-campus PBDs for the facility part of the same service.

We recognize that the process of allocating indirect costs under the PFS is built on assumptions about organizational practices and healthcare payment structures that may not fully reflect the current health care delivery environment, especially where physicians and other professionals are paid under salaried arrangements by institutions such as hospitals. Under the current PFS payment methodology, we assume that indirect costs associated with professional services furnished in institutions like hospital PBDs are incurred by the individual practitioners and not by the institutions. We may consider this issue for future rulemaking.

Comment: A commenter requested that CMS clarify how, in calculating the PFS Relativity Adjuster, CMS treated codes that are valued under the PFS only in a facility setting. Because these HCPCS codes do not have PE inputs reflecting the specific costs of furnishing a service in a freestanding office, the commenter stated concern that these codes may have been incorrectly incorporated in the analysis at a PFS payment rate of zero.

Response: We appreciate the commenter's concern and the opportunity to clarify the way we treated services not priced in the nonfacility setting in calculating the PFS Relativity Adjuster. Because there are no PFS payment rates for these services in the nonfacility setting, we incorporated the OPPS rate as the technical equivalent rate under the PFS.

Comment: Several commenters were opposed to our proposal to maintain the PFS Relativity Adjuster at 40 percent, citing both the lack of transparency in our methodology and prior analyses provided by the American Hospital Association (AHA) in earlier notice and comment rulemaking, suggesting that a 65 percent PFS Relativity Adjuster would appropriately incorporate into the Adjuster the additional packaging that occurs under the OPPS. Two commenters urged CMS to implement a 75 percent PFS Relativity Adjuster for CY 2019, although no specific rationale was given.

Response: We accounted for packaging under the OPPS by including PFS payment rates for HCPCS codes that were reported with OPPS SI “N”. Our analysis does not support a PFS Relativity Adjuster of 65 or 75 percent, but rather indicates that a PFS Relativity Adjuster of 40 percent appropriately accounts for packaging of services under the OPPS. For additional discussion of the challenges related to incorporating the effect of packaging into the PFS Relativity Adjuster, we refer readers to the CY 2018 PFS final rule (82 FR 53024 through 53022).

Comment: A commenter stated that CMS has not provided sufficient justification for continuation of a reduction in payment of 60 percent for nonexcepted items and services furnished in nonexcepted off campus PBDs. Commenters noted that the first 2017 claims from the initial period of implementation of this policy are only now being incorporated into CMS claims files. The commenter indicated that there is an insufficient volume of claims to determine the impact this policy is having on beneficiary access to services in the PBD setting, particularly at the 40 percent Relativity Adjuster. The commenter stated that CMS should, at minimum, restore the 50 percent PFS Relativity Adjuster that was in place for CY 2017.

Response: We appreciate the commenter's suggestions, but we do not agree that there is insufficient data to support the PFS Relativity Adjuster of 40 percent. We have no reason to believe that the CY 2017 claims data are not as robust as any other claims based analysis and, to the extent that we recognize, acknowledge, and try to account for difference in payment policies between the PFS and OPPS, we believe our analysis demonstrates that a PFS Relativity Adjuster of 40 percent is appropriate.

Comment: Several commenters supported the 40 percent PFS Relativity Adjuster for CY 2019 and future years because this will provide stability for clinicians practicing in these settings and not disrupt patient access to care. One commenter cited the importance of making gradual changes to site neutrality policies to ensure alignment with other rapid changes in Medicare and the private sector regarding provider payment, including the movement to value-based purchasing and alternative payment systems.

Response: We agree with the commenter that there is value in the stability of maintaining the PFS Relativity Adjuster at 40 percent, particularly to the extent that this enables continuity of care for beneficiaries. We appreciate the support from commenters.

Comment: Some commenters, rather than opposing any particular PFS Relativity Adjuster, expressed disappointment that CMS did not propose to make broader changes to implement site-neutrality under section 603 of the Bipartisan Budget Act of 2015. Commenters were displeased that CMS is continuing to implement the requirements of the legislation using a single scaling factor applied to payment rates under the OPPS. Instead, they stated CMS should revise the applicable payment rates to appropriately reimburse for services provided by off-campus PBDs. Commenters did not provide specific suggestions for implementing alternative policies, but several commenters noted that a single overall scaling factor was intended by CMS to be an interim, not a long term policy solution. A few commenters suggested that the PFS Relativity Adjuster as a mechanism for implementing section 603 of the Bipartisan Budget Act of 2015 is not consistent with the requirement under that section to pay for nonexcepted items and services under the applicable payment system because this approach is still fundamentally based on OPPS payment rates. Other commenters stated that nonexcepted off-campus PBDs differ from one another in the mix of services furnished and the beneficiary population and that CMS payment policies should reflect those variances.

Despite concerns about the appropriateness of the PFS Relativity Adjuster for implementing requirements under section 603 of the Bipartisan Budget Act of 2015, several of the same commenters pointed out that there are significant advantages of continuing to allow hospitals to bill for items and services furnished in nonexcepted PBDs using the institutional claim form. In particular, they stated, this allows PBDs to properly use cost reporting procedures and to accurately reconcile the cost report to hospital ledgers for all services and departments and to correctly allow revenue for nonexcepted PBDs to flow through the Provider Statistical and Reimbursement (PS&R) report.

Response: We previously expressed interest in exploring how hospitals might report and receive payment for nonexcepted items and services furnished in nonexcepted off-campus PBDs using the standard PFS payment rates based on HCPCS-specific RVUs. However, CMS does not currently develop as part of the PFS ratesetting process separate payment rates for the technical aspects of the full range of nonexcepted items and services furnished in nonexcepted off-campus PBDs specifically for services for which there are not separately valued PCs and TCs. As such, we do not have a consistent way for nonexcepted off-campus PBDs and the professionals who furnish services in those settings to bill for the respective portions of the services for which they incurred costs. Additionally, while the statute was amended to change the nature and payment of nonexcepted items and services furnished in nonexcepted off-campus PBDs, the amendments did not alter the status of non-excepted off-campus PBDs as parts of hospitals. Nonexcepted off-campus PBDs are still required to follow all reporting and regulatory policies consistent with hospital settings.

We continue to explore options that would allow hospitals to report nonexcepted items and services on an institutional claim form but receive payments that more directly reflect the technical aspect of services under the PFS. In general, we believe there may be additional utility, especially in the context of improving price transparency for Medicare beneficiaries, in establishing and displaying a set of payment rates, recalculated annually as part of the annual PFS rulemaking cycle, that reflect the relative resource costs of the technical aspects of furnishing PFS services.

Along with this final rule, we are including the technical-equivalent rates that we developed specifically for calculating the PFS Relativity Adjuster for CY 2019, which is the current mechanism for implementing the PFS as the applicable payment system for nonexcepted items and services furnished in nonexcepted off-campus PBDs. This information is being made available under the downloads section for this final rule on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

Comment: Several commenters supported our ongoing efforts to implement site neutral payments in the context of section 603 of the Bipartisan Budget Act of 2015. Several commenters indicated their support for additional policies that would equalize payment across freestanding offices and hospital PBDs, both on-campus and off-campus.

Response: We recognize that this is a topic of great interest to many commenters and we welcome the range of perspectives and ideas posed by commenters.

Comment: Some commenters disagreed with our view that the amendments under section 603 of the Bipartisan Budget Act of 2015 were intended to produce site neutral payments between freestanding offices and off-campus PBDs with the goal of removing incentives for hospitals to purchase physician offices. These commenters noted that hospital PBDs face higher costs than freestanding offices, such as those associated with regulatory requirements, and reducing payment to nonexcepted off-campus PBDs threatens the viability of hospitals that serve a vital role in providing services to rural and underserved communities in these off-campus settings. We received several comment letters from Medicare beneficiaries expressing concern about reduced payments to their community's major medical hospital offsite locations. The commenters stated that without the hospital's offsite locations community members would be forced to drive unreasonable distances to seek basic and immediate care.

Response: We understand the commenters' concerns, especially with regard to maintaining access to appropriate care. CMS continues to evaluate data regarding beneficiary access to care to identify possible issues. We also agree that hospitals face additional regulatory and operational costs not generally incurred by physician offices, and that OPDs of a hospital function as an important and integral part of the Medicare care delivery infrastructure. However, many off-campus PBDs are similar to physician's offices and do not necessarily have the same operational costs as the main hospital. We believe that the amendments made to the statute by section 603 of the Bipartisan Budget Act of 2015 were intended to reduce Medicare payment incentives for hospitals to purchase physician offices, convert them to off-campus PBDs, and bill under the OPPS for items and services furnished there.

Comment: Several commenters opposed our inclusion of the proposal related to payment for nonexcepted off-campus PBDs under the CY 2019 PFS rule instead of the CY 2019 OPPS/ASC rule. They suggested that proposals related to the payment rate for nonexcepted items and services furnished in nonexcepted off-campus PBDs are inseparable from proposals and comment solicitations in the OPPS/ASC rule related to service line expansions and other payment policies related to implementation of the amendments under section 603 of the Bipartisan Budget Act of 2015. Some commenters suggested that, for purposes of administrative simplification, the discussion of any changes to site-of-service payments regarding PBDs of a hospital should be fully maintained within a single rule and recommended this be included in the OPPS rule. Some commenters expressed concern that the PFS and OPPS proposed rules were not released at the same time and that this presents challenges for them in reconciling and preparing their comments on each rule.

Response: We appreciate commenters' concerns about responding to two separate rules for policies associated with payment for nonexcepted items and services furnished in nonexcepted off-campus PBDs. However, we note that in finalizing the PFS as the applicable payment system for most nonexcepted items and services, proposals related to the implementation of payment rates under the PFS fall reasonably under the purview of PFS rulemaking, while proposals related to the applicability of those rates are more appropriately addressed in OPPS/ASC rulemaking. We will consider these concerns for future rulemaking.

We believe that our proposal to maintain the PFS Relativity Adjuster at 40 percent for CY 2019 and for future years reflects an analysis that accounts for many of the concerns expressed by commenters regarding the PFS Relativity Adjuster in prior rules. Therefore, we are finalizing the proposal to maintain the PFS Relativity Adjuster at 40 percent for CY 2019 and beyond until there is an appropriate reason and process for implementing an alternative to our current policy, at which time we will make a proposal through notice and comment rulemaking.

5. Policies Related to Supervision, Beneficiary Cost-Sharing, and Geographic Adjustments

In the CY 2018 PFS final rule (81FR 53019 through 53031), we finalized policies related to supervision rules, beneficiary cost sharing, and geographic adjustments. We finalized that supervision rules in nonexcepted off-campus PBDs that furnish nonexcepted items and services are the same as those that apply for hospitals, in general. We also finalized that all beneficiary cost sharing rules that apply under the PFS in accordance with sections 1848(g) and 1866(a)(2)(A) of the Act continue to apply when payment is made under the PFS for nonexcepted items and services furnished by nonexcepted off-campus PBDs, regardless of cost sharing obligations under the OPPS. Lastly, we finalized the policy to apply the same geographic adjustments used under the OPPS to nonexcepted items and services furnished in nonexcepted off-campus PBDs. We are maintaining these policies for CY 2019, as finalized in the CY 2018 PFS final rule.

6. Partial Hospitalization

a. Partial Hospitalization Services

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

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

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

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

In the CY 2018 PFS final rule, we did not require these PHPs to enroll as CMHCs but instead we continued to pay nonexcepted off-campus PBDs providing PHP items and services under the PFS. Further, in that CY 2018 PFS final rule (82 FR 53025 to 53026), we continued to adopt the CMHC per diem rate for APC 5853 as the PFS payment amount for nonexcepted off-campus PBDs providing three or more PHP services per day in CY 2018.

For CY 2019, we proposed to continue to identify the PFS as the applicable payment system for PHP services furnished by nonexcepted off-campus PBDs, and proposed to continue to set the PFS payment rate for these PHP services as the per diem rate that will be paid to a CMHC in CY 2019. We further proposed to maintain these policies for future years until updated data or other considerations indicate that a change to our approach is warranted, which we will then propose through notice and comment rulemaking.

We received no comments on our PHP proposals for CY 2019 and future years, and are finalizing our policies as proposed.

7. Future Years

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

In developing our proposal for CY 2019 as described previously, we incorporated all HCPCS codes that appeared in CY 2017 claims data from nonexcepted off-campus PBDs. We also expanded the number of site specific, technical-equivalent rates for nonexcepted items and services furnished in nonexcepted off-campus PBDs, in order to ensure that Medicare payment to hospitals billing for nonexcepted items and services furnished by nonexcepted off-campus PBDs reflects the relative resources involved in furnishing the items and services. We recognize that for certain specialties, service lines, and nonexcepted off-campus PBDs, total Medicare payments for the same services might be either higher or lower when furnished by a nonexcepted off-campus PBD rather than in a physician office.

We intend to continue to examine the claims data in order to assess whether a different PFS Relativity Adjuster is warranted and also to consider whether additional adjustments to the methodology are appropriate. In particular, we are monitoring claims for shifts in the mix of services furnished in nonexcepted off-campus PBDs that may affect the relativity between the PFS and OPPS. An increase over time in the share of nonexcepted items and services with lower technical-equivalent rates under the PFS compared with APC rates under the OPPS might result in a lower PFS Relativity Adjuster, for example. We will also carefully assess annual payment policy updates to the PFS and OPPS, respectively, to identify changes in overall relativity resulting from any new or modified policies, such as expanded packaging under the OPPS or an increase in the number of HCPCS codes with global periods under the PFS. As part of these ongoing efforts, we are also analyzing PFS claims data to identify patterns of services furnished together on the same day. We anticipate that this will ultimately allow us to make refinements to the PFS Relativity Adjuster to better account for the more extensive packaging of services under the OPPS and the potential underreporting of services that are not separately payable under the OPPS but are paid separately under the PFS.

Another dimension of our ongoing efforts to improve implementation of section 603 of the Bipartisan Budget Act of 2015 is the development and refinement of a new set of payment rates under the PFS that reflect the relative resource costs of furnishing the TC of items and services furnished in nonexcepted off-campus PBDs. Although we believe that our site-specific HCPCS code-level rates reflect the best available estimate of the amount that would have been paid for the service in the office setting under the PFS for practice expenses not associated with the PC of the service, for the majority of HCPCS codes there is no established methodology for separately valuing the resource costs incurred by a provider while furnishing a service from those incurred exclusively by the facility in which the service is furnished. We continue to explore alternatives to our current estimates that would better reflect the TC of services furnished in nonexcepted off-campus PBDs. We are broadly interested in stakeholder feedback and recommendations for ways in which CMS can improve pricing and transparency with regard to the differences in the payment rates across sites of service.

We expect that our continued analyses of claims data and our ongoing exploration of systems changes that are needed to allow nonexcepted off-campus PBDs to bill directly for the TC portion of nonexcepted items and services may lead us to consider a different approach for implementing section 603 of the Bipartisan Budget Act of 2015. On the whole, however, we believe that a PFS Relativity Adjuster for CY 2019 of 40 percent advances efforts to equalize payment rates in the aggregate between physician offices and nonexcepted off-campus PBDs. Maintaining our policy of applying an overall scaling factor to OPPS payments allows hospitals to continue billing through a facility claim form and permits continued use of the packaging rules and cost report-based relative payment rate determinations for nonexcepted services.

H. Valuation of Specific Codes

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

Establishing valuations for newly created and revised CPT codes is a routine part of maintaining the PFS. Since the inception of the PFS, it has also been a priority to revalue services regularly to make sure that the payment rates reflect the changing trends in the practice of medicine and current prices for inputs used in the PE calculations. Initially, this was accomplished primarily through the 5-year review process, which resulted in revised work RVUs for CY 1997, CY 2002, CY 2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY 2011, and revised MP RVUs in CY 2010 and CY 2015. Under the 5-year review process, revisions in RVUs were proposed and finalized via rulemaking. In addition to the 5-year reviews, beginning with CY 2009, CMS and the RUC identified a number of potentially misvalued codes each year using various identification screens, as discussed in section II.E. of this final rule, Potentially Misvalued Services under the PFS. Historically, when we received RUC recommendations, our process had been to establish interim final RVUs for the potentially misvalued codes, new codes, and any other codes for which there were coding changes in the final rule with comment period for a year. Then, during the 60-day period following the publication of the final rule with comment period, we accepted public comment about those valuations. For services furnished during the calendar year following the publication of interim final rates, we paid for services based upon the interim final values established in the final rule. In the final rule with comment period for the subsequent year, we considered and responded to public comments received on the interim final values, and typically made any appropriate adjustments and finalized those values.

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

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

For CY 2018, we generally proposed the RUC-recommended work RVUs for new, revised, and potentially misvalued codes. We proposed these values based on our understanding that the RUC generally considers the kinds of concerns we historically raised regarding appropriate valuation of work RVUs. However, during our review of these recommended values, we identified some concerns similar to those we recognized in prior years. Given the relative nature of the PFS and our obligation to ensure that the RVUs reflect relative resource use, we included descriptions of potential alternative approaches we might have taken in developing work RVUs that differed from the RUC-recommended values. We sought comment on both the RUC-recommended values, as well as the alternatives considered. Several commenters generally supported the proposed use of the RUC-recommended work RVUs, without refinement. Other commenters expressed concern about the effect of the misvalued code reviews on particular specialties and settings and disappointment with our proposed approach for valuing codes for CY 2018. A detailed summary of the comments and our responses can be found in the CY 2018 PFS final rule (82 FR 53033-53035).

We clarified in response to commenters that we are not relinquishing our obligation to independently establish appropriate RVUs for services paid under the PFS. We will continue to thoroughly review and consider information we receive from the RUC, the Health Care Professionals Advisory Committee (HCPAC), public commenters, medical literature, Medicare claims data, comparative databases, comparison with other codes within the PFS, as well as consultation with other physicians and healthcare professionals within CMS and the federal government as part of our process for establishing valuations. Although generally proposing the RUC-recommended work RVUs for new, revised, and potentially misvalued codes was our approach for CY 2018, we note that we also included alternative values where we believed there was a possible opportunity for increased precision. We also clarified that as part of our obligation to establish RVUs for the PFS, we annually make an independent assessment of the available recommendations, supporting documentation, and other available information from the RUC and other commenters to determine the appropriate valuations. Where we concur that the RUC's recommendations, or recommendations from other commenters, are reasonable and appropriate and are consistent with the time and intensity paradigm of physician work, we propose those values as recommended. Additionally, we will continue to engage with stakeholders, including the RUC, with regard to our approach for accurately valuing codes, and as we prioritize our obligation to value new, revised, and potentially misvalued codes. We continue to welcome feedback from all interested parties regarding valuation of services for consideration through our rulemaking process.

2. Methodology for Establishing Work RVUs

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

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

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

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

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

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

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

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

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

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

Several stakeholders, including the RUC, have expressed general objections to our use of these methodologies and deemed our actions in adjusting the recommended work RVUs as inappropriate; other stakeholders have also expressed general concerns with CMS refinements to RUC recommended values in general. In the CY 2017 PFS final rule (81 FR 80272 through 80277) we responded in detail to several comments that we received regarding this issue. In the CY 2017 PFS proposed rule, we requested comments regarding potential alternatives to making adjustments that would recognize overall estimates of work in the context of changes in the resource of time for particular services; however, we did not receive any specific potential alternatives. As described earlier in this section, crosswalks to key reference or similar codes is one of the many methodological approaches we have employed to identify potential values that reconcile the RUC-recommend work RVUs with the recommended time values when the RUC-recommended work RVUs did not appear to account for significant changes in time.

Following the publication of the CY 2019 PFS proposed rule, we received several comments noting that there was some confusion in the terminology between “reference services” and “crosswalks.” Commenters stated that “reference services” are services indicated by the specialty society or the RUC as a good comparator that demonstrates relativity using magnitude estimation as requiring similar physician work, time, intensity and complexity. “Key reference services” are the top two services selected by the survey respondents as most similar to the code being surveyed. By contrast, “crosswalks” are services that have similar or exact intraservice time and require the same physician work (that is, have the same work RVU), and the term “crosswalk” should only be used when making a comparison to a CPT code with the identical work RVU. The commenters noted that these terms were used interchangeably in the proposed rule when they have distinct and separate meanings.

In response to the commenters, we would like to clarify that the terms “reference services”, “key reference services”, and “crosswalks” as described by the commenters are part of the RUC's process for code valuation. These are not terms that we created, and we do not agree that we necessarily must employ them in the identical fashion for the purposes of discussing our valuation of individual services that come up for review. However, in the interest of minimizing confusion and providing clear language to facilitate stakeholder feedback, we will seek to limit the use of the term, “crosswalk,” to those cases where we are making a comparison to a CPT code with the identical work RVU.

We look forward to continuing to engage with stakeholders and commenters, including the RUC, as we prioritize our obligation to value new, revised, and potentially misvalued codes; and will continue to welcome feedback from all interested parties regarding valuation of services for consideration through our rulemaking process. We refer readers to the detailed discussion in this section of the final valuation considered for specific codes. Table 13 contains a list of codes for which we are finalizing work RVUs; this includes all codes for which we received RUC recommendations by February 10, 2018. The finalized work RVUs, work time and other payment information for all CY 2019 payable codes are available on the CMS website under downloads for the CY 2019 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html). Table 13 also contains the CPT code descriptors for all new, revised, and potentially misvalued codes discussed in this section.

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

a. Background

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

Our review and refinement of RUC-recommended direct PE inputs includes many refinements that are common across codes, as well as refinements that are specific to particular services. Table 14 details our refinements of the RUC's direct PE recommendations at the code-specific level. In this final rule, we address several refinements that are common across codes, and refinements to particular codes are addressed in the portions of this section that are dedicated to particular codes. We note that for each refinement, we indicate the impact on direct costs for that service. We note that, on average, in any case where the impact on the direct cost for a particular refinement is $0.30 or less, the refinement has no impact on the PE RVUs. This calculation considers both the impact on the direct portion of the PE RVU, as well as the impact on the indirect allocator for the average service. We also note that nearly half of the refinements listed in Table 14 result in changes under the $0.30 threshold and are unlikely to result in a change to the RVUs.

We also note that the finalized direct PE inputs for CY 2019 are displayed in the CY 2019 direct PE input database, available on the CMS website under the 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 inputs displayed there have been used in developing the final CY 2019 PE RVUs as displayed in Addendum B.

b. Common Refinements

(1) Changes in Work Time

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

(2) Equipment Time

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

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

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

(3) Standard Tasks and Minutes for Clinical Labor Tasks

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

We refer readers to section II.B. of this final rule, Determination of Practice Expense Relative Value Units (PE RVUs), for more information regarding the collaborative work of CMS and the RUC in improvements in standardizing clinical labor tasks.

(4) Recommended Items That Are Not Direct PE Inputs

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

(5) New Supply and Equipment Items

The RUC generally recommends the use of supply and equipment items that already exist in the direct PE input database for new, revised, and potentially misvalued codes. Some recommendations, however, include supply or equipment items that are not currently in the direct PE input database. In these cases, the RUC has historically recommended that a new item be created and has facilitated our pricing of that item by working with the specialty societies to provide us copies of sales invoices. For CY 2019, we received invoices for several new supply and equipment items. Tables 14 and 15 detail the invoices received for new and existing items in the direct PE database. As discussed in section II.B. of this final rule, we encouraged stakeholders to review the prices associated with these new and existing items to determine whether these prices appear to be accurate. Where prices appear inaccurate, we encouraged stakeholders to submit invoices or other information to improve the accuracy of pricing for these items in the direct PE database by February 10th of the following year for consideration in future rulemaking, similar to our process for consideration of RUC recommendations.

We remind stakeholders that due to the relativity inherent in the development of RVUs, reductions in existing prices for any items in the direct PE database increase the pool of direct PE RVUs available to all other PFS services. Tables 14 and 15 also include the number of invoices received and the number of nonfacility allowed services for procedures that use these equipment items. We provide the nonfacility allowed services so that stakeholders will note the impact the particular price might have on PE relativity, as well as to identify items that are used frequently, since we believe that stakeholders are more likely to have better pricing information for items used more frequently. A single invoice may not be reflective of typical costs and we encourage stakeholders to provide additional invoices so that we might identify and use accurate prices in the development of PE RVUs.

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

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

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

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

We note that the public use files for the PFS proposed and final rules for each year display the services subject to the MPPR lists on diagnostic cardiovascular services, diagnostic imaging services, diagnostic ophthalmology services, and therapy services. We also include a list of procedures that meet the definition of imaging under section 1848(b)(4)(B) of the Act, and therefore, are subject to the OPPS cap for the upcoming calendar year. The public use files for CY 2019 are available 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. For more information regarding the history of the MPPR policy, we refer readers to the CY 2014 PFS final rule with comment period (78 FR 74261-74263). For more information regarding the history of the OPPS cap, we refer readers to the CY 2007 PFS final rule with comment period (71 FR 69659-69662).

4. Valuation of Specific Codes for CY 2019

(1) Fine Needle Aspiration (CPT Codes 10021, 10004, 10005, 10006, 10007, 10008, 10009, 10010, 10011, 10012, 76492, 77002 and 77021)

CPT code 10021 was identified as part of the OPPS cap payment proposal in CY 2014 (78 FR 74246-74248), and it was reviewed by the RUC for direct PE inputs only as part of the CY 2016 rule cycle. Afterwards, CPT codes 10021 and 10022 were referred to the CPT Editorial Panel to consider adding additional clarifying language to the code descriptors and to include bundled imaging guidance due to the fact that imaging had become typical with these services. In June 2017, the CPT Editorial Panel deleted CPT code 10022, revised CPT code 10021, and created nine new codes to describe fine needle aspiration procedures with and without imaging guidance. These ten codes were surveyed and reviewed for the October 2017 and January 2018 RUC meetings. Several imaging services were also reviewed along with the rest of the code family, although only CPT code 77021 was subject to a new survey.

For CY 2019, we proposed the RUC-recommended work RVU for seven of the ten codes in this family. Specifically, we proposed a work RVU of 0.80 for CPT code 10004 (Fine needle aspiration biopsy; without imaging guidance; each additional lesion), a work RVU of 1.00 for CPT code 10006 (Fine needle aspiration biopsy, including ultrasound guidance; each additional lesion), a work RVU of 1.81 for CPT code 10007 (Fine needle aspiration biopsy, including fluoroscopic guidance; first lesion), a work RVU of 1.18 for CPT code 10008 (Fine needle aspiration biopsy, including fluoroscopic guidance; each additional lesion), and a work RVU of 1.65 for CPT code 10010 (Fine needle aspiration biopsy, including CT guidance; each additional lesion). We also proposed to assign the recommended contractor-priced status to CPT codes 10011 (Fine needle aspiration biopsy, including MR guidance; first lesion) and 10012 (Fine needle aspiration biopsy, including MR guidance; each additional lesion) due to low utilization until these services are more widely utilized. In addition, we proposed the recommended work RVU of 1.50 for CPT code 77021 (Magnetic resonance guidance for needle placement (e.g., for biopsy, fine needle aspiration biopsy, injection, or placement of localization device) radiological supervision and interpretation), as well as proposed to reaffirm the current work RVUs of 0.67 for CPT code 76942 (Ultrasonic guidance for needle placement (e.g., biopsy, fine needle aspiration biopsy, injection, localization device), imaging supervision and interpretation) and 0.54 for 77002 (Fluoroscopic guidance for needle placement (e.g., biopsy, fine needle aspiration biopsy, injection, localization device)).

We disagreed with the RUC-recommended work RVU of 1.20 for CPT code 10021 (Fine needle aspiration biopsy; without imaging guidance; first lesion) and proposed a work RVU of 1.03 based on a direct crosswalk to CPT code 36440 (Push transfusion, blood, 2 years or younger). CPT code 36440 is a recently reviewed code with the same intraservice time of 15 minutes and 2 additional minutes of total time. In reviewing CPT code 10021, we noted that the recommended intraservice time is decreasing from 17 minutes to 15 minutes (12 percent reduction), and the recommended total time is decreasing from 48 minutes to 33 minutes (32 percent reduction); however, the RUC-recommended work RVU is only decreasing from 1.27 to 1.20, which is a reduction of just over 5 percent. Although we did not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be appropriately reflected in decreases to work RVUs. In the case of CPT code 10021, we believed that it was more accurate to propose a work RVU of 1.03 based on a crosswalk to CPT code 36440 to account for these decreases in the surveyed work time.

We disagreed with the RUC-recommended work RVU of 1.63 for CPT code 10005 (Fine needle aspiration biopsy, including ultrasound guidance; first lesion) and proposed a work RVU of 1.46. Although we disagreed with the RUC-recommended work RVU, we concurred that the relative difference in work between CPT codes 10021 and 10005 is equivalent to the recommended interval of 0.43 RVUs. Therefore, we proposed a work RVU of 1.46 for CPT code 10005, based on the recommended interval of 0.43 additional RVUs above our proposed work RVU of 1.03 for CPT code 10021. The proposed increment of 0.43 RVUs above CPT code 10021 was also based on the use of two crosswalk codes: CPT code 99225 (Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of 3 key components); and CPT code 99232 (Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of 3 key components). Both of these codes have the same intraservice time and 1 additional minute of total time as compared with CPT code 10005, and both crosswalk codes share a work RVU of 1.39.

We disagreed with the RUC-recommended work RVU of 2.43 for CPT code 10009 (Fine needle aspiration biopsy, including CT guidance; first lesion) and we proposed a work RVU of 2.26. Although we disagreed with the RUC-recommended work RVU, we concurred that the relative difference in work between CPT codes 10021 and 10009 is equivalent to the recommended interval of 1.23 RVUs. Therefore, we proposed a work RVU of 2.26 for CPT code 10009, based on the recommended interval of 1.23 additional RVUs above our proposed work RVU of 1.03 for CPT code 10021. The proposed use of the recommended increment from CPT code 10021 was also based on the use of a crosswalk to CPT code 74263 (Computed tomographic (CT) colonography, screening, including image postprocessing), another CT procedure with 38 minutes of intraservice time and 50 minutes of total time at a work RVU of 2.28.

We noted that the recommended work pool is increasing by approximately 20 percent for the Fine Needle Aspiration family as a whole, while the recommended work time pool for the same codes is only increasing by about 2 percent. Since time is defined as one of the two components of work, we believed that this indicated a discrepancy in the recommended work values. We do not believe that the recoding of the services in this family has resulted in an increase in their intensity, only a change in the way in which they will be reported, and therefore, we do not believe that it would serve the interests of relativity to propose the recommended work values for all of the codes in this family. We believe that, generally speaking, the recoding of a family of services should maintain the same total work pool, as the services themselves are not changing, only the coding structure under which they are being reported. We also noted that through the bundling of some of these frequently reported services, it is reasonable to expect that the new coding system will achieve savings via elimination of duplicative assumptions of the resources involved in furnishing particular servicers. For example, a practitioner will not be carrying out the full preservice work twice for CPT codes 10022 and 76942, but preservice times were assigned to both of the codes under the old coding. We believe the new coding assigns more accurate work times and thus reflects efficiencies in resource costs that existed regardless of how the services were previously reported.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare room, equipment and supplies” (CA013) activity to 3 minutes and to refine the clinical labor time for the “Confirm order, protocol exam” (CA014) activity to 0 minutes for CPT code 77021. This code did not previously have clinical labor time assigned for the “Confirm order, protocol exam” clinical labor task, and we do not have any reason to believe that the services being furnished by the clinical staff have changed, only the way in which this clinical labor time has been presented on the PE worksheets. We also noted that there is no effect on the total clinical labor direct costs in these situations, since the same 3 minutes of clinical labor time is still being furnished. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the Fine Needle Aspiration family of codes.

Comment: Several commenters disagreed with the CMS statement in the proposed rule that the RUC-recommended work pool was increasing by approximately 20 percent for this family of codes. Commenters stated that the work pool based on the RUC-recommended values would actually decrease by 15 percent and that the CMS work valuations were based on a flawed methodology that did not account for the associated savings with bundling the image guidance codes. One of the commenters supplied a table with data to support the claim that the work pool based on the RUC-recommended values would decrease by 15 percent rather than increasing by 20 percent.

Response: We disagree with the commenters that the work pool would decrease by 15 percent if we were to finalize the RUC recommendations. We investigated the data in the table submitted by the commenters, and we believe that there are several methodological flaws in the analysis it contains. First, there are a number of 0.00 work RVUs listed in the “RUC Recommended RVUs” column for the new codes, which results in an incorrect amount of “New/Rev Total RVUs” when multiplied by the utilization for the new codes. As an example, CPT code 10005 has approximately 135,000 services that are counted as having a work RVU of 0.00 in this table instead of the RUC-recommended work RVU of 1.63, which undercounts the total number of RVUs by a wide margin. Second, the values in the “Total Source RVUs” include the ratios from the utilization crosswalk (listed on the table as “Percent”). We do not understand why these ratios would be used to calculate the total source RVUs, as this side of the work pool comparison is calculated from the utilization of the source codes times the work RVUs of the source codes. Third, the imaging guidance codes are not fully included in both sides of the comparison on this table, with their work RVUs included in the source RVU total but not in the new/revised RVU total. This uneven comparison results in an inaccurate tally of the work pools from before and after the coding revisions take place.

In the interest of providing transparency, we are including Table 12 with our work pool comparison for the Fine Needle Aspiration code family.

We continue to believe that the RUC-recommended work pool is increasing by approximately 20 percent for the Fine Needle Aspiration family as a whole, and that this percentage increase suggests that CPT codes 10021, 10005, and 10009 are more accurately valued at the CMS proposed work RVUs.

Comment: Several commenters disagreed that this code family will achieve savings via elimination of duplicative assumptions of the resources involved in furnishing particular services. Commenters stated that there is no overlap between the current descriptions of work for the bundled codes, and that CPT code 10022 is never performed on the same patient without an image guidance code and the image guidance codes are never performed on the same patient without a corresponding procedure code. The commenters stated that any associated reduction in payment would be due to other factors, not due to the code bundling.

Response: We disagree with the commenters that there would be no savings achieved via elimination of duplicative assumptions of the resources involved in furnishing particular services. As we stated in the proposed rule, a practitioner will not be carrying out the full preservice work twice for CPT codes 10022 and 76942, but preservice times were assigned to both of the codes under the old coding. In similar fashion, these codes both separately include immediate postservice work time for dictating a report in their clinical vignettes. This is an example of how savings are achieved via elimination of duplicative assumptions of resources, as the practitioner will only dictate a single report in the newly created CPT code 10005 that bundles these two services together. We continue to believe that the new coding assigns more accurate work times and thus reflects efficiencies in resource costs that existed regardless of how the services were previously reported.

Comment: One commenter stated that while it may be true mathematically that the work pool for this family of codes was increasing by 20 percent, using this observation as the sole basis to implement work value relies on incorrect assumptions which do not adhere to current relativity-based RUC methodologies. The commenter stated that the rationale proposed by CMS incorrectly implies that the decrease in time as reflected in survey values must equate to a one to one or linear decrease in the valuation of work RVUs and fails to recognize changes in intensity that have taken place over time.

Response: We disagree with the commenter that our analysis of changes in the work pool for this family of codes was the sole basis for the proposed refinements to the work RVUs. While this was an important factor in our analysis of the work valuation of individual codes, we also detailed in the proposed rule our use of time ratios, increments, and crosswalk codes as part of our larger methodology to determine work RVUs. We specifically stated that we did not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, but rather that we believe that since the two components of work are time and intensity, significant decreases in time should be appropriately reflected in decreases to work RVUs. We do consider changes in intensity that have taken place over time as part of our analysis of work valuation, as demonstrated by the fact that we proposed the RUC-recommended work RVUs for seven of the ten codes in this family.

Comment: One commenter disagreed that the work pool for a family of revised codes should be similar before and after the valuation of the new codes. The commenter stated that by separating different modalities into their own codes, the appropriate time and intensity differences for these services were more accurately reflected in the recommended RVUs, and the work pool appropriately expanded to reflect these differences. The commenter cited the example of CPT code 10022 being unable to account for different patients receiving a biopsy using ultrasound or CT technology.

Response: We agree with the commenter that the work pool for a revised code family does not always need to be similar before and after the valuation of the new codes. However, the commenter did not address our rationale for why we believe that an increase in the work pool would be inaccurate for this particular family of codes, which was based on the observation that the RUC-recommended work pool was increasing by approximately 20 percent while the RUC-recommended work time pool for the same codes was only increasing by about 2 percent. In a situation where prior coding was unable to account for newer and more complex forms of treatment, we would expect the work time pool to expand alongside the work pool, since these more complex and intensive procedures would take more time to furnish.

Comment: A few commenters stated that since CMS changed the multiple procedure indicator from “0” to “2” for all Fine Needle Aspiration biopsy initial lesion codes for CY 2019, the commenter believes that using XXX global codes as references was incorrect. The commenter instead recommended that CMS review similar minor procedures that have a 0-day global designation, which suggested that a higher work RVU could have been supported.

Response: We continue to believe that codes should generally be compared to codes with the same global period. Codes with a 0-day global period bundle other services that take place on the same day as the procedure into the valuation of the code, whereas such bundling is not included in codes with an XXX global period. 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.

Comment: Many commenters disagreed with the proposed work RVU of 1.03 for CPT code 10021 and stated that CMS should finalize the RUC-recommended work RVU of 1.20. Commenters stated that this service has a new coding structure as compared to the past, and that the prior review was last carried out in 1995 when physician work time was evaluated with much less rigor. Commenters stated that the old time values were also based on a crosswalk and not a survey, and that therefore the drop in work time did not warrant a proportional change in work RVU as the previous times were inaccurate.

Response: 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 also 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. However, we want to reiterate that we believe it would be irresponsible to ignore changes in time based on the best data available and that we are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. For additional information regarding the use of prior work time values in our methodology, we refer readers to our discussion of the subject in the CY 2017 PFS final rule (81 FR 80273 through 80274).

Comment: Several commenters stated the CMS rationale for the proposed work RVU for CPT code 10021 incorrectly implies that the decreased time reflected in survey values should have a one-to-one decrease in value, or a linear decrease in the valuation of work RVUs. Commenters stated that CMS incorrectly assumed that there are no differences in how work was valued in 1995 and how it is valued now.

Response: We do not agree with the commenters' characterization of our statements, and believe it misinterprets our view on this matter. We specifically stated in the CY 2019 PFS proposed rule that we were not implying that the decrease in time as reflected in survey values must necessarily equate to a one-to-one or linear decrease in the valuation of work RVUs, both generally speaking and with regards to this particular CPT code (83 FR 35747). We recognize that intensity for any given procedure may change over several years or within the intraservice period. Nevertheless, since the two components of work are time and intensity, we believe that absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure has specifically increased or the reduction in time occurs disproportionally in the less-intensive portions of the procedure, significant decreases in time should generally be reflected as decreases to work RVUs.

Comment: Several commenters disagreed with the use of CPT code 36440 as a crosswalk for the work RVU of CPT code 10021. Commenters stated that there were differences in site of service, patient population, and utilization between these two codes, which made CPT code 36440 a poor choice to use for work valuation. One commenter stated that CPT code 36440 is used to report a push transfusion of blood through an already established access in a vessel, and does not carry the same risk and intensity as CPT code 10021, which involves accessing a lesion in the neck multiple times to aspirate biopsy specimens. Commenters supplied a chart depicting several comparator codes for 10021 that they stated were more appropriate choices for a crosswalk.

Response: We disagree with the commenters that CPT code 36440 is an inappropriate choice for a crosswalk code. While it is true that this code is typically performed on an inpatient basis and the patient population comprises neonates instead of adults, we note that these factors suggest that the patient population for CPT code 36440 is likely sicker and more complex than the patient population for CPT code 10021. These differences would, if anything, be grounds for a lower work RVU for CPT code 10021, not a higher work RVU. We continue to believe that CPT code 36440 is an appropriate choice for a crosswalk due to the highly similar work times and intensity as compared to CPT code 10021. As for the other comparator codes provided by the commenters, we do not agree that they would be more appropriate choices for a crosswalk as we believe that they have a higher intensity than the service described by CPT code 10021. In more general terms, we continue to believe that the nature of the PFS relative value system necessarily involves comparisons of all services to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk.

Comment: Many commenters disagreed with the proposed work RVU of 1.46 for CPT code 10005 and stated that CMS should finalize the RUC-recommended work RVU of 1.63. Commenters stated that CMS should use valid methods of evaluating services, such as survey data and magnitude estimation, instead of relying on an incremental difference in work RVUs between CPT codes 10021 and 10005.

Response: We believe the use of an incremental difference between codes is a valid methodology for setting values, especially in valuing services within a family of revised codes where it is important to maintain appropriate intra-family relativity. Historically, we have frequently utilized an incremental methodology in which we value a code based upon its incremental difference between another code or another family of codes. We note that the RUC has also used the same incremental methodology on occasion when it was unable to produce valid survey data for a service. We further note that we did not rely solely on an increment for our proposed work RVU for CPT code 10005, supporting our proposed valuation with the use of two reference codes: CPT codes 99225 and 99232. Both of these codes have the same intraservice time and 1 additional minute of total time as compared with CPT code 10005, and both reference codes share a work RVU of 1.39.

Comment: One commenter stated that they did not object to the CMS designation of 0.43 RVUs as the increment over CPT code 10021 for adding ultrasound guidance; however, the commenter objected to the assumption that the work value for CPT code 36440 offers an acceptable baseline.

Response: We continue to believe that a crosswalk to the work RVU of CPT code 36440 produces the most accurate valuation for baseline CPT code 10021.

Comment: Commenters disagreed with the proposed work RVU of 2.26 for CPT code 10009 and stated that CMS should finalize the RUC-recommended work RVU of 2.43. Commenters provided similar comments for CPT code 10009 as they provided for CPT code 10005, suggesting that the use of an incremental methodology was inaccurate and that CMS should use more valid methods of evaluating services, such as survey data and magnitude estimation.

Response: We continue to disagree with the commenters that the use of an increment is a less valid methodology for valuing services. As detailed in the response to the comment summary above for CPT code 10005, we believe the use of an incremental difference is appropriate, especially in valuing services within a family of revised codes where it is important to maintain appropriate intra-family relativity. We further note that we did not rely solely on an increment for our proposed work RVU for CPT code 10009, supporting our proposed valuation with the use of a reference to CPT code 74263.

Comment: A commenter stated that in the CMS refinements to the direct PE inputs for CPT codes 77012 and 77021, CMS proposed to remove 1 minute from the CA014 activity code and proposed to add 1 minute to the CA013 activity code. The commenter stated that this refinement was inaccurate and encouraged CMS to modify this proposal by finalizing the RUC-recommended direct PE inputs for clinical labor.

Response: We address this subject in detail in the PE section of this final rule under the Changes to Direct PE Inputs for Specific Services heading (section II.B.3. of this final rule). For CPT codes 77012 and 77021, we are finalizing these clinical labor refinements as proposed.

After consideration of the public comments, we are finalizing the work RVUs and direct PE inputs for all of the codes in the Fine Needle Aspiration family as proposed.

(2) Biopsy of Nail (CPT Code 11755)

CPT code 11755 (Biopsy of nail unit (e.g., plate, bed, matrix, hyponychium, proximal and lateral nail folds) (separate procedure)) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. For CY 2019, the HCPAC recommended a work RVU of 1.25 based on the survey median value.

We disagreed with the recommended value and proposed a work RVU of 1.08 for CPT code 11755 based on the survey 25th percentile value. We noted that the recommended intraservice time for CPT code 11755 is decreasing from 25 minutes to 15 minutes (40 percent reduction), and the recommended total time for CPT code 11755 is decreasing from 55 minutes to 39 minutes (29 percent reduction); however, the recommended work RVU is only decreasing from 1.31 to 1.25, which is a reduction of less than 5 percent. Although we did not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs. In the case of CPT code 11755, we believed that it would be more accurate to propose the survey 25th percentile work RVU than the survey median to account for these decreases in the surveyed work time.

The proposed work RVU of 1.08 is also based on a crosswalk to CPT code 11042 (Debridement, subcutaneous tissue (includes epidermis and dermis, if performed); first 20 sq cm or less), which has a work RVU of 1.01, the same intraservice time of 15 minutes, and a similar total time of 36 minutes. We also noted that, generally speaking, working with extremities like nails tends to be less intensive in clinical terms than other services, especially as compared to surgical procedures. We believe that this further supports our proposal of a work RVU of 1.08 for CPT code 11755.

We proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 11755.

Comment: A few commenters stated that section 1848(c)(7) of the Act, as amended by section 220(e) of the Protecting Access to Medicare Act of 2014 (PAMA), specifies that for services that are not described by new and revised codes, if the total RVU for a service would be decreased by 20 percent or more as compared to the total RVUs for the previous year, the applicable adjustments must be phased in over a 2-year period. These commenters stated that, according to this requirement, CPT code 11755 should be subject to the phase-in for CY 2019.

Response: We agree that CPT code 11755 should be subject to the phase-in for CY 2019. Due to a technical error, we inadvertently neglected to apply the phase-in to the total RVU of this code in the facility setting for the proposed rule, and we are correcting this for the final rule.

Comment: Many commenters disagreed with the proposed work RVU of 1.08 for CPT code 11755 and stated that CMS should finalize the RUC-recommended work RVU of 1.25. Commenters urged CMS to view the survey and the HCPAC's recommendation for the survey median work value of 1.25 apart from the current work time and work RVU because the primary specialty that currently performs the service was not included in the prior survey conducted in 1993.

Response: We disagree with the commenters that the current work time and work RVU for CPT code 11755 should be viewed separately from the new recommended values. We do not pay differentially for services on the basis of specialty, and a change in the dominant specialty since the time of the last survey is not a reason to disregard the current work time and work RVUs in developing proposed work RVUs.

Comment: Commenters compared the proposed work RVU of CPT code 11755 to the work valuation of the top key reference service, CPT code 11730 (Avulsion of nail plate, partial or complete, simple; single). Commenters stated that the increment of work between CPT code 11730 of 1.05 and the CMS proposed value for CPT code 11755 of 1.08 was only 0.03 RVUs, which was not enough to account for the additional work involved in CPT code 11755 given that the latter code also had 50 percent more intraservice time. Commenters also expressed concerns with the CMS reference to CPT code 11042 at a work RVU of 1.01, stating that it required less physician work time and a less refined technique. Commenters stated that the service described by CPT code 11755 was more intense to perform because the physician has to be extremely careful not to accidentally hit the patient's bone while taking the biopsy. Commenters stated that the nail plate is typically difficult to remove during the process of the biopsy performed in the service described by CPT code 11755, and that the biopsy must be performed with extreme care to avoid injury to the surgeon or extension of the incision to the underlying bone, which carries the potential for an osteomyelitis and significant post-operative pain. Commenters again urged CMS to finalize the RUC-recommended values for this code.

Response: After reviewing the additional information about the risks inherent in the service provided by the commenters, we agree that it would be more accurate to finalize the RUC-recommended work RVU of 1.25 for CPT code 11755 to reflect the intensity of the procedure.

Comment: One commenter stated that CMS did not indicate what amount of service period time was removed from the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the basic instrument pack (EQ137) equipment, we removed the clinical labor for the CA024, CA027, CA029, and CA035 clinical labor activities in accordance with our standard equipment time formula for surgical instrument packs. For the other three equipment items, we removed the clinical labor for the CA027 and CA035 clinical labor activity codes in accordance with our standard equipment time formula for non-highly technical equipment.

After consideration of the public comments, we are finalizing the RUC-recommended work RVU of 1.25 for CPT code 11755. We are finalizing the direct PE inputs for this code as proposed.

(3) Skin Biopsy (CPT Codes 11102, 11103, 11104, 11105, 11106, and 11107)

In CY 2016, CPT codes 11100 (Biopsy of skin, subcutaneous tissue and/or mucous membrane (including simple closure), unless otherwise listed; single lesion) and 11101 (Biopsy of skin, subcutaneous tissue and/or mucous membrane (including simple closure), unless otherwise listed; each separate/additional lesion) were identified as potentially misvalued using a high expenditure services screen across specialties with Medicare allowed charges of $10 million or more. Prior to the January 2016 RUC meeting, the specialty society notified the RUC that its survey data displayed a bimodal distribution of responses with more outliers than usual. The RUC referred CPT codes 11100 and 11101 to the CPT Editorial Panel. In February 2017, the CPT Editorial Panel deleted these two codes and created six new codes for primary and additional biopsy based on the thickness of the sample and the technique utilized.

For CY 2019, we proposed the RUC-recommended work RVUs for five of the six codes in the family. We proposed a work RVU of 0.66 for CPT code 11102 (Tangential biopsy of skin, (e.g., shave, scoop, saucerize, curette), single lesion), a work RVU of 0.83 for CPT code 11104 (Punch biopsy of skin, (including simple closure when performed), single lesion), a work RVU of 0.45 for CPT code 11105 (Punch biopsy of skin, (including simple closure when performed), each separate/additional lesion), a work RVU of 1.01 for CPT code 11106 (Incisional biopsy of skin (e.g., wedge), (including simple closure when performed), single lesion), and a work RVU of 0.54 for CPT code 11107 (Incisional biopsy of skin (e.g., wedge), (including simple closure when performed), each separate/additional lesion).

For CPT code 11103 (Tangential biopsy of skin, (e.g., shave, scoop, saucerize, curette), each separate/additional lesion), we disagreed with the RUC-recommended work RVU of 0.38 and proposed a work RVU of 0.29. When we compared the RUC-recommended work RVU of 0.38 to other add-on codes in the RUC database, we found that CPT code 11103 would have the second-highest work RVU for any code with 7 minutes or less of total time, with the recommended work RVU noticeably higher than other related add-on codes, and we did not agree that the tangential biopsy service being performed should have an anomalously high work value in comparison to other similar add-on codes. Our proposed work RVU of 0.29 was based on a crosswalk to CPT code 11201 (Removal of skin tags, multiple fibrocutaneous tags, any area; each additional 10 lesions, or part thereof), a clinically related add-on procedure with 5 minutes of intraservice and total time as opposed to the surveyed 6 minutes for CPT code 11103. We also noted that the intraservice time ratio between CPT code 11103 and the recommended reference code, CPT code 11732 (Avulsion of nail plate, partial or complete, simple; each additional nail plate), was 75 percent (6 minutes divided by 8 minutes). This 75 percent ratio when applied to the work RVU of CPT code 11732 also produced a work RVU of 0.29 (0.38 * 0.75 = 0.29). Finally, we also supported the proposed work RVU through a crosswalk to CPT code 33508 (Endoscopy, surgical, including video-assisted harvest of vein(s) for coronary artery bypass procedure), which has a higher intraservice time of 10 minutes but a similar work RVU of 0.31. We believed that our proposed work RVU of 0.29 for CPT code 11103 better serves the interests of relativity, as well as better fitting with the other recommended work RVUs within this family of codes.

For the direct PE inputs, we proposed to remove the 2 minutes of clinical labor time for the “Review home care instructions, coordinate visits/prescriptions” (CA035) activity for CPT codes 11102, 11104, and 11106. These codes are typically billed with a same day E/M service, and we believe that it would be duplicative to assign clinical labor time for reviewing home care instructions given that this task would typically be done during the same day E/M service. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

We proposed to refine the quantity of the “gown, staff, impervious” (SB024) and the “mask, surgical, with face shield” (SB034) supplies from 2 to 1 for CPT codes 11102, 11104, and 11106. We proposed to remove one gown and one surgical mask from these codes as duplicative since these supplies are also included within the surgical instrument cleaning pack (SA043). We also proposed to remove all of the supplies in the three add-on procedures (CPT codes 11103, 11105, and 11107) that were not contained in the previous add-on procedure for this family, CPT code 11101. We do not believe that the use of these supplies would be typical for the “each additional lesion” add-on codes, as these supplies are all included in the base codes and are not currently utilized in CPT code 11101. We noted that the recommended direct PE costs for the three new add-on codes represent an increase of approximately 500 percent from the direct PE costs for CPT code 11101, and believe that this is largely due to the addition of these new supplies.

The following is a summary of the public comments we received on our proposals involving the Skin Biopsy family of codes.

Comment: Many commenters disagreed with the proposed work RVU of 0.29 for CPT code 11103 and stated that CMS should finalize the RUC-recommended work RVU of 0.38. Commenters disagreed that CPT code 11103 would have the second-highest work RVU for any code with 7 minutes or less of total time, stating that the total number of add-on codes with RUC total time of 7 minutes or less is 18. Commenters stated that only five of these services have total time of 6 or 7 minutes and the rest were lower, thus the majority of the work RVUs among these services were lower and not comparable. Commenters stressed that the RUC-recommended work RVU of 0.38 for CPT code 11103 was appropriate since the service is performed on a separate site than the base code and there is additional physician work to transition to a different site. Commenters stated that the RUC's direct crosswalk to CPT code 11732 (Avulsion of nail plate, partial or complete, simple; each additional nail plate), which describes procedures with significant physician effort in removing a nail plate with its anesthesia and hemostasis challenges, was a much better comparator to CPT code 11103 which involves the biopsy of a vascular tumor, typically on the face. Commenters stated that the proposed crosswalk to CPT code 11201 at a work RVU of 0.29 was too low to maintain relativity within the family of codes. One commenter stated that the type of skin biopsies performed in CPT code 11103 can result in the detection of carcinoma, melanoma, sarcoma/lymphoma, and other dangerous pathologies, and that making these diagnoses can save lives and ultimately decrease Medicare spending.

Response: After reviewing the additional information provided by the commenters, we agree that it would be more accurate to finalize the RUC-recommended work RVU of 0.38 for CPT code 11103 as the proposed work RVU was too low to maintain relativity within the family of codes.

Comment: Commenters disagreed with many of the refinements made by CMS to the direct PE inputs for this family of codes. Commenters stated that it was not appropriate to only include equipment and supply items in the new biopsy add-on codes that were included in the old add-on code (CPT code 11101) because the old codes were not specific enough to accurately distinguish between the three types of biopsies. Commenters cited as an example the fact that the predecessor CPT code 11101 did not include supply items that are necessary for the performance of the incisional biopsy.

Response: We appreciate the feedback from the commenters clarifying some of the differences between the predecessor code and the newly created add-on codes. We evaluated these differences on an individual case-by-case basis when determining whether or not to finalize the proposed refinements to the direct PE inputs.

Comment: Several commenters disagreed with the proposed refinements to the “Review home care instructions, coordinate visits/prescriptions” (CA035) clinical labor time. Commenters stated that home care instructions furnished in an E/M visit do not typically include wound care instructions, and that this instruction would be above and beyond instructions proved during an E/M visit in which no procedure is performed.

Response: We disagree with the commenters that wound care instructions would not be provided during the same day E/M visit. We continue to believe that it would be duplicative to assign clinical labor time for this task given the fact that a same day E/M visit is typical for these services. We believe that these instructions would be provided during the same day E/M visit.

Comment: Several commenters disagreed with the CMS proposal to refine the quantity of the “gown, staff, impervious” (SB024) and the “mask, surgical, with face shield” (SB034) supplies from 2 to 1 for CPT codes 11102, 11104, and 11106 since these supplies are also included within the surgical instrument cleaning pack (SA043). Commenters stated that the SA043 instrument cleaning pack is used in the dirty instrument room as part of the instrument cleaning and sterilization process and therefore cannot be used during a patient procedure as the instrument cleaning occurs after the procedure has been completed. Commenters stated that the personal protective equipment used during the patient procedure is considered contaminated after the procedure is concluded, and that personal protective equipment must be removed and disposed of prior to leaving the procedure room. As a result, these supplies were not duplicative and should not be removed.

Response: We disagree with the commenter and we continue to believe that the impervious staff gown and the surgical mask with face shield would be duplicative supplies given that they are also contained within the instrument cleaning pack. We do not believe that it would be typical to remove the staff gown and face shield used during a procedure and put on new items afterwards for the purposes of cleaning instruments.

Comment: Commenters also disagreed with the CMS proposal to remove all of the supplies in the three add-on procedures (CPT codes 11103, 11105, and 11107) that were not contained in the previous add-on procedure for this family, CPT code 11101. For the “drape, sterile, fenestrated 16in x 29in” (SB011) supply, commenters stated that draping the new body site with a new sterile disposable drape was clinically indicated and would be typically done rather than take a drape used on one body site and then reposition it to a new body site for a new procedure. Commenters made the same claim for the sterile gloves (SB024) supply. For the “needle, OSHA compliant (SafetyGlide)” (SC080) and the “scalpel, safety, surgical, with blade (#10-20)” (SF047) supplies, commenters stated that the add-on represented a completely new body site and completely new skin lesion which would not allow the needle or scalpel to be un-sheathed and then reused at a separate body site out of fear of contamination. For the “dressing, 12-7mm (Gelfoam)” (SG033), “dressing, 3in x 4in (Telfa, Release)” (SG035), and “gauze, sterile 4in x 4in (10 pack uou)” (SG056) supplies, commenters stated that the add-on procedure is a second biopsy of a completely different body location and that these dressings/gauze pads would not be retained and then used on the second procedure out of fear of contamination. For the “tape, surgical paper 1in (Micropore)” (SG079) supply, commenters stated that the quantity of this supply in the base code was sufficient for one lesion, but not more than one lesion due to the simple fact that two lesions required more surgical tape than one lesion. Finally, for the “swab, patient prep, 1.5 ml (chloraprep)” (SJ081) supply, commenters stated that the process of skin prep starts with the center of the lesion and moves outward in concentric circles to avoid bringing pathogens back into the field. Commenters stated that the prep sponge cannot be reused on a separate area of skin as it will contaminate that area by transporting pathogens from the last concentric circle of the prior area, and that the supply quantity in the base code contained an amount insufficient to prep more than one area. Commenters requested CMS not to finalize the proposal to remove these supplies from the add-on codes.

Response: After considering the new information provided by the commenters regarding the clinical use of these supplies, we will not finalize our proposal to remove these supplies from the three add-on procedures (CPT codes 11103, 11105, and 11107). We will restore the RUC-recommended supplies for these three codes.

Comment: Several commenters disagreed with the refinements to the equipment time in CPT codes 11102, 11104, and 11106. The commenters stated that the removal of 2 minutes of equipment time was not appropriate and that equipment time needs to match clinical staff time.

Response: We agree with the commenter that changes in clinical labor time should be matched with corresponding changes in equipment time. However, since we continue to believe that the clinical labor to the “Review home care instructions, coordinate visits/prescriptions” (CA035) clinical labor time should be removed as duplicative with the same day E/M visit, we also continue to believe that the equipment times are accurate as proposed.

After consideration of the public comments, we are finalizing the RUC-recommended work RVUs for all of the codes in the Skin Biopsy family. We are finalizing the direct PE inputs as proposed, with the exception of the supplies from the three add-on procedures (CPT codes 11103, 11105, and 11107) as detailed above.

(4) Injection Tendon Origin-Insertion (CPT Code 20551)

CPT code 20551 (Injection(s); single tendon origin/insertion) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. For CY 2019, we proposed the RUC-recommended work RVU of 0.75 for CPT code 20551.

We proposed to maintain the current work RVU for many of the CPT codes identified as potentially misvalued on the screen of 0-day global services reported with an E/M visit 50 percent of the time or more. We noted that regardless of the proposed work valuations for individual codes, which may or may not retain the same work RVU, we continue to have reservations about the valuation of 0-day global services that are typically billed with a separate E/M service with the use of Modifier 25 (indicating that a significant and separately identifiable E/M service was provided on the same day). As we stated in the CY 2017 PFS final rule (81 FR 80204), we continue to believe that the routine billing of separate E/M services in conjunction with a particular code may indicate a possible problem with the valuation of the code bundle, which is intended to include all the routine care associated with the service. We will continue to consider additional ways to address the appropriate valuation for these services.

For the direct PE inputs, we proposed to remove the clinical labor time for the “Provide education/obtain consent” (CA011) and the “Review home care instructions, coordinate visits/prescriptions” (CA035) activities for CPT code 20551. This code is typically billed with a same day E/M service, and we believe that it will be duplicative to assign clinical labor time for obtaining consent or reviewing home care instructions given that these tasks will typically be done during the same day E/M service. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 20551.

Comment: A few commenters supported our proposal to maintain the current work RVU for this code, as recommended by the RUC.

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

Comment: Several commenters disagreed with the proposed direct PE refinements to CPT code 20551. Commenters stated that they did not agree that the clinical labor taking place in activity codes CA011 and CA035 were duplicative and that the RUC is careful to remove any duplication with E/M visits. Commenters stated that the home care instructions in activity code CA035 refer directly to the tendon injection and may include discussion of care for the affected area and home restrictions. Commenters stated that this injection is more involved and invasive than a vaccination such as the ones taking place in CPT codes 90470 and 90471, which were allowed 3 minutes for “F/u on physician's discussion w/patient/parent & obtain actual consent signature” and an additional 3 minutes for home care instructions and recording vaccine information.

Response: For the CA011 clinical labor activity, we agree with the commenters that there would be a need for some additional time to obtain consent for the injection, but we do not agree that it would be typical to require the full 3 minutes because we believe there would be some overlap with the same day E/M visit. In similar fashion, we believe that there would also be some overlap with the same-day E/M visit for the home care instructions described in activity code CA035. We also note that there is 1 minute of clinical labor time assigned to the “Check dressings & wound/home care instructions/coordinate office visits/prescriptions” clinical labor task for CPT code 90471 referenced by the commenters. As a result, we are finalizing the assignment of 1 minute of clinical labor time to both of the CA011 and CA035 activities for CPT code 20551. We are also finalizing an increase of 1 minute in the equipment time for the exam table (EF023) to a total of 15 minutes, in accordance with our standard time formula for non-highly technical equipment.

After consideration of the public comments, we are finalizing our proposal to maintain the current work RVU for CPT code 20551. We are finalizing the direct PE inputs with the refinements detailed above.

(5) Structural Allograft (CPT Codes 20932, 20933, and 20934)

In February 2017, the CPT Editorial Panel created three new codes to describe allografts. These codes were designated as add-on codes and revised to more accurately describe the structural allograft procedures they represent. For CY 2019, we proposed the RUC-recommended work RVUs for all three codes. We proposed a work RVU of 13.01 for CPT code 20932 (Allograft, includes templating, cutting, placement and internal fixation when performed; osteoarticular, including articular surface and contiguous bone), a work RVU of 11.94 for CPT code 20933 (Allograft, includes templating, cutting, placement and internal fixation when performed; hemicortical intercalary, partial (i.e., hemicylindrical)), and a work RVU of 13.00 for CPT code 20934 (Allograft, includes templating, cutting, placement and internal fixation when performed; intercalary, complete (i.e., cylindrical)).

These three new codes are all facility-only procedures with no recommended direct PE inputs.

We did not receive any comments on our proposals involving the Structural Allograft family of codes. Therefore we are finalizing the work RVUs for the codes in this family as proposed.

(6) Knee Arthrography Injection (CPT Code 27369)

CPT code 27370 (Injection of contrast for knee arthrography) repeatedly appeared on high volume growth screens between 2008 and 2016, and the RUC expressed concern that the high volume growth for this procedure was likely due to its being reported incorrectly as arthrocentesis or aspiration. In June 2017, the CPT Editorial Panel deleted CPT code 27370 and replaced it with a new code, 27369, to report injection procedure for knee arthrography or enhanced CT/MRI knee arthrography.

The RUC recommended a work RVU of 0.96 for CPT code 27369, which is identical to the work RVU for CPT code 27370 (Injection of contrast for knee arthrography). The RUC's recommendation is based on key reference service, CPT code 23350 (Injection procedure for shoulder arthrography or enhanced CT/MRI shoulder arthrography), with identical intraservice time (15 minutes) and total time (28 minutes) as the new CPT code and a work RVU of 1.00. The RUC notes that its recommendation is lower than the 25th percentile from the survey results, but that the work described by the service should be valued identically with the CPT code being replaced. We disagreed with the RUC's recommended work RVU for CPT code 27369. Both the total (28 minutes) and intraservice (15 minutes) times for the new CPT code are considerably lower than the deleted CPT code 27370. Based on the reduced times and the projected work RVU from the reverse building block methodology (0.60 work RVUs), we believe this CPT code should be valued at 0.77 work RVUs, supported by a crosswalk to CPT code 29075 (Application, cast; elbow to finger (short arm)), with total time of 27 minutes and intraservice time of 15 minutes. Therefore, we proposed a work RVU of 0.77 for CPT code 27369.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare room, equipment and supplies” (CA013) activity to 3 minutes and to refine the clinical labor time for the “Confirm order, protocol exam” (CA014) activity to 0 minutes. The predecessor code for 27369, CPT code 27370, did not have clinical labor time assigned for the “Confirm order, protocol exam” clinical labor task, and we do not have any reason to believe that the services being furnished by the clinical staff have changed, only the way in which this clinical labor time has been presented on the PE worksheets. We also noted that there is no effect on the total clinical labor direct costs in these situations, since the same 3 minutes of clinical labor time is still being furnished.

We proposed to remove the clinical labor time for the “Scan exam documents into PACS. Complete exam in RIS system to populate images into work queue” (CA032) activity. CPT code 27369 does not include a PACS workstation among the recommended equipment, and the predecessor code 27370 did not previously include time for this clinical labor activity. We believe that data entry activities such as this task would be classified as indirect PE, as they are considered administrative activities and are not individually allocable to a particular patient for a particular service. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 27369.

Comment: We received one comment regarding our proposed work RVU for CPT code 27369 of 0.77 RVUs. The commenter disagreed with CMS's reference to CPT code 27370, which is being deleted, as a basis for evaluating whether the RUC's proposed work RVU for this CPT code (0.96) adequately accounts for the large reduction in time between the deleted code, CPT code 27370 and the new code, CPT code 27369. The commenter noted that it is particularly inappropriate for CMS to value codes on the basis of time differences when the comparison code had not been previously surveyed by the RUC. The commenter urged CMS to finalize the RUC-recommended work RVU for CPT code 27369 of 0.96.

Response: We use several parameters to review the work RVU for codes including, where applicable, refining the work RVUs in direct proportion to either total time or intraservice time based on the best available information regarding the time resources involved in furnishing particular services. We note that the reason the CPT Editorial Panel was asked to review the code was to prevent incorrect reporting of the code, not to reflect a fundamentally different service. The work involved in furnishing the service described by CPT code 27369 is not fundamentally different from the work involved in furnishing the service described by the deleted code. In such cases we do not believe it is inappropriate to compare the survey times for the new code to the existing time for the code that it is intended to replace as one of several parameters we consider in our review. We are finalizing a work RVU for CPT code 27369 of 0.77 as proposed.

Comment: A commenter stated that in the CMS refinements to the direct PE inputs for CPT code 27369, CMS proposed to remove 1 minute from the CA014 activity code and proposed to add 1 minute to the CA013 activity code. The commenter stated that this refinement was inaccurate and encouraged CMS to modify this proposal by finalizing the RUC-recommended direct PE inputs for clinical labor.

Response: We addressed this subject in detail in the PE section of this final rule under the Changes to Direct PE Inputs for Specific Services heading (section II.B.3. of this final rule). For CPT code 27369, we are finalizing these clinical labor refinements as proposed.

Comment: One commenter agreed with the proposed CMS refinement to the CA032 clinical labor activity.

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

After consideration of the public comments, we are finalizing the direct PE inputs for CPT code 27369 as proposed.

(7) Application of Long Arm Splint (CPT Code 29105)

CPT code 29105 (Application of long arm splint (shoulder to hand)) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. For CY 2019, we proposed the RUC-recommended work RVU of 0.80 for CPT code 29105. For the direct PE inputs, we proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 29105.

Comment: Some commenters expressed support for our proposal to accept the RUC-recommended work RVU for this code.

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

Comment: One commenter stated that CMS did not indicate what amount of service period time was removed from the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the five equipment items utilized in CPT code 29105, we removed the clinical labor for the CA035 clinical labor activity code in accordance with our standard equipment time formula for non-highly technical equipment.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for CPT code 29105 as proposed.

(8) Strapping Lower Extremity (CPT Codes 29540 and 29550)

CPT codes 29540 (Strapping; ankle and/or foot) and 29550 (Strapping; toes) were identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. For CY 2019, we proposed the HCPAC-recommended work RVU of 0.39 for CPT code 29540 and the HCPAC-recommended work RVU of 0.25 for CPT code 29550.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Provide education/obtain consent” (CA011) activity from 3 minutes to 2 minutes for both codes, as this is the standard clinical labor time assigned for patient education and consent. We also proposed to remove the 2 minutes of clinical labor time for the “Review home care instructions, coordinate visits/prescriptions” (CA035) activity for both codes. CPT codes 29540 and 29550 are both typically billed with a same day E/M service, and we believe that it would be duplicative to assign clinical labor time for reviewing home care instructions given that this task would typically be done during the same day E/M service. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the Strapping Lower Extremity family of codes.

Comment: A few commenters supported our proposal to accept the HCPAC-recommended work RVUs.

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

Comment: Several commenters disagreed with the proposed direct PE refinements to CPT codes 29540 and 29550. Commenters stated that CMS mistakenly cited a standard for this activity of 2 minutes, however there is no set standard for CA011, and that 3 minutes is needed for clinical staff to perform this clinical activity.

Response: We disagree with the commenters that 3 minutes would be typically needed for the clinical staff to provide education and obtain consent in these procedures. We have typically assigned 2 minutes for this clinical labor activity unless we had a specific rationale for a higher amount of clinical labor time, and we continue to believe that this standard amount of clinical labor time would be the most accurate value for CPT codes 29540 and 29550.

Comment: Several commenters disagreed that the clinical labor for home care instructions and coordinating visits/prescriptions would be duplicative with the same day E/M office visit in these services. Commenters stated that these home care instructions directly pertain to the strapping procedure and would not be provided during an evaluation of the patient. Commenters stated that the strappings do not work unless left alone and taken care of in a specific manner, and that this important information is included in the home care instructions that the patient receives from clinical staff.

Response: We disagree with the commenters and we continue to believe that this clinical labor would be duplicative with the same day E/M visit. We believe that this clinical labor would take place during the same day E/M visit. Due to the way patients typically present in these procedures, we do not believe that the patients would typically need additional home care instructions above and beyond the E/M visit. We also note that these strapping procedures are frequently repeated for the same patient multiple times, and there would not be a need for repeated home care instructions for subsequent strapping procedures for the same patient. Any home care instructions taking place outside of the same day E/M visit would only be needed the first time that these procedures are performed on a patient, and as a result they would not be typical. As a result, we continue to believe that this clinical labor would not be typical.

Comment: One commenter stated that CMS did not indicate what amount of service period time was removed from the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the two equipment items utilized in these CPT codes, we removed the clinical labor for the CA035 clinical labor activity code in accordance with our standard equipment time formula for non-highly technical equipment.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for CPT codes 29540 and 29550 as proposed.

(9) Bronchoscopy (CPT Codes 31623 and 31624)

CPT code 31623 (Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed; with brushing or protected brushings) was identified on a high growth screen of services with total Medicare utilization of 10,000 or more that have increased by at least 100 percent from 2009 through 2014. CPT code 31624 (Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed; with bronchial alveolar lavage) was also included for review as part of the same family of codes. For CY 2019, we proposed the RUC-recommended work RVU of 2.63 for CPT codes 31623 and 31624.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Complete post-procedure diagnostic forms, lab and x-ray requisitions” (CA027) activity from 4 minutes to 2 minutes for CPT codes 31623 and 31624. Two minutes is the standard time, as well as the current time for this clinical labor activity, and we have no reason to believe that the time to perform this task has increased since the codes were last reviewed. We did not receive any explanation in the recommendations as to why the time for this activity would be doubling over the current values. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the Bronchoscopy family of codes.

Comment: Several commenters disagreed with the proposal to refine the clinical labor time for the “Complete post-procedure diagnostic forms, lab and x-ray requisitions” (CA027) activity from 4 minutes to 2 minutes for CPT codes 31623 and 31624. Commenters stated that there is no standard for the CA027 clinical labor activity and that the CMS logic to conform to such a standard lacks merit. Commenters also stated that these services require verification of samples, and completion of several lab forms and clearly requires more than the standard time for completing forms.

Response: We disagree with the commenters. While it is true that we have not formalized 2 minutes as a standard through rulemaking for this clinical labor activity code, we have typically assigned 2 minutes for the CA027 activity across a wide variety of codes. Out of the 168 HCPCS codes that have clinical labor time for the CA027 clinical labor activity in our database, 64 codes have 2 minutes of assigned clinical labor time while only 9 codes have 4 minutes of assigned clinical labor time, which indicates that 2 minutes is far more typical for this activity. More importantly, commenters did not address our statement that 2 minutes is the current time for this clinical labor activity, and we had no reason to believe that the time to perform this task has increased since the codes were last reviewed. As a result, we are finalizing our refinement to 2 minutes of clinical labor time for the CA027 activity.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for CPT codes 31623 and 31624 as proposed.

(10) Pulmonary Wireless Pressure Sensor Services (CPT Codes 33289 and 93264)

In September 2017, the CPT Editorial Panel created a code to describe pulmonary wireless sensor implantation and another code for remote care management of patients with an implantable, wireless pulmonary artery pressure sensor monitor. For CY 2019, we proposed the RUC-recommended work RVU of 6.00 for CPT code 33289 (Transcatheter implantation of wireless pulmonary artery pressure sensor for long term hemodynamic monitoring, including deployment and calibration of the sensor, right heart catheterization, selective pulmonary catheterization, radiological supervision and interpretation, and pulmonary artery angiography, when performed), and the RUC-recommended work RVU of 0.70 for CPT code 93264 (Remote monitoring of a wireless pulmonary artery pressure sensor for up to 30 days including at least weekly downloads of pulmonary artery pressure recordings, interpretation(s), trend analysis, and report(s) by a physician or other qualified health care professional).

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving the Pulmonary Wireless Pressure Sensor Services family of codes.

Comment: Commenters were supportive of our proposal of the RUC-recommended work RVUs.

Response: We thank commenters for their support.

After consideration of the public comments, we are finalizing the RUC-recommended work RVUs for CPT codes 33289 and 93264 as proposed.

(11) Cardiac Event Recorder Procedures (CPT Codes 33285 and 33286)

In February 2017, the CPT Editorial Panel created two new codes replacing cardiac event recorder codes to reflect new technology. For CY 2019, we proposed the RUC-recommended work RVU of 1.53 for CPT code 33285 (Insertion, subcutaneous cardiac rhythm monitor, including programming) and the RUC-recommended work RVU of 1.50 for CPT code 33286 (Removal, subcutaneous cardiac rhythm monitor).

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving the Cardiac Event Recorder Procedures family of codes.

Comment: Commenters were supportive of our proposal of the RUC-recommended work RVUs.

Response: We thank commenters for their support.

After consideration of the public comments, we are finalizing the RUC-recommended work RVUs and direct PE inputs for CPT codes 33285 and 33286 as proposed.

(12) Aortoventriculoplasty With Pulmonary Autograft (CPT Code 33440)

In September 2017, the CPT Editorial Panel created one new code to combine the efforts of aortic valve and root replacement with subvalvular left ventricular outflow tract enlargement to allow for an unobstructed left ventricular outflow tract.

For CY 2019, we proposed the RUC-recommended work RVU of 64.00 for CPT code 33440 (Replacement, aortic valve; by translocation of autologous pulmonary valve and transventricular aortic annulus enlargement of the left ventricular outflow tract with valved conduit replacement of pulmonary valve (Ross-Konno procedure)). When this code is re-reviewed in a few years as part of the new technology screen, we look forward to receiving new recommendations on the whole family, including the related Ross and Konno procedures (CPT codes 33413 and 33412 respectively) that were used as references for CPT code 33440.

For the direct PE inputs, we proposed to refine the preservice clinical labor times to match our standards for 90-day global procedures. We proposed to refine the clinical labor time for the “Coordinate pre-surgery services (including test results)” (CA002) activity from 25 minutes to 20 minutes, to refine the clinical labor time for the “Schedule space and equipment in facility” (CA003) activity from 12 minutes to 8 minutes, and to refine the clinical labor time for the “Provide pre-service education/obtain consent” (CA004) activity from 26 minutes to 20 minutes. We also proposed to add 15 minutes of clinical labor time for the “Perform regulatory mandated quality assurance activity (pre-service)” (CA008) activity. We agreed with the recommendation that the total preservice clinical labor time for CPT code 33440 is unchanged from the two reference codes at 75 minutes. However, we believed that the clinical labor associated with additional coordination between multiple specialties prior to patient arrival is more accurately described through the use of the CA008 activity code than by distributing this 15 minutes amongst the other preservice clinical labor activities. We previously established standard preservice times for 90-day global procedures, and did not want to propose clinical labor times above those standards for CPT code 33440. We also noted that there is no effect on the total clinical labor direct costs in this situation, since the same 15 minutes of preservice clinical labor time is still being furnished.

The following is a summary of the public comments we received on our proposals involving CPT code 33440.

Comment: A few commenters stated that they had no objections to the CMS proposal to refine the preservice clinical labor times for the direct PE inputs for code 33440 to match the 90-day global procedure standards and to add 15 minutes of clinical labor time to clinical labor activity code CA008. The commenters stated that they believed the RUC-recommended allocation of the preservice activities was appropriate, whereas activity code CA008 was not an accurate description of the additional work being done, and hoped that CMS would not use the allocation of time to CA008 as a way to reduce the preservice time in future rulemaking.

Response: We appreciate the feedback on our proposed direct PE refinements from the commenters.

After consideration of the public comments, we are finalizing the work RVUs and direct PE inputs for CPT code 33440 as proposed.

(13) Hemi-Aortic Arch Replacement (CPT Code 33866)

At the September 2017 CPT Editorial Panel meeting, the Panel created one new add-on code to report hemi-aortic arch graft replacement. For CY 2019, we proposed the RUC-recommended work RVU of 19.74 for CPT code 33866 (Aortic hemiarch graft including isolation and control of the arch vessels, beveled open distal aortic anastomosis extending under one or more of the arch vessels, and total circulatory arrest or isolated cerebral perfusion). CPT code 33866 is a facility-only procedure with no recommended direct PE inputs.

The following is a summary of the public comments we received on our proposals involving CPT code 33866.

Comment: We received several comments, including comments from the RUC. The RUC noted in its comment letter that at the April 2018 RUC meeting, the specialty societies determined that the family of services encompassing CPT code 33866 should be submitted to the CPT Editorial Panel for the following revisions: (1) To develop distinct codes for ascending aortic report for dissection and ascending aortic repair for other ascending aortic disease such as aneurysms and congenital anomalies. The specialties noted that there is a difference in the work associated with these procedures and now there is sufficient volume to allow for more accurate capture of the work and outcomes data for these distinct patient populations, which was not the case when the code was first developed, (2) Revise the descriptor for transverse arch code, CPT code 33870, to further clarify the difference in work between the new add on code, CPT code 33866, and (3) Revise the guidelines to provide additional instructions on the appropriate use of these codes. The RUC further noted that the specialty societies had already submitted a new coding proposal for consideration at the May 2018 CPT Editorial Panel for CPT 2020, which the RUC supported. Following the April 2018 RUC meeting, the RUC rescinded its interim value recommendation (work RVU of 19.74) to us for CPT code 33866 for CY 2019. One commenter noted, that although the RUC rescinded the interim work RVU of 19.74 due to a specialty societies' recommendation to submit the family of services to the CPT Editorial Panel, they encouraged CMS to consider using the work RVU of 19.74 as an interim value until the code can be re-surveyed and reviewed by the RUC. The commenter further noted that using the RUC-recommended value would allow physicians to be paid for the service in CY 2019, decreasing the burden of reporting a carrier-priced service to both the carriers and providers.

Response: While we recognize that the RUC rescinded its work RVU recommendation, we note that we proposed the RUC-recommended work RVU for valuation in CY 2019. We also want to remind commenters that we no longer establish interim valuations on a routine basis, and we are not convinced that establishing an interim valuation for CPT code 33866 is necessary. We will review any new coding that the CPT Editorial Panel provides for 2020, and will review any recommendations we receive timely from the RUC or other stakeholders for valuation through CY 2020 rulemaking.

After consideration of the public comments received, we are finalizing the RUC-recommended work RVUs for CPT code 33866 as proposed.

(14) Leadless Pacemaker Procedures (CPT Codes 33274 and 33275)

At the September 2017 CPT Editorial Panel meeting, the Panel replaced the five leadless pacemaker services, Category III codes, with the addition of two new CPT codes to report transcatheter leadless pacemaker procedures and revised five codes to include evaluation and interrogation services of leadless pacemaker systems.

For CPT code 33274 (Transcatheter insertion or replacement of permanent leadless pacemaker, right ventricular, including imaging guidance (e.g., fluoroscopy, venous ultrasound, ventriculography, femoral venography) and device evaluation (e.g., interrogation or programming), when performed), we disagreed with the recommended work RVU of 8.77 and we proposed a work RVU of 7.80 based on a direct crosswalk to one of the top reference codes selected by the RUC survey participants, CPT code 33207 (Insertion of new or replacement of permanent pacemaker with transvenous electrode(s); ventricular). This code has the same 60 minutes of intraservice time as CPT code 33274 and an additional 61 minutes of total time at a work RVU of 7.80. In our review of CPT code 33274, we noted that this reference code had an additional inpatient hospital visit of CPT code 99232 (Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of 3 key components) and a full instead of a half discharge visit of CPT code 99238 (Hospital discharge day management; 30 minutes or less) included in its 90-day global period. The combined work RVU of these two visits would be equal to 2.03. However, the recommended work RVU for CPT code 33274 was 0.97 work RVUs higher than CPT code 33207, despite having fewer of these visits and significantly less surveyed total time. While we acknowledge that CPT code 33274 is a more intense procedure than CPT code 33207, we do not believe that it should be valued almost a full RVU higher than the reference code given the fewer visits in the global period and the lower surveyed work time.

Therefore, we proposed to crosswalk CPT code 33274 to CPT code 33207 at the same work RVU of 7.80. The proposed work RVU was also supported through a reference crosswalk to CPT code 38542 (Dissection, deep jugular node(s)), which has 60 minutes of intraservice time, 198 minutes of total time, and a work RVU of 7.95. We believe that our proposed work RVU of 7.80 is a more accurate valuation for CPT code 33274, while still recognizing the greater intensity of this procedure in comparison to its reference code.

For CPT code 33275 (Transcatheter removal of permanent leadless pacemaker, right ventricular), we disagreed with the RUC-recommended work RVU of 9.56 and we proposed a work RVU of 8.59. Although we disagreed with the RUC-recommended work RVU, we concurred that the relative difference in work between CPT codes 33274 and 33275 is equivalent to the recommended interval of 0.79 RVUs. Therefore, we proposed a work RVU of 8.59 for CPT code 33275, based on the recommended interval of 0.79 additional RVUs above our proposed work RVU of 7.80 for CPT code 33274. We also noted that our proposed work RVU for CPT code 33275 situates it approximately halfway between the two reference codes from the survey, with CPT code 33270 (Insertion or replacement of permanent subcutaneous implantable defibrillator system, with subcutaneous electrode, including defibrillation threshold evaluation, induction of arrhythmia, evaluation of sensing for arrhythmia termination, and programming or reprogramming of sensing or therapeutic parameters, when performed) having an intraservice time of 90 minutes and a work RVU of 9.10, and CPT code 33207 having an intraservice time of 60 minutes and a work RVU of 7.80. CPT code 33275 has a surveyed intraservice time of 75 minutes and nearly splits the difference between them at our proposed work RVU of 8.59.

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving the Leadless Pacemaker Procedures family of codes.

Comment: One commenter recommended that CMS adopt the RUC-recommended RVUs for both codes due to the newness of the procedures. The commenter stated that there might not be sufficient evidence or rationale for CMS to disagree with the RUC-recommended values, and again cited the newness of these procedures.

Response: We disagree with the commenter that the newness of a procedure would provide a sufficient rationale for finalizing the RUC-recommended work RVU for a new CPT code without any further consideration. Establishing valuations for newly created CPT codes is a routine part of maintaining the PFS, and we have historically valued new services since the inception of the resource-based relative value system. We also believe that RUC surveys are less likely to be representative of practitioners when evaluating new services, due to the fact that practitioners are not yet sufficiently experienced with the services to provide accurate evaluations, which is why we have been supportive of the RUC's policy to resurvey new services a few years after their creation when typical practice patterns have been more firmly established.

Comment: Many commenters disagreed with the proposed work RVUs for CPT codes 33274 and 33275 and stated that CMS should instead finalize the RUC-recommended work RVUs for these services. Commenters stated that CMS provided no qualitative or quantitative rationale to support their assumption that the difference in time between CPT codes 33274 and the top key reference from the survey (CPT code 33207) completely reflects the difference in intensity. Commenters stated that patients receiving leadless pacemakers are more complex and have more comorbidities and contraindications than transvenous patients, with more significant groin complications and more commonly present tamponade. Commenters stated that there were other issues that make CPT code 33274 more challenging, including: (1) Capture thresholds tend to change more than with transvenous devices; (2) There is a higher risk for complications including embolization and groin complications, which are not associated with tranvenous implants; and (3) Patients undergoing leadless pacemaker procedures are more likely to have chronic atrial fibrillation and poor venous access. Commenters emphasized that they believed the leadless pacemaker procedure described by CPT code 33274 was more intensive than the CMS crosswalk to CPT code 33207.

Response: We disagree with the commenters' assertion that we provided no qualitative or quantitative rationale to support our choice of a crosswalk to CPT code 33207. We stated in the proposed rule that in our review of CPT code 33274, we noted that this reference code had an additional inpatient hospital visit of CPT code 99232 and a full, instead of a half, discharge visit of CPT code 99238 included in its 90-day global period. We acknowledged that CPT code 33274 is a more intense procedure than CPT code 33207; however, we did not believe that it should be valued almost a full RVU higher than the reference code. We also supported the proposed work RVU through the use of a reference code, CPT code 38542, which was not addressed by the commenters.

We also disagree with the commenters that CPT code 33274 has so much additional intensity and complexity as compared to key reference CPT code 33207 that they should be valued at the same work RVU of 8.77. We note that the RUC's research panel selected preservice package 3, “a straightforward patient and a difficult procedure” for CPT code 33274. We believe this indicates that the patient population for CPT code 33274 would not be unusually difficult or complex as suggested by the commenters. We further note that the summary of recommendations for CPT code 33274 states that these patients are typically sent home from the facility the next day. In contrast, reference CPT code 33207 includes a full hospital inpatient day of post procedure care associated with CPT code 99322, as well as a full discharge visit instead of half of a discharge visit. We believe that this further suggests that the patient population for CPT code 33274 would not be more difficult or complex than the patient population for CPT code 33207. As we stated in the proposed rule, we continue to acknowledge that CPT code 33274 is a more intense procedure than CPT code 33207, but we do not believe that it should be valued almost a full RVU higher than the reference code given the fewer visits in the global period and the lower surveyed work time.

Comment: Commenters stated that CMS should use valid methods of evaluating services, such as survey data and magnitude estimation, instead of relying on an incremental difference in work RVUs between CPT codes 33274 and 33275.

Response: We believe the use of an incremental difference between codes is a valid methodology for setting values, especially in valuing services within a family of revised codes where it is important to maintain appropriate intra-family relativity. Historically, we have frequently utilized an incremental methodology in which we value a code based upon its incremental difference between another code or another family of codes. We note that the RUC has also used the same incremental methodology on occasion when it was unable to produce valid survey data for a service. We further note that we did not rely solely on an increment for our proposed work RVU for CPT code 33275, supporting our proposed valuation by noting that the CMS work RVU of 8.59 situated the code approximately halfway between the two reference codes from the survey, with CPT code 33270 having an intraservice time of 90 minutes and a work RVU of 9.10, and CPT code 33207 having an intraservice time of 60 minutes and a work RVU of 7.80.

Comment: Several commenters stated that while these procedures described in CPT code 33275 will be rare, these patients will still have the elevated risk factors mentioned in discussion of CPT code 33274 and warranted the additional work indicated by survey respondents at the 25th percentile of the survey.

Response: We continue to believe that the patients in CPT code 33274 would not be more difficult or complex than the patients in CPT code 33207 for the reasons detailed above. We continue to believe that the relative difference in work between CPT codes 33274 and 33275 is equivalent to the recommended interval of 0.79 RVUs.

After consideration of the public comments, we are finalizing the work RVUs and direct PE inputs for the codes in the Leadless Pacemaker Procedures family as proposed.

(15) PICC Line Procedures (CPT Codes 36568, 36569, 36572, 36573, and 36584)

In CY 2016, CPT code 36569 (Insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump, without imaging guidance; age 5 years or older) was identified as potentially misvalued using a high expenditure services screen across specialties with Medicare allowed charges of $10 million or more. CPT code 36569 is typically reported with CPT codes 76937 (Ultrasound guidance for vascular access requiring ultrasound evaluation of potential access sites, documentation of selected vessel patency, concurrent real-time ultrasound visualization of vascular needle entry, with permanent recording and reporting) and 77001 (Fluoroscopic guidance for central venous access device placement, replacement (catheter only or complete), or removal) and was referred to the CPT Editorial Panel to have the two common imaging codes bundled into the code. In September 2017, the CPT Editorial Panel revised CPT codes 36568 (Insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump; younger than 5 years of age), 36569 and 36584 (Replacement, complete, of a peripherally inserted central venous catheter (PICC), without subcutaneous port or pump, through same venous access, including all imaging guidance, image documentation, and all associated radiological supervision and interpretation required to perform the replacement) and created two new CPT codes to specify the insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump, including all imaging guidance, image documentation, and all associated radiological supervision and interpretation required to perform the insertion.

For CY 2019, we proposed the RUC-recommended work RVU for two of the CPT codes in the family. We proposed the RUC-recommended work RVU of 2.11 for CPT code 36568 and the RUC-recommended work RVU of 1.90 for CPT code 36569.

For CPT code 36572 (Insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump, including all imaging guidance, image documentation, and all associated radiological supervision and interpretation required to perform the insertion; younger than 5 years of age), we disagreed with the RUC-recommended work RVU of 2.00 and proposed a work RVU of 1.82 based on a direct crosswalk to CPT code 50435 (Exchange nephrostomy catheter, percutaneous, including diagnostic nephrostogram and/or ureterogram when performed, imaging guidance (e.g., ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation). CPT code 50435 is a recently reviewed code that also includes radiological supervision and interpretation with similar intraservice and total time values. In our review of CPT code 36572, we were concerned about the possibility that the recommended work RVU of 2.00 could create a rank order anomaly in terms of intensity with the other codes in the family. We noted that the recommended intraservice time for CPT code 36572 as compared to CPT code 36568, the most similar code in the family, is decreasing from 38 minutes to 22 minutes (42 percent), and the recommended total time is decreasing from 71 minutes to 51 minutes (38 percent); however, the recommended work RVU is only decreasing from 2.11 to 2.00, which is a reduction of just over 5 percent. We also noted that CPT code 36572 has a lower recommended intraservice time and total time as compared to CPT code 36569, yet has a higher recommended work RVU. Although we did not imply that the decreases in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs.

In the case of CPT code 36572, we believed that it would be more accurate to propose a work RVU of 1.82 based on a crosswalk to CPT code 50435 to better fit with the recommended work RVUs for CPT codes 36568 and 36569. The proposed work valuation was also based on the use of three additional crosswalk codes: CPT code 32554 (Thoracentesis, needle or catheter, aspiration of the pleural space; without imaging guidance), CPT code 43198 (Esophagoscopy, flexible, transnasal; with biopsy, single or multiple), and CPT code 64644 (Chemodenervation of one extremity; 5 or more muscles). All of these codes were recently reviewed with similar intensity, intraservice time, and total time values, and all three of them share a work RVU of 1.82.

For CPT code 36573 (Insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump, including all imaging guidance, image documentation, and all associated radiological supervision and interpretation required to perform the insertion; age 5 years or older), we disagreed with the RUC-recommended work RVU of 1.90 and proposed a work RVU of 1.70 based on maintaining the current work RVU of CPT code 36569. In our review of CPT code 36573, we were again concerned about the possibility that the recommended work RVU of 1.90 could create a rank order anomaly in terms of intensity with the other codes in the family. We noted that the recommended intraservice time for CPT code 36573 as compared to CPT code 36569, the most similar code in the family, was decreasing from 27 minutes to 15 minutes (45 percent), and the recommended total time was decreasing from 60 minutes to 40 minutes (33 percent); however, the RUC-recommended work RVU was exactly the same for these two codes at 1.90. Although we did not imply that the decreases in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs.

In the case of CPT code 36573, we believed that it would be more accurate to propose a work RVU of 1.70 based on maintaining the current work RVU of CPT code 36569. These two CPT codes describe the same procedure done with (CPT code 36573) and without (CPT code 35659) imaging guidance and radiological supervision and interpretation. Because the inclusion of the imaging described by CPT code 36573 has now become the typical case for this service, we believe that it is more accurate to maintain the current work RVU of 1.70 as opposed to increasing the work RVU to 1.90, especially considering that the new surveyed work time for CPT code 36573 is lower than the current work time for CPT code 36569. The proposed work RVU of 1.70 was also based on a crosswalk to CPT code 36556 (Insertion of non-tunneled centrally inserted central venous catheter; age 5 years or older). This is a recently reviewed code with the same 15 minutes of intraservice time and the same 40 minutes of total time with a work RVU of 1.75.

For CPT code 36584, we disagreed with the RUC-recommended work RVU of 1.47 and proposed a work RVU of 1.20 based on maintaining the current work RVU. We noted that the recommended intraservice time for CPT code 36584 was decreasing from 15 minutes to 12 minutes (20 percent reduction), and the recommended total time was decreasing from 45 minutes to 34 minutes (25 percent reduction); however, the recommended work RVU was increasing from 1.20 to 1.47, an increase of approximately 23 percent. Although we did not imply that the decreases in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believed that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs. We were especially concerned when the recommended work RVU is increasing despite survey results indicating that the work time is decreasing due to a combination of improving technology and greater efficiencies in practice patterns.

In the case of CPT code 36584, we believed that it would be more accurate to propose a work RVU of 1.20 based on maintaining the current work RVU for the code. Because the inclusion of the imaging has now become the typical case for this service, we believed that it was more accurate to maintain the current work RVU of 1.20 as opposed to increasing the work RVU to 1.47, especially considering that the new surveyed work time for CPT code 36584 was decreasing from the current work time. The proposed work RVU of 1.20 was also based on a crosswalk to CPT code 40490 (Biopsy of lip), which has the same total time of 34 minutes and slightly higher intraservice time at a work RVU of 1.22.

We noted that the RUC-recommended work pool was increasing by approximately 68 percent for the PICC Line Procedures family as a whole, while the RUC-recommended work time pool for the same codes was only increasing by about 22 percent. Since time is defined as one of the two components of work, we believe that this indicated a discrepancy in the recommended work values. We do not believe that the recoding of the services in this family has resulted in an increase in their intensity, only a change in the way in which they will be reported, and therefore, we did not believe that it would serve the interests of relativity to propose the RUC-recommended work values for all of the codes in this family. We believe that, generally speaking, the recoding of a family of services should maintain the same total work pool, as the services themselves are not changing, only the coding structure under which they are being reported. We also noted that, through the bundling of some of these frequently reported services, it is reasonable to expect that the new coding system will achieve savings via elimination of duplicative assumptions of the resources involved in furnishing particular servicers. For example, a practitioner would not be carrying out the full preservice work three times for CPT codes 36568, 76937, and 77001, but preservice times were assigned to all of the codes under the old coding. We believed the new coding assigns more accurate work times and thus reflects efficiencies in resource costs that existed but were not reflected in the services as they were previously reported.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare, set-up and start IV, initial positioning and monitoring of patient” (CA016) activity from 4 minutes to 2 minutes for CPT codes 36572 and 36573. We noted that the two reference codes for the two new codes, CPT codes 36568 and 36569, currently have 2 minutes assigned for this activity, and CPT code 36584 also has a recommended 2 minutes assigned to this same activity. We did not agree that the patient positioning would take twice as long for CPT codes 36572 and 36573 as compared to the rest of the family, and therefore proposed to refine both of them to the same 2 minutes of clinical labor time. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the PICC Line Procedures family of codes.

Comment: One commenter stated that CMS believes it is not accurate to “increase” work RVUs when survey results indicate that work time is “decreasing” due to improving technology and greater efficiencies in practice patterns. The commenter disagreed that the difference between the current codes (without imaging guidance) and the new bundled codes (with imaging guidance) could be characterized as an “increase” or a “decrease,” as it was inappropriate simply to compare the RVUs of the bundled codes to the existing codes, because the bundled codes include imaging services that involve significantly more intense physician work than PICC line insertion without imaging guidance.

Response: We disagree with the commenter that it is methodologically inappropriate to characterize changes in surveyed work time as “increases” or “decreases”. As we stated in the proposed rule, we do not believe that the revised coding of the services in this family has changed the services themselves or resulted in an increase in their intensity, only changed in the way in which they will be reported under the new coding. CPT code 36572 is a new code resulting from the bundling together of CPT code 36568 with imaging guidance. The same services that were previously reported through a combination of CPT codes 36568 and 76397 will now be reported under CPT code 36572. We believe that it is highly relevant to note how the recommended work times for CPT code 36572 compare to the recommended work times for CPT code 36568, which includes noting that the intraservice time is decreasing from 38 minutes to 22 minutes (42 percent), and the recommended total time is decreasing from 71 minutes to 51 minutes (38 percent). We also do not agree that it is inappropriate to compare the RVUs of the bundled codes to the existing codes, as all of these procedures describe clinically similar procedures that together comprise a family of codes. In more general terms, we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes with clinically similar services are sometimes stronger comparator codes, we do not agree that codes must both include imaging guidance or not include imaging guidance to be used as a crosswalk.

Comment: Several commenters disagreed that the recoding of the services in the PICC line code family had only resulted in a change in the way that services will be reported, and stated that that the imaging-related services now bundled into CPT codes 36572, 36573, and 36584 are significantly more intense than PICC line insertion standing alone. One commenter stated that valuing a code using imaging guidance the same or less than the same code without imaging guidance is specious and treats the use of imaging guidance as a negative work component when in fact there is additional work required in using imaging guidance. Commenters stated that the RUC-recommended values already reflect efficiencies in radiology work, and that the efficiency of radiologists should not diminish the RUC's recognition that their work is significantly more intense in these procedures.

Response: We disagree with the commenters that the addition of imaging guidance has made CPT codes 36572, 36573, and 36584 significantly more intense than the non-imaging guidance version of these procedures. While the incorporation of new technology can sometimes make services more complex and difficult to perform, it can also have the opposite effect by making services less reliant on manual skill and technique. We believe that if these procedures were significantly more intensive to perform, this would be reflected in the surveyed work times associated with these codes. However, the surveyed work times are instead decreasing in all three cases in comparison to the current non-imaging guidance version of the same services. As we stated in the proposed rule, we believe that the work times for these services are decreasing due to a combination of improving technology and greater efficiencies in practice patterns. Based on the RUC-recommended utilization crosswalk for these services, which has 90 to 95 percent of the utilization expected to be reported under the new codes that include imaging guidance, we believe that the use of imaging guidance has become typical for these services and does not represent a dramatic increase in intensity.

Comment: Many commenters disagreed with the proposed work RVU of 1.82 for CPT code 36572 and stated that CMS should finalize the RUC-recommended work RVU of 2.00. Commenters stated that the CMS use of a crosswalk to CPT code 50435 was unsupported on a clinical basis, with significant differences in work intensity and patient population. Commenters stated that CPT code 36572 involves establishing new deep venous access on a pediatric patient while ensuring maximum sterile barrier technique so as to prevent a hospital acquired infection, whereas CPT code 50435 involves the exchange of an existing catheter in an adult who understands the procedure involved and has had previous catheter exchanges to maintain patency. One commenter stated that the RUC crosswalk to CPT code 19283 (Placement of breast localization device(s) (e.g., clip, metallic pellet, wire/needle, radioactive seeds)) was a more accurate choice because this service also uses imaging guidance to obtain de novo percutaneous access to a target and perform an intervention. Commenters stated that the crosswalk code would frequently be less intense than CPT code 36572.

Response: We disagree with the commenters that the work involved in CPT code 50435 would be less clinically intense than the work in CPT code 36572. We believe that the exchange of a nephrostomy catheter taking place in CPT code 50435 is more difficult than the placement of a breast localization device as in the RUC crosswalk to CPT code 19283, percutaneous; first lesion, including stereotactic guidance). We also disagree with the commenters that the crosswalk we identified lacks clinical similarity to CPT code 36572. Both the reviewed code and the crosswalk to CPT code 50435 involve the percutaneous placement of a catheter in a deep structure; we believe that this crosswalk code is more clinically similar than the RUC's choice of a crosswalk to CPT code 19283, which does not involve catheter placement at all.

Commenter: Several commenters disagreed that the RUC-recommended work RVU of 2.00 for CPT code 36572 would create a rank order anomaly within the family of codes. Commenters stated that since CPT code 36568 requires more physician time to complete than CPT code 36572 (38 versus 22 minutes intra-service time), the recommended work RVU of 2.00 for CPT code 36572 maintains the proper rank order within this family of services considering differences in patient population and differences in clinical intensity of work.

Response: The commenters did not address the concerns we expressed regarding a potential rank order anomaly within the family. We noted in the proposed rule that CPT code 36572 had a lower recommended intraservice time and total time as compared to CPT code 36569 (not CPT code 36568), yet had a higher recommended work RVU. We continue to believe that this creates the potential for a rank order anomaly within the family, and we do not believe that this discrepancy can be justified by differences in patient population and differences in clinical intensity of work.

Comment: Several commenters disagreed with the CMS statement that the reduced intraservice and total times in CPT code 36572 as compared to CPT code 36568 should result in a lower work value. Commenters stated that this was a simplistic comparison based on time, and that these were two technically different procedures, involving different patient populations and different service intensity. Commenters stated that each step in the non-image guided CPT code 36568 takes longer, though involves more periods of low intensity intraservice work as compared to CPT code 36572, where each procedural step is performed sequentially without the less intense intraservice work of the non-image guided CPT code 36568.

Response: We disagree with the commenters that the reductions in intraservice and total work time in CPT code 36572 as compared to CPT code 36568 should not result in a lower work value. Although we do not imply that the decreases in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we continue to believe that, since the two components of work are time and intensity, significant decreases in time should typically be reflected in decreases to work RVUs. We disagree that this is a simplistic comparison, and chose a crosswalk to CPT code 50435 to better fit with the recommended work RVUs for CPT codes 36568 and 36569.

We also do not agree that CPT codes 36568 and 36572 have significantly different patient populations and different service intensity. As we stated in the proposed rule, we do not believe that the revised coding of the services in this family has changed the services themselves or resulted in an increase in their intensity, only changed in the way in which they will be reported under the new coding. CPT code 36572 is a new code resulting from the bundling together of CPT code 36568 with imaging guidance. The same services that were previously reported through a combination of CPT codes 36568 and 76397 will now be reported under CPT code 36572. Given that 90 percent of the services that were formerly reported using CPT code 36568 will now be reported using CPT code 36572, we do not agree that these codes represent significantly different patient populations.

Comment: Many commenters disagreed with the proposed work RVU of 1.70 for CPT code 36573 and stated that CMS should finalize the RUC-recommended work RVU of 1.90. Commenters stated that CMS should not use a code value that is no longer in existence as the service (CPT code 36569) itself has been revised and is currently under review in this family. Commenters stated that the reference was therefore not valid to the old work RVU.

Response: We disagree with the commenters that it is somehow invalid to use a crosswalk to the current work RVU for CPT code 36569. It is not accurate to state that this code is no longer in existence, as it is being revised for CY 2019, not deleted. The RUC frequently recommends maintaining the current work RVU for reviewed codes rather than using a new work RVU from survey results when it believes that there is appropriate rationale to do so. Given that CPT code 36573 is a new code resulting from the bundling together of CPT code 36569 with imaging guidance, and that the use of imaging guidance has become typical in the performance of this service, we believe that it is appropriate to maintain the same work RVU for these services when they are reported under the new coding, especially in light of the fact that the surveyed intraservice work time for CPT code 36573 remains the same 15 minutes as the current intraservice work time for CPT code 36569.

Comment: Several commenters stated that CPT code 36573 involves a different patient population than CPT code 36569, as the patient population for CPT code 36573 does not have peripheral venous access present that can be used to obtain central venous access. Commenters stated that there is no evidence for a rank order anomaly within the codes in the family considering the differences in intensity and patient population.

Response: As we stated previously with regard to CPT codes 36568 and 36572, we also do not agree that CPT codes 36569 and 36573 have significantly different patient populations and different service intensity. As we stated in the proposed rule, we do not believe that the revised coding of the services in this family has changed the services themselves or resulted in an increase in their intensity, only changed in the way in which they will be reported under the new coding. CPT code 36573 is a new code resulting from the bundling together of CPT code 36569 with imaging guidance. The same services that were previously reported through a combination of CPT codes 36569 and 76397 will now be reported under CPT code 36573. Given that 95 percent of the services that were formerly reported using CPT code 36569 are expected to be reported using CPT code 36573, we do not agree that these codes represent noticeably different patient populations.

Comment: Several commenters disagreed with our use of CPT code 36556 as a reference code. Commenters stated that CPT code 36556 describes line placement in a larger and more central vein such as the internal jugular vein with known anatomical landmarks and a shorter distance between access and where the tip terminates centrally while CPT code 36573 describes access into a smaller vein without anatomic landmarks. Commenters stated that although imaging is inherent to CPT code 36573, the catheter is longer and there is a need to navigate the catheter through these peripheral and central veins for adequate placement, all of which would require more work.

Response: We disagree with the commenters that CPT code 36556 would not be an accurate reference code for CPT code 36573. CPT code 36556 describes the insertion of non-tunneled centrally inserted central venous catheter whereas CPT code 36573 describes the insertion of a peripherally inserted central venous catheter (PICC). We believe that these two codes, which both describe the insertion of central venous catheters, are highly similar to one another on a clinical basis and also from the perspective of work time, as they share the identical intraservice work time and total work time. Moreover, after further consideration, we are not able to identify any other more appropriate reference code for CPT code 36573 than CPT code 36556.

Comment: Many commenters disagreed with the proposed work RVU of 1.20 for CPT code 36584 and stated that CMS should finalize the RUC-recommended work RVU of 1.47. Commenters stated that CMS was completely dismissing the additional work that was bundled in with CPT code 36584 as part of the imaging guidance. Commenters stated that the RUC agreed that the recommended work RVU of 1.47 involves less time but involves a significant increase in intensity, and that the work RVU should not remain at the current work RVU of 1.20 as CPT code 36584 is now a bundled service.

Response: We disagree with the commenters that the bundling of a service or the addition of imaging guidance must necessarily increase the intensity of the service or the work RVU. As we stated above, while the incorporation of new technology can sometimes make services more complex and difficult to perform, it can also have the opposite effect by making services less reliant on manual skill and technique. We believe that if CPT code 36584 had become significantly more intensive to perform, this would be reflected in the surveyed work times associated with the code. However, the surveyed intraservice work time and total work time for CPT code 36584 are both decreasing from their current values. As we stated in the proposed rule, we believe that these work times are decreasing due to a combination of improving technology and greater efficiencies in practice patterns, and we believe that the use of imaging guidance has become now typical for CPT code 36584 and does not represent a dramatic increase in intensity.

Comment: Several commenters disagreed with the proposal to refine the clinical labor time for the “Prepare, set-up and start IV, initial positioning and monitoring of patient” (CA016) activity from 4 minutes to 2 minutes for CPT codes 36572 and 36573. Commenters stated that this additional clinical labor time would be typical since it included positioning of the patient as well as positioning the two forms of imaging equipment which are being bundled into the code (fluoroscopy and ultrasound). Commenters stated that the equipment needs to be positioned in a manner that is specific to the procedure and the chosen extremity, and that it takes approximately 2 additional minutes to position the patient and the equipment for those codes which are imaging-guided as opposed to those procedures which are not. Commenters stated that this difference applies to the two new placement codes (CPT code 36572 and 36573) but not to the replacement code (CPT code 36584) as the equipment is limited to fluoroscopy and the positioning is slightly simpler as the site already contains a PICC line.

Response: After consideration of the new information provided by the commenters regarding the need for additional positioning time, we are not finalizing our proposed refinement to the CA016 clinical labor time. Due to this change in clinical labor time, we are also not finalizing any changes to the RUC-recommended equipment times.

After consideration of the public comments, we are finalizing the work RVUs for the codes in the PICC Line Procedures family as proposed. After considering public comments, we are not finalizing our proposed direct PE refinements, and we are instead finalizing the RUC-recommended direct PE inputs for all five codes.

(16) Biopsy or Excision of Inguinofemoral Node(s) (CPT Code 38531)

In September 2017, the CPT Editorial Panel created a new code to describe biopsy or excision of inguinofemoral node(s). A parenthetical was added to CPT codes 56630 (Vulvectomy, radical, partial) and 56633 (Vulvectomy, radical, complete) to instruct separate reporting of CPT code 38531 with radical vulvectomy. This service was previously reported with unlisted codes.

CPT code 38531 (Biopsy or excision of lymph node(s); open, inguinofemoral node(s)) is a new CPT code describing a lymph node biopsy without complete lymphadenectomy. The RUC recommended a work RVU of 6.74 for CPT code 38531, with 223 minutes of total time and 65 minutes of intraservice time. We proposed the RUC-recommended work RVU of 6.74 for CPT code 38531. However, we were concerned that this CPT code is described as having a 10-day global period. The two CPT codes that are often reported together with this code, CPT codes 56630 and 56633, are both 90-day global codes. In addition, CPT code 38531 has a discharge visit and two follow up visits in the global period. This is consistent with the number of postoperative visits typically associated with 90-day global codes. Therefore, we proposed to assign a 90-day global indicator for CPT code 38531 rather than the 10-day global time period reflected in the RUC recommendation.

We did not propose any direct PE refinements for this code family.

Comment: Several commenters thanked us for proposing the RUC-recommended work RVU of 6.74 for CPT code 38531.

Response: We appreciate the support from commenters.

Comment: Several stakeholders disagreed with CMS's proposal to change the global status of this code from a 10-day global code to a 90-day global code. They maintained that there are no claims data available to assess how often CPT code 38531 will be billed together with CPT codes 56630 or 56633. Commenters also noted that there is no necessary direct correlation between the two codes (CPT code 56630 and CPT code 56633) having a 90-day global period and the new code having a 90-day global period.

Response: We agree with commenters that when two or more closely related CPT codes are billed together, there is no requirement for them to share the same global period. However, the amount of post service time and the number of visits in CPT code 38531 are consistent with other 90-day global codes. We continue to believe that CPT code 38531 should have a 90-day global period and we are finalizing that change as proposed.

Comment: A few commenters pointed out that CMS has the opportunity to review the global periods for new codes directly after CPT Editorial Panel meetings, and that CMS should have provided input regarding the code's global period at that time.

Response: While some of our staff have the opportunity to review global periods for new or modified CPT codes immediately after the CPT Editorial Panel meeting, the Agency does not systematically review or provide feedback on components of a CPT code, including global period, until we fully consider and address the code as part of the annual PFS notice-and-comment rulemaking process.

After consideration of the public comments, we are finalizing a work RVU of 6.74 for CPT code 38531 as proposed.

(17) Radioactive Tracer (CPT Code 38792)

CPT code 38792 (Injection procedure; radioactive tracer for identification of sentinel node) was identified as potentially misvalued on a screen of codes with a negative intraservice work per unit of time (IWPUT), with 2016 estimated Medicare utilization over 10,000 for RUC reviewed codes and over 1,000 for Harvard valued and CMS/Other source codes. For CY 2019, we proposed the RUC-recommended work RVU of 0.65 for CPT code 38792.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare room, equipment and supplies” (CA013) activity to 3 minutes and to refine the clinical labor time for the “Confirm order, protocol exam” (CA014) activity to 0 minutes. CPT code 38792, as well as its alternate reference code, CPT code 78300 (Bone and/or joint imaging; limited area), did not previously have clinical labor time assigned for the “Confirm order, protocol exam” clinical labor task, and we do not have any reason to believe that the services being furnished by the clinical staff have changed, only the way in which this clinical labor time has been presented on the PE worksheets. We also note that there is no effect on the total clinical labor direct costs in these situations, since the same 3 minutes of clinical labor time is still being furnished. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 38792.

Comment: A commenter stated that they appreciated and supported our proposal to adopt the RUC-recommended work RVU of 0.65. The commenter also stated that they agreed with and supported the changes CMS proposed in clinical labor time and the standardized equipment time formulas.

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

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for CPT code 38792 as proposed.

(18) Percutaneous Change of G-Tube (CPT Code 43760)

CPT code 43760 (Change of gastrostomy tube, percutaneous, without imaging or endoscopic guidance) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. It was surveyed for the April 2017 RUC meeting and recommendations for work and direct PE inputs were submitted to CMS. However, the RUC also noted that because the data for CPT code 43760 were bimodal, it might be appropriate to consider changes in the CPT descriptors to better differentiate physician work. In September 2017, the CPT Editorial Panel deleted CPT code 43760 and will use two new CPT codes, CPT codes 43762 and 43763, which describe replacement of gastrostomy tube, with and without revision of gastrostomy tract, respectively. (See discussion of these codes below.) Therefore, we did not propose work or direct PE values for CPT code 43760.

Due to the impending deletion of CPT code 43760, we received no comments on this code.

(19) Gastrostomy Tube Replacement (CPT Codes 43762 and 43763)

In September 2017, the CPT Editorial Panel created two new codes that describe replacement of gastrostomy tube, with and without revision of gastrostomy tract, respectively. These two new codes were surveyed for the January 2018 RUC meeting and recommendations for work and direct PE inputs were submitted to CMS.

We proposed a work RVU of 0.75 for CPT code 43762 (Replacement of gastrostomy tube, percutaneous, includes removal, when performed, without imaging or endoscopic guidance; not requiring revision of gastrostomy tract.) and a work RVU of 1.41 for CPT code 43763 (Replacement of gastrostomy tube, percutaneous, includes removal, when performed, without imaging or endoscopic guidance; requiring revision of gastrostomy tract.), consistent with the RUC's recommendations for these new CPT codes.

For the direct PE inputs, we proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the codes in the Gastrostomy Tube Replacement code family.

Comment: Several commenters stated that they appreciated CMS proposing the RUC-recommended work RVU for CPT codes 43762 and 43763.

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

Comment: One commenter stated that CMS did not indicate what amount of service period time was added to the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the four equipment items where we made time refinements, we added the clinical labor for the CA029 clinical labor activity in accordance with our standard equipment time formula for non-highly technical equipment.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for the codes in the as Gastrostomy Tube Replacement code family as proposed.

(20) Diagnostic Proctosigmoidoscopy—Rigid (CPT Code 45300)

CPT code 45300 (Proctosigmoidoscopy, rigid; diagnostic, with or without collection of specimen(s) by brushing or washing (separate procedure)) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years, with Medicare utilization greater than 20,000. For CY 2019, we proposed the RUC-recommended work RVU of 0.80 for CPT code 45300.

For the direct PE inputs, we proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 45300.

Comment: Commenters were supportive of our proposal of the RUC-recommended work RVUs.

Response: We thank commenters for their support.

Comment: One commenter stated that CMS did not indicate what amount of service period time was removed from the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the four equipment items where we made time refinements, we removed the clinical labor for the CA035 clinical labor activity in accordance with our standard equipment time formula for non-highly technical equipment.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for CPT code 45300 as proposed.

(21) Hemorrhoid Injection (CPT Code 46500)

CPT code 46500 (Injection of sclerosing solution, hemorrhoids) was identified as potentially misvalued on a screen of codes with a negative intraservice work per unit of time (IWPUT), with 2016 estimated Medicare utilization over 10,000 for RUC reviewed codes and over 1,000 for Harvard valued and CMS/Other source codes.

For CPT code 46500, we disagreed with the RUC-recommended work RVU of 2.00 and we proposed a work RVU of 1.74 based on a direct crosswalk to CPT code 68811 (Probing of nasolacrimal duct, with or without irrigation; requiring general anesthesia). This crosswalk code is another recently-reviewed 10-day global code with the same 10 minutes of intraservice time and slightly higher total time. When CPT code 46500 was previously reviewed as described in the CY 2016 PFS final rule with comment period (80 FR 70963), we finalized a proposal to reduce the work RVU from 1.69 to 1.42, which reduced the work RVU by the same ratio as the reduction in the total work time. In light of the additional evidence provided by this new survey, we agree that the work RVU should be increased from the current value of 1.42. However, we believe that our proposed work RVU of 1.74 based on a crosswalk to CPT code 68811 is more accurate than the RUC-recommended work RVU of 2.00.

In the most recent survey of CPT code 46500, the intraservice work time remained unchanged at 10 minutes while the total time increased by only 2 minutes, increasing from 59 minutes to 61 minutes (3 percent). However, the RUC-recommended work RVU is increasing from 1.42 to 2.00, an increase of 41 percent, and also an increase of 19 percent over the historic value of 1.69 for CPT code 46500. Although we did not imply that the increase in time as reflected in survey values must equate to a one-to-one or linear increase in the valuation of work RVUs, we believe that since the two components of work are time and intensity, minimal increases in surveyed work time typically should not be reflected in disproportionately large increases to work RVUs. In the case of CPT code 46500, we believe that our crosswalk to CPT code 68811 at a work RVU of 1.74 more accurately maintains relativity with other 10-day global codes on the PFS. We also noted that the 3 percent increase in surveyed work time for CPT code 46500 matches a 3 percent increase in the historic work RVU of the code, from 1.69 to 1.74. Therefore, we proposed a work RVU of 1.74 for CPT code 46500 based on the aforementioned crosswalk.

For the direct PE inputs, we proposed to remove 10 minutes of clinical labor time for the “Assist physician or other qualified healthcare professional—directly related to physician work time (100%)” (CA018) activity. This clinical labor time is listed twice in the recommendations along with a statement that although the clinical labor has not changed from prior reviews, time for both clinical staff members was inadvertently not included in the previous spreadsheets. We appreciated this notification in the recommendations, and therefore, we requested more information about why the clinical labor associated with this additional staff member was left out for previous reviews. We were particularly interested in knowing what activities the additional staff member would be undertaking during the procedure. We proposed to remove the clinical labor associated with this additional clinical staff member pending the receipt of additional information. We also proposed to remove 1 impervious staff gown (SB027), 1 surgical mask with face shield (SB034), and 1 pair of shoe covers (SB039) pending more information about the additional clinical staff member.

We proposed to remove the clinical labor time for the “Review home care instructions, coordinate visits/prescriptions” (CA035) activity. CPT code 46500 is typically billed with a same day E/M service, and we believe that it would be duplicative to assign clinical labor time for reviewing home care instructions given that this task would typically be done during the same day E/M service. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 46500.

Comment: Many commenters disagreed with the proposed work RVU of 1.74 for CPT code 46500 and stated that CMS should finalize the RUC-recommended work RVU of 2.00. Commenters stated that they disagreed with CMS calculating intraservice time ratios to account for changes in work time, and that CPT code 46500 possesses a negative IWPUT, which makes the use of time ratios particularly inappropriate.

Response: We disagree with the commenters and continue to believe that the use of time ratios is one of several reasonable methods for identifying potential work RVUs for particular PFS services, particularly when the alternative values do not account for information that suggests the amount of time involved in furnishing the service has changed significantly. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. When our review of recommended values reveals that changes in the resource of time have been unaccounted for in a recommended RVU, then we believe we have the obligation to account for that change in establishing work RVUs since the statute explicitly identifies time as one of the two elements of the work RVUs. We recognize that it would not be appropriate to develop work RVUs solely based on time given that intensity is also an element of work, but in applying the time ratios, we are using derived intensity measures based on current work RVUs for individual procedures. Were we to disregard intensity altogether, the work RVUs for all services would be developed based solely on time values and that is definitively not the case, as indicated by the many services that share the same time values but have different work RVUs. (As an example, CPT codes 38222, 54231, 55870, 75573, and 78814 all share identical CY 2019 work times with 15 minutes of preservice time, 30 minutes of intraservice time, and 15 minutes of postservice time; however these codes have respective CY 2019 work RVUs of 1.44, 2.04, 2.58, 2.55, and 2.20.) Furthermore, we reiterate that we use time ratios to identify potentially appropriate work RVUs, and then use other methods (including estimates of work from CMS medical personnel and crosswalks to key reference or similar codes) to validate these RVUs. For more details on our methodology, we direct readers to the CY 2017 PFS final rule (81 FR 80272 through 80277). We also note that in the case of CPT code 46500, we derived our proposed work RVU of 1.74 by using a direct crosswalk to CPT code 68811 and not a time ratio.

Comment: Several commenters stated that the RUC compared CPT code 46500 to the two key reference services: CPT code 46221 (Hemorrhoidectomy, internal, by rubber band ligation(s)) and CPT code 46930 (Destruction of internal hemorrhoid(s) by thermal energy (e.g., infrared coagulation, cautery, radiofrequency)). Commenters stated that the RUC-recommended work RVU of 2.00 places the value correctly between the key reference services and results in similar procedure intensity, whereas the CMS crosswalk to CPT code 68811 was not well aligned with the top two key reference services due to having a lower intensity.

Response: We disagree with the commenters that our crosswalk to CPT code 68811 would be less accurate for work valuation than the two key references chosen by the survey respondents. We note, for example, that CPT code 46221 has 50 percent more intraservice time than CPT code 46500, and CPT code 46930 has 50 percent less intraservice time than CPT code 46500, whereas the CMS crosswalk to CPT code 68811 shares the same 10 minutes of intraservice time as CPT code 46500. We believe that this closer match in the work time values makes CPT code 68811 a more appropriate choice for a crosswalk code. We also note that at the RUC meeting when CPT code 46500 was under review, the specialty presenters stated that the work RVU had not changed from the historical value of 1.69 before the recommendation was changed to the final value of 2.00. As we stated in the proposed rule, the 3 percent increase in surveyed work time for CPT code 46500 matches a 3 percent increase in the historic work RVU of the code, from 1.69 to 1.74. We continue to believe that this is the most accurate value to finalize for CPT code 46500.

Comment: Several commenters compared CPT code 46500 to CPT code 68810 (Probing of nasolacrimal duct, with or without irrigation) and noted that these codes have the same intraservice work time but the comparison code includes a lower level follow-up visit and therefore correctly has a lower work RVU. Commenters stated that CPT code 46500 includes a follow-up office visit with an anoscopy to determine the effectiveness of the treatment and to monitor for infection or sepsis which adds work to the visit. Commenters stated that the proposed CMS crosswalk to CPT code 68811 includes an even lower level office visit (CPT code 99211) than the office visit in CPT code 68810, which indicated that it was an inappropriate choice for a crosswalk.

Response: We continue to disagree with the commenters that the CMS crosswalk to CPT code 68811 would provide an inappropriate work valuation for CPT code 46500 based on the differences in postoperative work and work time. We would like to clarify again that we used CPT code 68811 as our crosswalk, not CPT code 68810, and we do not understand the comparisons to CPT code 68810 suggested by the commenters. Regarding our crosswalk code, while it is true that CPT code 68811 does not contain a level three (CPT code 99213) office visit in its global period like CPT code 46500, the code does include half of a discharge visit (CPT code 99238) in its global period, which is missing from the reviewed code. Under the building block methodology, the combined work RVU and the work time of a half discharge visit (CPT code 99238) and a level 1 office visit (CPT code 99211) would equal 0.82 RVUs and 26 minutes. This is approximately equal to the level 3 office visit (CPT code 99213 with 0.97 work RVUs and 23 minutes of work time) in the global period of CPT code 46500. As a result, we do not agree with the commenters that CPT code 46500 has a significantly greater amount of postservice work and postservice work time than our crosswalk code.

Comment: Several commenters responded to our request for more information about why the clinical labor associated with the additional staff member was left out of previous reviews and what activities the additional staff member would be undertaking during the procedure. Commenters stated that two clinical staff are needed to assist the physician during the intraservice portion of the service: one staff person is handling suction and holding the retractor while the surgeon identifies and injects anesthetic and sclerosant into the poles of the hemorrhoids, and the second staff person is handing supplies (syringes, gauze) and taking soiled supplies away. The commenters stated that one staff person will assist with tasks such as irrigation, suction, etc. and one circulating staff person will hand syringes, sponges, etc. to the physician.

Response: We appreciate the additional feedback from the commenters regarding what activities the additional staff member would be undertaking during the procedure, although we note that we did not receive a response regarding why the clinical labor associated with this additional staff member was left out of previous reviews. After reviewing the additional information supplied by the commenters, we are not finalizing our proposal to remove the clinical labor time for the “Assist physician or other qualified healthcare professional” (CA018) activity or the proposal to remove 1 impervious staff gown (SB027), 1 surgical mask with face shield (SB034), and 1 pair of shoe covers (SB039). We are finalizing the RUC-recommended values for these direct PE inputs.

Comment: Several commenters disagreed with the proposal to remove the clinical labor time for the “Review home care instructions, coordinate visits/prescriptions” (CA035) activity. Commenters stated that this clinical activity was not duplicative with the same day E/M office visit, as the home care instructions directly pertain to the procedure and would not be provided during an evaluation of the patient.

Response: We disagree with the commenters that home care instructions would not be provided during the same day E/M visit. The commenters did not provide a rationale to explain why home care instructions would not be provided during the same day E/M visit, which also directly pertains to the procedure. We continue to believe that it would be duplicative to assign clinical labor time for this task, as we believe that the home care instructions would be furnished during the same day E/M visit.

Comment: One commenter stated that CMS did not indicate what amount of service period time was removed from the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the anoscope with light source (ES002) equipment, we removed the clinical labor for the CA029 and CA035 clinical labor activities in accordance with our standard equipment time formula for scopes.

After consideration of the public comments, we are finalizing the work RVU for CPT code 46500 as proposed. We are finalizing the RUC-recommended direct PE inputs for this code, with the exception of our refinement to the CA035 clinical labor activity and standard equipment time refinements as detailed above.

(22) Removal of Intraperitoneal Catheter (CPT Code 49422)

In October 2016, CPT code 49422 (Removal of tunneled intraperitoneal catheter) was identified as a site of service anomaly because Medicare data from 2012-2014 indicated that it was performed less than 50 percent of the time in the inpatient setting, yet it included inpatient hospital E/M services within the 10-day global period. The code was resurveyed using a 0-day global period for the April 2017 RUC meeting. For CY 2019, we proposed the RUC-recommended work RVU of 4.00 for CPT code 49422.

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving CPT code 49422.

Comment: Commenters were supportive of our proposal of the RUC-recommended work RVUs. Commenters also supported the change in global period to a 0-day global.

Response: We thank commenters for their support.

After consideration of the public comments, we are finalizing the RUC-recommended work RVU and direct PE inputs for CPT code 49422 as proposed.

(23) Dilation of Urinary Tract (CPT Codes 50436, 50437, 52334, and 74485)

In October 2014, the CPT Editorial Panel deleted 6 codes and created 12 new codes to describe genitourinary catheter procedures and bundle inherent imaging services. In January 2015, the specialty societies indicated that CPT code 50395 (Introduction of guide into renal pelvis and/or ureter with dilation to establish nephrostomy tract, percutaneous), which was identified as part of the family, would be referred to the CPT Editorial Panel to clear up any confusion with overlap in physician work with CPT code 50432 (Placement of nephrostomy catheter, percutaneous, including diagnostic nephrostogram and/or ureterogram when performed, imaging guidance (e.g., ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation). In September 2017, the CPT Editorial Panel deleted CPT code 50395 and created 2 new codes to report dilation of existing tract, and establishment of new access to the collecting system, including percutaneous, for an endourologic procedure including imaging guidance (e.g., ultrasound and/or fluoroscopy), all associated radiological supervision and interpretation, as well as post procedure tube placement when performed.

The specialty society surveyed the new CPT code 50436 (Dilation of existing tract, percutaneous, for an endourologic procedure including imaging guidance (e.g., ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation, as well as post procedure tube placement, when performed), and the RUC recommended a total time of 70 minutes, intraservice time of 30 minutes, and a work RVU of 3.37. The RUC indicated that its recommended work RVU for this CPT code is identical to the work RVU of the CPT code being deleted, even though imaging guidance CPT code 74485 has now been bundled into the valuation of the CPT code. The RUC provided two key reference CPT codes to support its recommendation: CPT code 50694 (Placement of ureteral stent, percutaneous, including diagnostic nephrostogram and/or ureterogram when performed, imaging guidance (e.g., ultrasound and/or fluoroscopy), and all associated radiological supervision and interpretation; new access, without separate nephrostomy catheter) with total time of 111 minutes, intraservice time of 62 minutes, and a work RVU of 5.25; and CPT code 50695 (Placement of ureteral stent, percutaneous, including diagnostic nephrostogram and/or ureterogram when performed, imaging guidance (e.g., ultrasound and/or fluoroscopy), and all associated radiological supervision and interpretation; new access, with separate nephrostomy catheter), with total time of 124 minutes and intraservice time of 75 minutes, and a work RVU of 6.80. To further support its recommendation, the RUC also referenced CPT code 52287 (Cystourethroscopy, with injection(s) for chemodenervation of the bladder) with total time of 58 minutes, intraservice time of 21 minutes, and a work RVU of 3.37.

We disagreed with the RUC that the work RVU for this CPT code should be the same as the CPT code being deleted. Survey respondents indicated that the total time for completing the service described by the new CPT code is nearly 30 minutes less than the existing CPT code, even though imaging guidance was described as part of the procedure. We also noted that the reference CPT codes both have substantially higher total and intraservice times than CPT code 50436. We considered a number of parameters to arrive at our proposed work RVU of 2.78, supported by a crosswalk to CPT code 31646 (Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed; with therapeutic aspiration of tracheobronchial tree, subsequent, same hospital stay). We examined the intraservice time ratio for the new CPT code in relation to the combination of CPT codes that the service represents and found that this would support a work RVU of 2.55. We also calculated the intraservice time ratio for the new CPT code in relation to each of the two reference CPT codes. For the comparison with CPT code 50694, the intraservice time ratio is 2.54, while the comparison with the second reference CPT code 50695 yields an intraservice time ratio of 2.72. We took the highest of these three values, 2.72, and found a corresponding crosswalk that we believe appropriately values the service described by the new CPT code. Therefore, we proposed a work RVU of 2.78 for CPT code 50436.

The specialty society also surveyed the new CPT code 50437 (Dilation of existing tract, percutaneous, for an endourologic procedure including imaging guidance (e.g., ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation, as well as post procedure tube placement, when performed; including new access into the renal collecting system) and the RUC recommended a total time of 100 minutes, an intraservice time of 60 minutes, and a work RVU of 5.44. The recommended intraservice time of 60 minutes reflects the 75th percentile of survey results, rather than the median survey time, which is typically used for determining the intraservice time for new CPT codes. The RUC justified the use of the higher intraservice time because they believe the time better represents the additional time needed to introduce the guidewire into the renal pelvis and/or ureter, above and beyond the work involved in performing CPT code 50436. The RUC compared this CPT code to CPT code 52235 (Cystourethroscopy, with fulguration (including cryosurgery or laser surgery) and/or resection of; MEDIUM bladder tumor(s) (2.0 to 5.0 cm)), with total time of 94 minutes, intraservice time of 45 minutes, and a work RVU of 5.44. The RUC also cited as support the second key reference CPT code 50694 (Placement of ureteral stent, percutaneous, including diagnostic nephrostogram and/or ureterogram when performed, imaging guidance (e.g., ultrasound and/or fluoroscopy), and all associated radiological supervision and interpretation; new access, without separate nephrostomy catheter) with total time 111 minutes, intraservice time 62 minutes, and a work RVU of 5.25.

We did not agree with the RUC's recommended work RVU because we believed that the intraservice time for this CPT code should reflect the survey median rather than the 75th percentile. There is no indication that the additional work of imaging guidance was systematically excluded by survey respondents when estimating the time needed to furnish the service. Therefore, we proposed to reduce the intraservice time for CPT code 50437 from the RUC- recommended 60 minutes to the survey median time of 45 minutes. We noted that this is still 15 minutes more than the intraservice time for CPT code 50436, primarily for the provider to introduce the guidewire into the renal pelvis and/or ureter. We welcomed comments about the amount of time needed to furnish this procedure.

With the revised intraservice time of 45 minutes and a total time of 85 minutes, we believed that the RUC-recommended work RVU for this CPT code is overstated. When we applied the increment between the RUC-recommended values for between CPT codes 50436 and 50437 (2.07 work RVUs) in addition to our proposed work RVU for CPT code 50436, we estimated that this CPT code was more accurately represented by a work RVU of 4.83. This value is supported by a crosswalk to CPT code 36902 (Introduction of needle(s) and/or catheter(s), dialysis circuit, with diagnostic angiography of the dialysis circuit, including all direct puncture(s) and catheter placement(s), injection(s) of contrast, all necessary imaging from the arterial anastomosis and adjacent artery through entire venous outflow including the inferior or superior vena cava, fluoroscopic guidance, radiological supervision and interpretation and image documentation and report; with transluminal balloon angioplasty, peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the angioplasty), which has an intraservice time of 40 minutes and a total time of 86 minutes. We believed that CPT code 36902 describes a service that is similar to the new CPT code 50437) and therefore provides a reasonable crosswalk. We proposed a work RVU of 4.83 for CPT code 50437.

We proposed the RUC-recommended work RVU of 3.37 for CPT code 52334 (Cystourethroscopy with insertion of ureteral guide wire through kidney to establish a percutaneous nephrostomy, retrograde) and the RUC-recommended work RVU of 0.83 for CPT code 74485 (Dilation of ureter(s) or urethra, radiological supervision and interpretation).

For the direct PE inputs, we proposed to remove the clinical labor time for the “Confirm availability of prior images/studies” (CA006) activity for CPT code 52334. This code does not currently include this clinical labor time, and unlike the two new codes in the family (CPT codes 50436 and 50437), CPT code 52334 does not include imaging guidance in its code descriptor. When CPT code 52334 is performed with imaging guidance, it would be billed together with a separate imaging code that already includes clinical labor time for confirming the availability of prior images. As a result, we believed that it would be duplicative to include this clinical labor time in CPT code 52334.

The following is a summary of the public comments we received on our proposals involving the Dilation of Urinary Tract family of codes.

Comment: Several commenters responded to our proposals regarding work RVUs for this family of codes. In general, commenters expressed support for our proposed work RVU of 3.37 for CPT code 52334 and 0.83 for CPT code 74485.

Response: We are finalizing the work RVUs for each of these codes as proposed.

Comment: Several commenters did not support our proposals regarding the work RVU for CPT codes 50436 and 50437. The RUC and other commenters stated that CMS misunderstood the RUC's summary of results (SOR) and the purpose of the reference codes and the code comparisons as part of their review process. They suggested that our rejection of the RUC recommendation for CPT code 50436 was based on a mistake about the codes that the RUC cited as reference codes.

Response: We consider a variety of documents and data during our review of the RUC's recommended work RVU for a code. The two reference codes cited in the excel summary work RVU spreadsheet for CPT code 50436 were CPT codes 50694 and 50695, while the two reference codes cited in the SOR were CPT codes 52287 52214. In other words, there was an inconsistency in the documentation. We believe that any of the four reference codes cited in the documentation and/or data are valid points of comparison for evaluating whether the RUC's recommended work RVUs are appropriate.

Comment: Some commenters did not agree with CMS's use of intraservice time ratios as a factor in determining whether a CPT code is appropriately valued. The commenters maintained that CMS's use of these parameters is inappropriate and demonstrates our prioritization of time-related factors above the intensity and complexity of the service.

Response: We routinely use intraservice time ratios to determine whether a recommended work RVU for a new CPT code adequately reflects efficiencies gained when codes are bundled and/or providers become more efficient at furnishing services and we disagree with commenters that time ratios are an inappropriate metric. We identify a crosswalk for the purpose of establishing the work RVU by comparing the survey code to other codes in the PFS with similar intraservice and total times and also by considering the intensity among codes with similar times. We disagree that this means we are prioritizing time parameters over other factors that are relevant in considering a code's value.

Comment: Commenters disagreed with CMS's proposed work RVU of 2.78 for CPT code 50436, citing CMS's inappropriate use of time parameters in comparing this code with the deleted CPT code 50395.

Response: Even after taking into consideration the bundling of the deleted code, CPT 50395, with CPT code 74485, we believe that there are efficiencies in the work that are not adequately reflected in the RUC-recommended work RVU for this new code, CPT 50436. We examined a number of parameters in seeking an appropriate crosswalk code for CPT 50436, including the intraservice time ratio for this new code in relation to the combination of CPT codes that the service represents and the intraservice time ratio for the new code in relation to each of the RUC's two reference codes. Our crosswalk, CPT code 31646, reflects the work RVU (2.78) corresponding to the most appropriate, and the highest, work RVU (2.72) associated with these calculations. Our identification of a crosswalk code is not dictated by the time parameter calculations alone, but rather is based on a combination of the time parameters and our understanding of the intensity involved in furnishing the service. If we had been looking only at time parameters, we might have chosen a CPT code with a work RVU closest to the lowest of the time parameter calculations (2.54). We continue to believe that the most appropriate crosswalk is CPT code 31646, and we are finalizing our proposed work RVU of 2.78 for CPT code 50436.

Comment: As with CPT code 50436, commenters suggested that CMS mistook the codes included in the SOR as the codes that the RUC cited as reference codes.

Response: As we indicated in our response to this comment for CPT code 50436, we consider all documentation and data provided by the RUC in our assessment of the work RVU for a code. The reference and comparison CPT codes cited in the SOR did not match those in the summary work RVU spreadsheet.

Comment: Several commenters disagreed with our method of proposing a work RVU based on the incremental differences in the RUC-recommended work RVU between codes. Commenters stated that this erroneously considers all time components as having equal intensity.

Response: We generally apply this methodology where we agree with, and seek to maintain the relativity between two codes reflected in the RUC recommendations, but we disagree with the RUC-recommended work RVU for one or both of the codes. We also considered, as an alternative, whether it would be more appropriate to use proportional increments rather than absolute differences between two RUC-recommended work RVUs. Under that scenario, we would have proposed a work RVU of 4.49 for CPT code 50437 [(2.78 * 5.44)/3.37 = 4.49]. However, since our general approach involves applying the absolute difference in work RVUs, our proposed value for CPT code 50437 was 4.83 work RVUs. We thank the commenter for pointing out our calculation error, due to which our proposed work RVU should have been 4.85 instead of 4.83. We continue to believe that relative difference in the RUC's recommendations for work RVUs between codes is a useful and appropriate tool for determining work RVUs for CPT codes, and we are finalizing a work RVU of 4.85 for CPT code 50437 based on a comparison with CPT code 36902, which has a work RVU of 4.83.

Comment: Several commenters disagreed with the proposal to remove the clinical labor time for the “Confirm availability of prior images/studies” (CA006) activity for CPT code 52334. Commenters stated that the equivalent of the CA006 clinical labor activity did not exist when this service was last reviewed by the Practice Expense subcommittee in 2002, and that many surgical procedures and other types of services that do not have imaging bundled involve the physician reviewing images and studies before performing the service. Commenters stated that this review is not duplicative with image-guidance codes as it instead involves reviewing distinct previous studies.

Response: We continue to believe that this clinical labor time should be removed because it is duplicative, as CPT code 52334 would be billed together with a separate imaging code that already includes clinical labor time for confirming the availability of prior images when it is performed with imaging guidance. We believe that the commenters may be conflating the absence of the CA006 clinical labor activity when CPT code 52334 was previously reviewed with the lack of any clinical labor for reviewing images that did not exist previously in this specific code. There were hundreds of procedures that included clinical labor for reviewing images prior to the creation of the CA006 clinical labor code, and CPT code 52334 was not one of them. Similarly, while we agree that there are many services that do not have bundled imaging and nonetheless include the physician reviewing images and studies before performing the service, this does not explain why CPT code 52334 would require clinical labor time for confirming the availability of prior images and studies when the service did not include this clinical labor time previously. We continue to believe that the inclusion of this clinical labor time would be duplicative for this service.

Comment: One commenter requested that CPT code 52334 be added to the phase-in list for codes with significant PE RVU reductions.

Response: Section 1848(c)(7) of the Act, as added by section 220(e) of the PAMA, 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. We proposed to exempt CPT code 52334 from the phase-in due to the fact that it is part of the same family of codes that included new CPT codes 50436 and 50437. We have previously finalized this policy through rulemaking, stating that significant coding revisions within a family of codes can change the relationships among codes to the extent that it changes the way that all services in the group are reported, even if some individual codes retain the same number or, in some cases, the same descriptor. Excluding codes from the phase-in when there are significant revisions to the code family also helps to maintain the appropriate rank order among codes in the family, avoiding years for which RVU changes for some codes in a family are in transition while others were fully implemented. For additional information regarding the phase-in of significant RVU reductions, we direct readers to the CY 2016 PFS final rule with comment period (80 FR 70927 through 70929).

(24) Transurethral Destruction of Prostate Tissue (CPT Codes 53850, 53852, and 53854)

In September 2017, the CPT Editorial Panel created a new code (CPT code 53854) to report transurethral destruction of prostate tissue by radiofrequency-generated water vapor thermotherapy. CPT codes 53850 (Transurethral destruction of prostate tissue; by microwave thermotherapy) and 53852 (Transurethral destruction of prostate tissue; by radiofrequency thermotherapy) were also included for review as part of the same family of codes.

For CPT code 53850 (Transurethral destruction of prostate tissue; by microwave thermotherapy), the RUC recommended a work RVU of 5.42, supported by a direct crosswalk to CPT code 33272 (Removal of subcutaneous implantable defibrillator electrode) with a total time of 151 minutes, intraservice time of 45 minutes, and a work RVU of 5.42. The RUC indicated that a work RVU of 5.42 accurately reflects the lowest value of the three CPT codes in this family. We proposed the work RVU of 5.42 for CPT code 53850, as recommended by the RUC.

The RUC recommended a work RVU of 5.93 for CPT code 53852 (Transurethral destruction of prostate tissue; by radiofrequency thermotherapy) and for CPT code 53854 (Transurethral destruction of prostate tissue; by radiofrequency generated water vapor thermotherapy). We proposed the RUC-recommended work RVU of 5.93 for CPT code 53852.

CPT code 53854 is a service reflecting the use of a new technology, “radiofrequency generated water vapor thermotherapy,” as distinct from CPT code 53852, which describes destruction of tissue by “radiofrequency thermotherapy.” The RUC indicated that this CPT code is the most intense of the three CPT codes in this family, thereby justifying a work RVU identical to that of CPT code 53852, despite lower intraservice and total times. The RUC stated that 15 minutes of post service time is appropriate due to greater occurrence of post-procedure hematuria necessitating a longer monitoring time. However, the post-service monitoring time for this CPT code, 15 minutes, is identical to that for CPT code 53852. We did not agree with the explanation provided by the RUC for recommending a work RVU identical to that of CPT code 53852, given that the total time is 5 minutes lower, and the post service times are identical. Both the intraservice time ratio between this new CPT code and CPT code 53852 (4.94) and the total time ratio between the two CPT codes (5.72) suggest that the RUC-recommended work RVU of 5.93 overestimates the work involved in furnishing this service. We reviewed other 90-day global CPT codes with similar times and identified CPT code 24071 (Excision, tumor, soft tissue of upper arm or elbow area, subcutaneous; 3 cm or greater) with a total time of 183 minutes, intraservice time of 45 minutes, and a work RVU of 5.70 as an appropriate crosswalk. We believed that this would be a better reflection of the work involved in furnishing CPT code 53854, and therefore, we proposed a work RVU of 5.70 for this CPT code. We welcomed comments about the time and intensity required to furnish this new service. Since this CPT code reflects the use of a new technology, it will be reviewed again in 3 years.

For the direct PE inputs, we proposed to add a new supply (SA128: “kit, Rezum delivery device”), a new equipment item (EQ389: “generator, water thermotherapy procedure”), and proposed to update the price of two supplies (SA036: “kit, transurethral microwave thermotherapy” and SA037: “kit, transurethral needle ablation (TUNA)”) after reviewing invoices that we received. We noted that these invoices were submitted along with additional information listing the vendor discount for these supplies and equipment. We appreciated the inclusion of the discounted prices on these invoices, and we encouraged other invoice submissions to provide the discounted price as well, where available. Based on market research on supply and equipment pricing carried out by our contractors, we believe that a vendor discount of 10-15 percent is common on many supplies and equipment. Since we are obligated by statute to establish RVUs for each service as required based on the resource inputs required to furnish the typical case of a service, we have concerns that relying on invoices for supply and equipment pricing absent these vendor discounts may overestimate the resource cost of some services. We encouraged the submission of additional invoices that include the discounted price of supplies and equipment to more accurately assess the market cost of these resources.

The following is a summary of the public comments we received on our proposals involving the Transurethral Destruction of Prostate Tissue family of codes.

Comment: Several commenters expressed support for our proposed work RVU of 5.42 for CPT code 53850 and 5.93 for CPT code 53852, which reflect the RUC's recommendations for these two codes.

Response: We appreciate the commenters' support and we are finalizing a work RVU of 5.42 for CPT code 53850 and a work RVU of 5.93 for CPT code 53852.

Comment: A commenter pointed out that there is an error in our description of the RUC's time components for this code. We stated that there was less post service time for CPT code 53854 than for CPT code 53852 when, in fact, both codes have a post service time of 15 minutes. The intraservice time between the two codes differs by 5 minutes, with CPT code 53854 having 5 fewer minutes than CPT code 53852.

Response: We thank the commenter for informing us of the error. We note, however, that this does not affect our proposal which is based on a comparison of both intraservice and total time ratios.

Comment: Several commenters, ranging from device manufacturers and professional associations, disagreed with our proposed value of 5.70 for CPT code 53854 instead of the RUC-recommended work RVU of 5.93. Commenters stated that the work involved in furnishing the service described by CPT code 53854 is the most intense of the three CPT codes in this family because of the added risk of bleeding, urinary retention and damage to the external urinary sphincter with resultant incontinence of urine if not performed properly. Commenters also urged CMS to approach the time results from the survey for this code with caution, as few practitioners are likely to have had much experience with the new technology described by this service.

Response: In our proposal, we requested additional information from stakeholders about the time and intensity required to furnish this service because we were not convinced that the work involved in furnishing the service described by CPT code 53854 is more intense than the work involved in furnishing CPT code 53852, which the RUC used as a reference code in developing their recommendation. We were convinced by commenters, however, that the additional risk in furnishing this service supports a higher work RVU than what we proposed. Therefore, we are finalizing a work RVU of 5.93 for this CPT code, as recommended by the RUC.

Comment: One commenter stated that both CPT codes should be subject to the phase-in for CY 2019 because they will decrease more than 20 percent and are not new or revised codes. The commenter urged CMS to add CPT codes 52380 and 52382 to the list of codes subject to the phase-in.

Response: Section 1848(c)(7) of the Act, as added by section 220(e) of the PAMA, 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. We proposed to exempt CPT codes 52380 and 52382 from the phase-in of significant RVU reductions required by section 1848(b)(11) of the Act because these codes are part of the same family of codes that included new CPT code 53854. We have previously finalized this policy through rulemaking, stating that significant coding revisions within a family of codes can change the relationships among codes to the extent that it changes the way that all services in the group are reported, even if some individual codes retain the same number or, in some cases, the same descriptor. Excluding codes from the phase-in when there are significant revisions to the code family also helps to maintain the appropriate rank order among codes in the family, avoiding years for which RVU changes for some codes in a family are in transition while others were fully implemented. For additional information regarding the phase-in of significant RVU reductions, we direct readers to the CY 2016 PFS final rule with comment period (80 FR 70927 through 70929).

Comment: One commenter stated that they were concerned about substantial reductions in billable staff time and supply costs associated with CPT codes 53850 and 53852. The commenter stated that reductions in billable staff time will require treating physicians to minimize non-procedural time which may include: Comfort control protocols; patient expectation management; patient post-procedure instructions; and recommended best practices for follow-up care. The commenter stated that they were concerned that the proposed supply costs are not in line with actual pricing or with actual cost increases for manufacturing of the product, and indicated that significant reductions in reimbursement will limit patient access to a therapy with demonstrated safety, effectiveness, and cost efficacy.

Response: We appreciate the feedback from the commenter, and we are sensitive to the need for accurate payment under the PFS to ensure that beneficiaries maintain access to care. However, we note that we proposed the RUC-recommended direct PE inputs for this family of codes without refinement, and the decreases in clinical staff time for these procedures were almost entirely due to shorter surveyed intraservice work times and the removal of office visits in the postoperative portion of the global period as identified by the RUC. We agree with the RUC that fewer follow-up office visits and shorter intraservice times are now typical for these procedures, and we do not believe that the resulting decreases in clinical labor time will create barriers to accessing care. With regard to changes in the proposed supply costs, we direct readers to our discussion of the market-based supply and equipment pricing update in section II.B. of this final rule. We encourage stakeholders to continue to provide feedback concerning accurate supply and equipment pricing.

After consideration of the comments, we are finalizing the RUC-recommended work RVUs and direct PE inputs for the three codes in the Transurethral Destruction of Prostate Tissue family of codes.

(25) Vaginal Treatments (CPT Codes 57150 and 57160)

CPT codes 57150 (Irrigation of vagina and/or application of medicament for treatment of bacterial, parasitic, or fungoid disease) and 57160 (Fitting and insertion of pessary or other intravaginal support device) were identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. For CY 2019, we proposed the RUC-recommended work RVU of 0.50 for CPT code 57150 and the RUC-recommended work RVU of 0.89 for CPT code 57160.

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving the Vaginal Treatments family of codes.

Comment: Commenters were supportive of our proposal of the RUC-recommended work RVUs.

Response: We thank commenters for their support.

After consideration of the public comments, we are finalizing the RUC-recommended work RVUs and direct PE inputs for CPT codes 57150 and 57160 as proposed.

(26) Biopsy of Uterus Lining (CPT Codes 58100 and 58110)

CPT code 58100 (Endometrial sampling (biopsy) with or without endocervical sampling (biopsy), without cervical dilation, any method) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. CPT code 58110 (Endometrial sampling (biopsy) performed in conjunction with colposcopy) was also included for review as part of the same family of codes. For CY 2019, we proposed the RUC-recommended work RVU of 1.21 for CPT code 58100 and the RUC-recommended work RVU of 0.77 for CPT code 58110.

For the direct PE inputs, we proposed to remove the clinical labor time for the “Review/read post-procedure x-ray, lab and pathology reports” (CA028) activity for CPT code 58100. This code is typically billed with a same day E/M service, and we believe that it would be duplicative to assign clinical labor time for reviewing reports given that this task would typically be done during the same day E/M service. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the Biopsy of Uterus Lining family of codes.

Comment: Several commenters stated that they appreciated that CMS proposed the RUC-recommended work RVU of 1.21 for CPT code 58100 and the RUC-recommended work RVU of 0.77 for CPT code 58110.

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

Comment: Several commenters disagreed with the CMS proposal to remove the clinical labor time for the “Review/read post-procedure x-ray, lab and pathology reports” (CA028) activity for CPT code 58100. Commenters stated that this clinical labor activity was not duplicative, as CA028 is designed specifically for post-procedure activity during the postservice of the service period which would not overlap with activities in the E/M office visit, which typically occur prior to the procedure and are listed as a preservice clinical labor activity. Commenters stated that the clinical description of the service for CPT code 58100 clearly notes that the E/M service is done the day before the service and that the patient returns for the biopsy.

Response: We disagree with the commenters' statements about the timing of the E/M office visit. The same day billing data indicates that CPT code 58100 is typically billed with an E/M office visit on the same day (59 percent of the time), and it therefore seems clear that the E/M office visit typically takes place during the day of the procedure, not the day before. We do not understand how the claims analysis fits with the statement from the commenters that the E/M service happens the day before the procedure, especially since CPT code 58100 has a 0-day global period that does not include preoperative care that takes place the day before the procedure. We continue to believe that it would be duplicative to assign clinical labor time for reviewing reports given that this task would typically be done during the same day E/M service. We believe that this clinical labor would be carried out during the same day E/M visit.

After consideration of the public comments, we are finalizing the work RVUs and the direct PE inputs for the codes in the Biopsy of Uterus Lining family of codes as proposed.

(27) Injection Greater Occipital Nerve (CPT Code 64405)

CPT code 64405 (Injection, anesthetic agent; greater occipital nerve) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. For CY 2019, we proposed the RUC-recommended work RVU of 0.94 for CPT code 64405.

For the direct PE inputs, we proposed to refine the equipment time for the exam table (EF023) in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 64405.

Comment: Some commenters expressed support for our proposal to accept the RUC-recommended work RVU for this code.

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

After consideration of the public comments, we are finalizing the work RVU and the direct PE inputs for CPT code 64405 as proposed.

(28) Injection Digital Nerves (CPT Code 64455)

CPT code 64455 (Injection(s), anesthetic agent and/or steroid, plantar common digital nerve(s) (e.g., Morton's neuroma)) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. For CY 2019, we proposed the RUC-recommended work RVU of 0.75 for CPT code 64455.

For the direct PE inputs, we proposed to refine the equipment time for the exam table (EF023) in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 64455.

Comment: Several commenters supported the CMS proposal of the RUC-recommended work RVU of 0.75.

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

After consideration of the public comments, we are finalizing the work RVU and the direct PE inputs for CPT code 64455 as proposed.

(29) Removal of Foreign Body—Eye (CPT Codes 65205 and 65210)

CPT codes 65205 (Removal of foreign body, external eye; conjunctival superficial) and 65210 (Removal of foreign body, external eye; conjunctival embedded (includes concretions), subconjunctival, or scleral nonperforating) were identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000.

For CY 2019, we proposed the RUC-recommended work RVU of 0.49 for CPT code 65205. We noted that the recommendations for this code included a statement that the work required to perform CPT code 65205 and the procedure itself had not fundamentally changed since the time of the last review. However, due to the fact that the surveyed intraservice time had decreased from 5 minutes to 3 minutes, the work RVU was lowered from the current value of 0.71 to the recommended work RVU of 0.49, based on a direct crosswalk to CPT code 68200 (Subconjunctival injection). We noted that this recommendation appears to have been developed under a methodology similar to our ongoing use of time ratios as one of several methods used to evaluate work. We used time ratios to identify potential work RVUs and considered these work RVUs as potential options relative to the values developed through other options. As we have stated in past rulemaking (such as 82 FR 53032-53033), we did not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in newly valued work RVUs, as indeed it does not in the case of CPT code 65205 here. Instead, we believed that, since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs. We appreciate that the RUC-recommended work RVU for CPT code 65205 has taken these changes in work time into account, and we support the use of similar methodologies, where appropriate, in future work valuations.

For CPT code 65210, we disagreed with the RUC-recommended work RVU of 0.75 and we proposed a work RVU of 0.61 based on a direct crosswalk to CPT code 92511 (Nasopharyngoscopy with endoscope). This crosswalk code has the same intraservice time of 5 minutes and 4 additional minutes of total time as compared to CPT code 65210. We noted that the recommended intraservice time for CPT code 65210 is decreasing from 13 minutes to 5 minutes (62 percent reduction), and the recommended total time for CPT code 65210 is decreasing from 25 minutes to 13 minutes (48 percent reduction); however, the RUC-recommended work RVU is only decreasing from 0.84 to 0.75, which is a reduction of about 11 percent. As we noted earlier, we do not believe that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, and we did not propose a linear decrease in the work valuation based on these time ratios. However, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs, and we do not believe that the recommended work RVU of 0.75 appropriately reflects these decreases in surveyed work time.

Our proposed work RVU of 0.61 is also based on a crosswalk to CPT code 51700 (Bladder irrigation, simple, lavage and/or instillation), another recently reviewed code with higher time values and a work RVU of 0.60. We also noted that two injection codes (CPT codes 20551 and 64455) were reviewed at the same RUC meeting as CPT code 65210, each of which shared the same intraservice time of 5 minutes and had a higher total time of 21 minutes. Both of these codes had a RUC-recommended work RVU of 0.75, which we proposed without refinement for CY 2019. Due to the fact that CPT code 65210 has a lower total time and a lower intensity than both of these injection procedures, we did not agree that CPT code 65210 should be valued at the same work RVU of 0.75. We believe that our proposed work RVU of 0.61 based on a crosswalk to CPT code 92511 is a more accurate value for this code.

For the direct PE inputs, we noted that the RUC-recommended equipment time for the screening lane (EL006) equipment in CPT codes 65205 and 65210 was equal to the total work time in addition to the clinical labor time needed to set up and clean the equipment. We disagreed that the screening lane would typically be in use for the total work time, given that this includes the preservice evaluation time and the immediate postservice time. Although we did not currently propose to refine the equipment time for the screening lane in these two codes, we solicited comments on whether the use of the intraservice work time would be more typical than the total work time for CPT codes 65205 and 65210.

The following is a summary of the public comments we received on our proposals involving the Removal of Foreign Body—Eye family of codes.

Comment: Commenters agreed with the CMS proposal of the RUC-recommended work RVU for CPT code 65205.

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

Comment: Several commenters disagreed with our statement that the RUC-recommended work RVU for CPT code 65205 appeared to have been developed under a methodology similar to the use of time ratios. Commenters stated that time ratios were not used in arriving at the value of 0.49 for CPT code 65205, and that the recommended work RVU was based instead on a crosswalk to the second key reference code from the survey, CPT code 68200, which requires the same total time to perform and shares identical intensity and complexity.

Response: We appreciate the additional information provided by the commenters regarding the methodology behind the recommended work RVU for CPT code 65205. As we noted in the proposed rule, this recommendation appeared to have been developed under a methodology similar to our ongoing use of time ratios; we did not state that the recommendation was explicitly based on the use of a time ratio.

Comment: Many commenters disagreed with the proposed work RVU of 0.61 for CPT code 65210 and stated that CMS should finalize the RUC-recommended work RVU of 0.75. Commenters stated that CMS should not use intraservice time ratios for work valuation as this methodology ignored the work estimates present in the survey data and the RUC review of those work estimates. Commenters stated that the RUC-recommended work values consider intensity and complexity of the work, while CMS substituted an arbitrary determination of work values based on time and a subjective estimate of intensity and complexity based on an unknown and clinically uninformed opinion.

Response: We disagree with the commenters and continue to believe that the use of time ratios is one of several appropriate methods for identifying potential work RVUs for particular PFS services, particularly when the alternative values recommended by the RUC and other commenters do not account for information provided by surveys that suggests the amount of time involved in furnishing the service has changed significantly. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. When our review of recommended values reveals that changes in the resource of time have been unaccounted for in a recommended RVU, then we believe we have the obligation to account for that change in establishing work RVUs since the statute explicitly identifies time as one of the two elements of the work RVUs. We recognize that it would not be appropriate to develop work RVUs solely based on time given that intensity is also an element of work, but in applying the time ratios, we are using derived intensity measures based on current work RVUs for individual procedures. Were we to disregard intensity altogether, the work RVUs for all services would be developed based solely on time values and that is definitively not the case, as indicated by the many services that share the same time values but have different work RVUs. (As an example, CPT codes 38222, 54231, 55870, 75573, and 78814 all share identical CY 2019 work times with 15 minutes of preservice time, 30 minutes of intraservice time, and 15 minutes of postservice time; however these codes have respective CY 2019 work RVUs of 1.44, 2.04, 2.58, 2.55, and 2.20.) Furthermore, we reiterate that we use time ratios to identify potentially appropriate work RVUs, and then use other methods (including estimates of work from CMS medical personnel and crosswalks to key reference or similar codes) to validate these RVUs. For more details on our methodology for developing work RVUs, we direct readers to the discussion in the CY 2017 PFS final rule (81 FR 80272 through 80277). We also note that in the case of CPT code 65210, we derived our proposed work RVU of 0.61 by using a direct crosswalk to CPT code 92511 and not a time ratio.

Comment: Several commenters noted that CPT code 65210 had never been surveyed and was based on Harvard time which contributed to the median survey intraservice time of 5 minutes being less than half of the current value of 13 minutes. Commenters stated that Harvard times should be not be used for any sort of time comparison, especially when the code was not originally surveyed by Harvard, and any comparisons with these work times were inappropriate.

Response: 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 also 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. However, we want to reiterate that we believe it would be irresponsible to ignore changes in time based on the best data available and that we are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. For additional information regarding the use of current work time values in our methodology, we refer readers to our discussion of the subject in the CY 2017 final rule (81 FR 80273 through 80274).

Comment: Several commenters stated that the procedure described by CPT code 65210 has not fundamentally changed, and therefore the RUC had recommended a work RVU at the 25th percentile in accordance with the recent survey. One commenter stated that the intensity of the procedure was also unchanged. Commenters stated that the crosswalk and reference codes chosen by CMS were clearly not as intense as the removal of an embedded foreign body described by CPT code 65210, in which an incision into ocular tissue is required.

Response: We disagree with the commenters that CPT code 65210 has not fundamentally changed. We note for example that the surveyed work times have decreased drastically from the prior valuation, and similarly, the intensity of the service as measured by the survey more than doubled. These factors do not comport with the statement from the commenters that intensity of this service is unchanged. We also note that the RUC-recommended work RVU of 0.75 was a decrease from the current work RVU of 0.84, which also does not appear to reflect the idea that the intensity of the service has not changed. We similarly disagree with the commenters that our crosswalk and reference codes are not as intense as CPT code 65210. CPT code 92511 in particular describes a nasopharyngoscopy with endoscope that requires removing secretions and dried mucus blocking passage to the nasopharynx with suction and/or forceps. We disagree with the commenters that this procedure would be less intensive than the removal of a foreign body as described in CPT code 65210.

Comment: Several commenters disagreed with the CMS comparison of CPT code 65210 to two injection codes (CPT codes 20551 and 64455) which were reviewed at the same RUC meeting as CPT code 65210. Commenters stated that the two referenced codes both have a lower intensity than CPT code 65210 and therefore they were not appropriate references for work valuation. Commenters stated that CPT code 65210 has a lower total time and a higher intensity than both of these injection procedures, justifying the recommended work RVU of 0.75.

Response: We disagree with the commenters that CPT code 65210 would typically have a higher intensity than CPT codes 20551 and 64455. These codes both describe injection procedures, with CPT code 20551 describing an injection into the tendon and CPT code 64455 describing an injection into the plantar common digital nerve. We do not agree that the removal of a foreign body from the eye as described in CPT code 65210 would have such greater intensity that it warrants a work RVU of 0.75 (to match CPT codes 20551 and 64455) despite having approximately 40 percent less total work time.

Comment: Several commenters stated in response to the CMS comment solicitation that the screening lane (EL006) equipment would typically be in use for the total work time of CPT codes 65205 and 65210. Commenters stated that the screening lane is the ophthalmic equivalent of an exam room in the non-facility setting which would be needed for the total time of the procedure. Commenters stated that this equipment time represented the total time taken by the physician to perform the service in the screening lane (which would be not be available for use by another patient during the time of the procedure), plus the time inputs for the technician work as listed above.

Response: We appreciate the additional information provided by the commenters regarding the use of the screening lane (EL006) equipment.

After consideration of the public comments, we are finalizing the work RVUs and the direct PE inputs for the codes in the Removal of Foreign Body—Eye family of codes as proposed.

(30) Injection—Eye (CPT Codes 67500, 67505, and 67515)

CPT code 67515 (Injection of medication or other substance into Tenon's capsule) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. CPT codes 67500 (Retrobulbar injection; medication (separate procedure, does not include supply of medication)) and 67505 (Retrobulbar injection; alcohol) were also included for review as part of the same family of codes. For CY 2019, we proposed the RUC-recommended work RVU of 1.18 for CPT code 67500.

For CPT code 67505, we disagreed with the RUC-recommended work RVU of 1.18 and we proposed a work RVU of 0.94 based on a direct crosswalk to CPT code 31575 (Laryngoscopy, flexible; diagnostic). This is a recently reviewed code with the same intraservice time of 5 minutes and 2 fewer minutes of total time as compared to CPT code 67505. We disagreed with the recommendation to propose the same work RVU of 1.18 for both CPT code 67500 and 67505 for several reasons. We noted that the current work RVU of 1.44 for CPT code 67500 is higher than the current work RVU of 1.27 for CPT code 67505, while the current work time of CPT code 67500 is less than the current work time for CPT code 67505. This supported the view that CPT code 67500 should be valued higher than CPT code 67505 due to its greater intensity, which we also found to be supportable on clinical grounds. The typical patient for CPT code 67505 has already lost their sight, and there is less of a concern about accidental blindness as compared to CPT code 67500. At the recommended identical work RVUs, CPT code 67500 has almost triple the intensity of CPT code 67505. Similarly, the intensity does not match our clinical understanding of the complexity and difficulty of the two procedures.

We also noted that the surveyed total time for CPT code 67505 was 7 minutes less than the surveyed time for CPT code 67500, approximately 21 percent lower. If we were to take the total time ratio between the two codes, it would produce a suggested work RVU of 0.93 (26 minutes divided by 33 minutes times a work RVU of 1.18). This time ratio suggested a work RVU almost identical to the 0.94 value that we determined via a crosswalk to CPT code 31575. Based on the preceding rationale, we proposed a work RVU of 0.94 for CPT code 67505.

For CPT code 67515, we disagreed with the RUC-recommended work RVU of 0.84 and we proposed a work RVU of 0.75 based on a crosswalk to CPT code 64450 (Injection, anesthetic agent; other peripheral nerve or branch). The recommended work RVU is based on a direct crosswalk to CPT code 65222 (Removal of foreign body, external eye; corneal, with slit lamp) at a work RVU of 0.84. However, the recommended crosswalk code has more than double the intraservice time of CPT code 67515 at 7 minutes, and we believe that it would be more accurate to use a crosswalk to a code with a more similar intraservice time such as CPT code 64450, which is another type of injection procedure. The proposed work RVU of 0.75 is also based on the use of the intraservice time ratio with the first code in the family, CPT code 67500. The intraservice time ratio between these codes is 0.60 (3 minutes divided by 5 minutes), which yields a suggested work RVU of 0.71 when multiplied by the recommended work RVU of 1.18 for CPT code 67500. We believe that this provides further rationale for our proposed work RVU of 0.75 for CPT code 67515.

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving the Injection—Eye family of codes.

Comment: Commenters were supportive of the CMS proposal of the RUC-recommended work RVU of 1.18 for CPT code 67500.

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

Comment: Many commenters disagreed with the proposed work RVU of 0.94 for CPT code 67505 and stated that CMS should finalize the RUC-recommended work RVU of 1.18. Commenters were confused by the CMS statement that, at the recommended identical work RVUs, CPT code 67500 has almost triple the intensity of CPT code 67505. Commenters stated that the RUC recommendation for CPT code 67505 has less total time and slightly higher intensity than CPT code 67500.

Response: We agree with the commenters that this was an inaccurate statement; we intended to state that the current intensity of CPT code 67500 prior to review is almost triple the current intensity of CPT code 67505. We regret any resulting confusion on this subject.

Comment: Several commenters disagreed with the use of a time ratio analysis to support the CMS proposed work value. Commenters stated that time ratios do not adequately account for intensity and complexity of work, which can only be addressed through the survey and the RUC process.

Response: We disagree with the commenters and continue to believe that the use of time ratios is one of several appropriate methods for identifying potential work RVUs for particular PFS services, particularly when the alternative values recommended by the RUC and other commenters do not account for information provided by surveys that suggests the amount of time involved in furnishing the service has changed significantly. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. When our review of recommended values reveals that changes in the resource of time have been unaccounted for in a recommended RVU, then we believe we have the obligation to account for that change in establishing work RVUs since the statute explicitly identifies time as one of the two elements of the work RVUs. We recognize that it would not be appropriate to develop work RVUs solely based on time given that intensity is also an element of work, but in applying the time ratios, we are using derived intensity measures based on current work RVUs for individual procedures. Were we to disregard intensity altogether, the work RVUs for all services would be developed based solely on time values and that is definitively not the case, as indicated by the many services that share the same time values but have different work RVUs. (As an example, CPT codes 38222, 54231, 55870, 75573, and 78814 all share identical CY 2019 work times with 15 minutes of preservice time, 30 minutes of intraservice time, and 15 minutes of postservice time; however these codes have respective CY 2019 work RVUs of 1.44, 2.04, 2.58, 2.55, and 2.20.) Furthermore, we reiterate that we use time ratios to identify potentially appropriate work RVUs, and then use other methods (including estimates of work from CMS medical personnel and crosswalks to key reference or similar codes) to validate these RVUs. For more details on our methodology for developing work RVUs, we direct readers to the discussion CY 2017 PFS final rule (81 FR 80272 through 80277). We also note that in the case of CPT code 65210, we derived our proposed work RVU of 0.61 by using a direct crosswalk to CPT code 31575 and not a time ratio.

Comment: Several commenters stated that while it was true that the current work value for CPT code 67500 is higher than that of CPT code 67505, the survey 25th percentiles indicated that the physician work of CPT code 67505 (work RVU = 1.30) is higher than that of CPT code 67500 (work RVU = 1.18). Commenters stated that the reason for performing surveys is to adjust for changes in physician work that have occurred since the prior survey, and that it was inappropriate to put more weight on old data than on the most recent data. Commenters also disagreed with the proposed work RVU on clinical grounds, stating that CPT code 67505 has a higher intensity than CPT code 67500, not because of potential vision loss, but because of the risk of death if the absolute alcohol is injected accidentally into the optic nerve sheath. Commenters stated that the alcohol injection involved in CPT code 67505 is typically very painful, even after a local anesthetic injection, and carries with it the risk of death which therefore makes it a high-intensity procedure for both patient and physician.

Response: We appreciate the additional clinical details involving CPT code 67505 from the commenters. After reviewing the information provided by the commenters, we are not finalizing our proposed work RVU of 0.94 for CPT code 67505, and we are finalizing the RUC-recommended work RVU of 1.18 instead due to the additional risks carried by the procedure.

Comment: Many commenters disagreed with the proposed work RVU of 0.75 for CPT code 67515 and stated that CMS should finalize the RUC-recommended work RVU of 0.84. Commenters disagreed with the CMS crosswalk to CPT code 64450 and stated that the intensity of an injection adjacent to the eye in which the physician is unable to see the needle tip is clearly greater than that of an injection into a peripheral nerve as in the code for the CMS proposed crosswalk. Commenters stated that the use of a time ratio methodology for CPT code 67515 was particularly inappropriate due to changes in the RUC survey methodology since the last survey for this service was performed, and that increases in the intensity of CPT code 67515 should not be of concern due to the 0-day global period and short intraservice work time.

Response: We continue to believe that the use of time ratios is one of several appropriate methods for identifying potential work RVUs, as described in more detail in our response to the comments for CPT code 67505 above. We also disagree with the commenters on their objections on clinical grounds concerning our crosswalk to CPT code 64450. CPT code 64450 describes the injection of an anesthetic agent into a peripheral nerve or branch, and the practitioner performing this service also cannot see a needle tip when injecting into a peripheral nerve. In other words, this is the same situation as that described in CPT code 67515: The practitioner performing the service is unable to see the needle tip in both cases. We continue to note that the RUC-recommended crosswalk code (CPT code 65222) has more than double the intraservice time of CPT code 67515 at 7 minutes, and we continue to believe that it would be more accurate to use a crosswalk to a code with a similar intraservice time such as CPT code 64450.

After consideration of the public comments, we are finalizing the work RVUs for CPT codes 67500 and 67515 as proposed. We are finalizing the RUC-recommended work RVU of 1.18 for CPT code 67505. We are also finalizing the direct PE inputs for all three codes as proposed.

(31) X-Ray Spine (CPT Codes 72020, 72040, 72050, 72052, 72070, 72072, 72074, 72080, 72100, 72110, 72114, and 72120)

CPT codes 72020 (Radiologic examination, spine, single view, specify level) and 72072 (Radiologic examination, spine; thoracic, 3 views) were identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. The code family was expanded to include ten additional CPT codes to be reviewed together as a group: CPT codes 72040 (Radiologic examination, spine, cervical; 2 or 3 views), 72050 (Radiologic examination, spine, cervical; 4 or 5 views), 72052 (Radiologic examination, spine, cervical; 6 or more views), 72070 (Radiologic examination, spine; thoracic, 2 views), 72074 (Radiologic examination, spine; thoracic, minimum of 4 views), 72080 (Radiologic examination, spine; thoracolumbar junction, minimum of 2 views), 72100 (Radiologic examination, spine, lumbosacral; 2 or 3 views), 72110 (Radiologic examination, spine, lumbosacral; minimum of 4 views), 72114 (Radiologic examination, spine, lumbosacral; complete, including bending views, minimum of 6 views), and 72120 (Radiologic examination, spine, lumbosacral; bending views only, 2 or 3 views).

The radiologic examination procedures described by CPT codes 72020 (Radiologic examination, spine, single view, specify level), 72040 (Radiologic examination, spine, cervical; 2 or 3 views), 72050 (Radiologic examination, spine, cervical; 4 or 5 views), 72052 (Radiologic examination, spine, cervical; 6 or more views), 72070 (Radiologic examination, spine; thoracic, 2 views), 72072 (Radiologic examination, spine; thoracic, 3 views), 72074 (Radiologic examination, spine; thoracic, minimum of 4 views), 72080 (Radiologic examination, spine; thoracolumbar junction, minimum of 2 views), 72100 (Radiologic examination, spine, lumbosacral; 2 or 3 views), 72110 (Radiologic examination, spine, lumbosacral; minimum of 4 views), 72114 (Radiologic examination, spine, lumbosacral; complete, including bending views, minimum of 6 views), 72120 (Radiologic examination, spine, lumbosacral; bending views only, 2 or 3 views), 72200 (Radiologic examination, sacroiliac joints; less than 3 views), 72202 (Radiologic examination, sacroiliac joints; 3 or more views), 72220 (Radiologic examination, sacrum and coccyx, minimum of 2 views), 73070 (Radiologic examination, elbow; 2 views), 73080 (Radiologic examination, elbow; complete, minimum of 3 views), 73090 (Radiologic examination; forearm, 2 views), 73650 (Radiologic examination; calcaneus, minimum of 2 views), and 73660 (Radiologic examination; toe(s), minimum of 2 views) were all identified as potentially misvalued through a screen for CPT codes with high utilization.

With approval from the RUC Research Subcommittee, the specialty societies responsible for reviewing these CPT codes did not conduct surveys, but instead employed a “crosswalk methodology,” in which they derived physician work and time components for CPT codes by comparing them to similar CPT codes. We recognize that a substantial amount of time and effort is involved in conducting surveys of potentially misvalued CPT codes; however, we had concerns about the quality of the underlying data used to value these CPT codes. The descriptors and other information on which the recommendations are based have themselves not been surveyed, in several instances, since 1995. Without the benefit of a survey or other external source of data about these CPT codes, there is no information that would allow us to detect any potential improvements in efficiency of furnishing the service or evaluate whether changes in practice patterns have affected time and intensity. We are not categorically opposed to changes in the RUC process or methodology that might reduce the burden of conducting surveys, but without the benefit of any additional data, through surveys or otherwise, we were not convinced that there was a basis for evaluating the RUC's recommendations for work RVUs for each of these CPT codes.

Since all 20 of the CPT codes in this group have very similar intraservice (from 3-5 minutes) and total (ranging from 5-8 minutes) times, we proposed to use an alternative approach to the valuation of work RVUs for these CPT codes. We calculated the utilization-weighted average RUC-recommended work RVU for the 20 CPT codes. The result of this calculation was a work RVU of 0.23, which we proposed to apply uniformly to each CPT code: 72020, 72040, 72050, 72052, 72070, 72072, 72074, 72080, 72100, 72110, 72114, 72120, 72200, 72202, 72220, 73070, 73080, 73090, 73650, and 73660. We recognized that the proposed work RVU for some of these CPT codes might be somewhat lower at the code level than the RUC's recommendation, while the proposed work RVU for other CPT codes might be slightly higher than the RUC's recommended value. We nevertheless believe that the alternative, accepting the RUC's recommendation for each separate CPT code implied a level of precision about the time and intensity of the CPT codes that we had no way to validate.

For the direct PE inputs, we proposed to add a patient gown (SB026) supply to CPT code 72120. We noted that all of the other codes in the family that included clinical labor time for the “Greet patient, provide gowning, ensure appropriate medical records are available” (CA009) task included a patient gown, and we proposed to add the patient gown to match the other codes in the family. We believed that the exclusion of the patient gown for CPT code 72120 was most likely due to a clerical error in the recommendations. We also proposed to refine the equipment time for the basic radiology room (EL012) in accordance with our standard equipment time formulas.

In our review of the clinical labor time recommended for the “Perform procedure/service—NOT directly related to physician work time” (CA021) task, we noted that the standard convention for this family of codes seemed to be 3 minutes of clinical labor time per view being conducted. For example, CPT code 72020 with a single view had 3 minutes of recommended clinical labor time for this activity, while CPT code 72070 with two views had 6 minutes. However, we also noted that for the codes with 2-3 views such as CPT codes 72040 and 72100, the recommended clinical labor time of 9 minutes appears to assume that 3 views would always be typical for the procedure. The same pattern occurred for codes with 4-5 views, which have a recommended clinical labor time of 15 minutes (assuming 5 views is typical), and for codes with 6 or more views, which have a recommended clinical labor time of 21 minutes (assuming 7 views is typical).

We did not propose to refine the clinical labor times for this task as we did not have data available to know how many views would be typical for these CPT codes. However, we noted that the intraservice clinical labor time has not changed in roughly 2 decades for these X-ray services, including during this most recent review, and we believed that improving technology during this span of time may have resulted in greater efficiencies in the procedures. We continue to be interested in data sources regarding the intraservice clinical labor times for services such as these that do not match the physician intraservice time, and we welcomed any comments that may be able to provide additional details for the 12 codes under review in this family.

The following is a summary of the public comments we received on our proposals involving the X-Ray Spine family of codes.

Comment: A number of commenters disagreed with our proposal to apply an identical work RVU, calculated as the utilization-weighted average RUC-recommended work RVU for each of the 20 CPT codes, to each of the CPT codes in this group. Commenters defended the crosswalk methodology, stating that it is the best approach for valuing work RVUs for codes in which the service times are very low and therefore difficult to survey. The commenters noted that the specialty societies have tried to survey codes such as this in the past with results that yielded substantial inconsistencies.

Response: We share the commenters' concerns about the validity of surveying services with very low intraservice and total time, but we have even more substantial concerns about a methodology that introduces no new information about the work involved in furnishing these CPT codes and then states their accuracy to the hundredth of a work RVU. Survey data from the specialty societies is often the only data source available to us that reflects the experiences of a cross-section of providers. We remind stakeholders that we welcome additional information or data from all sources to assist us in making proposals and finalizing values.

Comment: In response to our proposal, the RUC offered to survey each code in the expanded family of X-ray codes to which CMS applied the weighted average methodology and provide survey based recommendations for CY 2020.

Response: We appreciate the recognition on the part of the RUC of our serious concerns about the crosswalk methodology and the integrity of the resulting RUC recommended work RVUs. We welcome the submission of any additional data or information that would allow us to consider these codes for review at a future time. Commenters raised concerns that assigning a single weighted average work RVU across this broad family of x-ray codes inadequately reflects meaningful differences among the codes, including the number of views and the complexity of positioning for some x-ray services. In response to commenters' concerns, we are instead maintaining the CY 2018 work RVUs for each CPT code as follows: Work RVU of 0.15 for CPT code 72020, 0.22 for CPT 72040, 0.31 for CPT code 72050, 0.36 for CPT code 72052, 0.22 for CPT code 72070, 0.22 for CPT code 72072, 0.22 for CPT code 72074, 0.22 for CPT code 72080, 0.22 for CPT code 72100, 0.31 for CPT code 72110, 0.32 for CPT code 72114, and 0.22 for CPT code 72120.

Comment: Several commenters indicated that it was inappropriate for CMS to value the practice expense portion of the 20 CPT codes identically because the resources required to furnish each of the services differ in accordance with the number of X-rays or views and other factors.

Response: We did not propose to value the practice expense portion of these codes identically. The proposal regarding the weighted average for these codes refers to the work component of RVUs only.

Comment: One commenter stated that they appreciated and agreed with adding a patient gown (SB026) supply to CPT code 72120.

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

Comment: Several commenters stated that they would like to provide clarity on the typical number of films obtained for the X-ray spine codes and the rationale for the number of minutes and assumed number of views that would be typical. Commenters stated that a minimum of 3 views would be needed in order to adequately assess the cervical spine as described by CPT code 72040. Commenters stated that the open mouth odontoid view helps in the assessment of the atlanto-occipital joint, and that the AP and lateral views of the vertebral bodies are required to assess the alignment of the vertebral bodies in two planes, the disc spaces, the spinal canal, fractures, and widening of different joints. Commenters provided a similar level of clinical detail regarding the typical number of views required for CPT codes 72050 and 72052.

Response: We appreciate the detailed information provided by the commenters in response to our request for data sources regarding the intraservice clinical labor times in those services that do not match the physician intraservice time.

After consideration of the public comments, we are maintaining the CY 2018 work RVUs for the codes in the X-Ray Spine family of codes. We are finalizing the direct PE inputs for these codes as proposed.

(32) X-Ray Sacrum (CPT Codes 72200, 72202, and 72220)

CPT code 72220 (Radiologic examination, sacrum and coccyx, minimum of 2 views) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. CPT codes 72200 (Radiologic examination, sacroiliac joints; less than 3 views) and 72202 (Radiologic examination, sacroiliac joints; 3 or more views) were also included for review as part of the same family of codes. See (31) X-Ray Spine (CPT codes 72020, 72040, 72050, 72052, 72070, 72072, 72074, 72080, 72100, 72110, 72114, and 72120) for a discussion of proposed work RVUs for these codes.

For the direct PE inputs, we proposed to refine the equipment time for the basic radiology room (EL012) in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the X-Ray Sacrum family of codes.

Comment: Comments regarding our proposed work RVU for this family of codes were similar to those discussed in (31) X-Ray Spine (CPT codes 72020, 72040, 72050, 72052, 72070, 72072, 72074, 72080, 72100, 72110, 72114, and 72120).

Response: As discussed above, we are maintaining the CY 2018 work RVUs for each code in this family as follows: Work RVU of 0.17 for CPT code 72200, 0.19 for CPT Code 72202, and 0.17 for CPT code 72220.

Comment: One commenter stated that CMS did not indicate what amount of service period time was removed from the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the basic radiology room (EQ137) equipment, we removed the clinical labor for the CA030 clinical labor activity in accordance with our standard equipment time formula for highly technical equipment.

After consideration of the public comments, we are maintaining the CY 2018 work RVUs for the codes in the X-Ray Sacrum family of codes. We are finalizing the direct PE inputs for these codes as proposed.

(33) X-Ray Elbow-Forearm (CPT Codes 73070, 73080, and 73090)

CPT codes 73070 (Radiologic examination, elbow; 2 views) and 73090 (Radiologic examination; forearm, 2 views) were identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. CPT code 73080 (Radiologic examination, elbow; complete, minimum of 3 views) was also included for review as part of the same family of codes. See (31) X-Ray Spine (CPT codes 72020, 72040, 72050, 72052, 72070, 72072, 72074, 72080, 72100, 72110, 72114, and 72120) above for a discussion of proposed work RVUs for these codes.

For the direct PE inputs, we proposed to refine the equipment time for the basic radiology room (EL012) in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the X-Ray Elbow-Forearm family of codes.

Comment: Comments regarding our proposed work RVU for this family of codes were similar to those discussed in (31) X-Ray Spine (CPT codes 72020, 72040, 72050, 72052, 72070, 72072, 72074, 72080, 72100, 72110, 72114, and 72120).

Response: As discussed above, we are maintaining the CY 2018 work RVUs for each code in this family as follows: Work RVU of 0.15 for CPT code 73070, 0.17 for CPT code 73080, 0.17 for CPT code 73090.

Comment: One commenter stated that CMS did not indicate what amount of service period time was removed from the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the basic radiology room (EQ137) equipment, we removed the clinical labor for the CA030 clinical labor activity in accordance with our standard equipment time formula for highly technical equipment.

After consideration of the public comments, we are maintaining the CY 2018 work RVUs for the codes in the X-Ray Elbow-Forearm family of codes. We are finalizing the direct PE inputs for these codes as proposed.

(34) X-Ray Heel (CPT Code 73650)

CPT code 73650 (Radiologic examination; calcaneus, minimum of 2 views) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. See (31) X-Ray Spine above for a discussion of proposed work RVUs for these codes.

For the direct PE inputs, we proposed to refine the equipment time for the basic radiology room (EL012) in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 73650.

Comment: Comments regarding our proposed work RVU for this code were similar to those discussed in (31) X-Ray Spine (CPT codes 72020, 72040, 72050, 72052, 72070, 72072, 72074, 72080, 72100, 72110, 72114, and 72120).

Response: As discussed above, we are maintaining the CY 2018 work RVU of 0.16 for CPT code 73650.

Comment: One commenter stated that CMS did not indicate what amount of service period time was removed from the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the basic radiology room (EQ137) equipment, we removed the clinical labor for the CA030 clinical labor activity in accordance with our standard equipment time formula for highly technical equipment.

After consideration of the public comments, we are maintaining the CY 2018 work RVUs for the codes in the X-Ray Heel family of codes. We are finalizing the direct PE inputs for these codes as proposed.

(35) X-Ray Toe (CPT Code 73660)

CPT code 73660 (Radiologic examination; toe(s), minimum of 2 views) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. See (31) X-Ray Spine above for a discussion of proposed work RVUs for these codes.

For the direct PE inputs, we proposed to add a patient gown (SB026) supply to CPT code 73660. We noted that the other codes in related X-ray code families that included clinical labor time for the “Greet patient, provide gowning, ensure appropriate medical records are available” (CA009) task included a patient gown, and we proposed to add the patient gown to match the other codes in these families. We also proposed to refine the equipment time for the basic radiology room (EL012) in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 73660.

Comment: Comments regarding our proposed work RVU for this code were similar to those discussed in (31) X-Ray Spine (CPT codes 72020, 72040, 72050, 72052, 72070, 72072, 72074, 72080, 72100, 72110, 72114, and 72120).

Response: As discussed above, we are maintaining the CY 2018 work RVU of 0.13 for CPT code 73660.

Comment: Several commenters stated that the typical patient for this service would not require a patient gown. Commenters stated that this was different than other codes in the family where the patient may need to be rotated lateral and prone for different views.

Response: We appreciate the feedback from the commenters. In light of the information supplied by commenters, we will not finalize our proposal to add a patient gown (SB026) supply to CPT code 73660.

Comment: One commenter stated that CMS did not indicate what amount of service period time was removed from the calculation of the equipment time, and that this made it difficult to determine the accuracy of the refinements. The commenter requested more information about this change.

Response: For the basic radiology room (EQ137) equipment, we removed the clinical labor for the CA030 clinical labor activity in accordance with our standard equipment time formula for highly technical equipment.

After consideration of the public comments, we are maintaining the CY 2018 work RVUs for the codes in the X-Ray Toe family of codes. We are finalizing the direct PE inputs as proposed with the exception of the patient gown (SB026) supply as detailed above.

(36) X-Ray Esophagus (CPT Codes 74210, 74220, and 74230)

CPT code 74220 (Radiologic examination; esophagus) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. CPT codes 74210 (Radiologic examination; pharynx and/or cervical esophagus) and 74230 (Swallowing function, with cineradiography/videoradiography) were also included for review as part of the same family of codes.

We proposed the work RVUs recommended by the RUC for the CPT codes in this family as follows: A work RVU 0.59 for CPT code 74210 (Radiologic examination; pharynx and/or cervical esophagus), a work RVU of 0.67 for CPT code 74220 (Radiologic examination; esophagus), and a work RVU of 0.53 for CPT code 74230 (Swallowing function, with cineradiography/videoradiography).

For the direct PE inputs, we noted that the recommended quantity of the Polibar barium suspension (SH016) supply is increasing from 1 ml to 150 ml for CPT code 74210 and 100 ml are being added to CPT code 74220, which did not previously include this supply. The RUC recommendation states that this supply quantity increase is due to clinical necessity, but does not go into further details about the typical use of the supply. Although we did not propose to refine the quantity of the Polibar barium suspension at this time, we solicited additional comment about the typical use of the supply in these procedures. We also proposed to refine the equipment times for all three codes in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the X-Ray Esophagus family of codes.

Comment: We received no specific comments regarding our proposals for work RVUs in this family.

Response: As a result, we are finalizing a work RVU of 0.59 for CPT code 74210, a work RVU of 0.67 for CPT code 74220, and a work RVU of 0.53 for CPT code 74230 as proposed.

Comment: Several commenters responded to the comment solicitation about the typical use of the Polibar barium suspension (SH016) supply in these procedures. Commenters stated that the barium suspension quantity listed for CPT code 74210 prior to review was only 1 ml which appeared to be a technical error in mistaking number of milliliters for number of items, as this was an insufficient quantity of barium for the procedure. Commenters stated that CPT code 74220 did not have barium suspension listed as a supply item, which appeared to be an oversight. The commenters described how the patient swallows a small quantity of high density barium to outline the esophagus, followed by multiple subsequent swallows of normal density barium that are assessed under fluoroscopy from different angles to evaluate the esophageal anatomy and mucosa.

Response: We appreciate the additional details provided by the commenters regarding the use of the Polibar barium suspension (SH016) supply, and the clarification that the previous supply quantities in these procedures appear to have been in error.

After consideration of the public comments, we are finalizing the work RVU and the direct PE inputs for the codes in the X-Ray Esophagus family of codes as proposed.

(37) X-Ray Urinary Tract (CPT Code 74420)

CPT code 74420 (Urography, retrograde, with or without KUB) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. We proposed the RUC-recommended work RVU of 0.52 for CPT code 74420 (Urography, retrograde, with or without KUB).

For the direct PE inputs, we proposed to remove the 1 minute of clinical labor time for the “Confirm order, protocol exam” (CA014) activity. The clinical labor time recommended for this activity is not included in the reference code, nor is it included in any of the two dozen other X-ray codes that were reviewed at the same RUC meeting. There is also no explanation in the recommended materials as to why this clinical labor time would need to be added. We do not believe that this clinical labor would be typical for CPT code 74420, and we proposed to remove it to match the rest of the X-ray codes. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 74420.

Comment: We received no specific comments regarding our proposal for the work RVU for CPT code 74420.

Response: We are finalizing a work RVU of 0.52 for CPT code 74420.

Comment: Several commenters disagreed with the proposal to remove the 1 minute of clinical labor time for the “Confirm order, protocol exam” (CA014) activity. The commenters stated that this service was distinct from the other X-ray services reviewed during this cycle and encouraged CMS to modify this proposal by finalizing the RUC-recommended direct PE inputs for clinical labor.

Response: We addressed this subject in detail in the PE section of this final rule under the Changes to Direct PE Inputs for Specific Services heading (section II.B.3. of this final rule). For CPT code 74420, we are finalizing these clinical labor refinements as proposed as there is no clinical labor assigned to the “Review patient clinical extant information and questionnaire” (CA007) activity. We also note that commenters did not provide a rationale as to what made CPT code 74420 distinct from the other X-ray services reviewed during this cycle and would justify this additional clinical labor time.

After consideration of the public comments, we are finalizing the work RVU and the direct PE inputs for CPT code 74420 as proposed.

(38) Fluoroscopy (CPT Code 76000)

CPT code 76000 (Fluoroscopy (separate procedure), up to 1 hour physician or other qualified health care professional time) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. CPT code 76001 (Fluoroscopy, physician or other qualified health care professional time more than 1 hour, assisting a nonradiologic physician or other qualified health care professional) was also included for review as part of the same family of codes. However, due to the fact that supervision and interpretation services have been increasingly bundled into the underlying procedure codes, the RUC concluded that this practice is rare, if not obsolete, and CPT code 76001 was recommended for deletion by the CPT Editorial Panel for CY 2019.

We proposed the RUC-recommended work RVU of 0.30 for CPT code 76000 (Fluoroscopy (separate procedure), up to 1 hour physician or other qualified health care professional time, other than 71023 or 71034 (e.g., cardiac fluoroscopy)). For the direct PE inputs, we proposed to refine the equipment times in accordance with our standard equipment time formulas.

We did not receive specific comments regarding our proposals for CPT code 76000. We are finalizing a work RVU of 0.30 and the direct PE inputs for CPT code 76000 as proposed.

(39) Echo Exam of Eye Thickness (CPT Code 76514)

CPT code 76514 (Ophthalmic ultrasound, diagnostic; corneal pachymetry, unilateral or bilateral (determination of corneal thickness)) was identified as potentially misvalued on a screen of codes with a negative intraservice work per unit of time (IWPUT), with 2016 estimated Medicare utilization over 10,000 for RUC reviewed codes and over 1,000 for Harvard-valued and CMS/Other source codes.

For CPT code 76514, we disagreed with the RUC-recommended work RVU of 0.17 and we proposed a work RVU of 0.14. We noted that the recommended intraservice time for CPT code 76514 is decreasing from 5 minutes to 3 minutes (40 percent reduction), and the recommended total time for CPT code 76514 is decreasing from 15 minutes to 5 minutes (67 percent reduction); however, the RUC-recommended work RVU is not decreasing at all and remains at 0.17. Although we did not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs.

We also noted that the RUC recommendations for CPT code 76514 stated that, although the steps in the procedure are unchanged since it was first valued, the workflow has changed. With the advent of smaller and easier to use pachymeters, the technician now typically takes the measurements that used to be taken by the practitioner for CPT code 76514, and the intraservice time was reduced by two minutes to account for the technician performing this service. We believe that this change in workflow indicates that the work RVU for the code should be reduced in some fashion, since some of the work that was previously done by the practitioner is now typically performed by the technician. We have no reason to believe that there is more intensive cognitive work being performed by the practitioner after these measurements are taken since the recommendations indicated that the steps in the procedure are unchanged since this code was first valued.

Therefore, we proposed a work RVU of 0.14 for CPT code 76514, which is based on taking half of the intraservice time ratio. We considered applying the intraservice time ratio to CPT code 76514, which would reduce the work RVU to 0.10 based on taking the change in intraservice time (from 5 minutes to 3 minutes) and multiplying this ratio of 0.60 times the current work RVU of 0.17. However, we recognized that the minutes shifted to the clinical staff were less intense than the minutes that remained in CPT code 76514, and therefore, we applied half of the intraservice time ratio for a reduction of 0.03 RVUs to arrive at a proposed work RVU of 0.14. We believe that this proposed value more accurately takes into account the changes in workflow that have caused substantial reductions in the surveyed work time for the procedure.

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving CPT code 76514.

Comment: Many commenters disagreed with the proposed work RVU of 0.14 for CPT code 76514 and stated that CMS should finalize the RUC-recommended work RVU of 0.17. Commenters stated that using an approach that takes a fraction of the intraservice time ratio in lieu of strong crosswalks and input from the RUC and physicians providing these services is unfounded. Commenters restated the key reference codes chosen by the survey participants and urged CMS to use survey data and supportive relative reference services when valuing services.

Response: We disagree with the commenters and continue to believe that the use of time ratios is one of several appropriate methods for identifying potential work RVUs for particular PFS services, particularly when the alternative values recommended by the RUC and other commenters do not account for information provided by surveys that suggests the amount of time involved in furnishing the service has changed significantly. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. When our review of recommended values reveals that changes in the resource of time have been unaccounted for in a recommended RVU, then we believe we have the obligation to account for that change in establishing work RVUs since the statute explicitly identifies time as one of the two elements of the work RVUs. We recognize that it would not be appropriate to develop work RVUs solely based on time given that intensity is also an element of work, but in applying the time ratios, we are using derived intensity measures based on current work RVUs for individual procedures. Were we to disregard intensity altogether, the work RVUs for all services would be developed based solely on time values and that is definitively not the case, as indicated by the many services that share the same time values but have different work RVUs. (As an example, CPT codes 38222, 54231, 55870, 75573, and 78814 all share identical CY 2019 work times with 15 minutes of preservice time, 30 minutes of intraservice time, and 15 minutes of postservice time; however these codes have respective CY 2019 work RVUs of 1.44, 2.04, 2.58, 2.55, and 2.20.) Furthermore, we reiterate that we use time ratios to identify potentially appropriate work RVUs, and then use other methods (including estimates of work from CMS medical personnel and crosswalks to key reference or similar codes) to validate these RVUs. For more details on our methodology for developing work RVUs, we direct readers to the discussion CY 2017 PFS final rule (81 FR 80272 through 80277). We also note that in the case of CPT code 76514, we recognized that the minutes shifted to the clinical staff were less intense than the minutes that remained in CPT code 76514, and therefore, we applied only half of the intraservice time ratio instead of the full ratio.

Comment: Several commenters stated that while it is true that changes in workflow as a result of smaller, portable, easier to use pachymeters now mean that the technician typically takes the measurements that used to be taken by the physician, the remaining 3 minutes of intraservice work time reflect the more intense cognitive work performed by the physician after the measurements are taken. Commenters agreed that the procedure has not fundamentally changed and that maintaining a work RVU of 0.17 was warranted.

Response: We disagree with the commenters and continue to believe that CPT code 76514 does not require more intensive cognitive work being performed by the practitioner after these measurements are taken, since the recommendations indicated that the steps in the procedure are unchanged since this code was first valued. While the incorporation of new technology can sometimes make services more complex and difficult to perform, it can also have the opposite effect by making services less reliant on manual skill and technique, and we believe that for CPT code 76514 the latter case is true since the same work previously carried out by the practitioner is now being carried out by the technician.

After consideration of the public comments, we are finalizing the work RVU and the direct PE inputs for CPT code 76514 as proposed.

(40) Ultrasound Elastography (CPT Codes 76981, 76982, and 76983)

In September 2017, the CPT Editorial Panel created three new codes describing the use of ultrasound elastography to assess organ parenchyma and focal lesions: CPT codes 76981 (Ultrasound, elastography; parenchyma), 76982 (Ultrasound, elastography; first target lesion) and 76983 (Ultrasound, elastography; each additional target lesion). The most common use of this code set will be for preparing patients with disease of solid organs, like the liver, or lesions within solid organs.

The RUC recommended a work RVU of 0.59 for CPT code 76981 (Ultrasound, elastography; parenchyma (e.g., organ)), a work RVU of 0.59 for CPT code 76982 (Ultrasound, elastography; first target lesion), and a work RVU of 0.50 for add-on CPT code 76983 (Ultrasound, elastography; each additional target lesion). We are proposing the RUC- recommended work RVUs for each of these new CPT codes.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare room, equipment and supplies” (CA013) activity to 3 minutes and to refine the clinical labor time for the “Confirm order, protocol exam” (CA014) activity to 0 minutes for CPT codes 76981 and 76982. CPT code 76700 (Ultrasound, abdominal, real time with image documentation; complete), the reference code for these two new codes, did not previously have clinical labor time assigned for the “Confirm order, protocol exam” clinical labor task, and we do not have any reason to believe that these particular services being furnished by the clinical staff have changed in the new codes, only the way in which this clinical labor time has been presented on the PE worksheets. We also noted that there is no effect on the total clinical labor direct costs in these situations, since the same 3 minutes of clinical labor time is still being furnished in CPT codes 76981 and 76982. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the Ultrasound Elastography family of codes.

Comment: Several commenters expressed support for our proposed work RVUs for each of the three CPT codes in this family.

Response: We appreciate the support of commenters.

Comment: A commenter stated that in the CMS refinements to the direct PE inputs for CPT codes 76981 and 76982, CMS proposed to remove 1 minute from the CA014 activity code and proposed to add 1 minute to the CA013 activity code. The commenter stated that this refinement was inaccurate and encouraged CMS to modify this proposal by finalizing the RUC-recommended direct PE inputs for clinical labor.

Response: We addressed this subject in detail in the PE section of this final rule under the Changes to Direct PE Inputs for Specific Services heading (section II.B.3. of this final rule). For CPT codes 76981 and 76982, we are not finalizing these clinical labor refinements as proposed, as these codes have the “Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist” task in predecessor CPT code 76700 on the old PE worksheet as well as 1 minutes of CA007 clinical labor time. We are instead finalizing the RUC-recommended clinical labor times for CA013 and CA014 for CPT codes 76981 and 76982. We are also not finalizing our refinements to the corresponding equipment times as a result.

After consideration of the public comments, we are finalizing the work RVUs for the codes in the Ultrasound Elastography family of codes as proposed: 0.59 work RVUs for CPT code 76981, 0.59 work RVUs for CPT code 76982, and 0.50 work RVUs for CPT code 76983. We are not finalizing our proposed direct PE inputs and are instead finalizing the RUC-recommended direct PE inputs for these three codes.

(41) Ultrasound Exam—Scrotum (CPT Code 76870)

CPT code 76870 (Ultrasound, scrotum and contents) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. We proposed a work RVU of 0.64 for CPT code 76870 (Ultrasound, scrotum and contents), as recommended by the RUC.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare room, equipment and supplies” (CA013) activity to 3 minutes and to refine the clinical labor time for the “Confirm order, protocol exam” (CA014) activity to 0 minutes. CPT code 76870 did not previously have clinical labor time assigned for the “Confirm order, protocol exam” clinical labor task, and we did not have any reason to believe that the services being furnished by the clinical staff have changed, only the way in which this clinical labor time has been presented on the PE worksheets. We also noted that there was no effect on the total clinical labor direct costs in these situations since the same 3 minutes of clinical labor time is still being furnished under the CA013 room preparation activity. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 76870.

Comment: We received general support from commenters for our proposed work RVU of 0.64 for CPT code 76870, as recommended by the RUC.

Response: We thank commenters for their support.

Comment: A commenter stated that in the CMS refinements to the direct PE inputs for CPT code 76870, CMS proposed to remove 1 minute from the CA014 activity code and proposed to add 1 minute to the CA013 activity code. The commenter stated that this refinement was inaccurate and encouraged CMS to modify this proposal by finalizing the RUC-recommended direct PE inputs for clinical labor.

Response: We addressed this subject in detail in the PE section of this final rule under the Changes to Direct PE Inputs for Specific Services heading (section II.B.3. of this final rule). For CPT code 76870, we are finalizing these clinical labor refinements as proposed.

After consideration of the public comments, we are finalizing the work RVU of 0.64 and direct PE inputs for CPT code 76870 as proposed.

(42) Contrast-Enhanced Ultrasound (CPT Codes 76978 and 76979)

In September 2017, the CPT Editorial Panel created two new CPT codes describing the use of intravenous microbubble agents to evaluate suspicious lesions by ultrasound. CPT code 76978 (Ultrasound, targeted dynamic microbubble sonographic contrast characterization (non-cardiac); initial lesion) is a stand-alone procedure for the evaluation of a single target lesion. CPT code 76979 (Ultrasound, targeted dynamic microbubble sonographic contrast characterization (non-cardiac); each additional lesion with separate injection) is an add-on code for the evaluation of each additional lesion.

The two new CPT codes in this family represent a new technology that involves the use of intravenous microbubble agents to evaluate suspicious lesions by ultrasound. The first new CPT code 76978 (Ultrasound, targeted dynamic microbubble sonographic contrast characterization (non-cardiac); initial lesion), is the base code for the new add-on CPT code 76979 (Ultrasound, targeted dynamic microbubble sonographic contrast characterization (non-cardiac); each additional lesion with separate injection). The RUC reviewed the survey results for CPT code 76978 and recommended total time of 30 minutes and intraservice time of 20 minutes. Their recommendation for a work RVU of 1.62 is based neither on the median of the survey results (1.82) nor the 25th percentile of the survey results (1.27). Instead, the RUC-recommended work RVU is based on a crosswalk to CPT code 73719 (Magnetic resonance (e.g., proton) imaging, lower extremity other than joint; with contrast material(s)), which has identical intraservice and total times as the survey CPT code. The RUC also identified a comparison CPT code (CPT code 73222 (Magnetic resonance (e.g., proton) imaging, any joint of upper extremity; with contrast material(s)) with work RVU 1.62 and similar times. For add-on CPT code 76979, the RUC recommended a work RVU of 0.85, which is the 25th percentile of survey results, with total and intraservice times of 15 minutes.

Although we generally agree that, particularly in instances where a CPT code represents a new technology or procedure, there may be reason to deviate from survey metrics, we are confused by the logic behind the RUC's recommendation of a work RVU of 1.62 for CPT code 76978. When we considered the range of existing CPT codes with 30 minutes total time and 20 minutes intraservice time, we noted that a work RVU of 1.62 is among the highest potential crosswalks. We also noted that the RUC agreed with the 25th percentile of survey results for the new add-on CPT code, 76979, and we did not see why the 25th percentile would not also be appropriate for the base CPT code, 76978. Therefore, we proposed a work RVU of 1.27 for CPT code 76978. We identified two CPT codes with total time of 30 minutes and intraservice time of 20 minutes that bracket the proposed work RVU of 1.27: CPT code 93975 (Duplex scan of arterial inflow and venous outflow of abdominal, pelvic, scrotal contents and/or retroperitoneal organs; complete study) has a work RVU of 1.16, and CPT code 72270 (Myelography, 2 or more regions (e.g., lumbar/thoracic, cervical/thoracic, lumbar/cervical, lumbar/thoracic/cervical), radiological supervision and interpretation) has a work RVU of 1.33. We proposed the RUC-recommended work RVU of 0.85 for add-on CPT code 76979.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare room, equipment and supplies” (CA013) activity to 3 minutes and to refine the clinical labor time for the “Confirm order, protocol exam” (CA014) activity to 0 minutes for CPT code 76978. CPT codes 76700 (Ultrasound, abdominal, real time with image documentation; complete) and 76705 (Ultrasound, abdominal, real time with image documentation; limited), the reference codes for this new code, did not previously have clinical labor time assigned for the “Confirm order, protocol exam” clinical labor task, and we did not have any reason to believe that these particular services being furnished by the clinical staff have changed in the new code, only the way in which this clinical labor time has been presented on the PE worksheets. We also noted that there is no effect on the total clinical labor direct costs in these situations, since the same 3 minutes of clinical labor time is still being furnished in CPT code 76978.

We proposed to remove the 50 ml of the phosphate buffered saline (SL180) for CPT codes 76978 and 76979. When these codes were reviewed by the RUC, the conclusion that was reached was to remove this supply and replace it with normal saline. Since the phosphate buffered saline remained in the recommended direct PE inputs, we believe its inclusion may have been a clerical error. We proposed to remove the supply and solicited comments on the phosphate buffered saline or a replacement saline solution. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the Contrast-Enhanced Ultrasound family of codes.

Comment: Commenters were supportive of our proposed work RVU of 0.85 for CPT code 76979, as recommended by the RUC.

Response: We thank the commenters for their support of our proposal regarding the work RVU for this CPT code.

Comment: A few commenters expressed opposition to our proposed work RVU of 1.27 for new CPT code 76978. Commenters acknowledged that the code is valued at the high end of the range of values for a given intraservice time. However, they stated, being on the high end of a range of comparison codes is not necessarily in itself a reason to reduce the work RVU. They cite this as an illustration of CMS's discounting the importance of intensity in valuing physician services in favor of considering only time. The same commenters also noted that the new technology used in furnishing the service, Contrast Enhanced Ultrasound (CEUS), requires more technical skill and time than other established ultrasound services.

Response: Our observation that a survey code is on the high end of codes on the PFS with similar intraservice and total times is only one among several factors we consider when we perceive that the code is not properly valued in relation to other similar codes. We agree that there are instances in which valuing a code at the high range of work RVUs for codes with similar times is appropriate. However, on the whole, if a recommended work RVU places the code on the very high end of work RVUs with similar time parameters, we expect that the code would be of notably higher intensity than most other codes with those time parameters. We were not convinced that this was the case with CPT code 76978.

We were, however, persuaded by commenters that the higher technical skill and time involved in using the new technology, CEUS, compared with other established ultrasound services, is better reflected by the RUC's recommended work RVU than our proposed value. Consequently we are finalizing the RUC-recommended work RVU of 1.62 for CPT code 76978.

Comment: A commenter stated that in the CMS refinements to the direct PE inputs for CPT code 76978, CMS proposed to remove 1 minute from the CA014 activity code and proposed to add 1 minute to the CA013 activity code. The commenter stated that this refinement was inaccurate and encouraged CMS to modify this proposal by finalizing the RUC-recommended direct PE inputs for clinical labor.

Response: We addressed this subject in detail in the PE section of this final rule under the Changes to Direct PE Inputs for Specific Services heading (section II.B.3. of this final rule). For CPT code 76978, we are not finalizing these clinical labor refinements as proposed, as this code has the “Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist” task in predecessor CPT code 76700 on the old PE worksheet as well as 1 minutes of CA007 clinical labor time. We are therefore finalizing the RUC-recommended clinical labor times for CA013 and CA014 for CPT code 76978. We are also not finalizing our refinements to the corresponding equipment times as a result.

Comment: Several commenters disagreed with the proposal to remove the 50 ml of the phosphate buffered saline (SL180) for CPT codes 76978 and 76979. Commenters stated that the SL180 supply can be replaced with “normal saline”, however the change was not made because an appropriate replacement could not be identified. Commenters stated that the SL180 phosphate buffered saline (PBS) had been removed but “normal saline” has not replaced it. Commenters agreed that this change was appropriate and urged CMS to add the correct supply item for the appropriate type of saline.

Response: We disagree with the commenters that the “normal saline” was not added to these procedures. Both of these CPT codes include the “sodium chloride 0.9% inj bacteriostatic (30ml uou)” (SH068) supply which would function as a form of normal saline. We do not believe that it would be typical for these procedures to contain 50 ml of the phosphate buffered saline (SL180) in addition to the “normal saline” described by the SH068 supply.

After consideration of the public comments, we are finalizing the RUC-recommended work RVUs for both codes in this family as follows: Work RVU of 0.85 for CPT code 76979 and a work RVU of 1.62 for CPT code 76978. We are also finalizing the RUC-recommended direct PE inputs for these codes, with the exception of the refinement to the phosphate buffered saline (SL180) supply as detailed above.

(43) Magnetic Resonance Elastography (CPT Code 76391)

The CPT Editorial Panel created new stand-alone CPT code 76391 describing the use of magnetic resonance elastography for the evaluation of organ parenchymal pathology. This code will most often be used to evaluate patients with disease of solid organs (for example, cirrhosis of the liver) or pathology within solid organs that manifest with increasing fibrosis or scarring. The goal with magnetic resonance elastography is to evaluate the degree of fibrosis/scarring (that is, stiffness) without having to perform more invasive procedures (for example, biopsy). This technique can be used to characterize the severity of parenchymal disease, follow disease progression, or response to therapy.

The RUC recommended a work RVU for new CPT code 76391 (Magnetic resonance (e.g., vibration) elastography) of 1.29, with 15 minutes of intraservice time and 25 minutes of total time. The recommendation is based on a comparison with two reference CPT codes, CPT code 74183 (Magnetic resonance (e.g., proton) imaging, abdomen; without contrast material(s), followed by with contrast material(s) and further sequences) with total time of 40 minutes, intraservice time of 30 minutes, and a work RVU of 2.20; and CPT code 74181 (Magnetic resonance (e.g., proton) imaging, abdomen; without contrast material(s)), which has a total time of 30 minutes, intraservice time of 20 minutes, and a work RVU of 1.46. The RUC stated that both reference CPT codes have higher work values than the new CPT code, which is justified in both cases by higher intra-service times. They noted that, despite shorter intraservice and total time, CPT code 76391 is slightly more intense to perform due to the evaluation of wave propagation images and quantitative stiffness measures. We did not agree with the RUC's recommended work RVU for this CPT code. Using the RUC's two top reference CPT codes as a point of comparison, the intraservice time ratio in both instances suggests that a work RVU closer to 1.10 would be more appropriate. We recognize that the RUC believes the new CPT code is slightly more intense to furnish, but we are concerned about the relativity of this code in comparison with other imaging procedures that have similar intraservice and total times. Instead of the RUC-recommended work RVU of 1.29 for CPT code 76391, we proposed a work RVU of 1.10, which is based on a direct crosswalk to CPT code 71250 (Computed tomography, thorax; without contrast material). CPT code 71250 has identical intraservice time (15 minutes) and total time (25 minutes) compared to CPT code 76391, and we believe that the work involved in furnishing both services is similar. We note that CPT code 76391 describes a new technology and will be reviewed again by the RUC in 3 years.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare room, equipment and supplies” (CA013) activity from 6 minutes to 5 minutes, and for the “Prepare, set-up and start IV, initial positioning and monitoring of patient” (CA016) activity from 4 minutes to 3 minutes. We disagreed that this additional clinical labor time would be typical for these activities, which are already above the standard times for these tasks. In both cases, we proposed to maintain the current time from the reference CPT code 72195 (Magnetic resonance (e.g., proton) imaging, pelvis; without contrast material(s)) for these clinical labor activities. We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 76391.

Comment: A commenter stated that CMS misunderstood the role of reference CPT codes in the RUC's valuation process, and therefore our proposed work RVU for CPT code 76391 is premised on a false time comparison and a methodology that is invalid.

Response: In the materials provided to us, the RUC explicitly compared the two key reference services to CPT 76391 and stated that the higher work values for these codes are justified by higher intraservice times. The RUC did not provide a crosswalk code for CPT 76391. Because of the RUC's justification of the higher work RVUs in the reference services in relation to the higher intraservice times for these codes, and because the RUC did not provide a crosswalk CPT code for us to review, we believe it is an entirely appropriate methodology to calculate the intraservice time ratios using those reference codes. We acknowledged that the survey code is slightly more intense to perform than the reference codes, according to the RUC's SOR, which is why our calculation of intraservice time ratios is only a starting point in our review of the code's recommended work RVU. We considered the intraservice time ratios for both reference codes, which were not identical, and compared these values to other CPT codes in the PFS with similar intraservice and total times. For this particular CPT code 76391, we identified a crosswalk to CPT code 71250, which, as we stated, achieved an overall balance of similar times and similar intensity as the survey code and has a work RVU of 1.10.

Comment: Some commenters stated that our proposed value of 1.10 work RVUs for CPT code 76391 creates a rank order anomaly between an MRI code and CPT code, CPT code 74160.

Response: We do not agree that our proposed work RVU of 1.10 for this code creates a rank order anomaly between an MRI code and CT code because this service is described as being unlike a routine magnetic resonance imaging. This service also involves use of a new technology, which makes it difficult to compare directly to services involving magnetic resonance imaging. We are finalizing a work RVU of 1.10 for CPT code 76391.

Comment: One commenter agreed with the refinements to the direct PE inputs.

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

After consideration of the public comments, we are finalizing the work RVU of 1.10 and the direct PE inputs for CPT code 76391 as proposed.

(44) Computed Tomography (CT) Scan for Needle Biopsy (CPT Code 77012)

CPT code 77012 (Computed tomography guidance for needle placement (e.g., biopsy, aspiration, injection, localization device), radiological supervision and interpretation) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually.

We proposed the RUC-recommended work RVU of 1.50 for CPT code 77012 (Computed tomography guidance for needle placement (e.g., biopsy, aspiration, injection, localization device), radiological supervision and interpretation).

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare room, equipment and supplies” (CA013) activity to 3 minutes and to refine the clinical labor time for the “Confirm order, protocol exam” (CA014) activity to 0 minutes. CPT code 77012 did not previously have clinical labor time assigned for the “Confirm order, protocol exam” clinical labor task, and we did not have any reason to believe that the services being furnished by the clinical staff have changed, only the way in which this clinical labor time has been presented on the PE worksheets. We also noted that there is no effect on the total clinical labor direct costs in these situations since the same 3 minutes of clinical labor time is still being furnished under the CA013 room preparation activity.

We proposed to refine the equipment time for the CT room (EL007) to maintain the current time of 9 minutes. CPT code 77012 is a radiological supervision and interpretation procedure and there has been a longstanding convention in the direct PE inputs, shared by 38 other codes, to assign an equipment time of 9 minutes for the equipment room in these procedures. We do not believe that it would serve the interests of relativity to increase the equipment time for the CT room in CPT code 77012 without also addressing the equipment room time for the other radiological supervision and interpretation procedures. Therefore, we proposed to maintain the current equipment room time of 9 minutes until this group of procedures can be subject to a more comprehensive review. We also proposed to refine the equipment time for the Technologist PACS workstation (ED050) in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving CPT code 77012.

Comment: We received support from a few commenters for our proposed work RVU for CPT code 77012, as recommended by the RUC.

Response: We appreciate commenters' support. We are finalizing a work RVU of 1.50 for CPT code 77012.

Comment: A commenter stated that in the CMS refinements to the direct PE inputs for CPT code 77012 CMS proposed to remove 1 minute from the CA014 activity code and proposed to add 1 minute to the CA013 activity code. The commenter stated that this refinement was inaccurate and encouraged CMS to modify this proposal by finalizing the RUC-recommended direct PE inputs for clinical labor.

Response: We addressed this subject in detail in the PE section of this final rule under the Changes to Direct PE Inputs for Specific Services heading (section II.B.3. of this final rule). For CPT code 77012, we are finalizing these clinical labor refinements as proposed.

Comment: Several commenters disagreed with the proposal to refine the equipment time for the CT room (EL007) to maintain the current time of 9 minutes. Commenters stated that the room time is included in CT guidance, as it is in US guidance (such as in CPT code 76942) because that is the room the procedure is performed in. Commenters stated that they agreed with CMS that other RS&I codes use the 9 minutes for room time as a precedent, but this was specific to angiographic rooms and referred to language from 2013 regarding angiographic rooms.

Response: We disagree with the commenters regarding the equipment time for the CT room (EL007) due to the longstanding convention in the direct PE inputs, shared by 38 other codes, to assign an equipment time of 9 minutes for the equipment room in radiological supervision and interpretation procedure. We agree with the commenters that at least some portion of the procedure is performed in the CT room, but we continue to believe that it would not serve the interests of relativity to increase the equipment time for the CT room in CPT code 77012 without also addressing the equipment room time for the other radiological supervision and interpretation procedures in a more comprehensive fashion. We also disagree with the commenters that this policy is specific to angiography rooms, as CPT codes 75989 and 77012 both employ CT rooms and currently utilize the standardized 9 minutes of equipment time for radiological supervision and interpretation procedures.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for CPT code 77012 as proposed.

(45) Dual-Energy X-Ray Absorptiometry (CPT Code 77081)

CPT code 77081 (Dual-energy X-ray absorptiometry (DXA), bone density study, 1 or more sites; appendicular skeleton (peripheral) (e.g., radius, wrist, heel)) was identified as potentially misvalued on a screen of codes with a negative intraservice work per unit of time (IWPUT), with 2016 estimated Medicare utilization over 10,000 for RUC reviewed codes and over 1,000 for Harvard valued and CMS/Other source codes. For CY 2019, we proposed the RUC-recommended work RVU of 0.20 for CPT code 77081.

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving CPT code 77081.

Comment: Commenters were supportive of our proposal regarding the work RVU for CPT code 77081.

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

After consideration of the public comments, we are finalizing the work RVU of 0.20 and direct PE inputs for CPT code 77081 as proposed.

(46) Breast MRI With Computer-Aided Detection (CPT Codes 77046, 77047, 77048, and 77049)

CPT codes 77058 (Magnetic resonance imaging, breast, without and/or with contrast material(s); unilateral) and 77059 (Magnetic resonance imaging, breast, without and/or with contrast material(s); bilateral) were identified in 2016 on a high expenditure services screen across specialties with Medicare allowed charges of $10 million or more. When preparing to survey these codes, the specialties noted that the clinical indications had changed for these exams. The technology had advanced to make computer-aided detection (CAD) typical and these codes did not parallel the structure of other magnetic resonance imaging (MRI) codes. In June 2017 the CPT Editorial Panel deleted CPT codes 0159T, 77058, and 77059 and created four new CPT codes to report breast MRI with and without contrast (including computer-aided detection).

The RUC recommended a work RVU of 1.45 for CPT code 77046 (Magnetic resonance imaging, breast, without contrast material; unilateral). This recommendation was based on a comparison with CPT codes 74176 (Computed tomography, abdomen and pelvis; without contrast material) and 74177 (Computed tomography, abdomen and pelvis; with contrast material(s)), which both have similar intraservice and total times in relation to CPT code 77046. We disagreed with the RUC's recommended work RVU because we did not believe that the reduction in total time of 15 minutes between the new CPT code 77046 and the deleted CPT code 77058 was adequately reflected in its recommendation. Although total time has decreased by 15 minutes, the only other difference between the two CPT codes is the change in the descriptor from the phrase `without and/or with contrast material(s)' to `without contrast material,' suggesting that there is less work involved in the new CPT code than in the deleted CPT code. Instead, we proposed a work RVU of 1.15 for CPT code 77046, which is similar to the total time ratio between the new CPT code and the deleted CPT code. It is also supported by a crosswalk to CPT code 77334 (Treatment devices, design and construction; complex (irregular blocks, special shields, compensators, wedges, molds or casts)). CPT code 77334 has total time of 35 minutes, intraservice time of 30 minutes, and a work RVU of 1.15.

CPT code 77047 (Magnetic resonance imaging, breast, without contrast material; bilateral) describes the same work as CPT code 77046, but reflects a bilateral rather than the unilateral procedure. The RUC recommended a work RVU of 1.60 for CPT code 77047. Since we proposed a different work RVU for the unilateral procedure than the value proposed by the RUC, we believe it is appropriate to recalibrate the work RVU for CPT code 77047 relative to the RUC's recommended difference in work between the two CPT codes. The RUC's recommendation for the bilateral procedure is 0.15 work RVUs larger than for the unilateral procedure. Therefore, we proposed a work RVU of 1.30 for CPT code 77047.

The RUC recommended a work RVU of 2.10 for CPT code 77048 (Magnetic resonance imaging, breast, without and with contrast material(s), including computer-aided detection (CAD-real time lesion detection, characterization and pharmacokinetic analysis) when performed; unilateral). CPT code 77048 is a new CPT code that bundles the deleted CPT code for unilateral breast MRI without and/or with contrast material(s) with CAD, which was previously reported, in addition to the primary procedure CPT code, as CPT code 0159T (computer aided detection, including computer algorithm analysis of MRI image data for lesion detection/characterization, pharmacokinetic analysis, with further physician review for interpretation, breast MRI). Consistent with our belief that the proposed value for the base CPT code in this series of new CPT codes (CPT code 77046) should be a work RVU of 1.15, we are proposing a work RVU for CPT code 77048 that adds the RUC-recommended difference in RUC-recommended work RVUs between CPT codes 77046 and 77048 (0.65 work RVUs) to the proposed work RVU for CPT code 77046. Therefore, we proposed a work RVU of 1.80 for CPT code 77048.

The last new CPT code in this series, CPT code 77049 (Magnetic resonance imaging, breast, without and with contrast material(s), including computer-aided detection (CAD-real time lesion detection, characterization and pharmoacokinetic analysis) when performed; bilateral) describes the same work as CPT code 77048, but reflects a bilateral rather than a unilateral procedure. The RUC recommended a work RVU of 2.30 for this CPT code. Similar to the process for valuing work RVUs for CPT code 77047 and CPT code 77048, we believe that a more appropriate work RVU is calculated by adding the difference in the RUC recommended work RVU for CPT codes 77046 and 77049, to the proposed value for CPT code 77046. Therefore, we proposed a work RVU of 2.00 for CPT code 77049.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare, set-up and start IV, initial positioning and monitoring of patient” (CA016) activity from 7 minutes to 3 minutes for CPT codes 77046 and 77047, and from 9 minutes to 5 minutes for CPT codes 77048 and 77049. We noted that when the MRI of Lower Extremity codes were reviewed during the previous rule cycle (CPT codes 73718-73720), these codes contained either 3 minutes or 5 minutes of recommended time for this same clinical labor activity. We also noted that the current Breast MRI codes that are being deleted and replaced with these four new codes, CPT codes 77058 and 77059, contain 5 minutes of clinical labor time for this same activity. We had no reason to believe that the new codes would require additional clinical labor time for patient positioning, especially given that the recommended clinical labor times are decreasing in comparison to the reference codes for obtaining patient consent (CA011) and preparing the room (CA013). Therefore, we refined the clinical labor time for the CA016 activity as detailed earlier to maintain relativity with the current clinical labor times in the reference codes, as well as with other recently reviewed MRI procedures.

Included in the recommendations for this code family were five new equipment items: CAD Server (ED057), CAD Software (ED058), CAD Software—Additional User License (ED059), Breast coil (EQ388), and CAD Workstation (CPU + Color Monitor) (ED056). We did not receive any invoices for these five equipment items, and as such we do not have any direct pricing information to use in their valuation. We proposed to use crosswalks to similar equipment items as proxies for three of these new types of equipment until we do have pricing information:

• CAD software (ED058) is crosswalked to flow cytometry analytics software (EQ380).
• Breast coil (EQ388) is crosswalked to Breast biopsy device (coil) (EQ371).
• CAD Workstation (CPU + Color Monitor) (ED056) is crosswalked to Professional PACS workstation (ED053).

We welcomed the submission of invoices with pricing information for these three new equipment items for our consideration to replace the use of these proxies. For the other two equipment items (CAD Server (ED057) and CAD Software—Additional User License (ED059)), we did not propose to establish a price at this time as we believe both of them would constitute forms of indirect PE under our methodology. We do not believe that the CAD Server or Additional User License would be allocated to the use of an individual patient for an individual service, and can be better understood as forms of indirect costs similar to office rent or administrative expenses. We understand that as the PE data age, these issues involving the use of software and other forms of digital tools become more complex. However, the use of new technology does not change the statutory requirement under which indirect PE is assigned on the basis of direct costs that must be individually allocable to a particular patient for a particular service. We look forward to continuing to seek out new data sources to help in updating the PE methodology.

We also proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving the Breast MRI with Computer-Aided Detection (CAD) family of codes.

Comment: A commenter disagreed with our use of deleted CPT code 77058 as a point of reference for considering whether the reduction in work RVU in the new code, CPT code 77046, is commensurate with the reduction in work time between the two codes. The commenter stated that CMS should not compare these new services with the old deleted services, as indicated by the specialty society having demonstrated compelling evidence that the work involved in the breast MRI code family has fundamentally changed.

Response: We disagree that it is inappropriate to use time comparisons with a code that is being deleted as a guide for assessing whether the reduction in work RVU recommended by the RUC is commensurate with the reduction in time based on survey results. The description of the work involved in furnishing CPT code 77046 has not changed substantively from the code being deleted. The compelling evidence that the commenter cites is related to the two new codes, CPT code 77048 and 77049, which are newly bundled with CAD. The main distinction in the description of physician work for this CPT code is that the new code specifies `without contrast', while the deleted code described the service `without and/or with contrast.' The change in patient population, also cited by the commenter, actually suggests that the more complex patients will be screened using the advanced technologies, such as is described by CPT code 77048. We recognize that changes in technology and work flow for the work described by CPT code 77046 have affected the work involved in furnishing these services. This is why we use the time ratios as a starting point for code comparisons rather than the end point.

Comment: One commenter stated that our proposed crosswalk code for CPT 77046, CPT code 77334, is inappropriate because of different preservice and intraservice times between the two codes, and because there is more low-intensity time in CPT code 77334 compared with CPT code 77046. The commenter also indicated that our proposed work RVU for CPT code 77046 would create a rank order anomaly with other MRI codes.

Response: As a matter of principle, we do not agree that a chosen crosswalk for a CPT code is required to be clinically similar or to have identical intraservice and/or total time as the code being valued. However, in this instance, after further consideration, we agree with the commenter that our crosswalk code, CPT 77334, is not a particularly good comparison, in terms of intensity, to CPT 77046. We also agree with the commenter that our proposed work RVU for CPT code 77046 would create an anomaly among other CPT codes involving MRI. We are finalizing a work RVU for CPT code 77046 of 1.45, as recommended by the RUC.

Comment: A commenter disagreed with our use of increments in recalibrating work RVUs for codes that precede or follow a new or revalued CPT code, as was the process underlying our proposed work RVUs for CPT codes 77047, 77048, and 77049.

Response: The recalibration of CPT codes based on incremental difference in the work RVUs recommended by the RUC is an established methodology used by CMS to value the work involved in furnishing a service. There are certain types of code groups, particularly those with clear stepwise changes in intensity, as described by the RUC, for which we believe this is entirely appropriate. We continue to believe that this is an appropriate approach. However, having agreed with the commenter that our proposed work RVU for CPT code 77046 should be finalized at the RUC recommended work RVU of 1.45, we also believe that it is unnecessary to recalibrate the RUC's recommended work RVUs for the remainder of the three codes in the series. Therefore, we are finalizing a work RVU of 1.60 for CPT code 77047, 2.10 for CPT code 77048, and 2.30 for CPT code 77049.

Comment: Several commenters disagreed with the CMS proposal to refine the clinical labor time for the “Prepare, set-up and start IV, initial positioning and monitoring of patient” (CA016) activity from 7 minutes to 3 minutes for CPT codes 77046 and 77047, and from 9 minutes to 5 minutes for CPT codes 77048 and 77049. Commenters stated that the rationale for this change was likely derived from reference to the lower clinical labor times for this activity associated with lower extremity MRI codes, and that it was an error to treat the clinical labor time for this activity as akin to that for lower extremity MRI. Commenters requested that CMS consider the experience of an 80-year-old patient who needs assistance on and off the table, along with reassurance, added explanation, IV insertion into delicate skin, and other anxiety needs. Commenters stated that another major distinction between breast MRI and extremity MRI is that the patient lies prone on the coil, which requires an awkward process of positioning and causes the need for additional clinical labor time.

Response: We continue to disagree with the commenters that the RUC-recommended clinical labor time would be typical for these procedures. As part of our review, we compared the clinical labor times for the CA016 activity not only to the codes in the MRI of Lower Extremity family, but also to the current Breast MRI codes that are being deleted and replaced with these four new codes. CPT codes 77058 and 77059 contain 5 minutes of clinical labor time for this same activity, and we do not agree that the clinical labor times would be increasing to 7 and 9 minutes in the newly created CPT codes, especially given that commenters did not provide a rationale as to why time would be increasing. We also note that while some patients will have conditions that are more difficult than the typical case, such as the 80-year-old patient described by the commenters, other patients would have conditions that are less difficult than the typical case. We remind the reader that valuation of services under the PFS is based on the typical case and not the most difficult cases that may arise. We further note that the clinical vignette for CPT code 77047 describes a 53-year old female patient, not an 80-year old patient, and was stated to be typical by 96 percent of the survey respondents.

Comment: A commenter stated that in the CMS refinements to the direct PE inputs for these four CPT codes, CMS proposed to remove 1 minute from the CA014 activity code and proposed to add 1 minute to the CA013 activity code. The commenter stated that this refinement was inaccurate and encouraged CMS to modify this proposal by finalizing the RUC-recommended direct PE inputs for clinical labor.

Response: We believe that the commenter may have been confused with several of the other code families that included these clinical labor refinements, which we described in the PE section of this final rule under the Changes to Direct PE Inputs for Specific Services heading (section II.B.3. of this final rule). We did not propose any refinements to the CA014 clinical labor for the codes in this family.

Comment: Several commenters requested that CMS add 5 minutes to CPT codes 77048 and 77049 to account for the time required to obtain vital signs. Commenters stated that to maintain consistency within the codes for MRI with contrast, they requested that new codes for breast MRI with contrast receive an additional two minutes of time for MRI technologist (L047A) bringing the total time for obtain vital signs to 5 minutes.

Response: We proposed in CY 2018 to assign 5 minutes of clinical labor time for all codes that include the “Obtain vital signs” task, that included at least 1 minute previously assigned to this task regardless of the date of last review. After considering the comments, we did not finalize our proposal to establish 5 minutes as the new standard for the “Obtain vital signs” clinical labor task. As a result, we do not agree with the commenters that the clinical labor time for the CA010 activity should be increased to 5 minutes for CPT codes 77048 and 77049, especially given that we did not make a proposal to do so. We refer readers to the CY 2018 PFS final rule (82 FR 52990-52991) for additional details about last year's proposal on this issue.

Comment: One commenter requested that CMS assign additional clinical labor time for MRI procedures with contrast in order to account for time spent counseling patients. Commenters stated that because of the increased public awareness of the risk relating to gadolinium, additional time is required to explain the benefits and risks of the procedure.

Response: We note that the MRI procedures in this family that are done with contrast (CPT codes 77048 and 77049) already contain more clinical labor than the MRI procedures that are done without contrast (CPT codes 77046 and 77047). Specifically, these procedures already contain two additional minutes for “Provide education/obtain consent” (CA011) clinical labor than the non-contrast versions of the procedures, which we believe indicates that the concerns of the commenters have been taken into account.

Comment: Several commenters stated that the lack of invoices for the new equipment items may have been an oversight and enclosed new invoices with their comment letter. Commenters also stated that the CAD Software equipment (ED058) is actually synonymous with the “breast biopsy software” (EQ370) equipment, and recognized that in hindsight they should have been consistent in identifying the equipment item between the breast biopsy codes and the MR breast codes. One commenter disagreed that the CAD Server or Additional User License equipment constituted forms of direct PE, and requested that CMS consider the cost of CAD service contracts and “C-view” costs in order to accurately access the calculation of indirect practice expenses.

Response: We appreciate the submission of additional invoices from the commenters to assist in pricing these new equipment items. As we detailed in the Practice Expense portion of this final rule (section II.B. of this final rule), we are finalizing an update in the price of the CAD Software (ED058) equipment to $43,308.12 based on the new invoice submission and additional review by the StrategyGen contractor. We are also finalizing a price of $83,200 for the Breast coil (EQ388) equipment and a price of $12,031.52 for the CAD Workstation (CPU + Color Monitor) (ED056) based on the invoices submitted by the commenters. For the other two equipment items (CAD Server (ED057) and CAD Software—Additional User License (ED059)), we continue to believe that both of them would constitute forms of indirect PE under our methodology. The submitted invoices indicated that the CAD Server was a server type used in a data center while the user license was for a third license above and beyond the two licenses included in the price of the CAD software. As we stated in the proposed rule, we do not believe that these types of equipment would be allocated to the use of an individual patient for an individual service, and can be better understood as forms of indirect costs similar to office rent or administrative expenses.

Comment: Several commenters stated that CMS had overstated the useful life of a breast coil. The commenters stated that a coil will start to display signs of wear, such as cracking of its case, flex spots, exposed wiring, or a degradation of its attenuated field causing a loss in image quality after about three to four years. Commenters stated that a useful life of 5 years would be more appropriate and consistent with the experience of their members.

Response: We appreciate the additional information regarding the useful life of the breast coil equipment from the commenters. Our proposal to use 10 years as the useful life for this new equipment was based on our use of the breast biopsy device (EQ371) equipment as a proxy. We agree with the commenters that it would be more accurate to update the useful life to 5 years in light of this new information.

After consideration of the public comments, we are finalizing the RUC-recommended work RVUs for the codes in the Breast MRI with Computer-Aided Detection family of codes. We are finalizing the direct PE inputs as proposed, with the updates to the pricing of the new equipment as detailed above.

(47) Blood Smear Interpretation (CPT Code 85060)

CPT code 85060 (Blood smear, peripheral, interpretation by physician with written report) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. For CY 2019, the RUC recommended a work RVU of 0.45 based on maintaining the current work RVU.

We disagreed with the recommended value and proposed a work RVU of 0.36 for CPT code 85060 based on the total time ratio between the current time of 15 minutes and the recommended time established by the survey of 12 minutes. This ratio equals 80 percent, and 80 percent of the current work RVU of 0.45 equals a work RVU of 0.36. When we reviewed CPT code 85060, we found that the recommended work RVU was higher than nearly all of the other global XXX codes with similar time values, and we do not believe that this blood smear interpretation procedure would have an anomalously high intensity. Although we did not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs. In the case of CPT code 85060, we believe that it would be more accurate to propose the total time ratio at a work RVU of 0.36 to account for these decreases in the surveyed work time.

The proposed work RVU was also based on the use of three crosswalk codes. We directly supported the proposed valuation through a crosswalk to CPT code 95930 (Visual evoked potential (VEP) checkerboard or flash testing, central nervous system except glaucoma, with interpretation and report), which has a work RVU of 0.35 along with 10 minutes of intraservice time and 14 minutes of total time. We also explained the proposed valuation by bracketing it between two other crosswalks, with CPT code 99152 (Moderate sedation services provided by the same physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; initial 15 minutes of intraservice time, patient age 5 years or older) on the lower end at a work RVU of 0.25 and CPT code 93923 (Complete bilateral noninvasive physiologic studies of upper or lower extremity arteries, 3 or more levels, or single level study with provocative functional maneuvers) on the higher end at a work RVU of 0.45.

The RUC recommended no direct PE inputs for CPT code 85060 and we proposed none.

The following is a summary of the public comments we received on our proposals involving CPT code 85060.

Comment: Many commenters disagreed with the proposed work RVU of 0.36 for CPT code 85060 and stated that CMS should finalize the RUC-recommended work RVU of 0.45. Commenters stated that a time ratio should not be used because any decrease will result in a large ratio and a corresponding but inappropriate decrease to the physician work RVU. Commenters stated that rather than using time ratios CMS should examine the magnitude estimation between the physician work, time, and intensity. Commenters also stated that the current time was not based on a survey and it was unclear how the time was determined.

Response: We disagree with the commenters and continue to believe that the use of time ratios is one of several appropriate methods for identifying potential work RVUs for particular PFS services, particularly when the alternative values recommended by the RUC and other commenters do not account for information provided by surveys that suggests the amount of time involved in furnishing the service has changed significantly. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. When our review of recommended values reveals that changes in the resource of time have been unaccounted for in a recommended RVU, then we believe we have the obligation to account for that change in establishing work RVUs since the statute explicitly identifies time as one of the two elements of the work RVUs. We recognize that it would not be appropriate to develop work RVUs solely based on time given that intensity is also an element of work, but in applying the time ratios, we are using derived intensity measures based on current work RVUs for individual procedures. Were we to disregard intensity altogether, the work RVUs for all services would be developed based solely on time values and that is definitively not the case, as indicated by the many services that share the same time values but have different work RVUs. (As an example, CPT codes 38222, 54231, 55870, 75573, and 78814 all share identical CY 2019 work times with 15 minutes of preservice time, 30 minutes of intraservice time, and 15 minutes of postservice time; however these codes have respective CY 2019 work RVUs of 1.44, 2.04, 2.58, 2.55, and 2.20.) Furthermore, we reiterate that we use time ratios to identify potentially appropriate work RVUs, and then use other methods (including estimates of work from CMS medical personnel and crosswalks to key reference or similar codes) to validate these RVUs. For more details on our methodology for developing work RVUs, we direct readers to the discussion CY 2017 PFS final rule (81 FR 80272 through 80277).

Comment: Several commenters disagreed with our statement that the recommended work value of 0.45 is higher than nearly all of the other global XXX codes with similar time values. Commenters stated that a search of the RUC database contradicted this finding, showing that eleven XXX codes with 12 minutes of intraservice time have values lower than 0.45 and thirteen XXX codes with 12 minutes of intraservice time have values the same or higher than 0.45 RVUs. Commenters stated that none of these services are pathology services and were not comparable, except for CPT code 88388 (Macroscopic examination, dissection, and preparation of tissue for non-microscopic analytical studies (e.g., nucleic acid-based molecular studies)) which has identical work value and intra-service time and was the reference code cited in the RUC recommendation. Commenters also disagreed with the CMS crosswalk to CPT code 95930 due to the fact that it is not a pathology service.

Response: We disagree with the commenters' statement that pathology services are only comparable to other pathology services. Although we agree that the unique nature of pathology and laboratory services can make comparisons across codes more difficult than in other services, we believe the comparison of codes with similar work RVUs across different specialties is important to maintaining the relativity of the PFS. We disagree with the commenters that the crosswalk to CPT code 95930 would be methodologically inappropriate solely on the grounds that it is not a pathology service.

Comment: Several commenters stated that there are a number of variables that must be considered in the evaluation of a blood smear when compared to others, including red blood cell count, size and morphology, platelet morphology and number, white blood cell morphology and the presence of white blood cell precursors. Commenters stated that other services with identical physician work include CPT code 88314 (Special stain including interpretation and report; histochemical stain on frozen tissue block) and CPT code 93923 (Complete bilateral noninvasive physiologic studies of upper or lower extremity arteries, 3 or more levels). Commenters stated the proposed work value would create significant rank order anomalies within the array of pathology services, as CPT code 85060 has nearly identical work time to CPT code 88314 but would be valued lower at the proposed work RVU.

Response: We appreciate the detailed information about CPT code 85060 provided by the commenters regarding the clinical comparisons to CPT codes 88314 and 93923.

After consideration of the public comments, we are not finalizing our proposed work RVU of 0.36 for CPT code 85060. We are finalizing the RUC-recommended work RVU of 0.45 instead.

(48) Bone Marrow Interpretation (CPT Code 85097)

CPT code 85097 (Bone marrow, smear interpretation) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. For CY 2019, the RUC recommended a work RVU of 1.00 based on a direct crosswalk to CPT code 88121 (Cytopathology, in situ hybridization (e.g., FISH), urinary tract specimen with morphometric analysis, 3-5 molecular probes, each specimen; using computer-assisted technology).

We disagreed with the RUC-recommended value and we proposed a work RVU of 0.94 for CPT code 85097 based on maintaining the current work valuation. We noted that the survey indicated that CPT code 85097 typically takes 25 minutes of work time to perform, down from a previous work time of 30 minutes, and, generally speaking, since the two components of work are time and intensity, we believe that significant decreases in time should be reflected in decreases to work RVUs. For the specific case of CPT code 85097, we supported our proposed work RVU of 0.94 through a crosswalk to CPT code 88361 (Morphometric analysis, tumor immunohistochemistry (e.g., Her-2/neu, estrogen receptor/progesterone receptor), quantitative or semiquantitative, per specimen, each single antibody stain procedure; using computer-assisted technology), a recently reviewed code from CY 2018 with the identical time values and a work RVU of 0.95.

We also considered a work RVU of 0.90 based on double the recommended work RVU of 0.45 for CPT code 85060 (Blood smear, peripheral, interpretation by physician with written report). When both of these CPT codes were under review, the explanation was offered that in a peripheral blood smear, typically, the practitioner does not have the approximately 12 precursor cells to review, whereas in an aspirate from the bone marrow, the practitioner is examining all the precursor cells. Additionally, for CPT code 85097, there are more cell types to look at as well as more slides, usually four, whereas with CPT code 85060 the practitioner would typically only look at one slide. Although we did not propose to value CPT code 85097 at twice the work RVU of CPT code 85060, we believe this analysis also supports maintaining the current work RVU of 0.94 as opposed to raising it to 1.00.

For the direct PE inputs, we proposed to remove the clinical labor time for the “Accession and enter information” (PA001) and “File specimen, supplies, and other materials” (PA008) activities. As we stated previously, information entry and specimen filing tasks are not individually allocable to a particular patient for a particular service and are considered to be forms of indirect PE. Although we agree that these are necessary tasks, under our established methodology we believe that they are more appropriately classified as indirect PE.

The following is a summary of the public comments we received on our proposals involving CPT code 85097.

Comment: Many commenters disagreed with the proposed work RVU of 0.94 for CPT code 85097 and stated that CMS should finalize the RUC-recommended work RVU of 1.00. Commenters stated that the CMS rationale about changes in work time was out of place in this context because the survey respondents indicate that the service requires 25 minutes to perform rather than the current time of 30 minutes, yet CMS proposed to maintain the current work value. The commenters suggested that maintaining the current work RVU of 0.94 was therefore inappropriate. Commenters also stated that the current work time for CPT code 85097 was not based on a survey and that it was unknown how this time was determined and what it actually represents.

Response: 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 also 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. However, we want to reiterate that we believe it would be irresponsible to ignore changes in time based on the best data available and that we are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. For additional information regarding the use of old work time values in our methodology, we refer readers to our discussion of the subject in the CY 2017 final rule (81 FR 80273 through 80274). With regard to the specific case of CPT code 85097, we proposed to maintain the current work RVU rather than decreasing the work RVU due to some of the same concerns about the historical work times for this code raised by the commenters. We believe that the logic provided by the commenters suggests that the decreases in the work time of CPT code 85097 should have been reflected in decreases to the work RVU (as opposed to maintaining the current value), which we do not believe was their intention.

Comment: Several commenters stated that given the total work, time, intensity, and complexity of the patient case, the current work RVU of 0.94 was too low for CPT code 85097. Commenters stated that the RUC chose a crosswalk to CPT code 88121 (Cytopathology, in situ hybridization (e.g., FISH), urinary tract specimen with morphometric analysis, 3-5 molecular probes, each specimen; using computer-assisted technology) specifically because it is a similar pathology code with a value between the current work value of 0.94 and the survey 25th percentile of 1.15. Commenters stated that the CMS reference code (CPT code 88361) was less intense and complex to perform as it involves evaluating a single antibody and determining the percentage of tumor cells that are positive for that antibody, as opposed to the work of CPT code 85097 which involves evaluating all blood cell precursors for quantitative and morphologic abnormalities, as well as evaluating for metastatic tumor cells, evidence of infection, or evidence of lymphoid neoplasms.

Response: We disagree with the commenters that the current work RVU of 0.94 or the work RVU of our reference code of 88361 are too low in comparison to CPT code 85097. All three of the codes under discussion (CPT codes 85097, 88121, and 88361) are clinically similar procedures that involve the practitioner using their eyes to look at staining patterns. We do not agree with the commenters that the RUC's use of CPT code 88121 as a crosswalk would be any more accurate on clinical grounds that the reference code of 88361 that we chose in the proposed rule. Overall, we do not believe that there is a significant difference between these three procedures given their nearly identical work RVUs, intensities, and work times. However, given the decrease in surveyed work time, we continue to believe that it is more appropriate to maintain the current work RVU of 0.94 than to increase it to 1.00 due to our longstanding belief that decreases in work time should typically be not be reflected in increases to the work RVU. We note that we are not proposing to decrease the work RVU for CPT code 85097 despite this decrease in the surveyed work time, only to maintain the current valuation.

Comment: Several commenters responded to the CMS consideration of a work RVU of 0.90 based on double the recommended work RVU of 0.45 for CPT code 85060. Commenters stated that they wished to clarify that this explanation was put forward to a RUC member whom was simply questioning why this service requires twice the time of CPT code 85060. Commenters stated that simply doubling the RUC-recommended work RVU of 0.45 for CPT code 85060 based on the amount of time does not account for the considerably greater intensity and complexity of CPT code 85097 over CPT code 85060 as described elsewhere in their comments.

Response: We appreciate the clarification on this issue from the commenters.

Comment: Several commenters disagreed with the CMS proposal remove the clinical labor time for the “Accession and enter information” (PA001) and “File specimen, supplies, and other materials” (PA008) activities. Commenters stated that although the descriptions for the PA001 and PA008 clinical labor activities appeared to describe data entry and filing activities, these tasks are very different in the pathology lab. Commenters stated that it is crucial for the performance of these tasks be executed accurately according to rigid patient laboratory protocols, standards, and legal processes associated with specimen/patient care and they should not be considered a form of indirect expense.

Response: Although we agree that the unique nature of pathology and laboratory services can make comparisons across codes more difficult than for other services, we believe the comparison of similar clinical labor activities across different services is important to maintaining the relativity of the direct PE inputs. As we stated in the CY 2017 PFS final rule (81 FR 80324), we agree with the commenters that entering patient data into information systems and filing specimens are important tasks, and we agree that these would take more than zero minutes to perform. However, we continue to believe that these activities are correctly categorized as indirect PE as administrative functions, and therefore, we do not recognize the entry of patient data or the filing of specimens as direct PE inputs, and we do not consider this task as typically performed by clinical labor on a per-service basis.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for CPT code 85097 as proposed.

(49) Fibrinolysins Screen (CPT Code 85390)

CPT code 85390 (Fibrinolysins or coagulopathy screen, interpretation and report) was identified as potentially misvalued on a screen of codes with a negative IWPUT, with 2016 estimated Medicare utilization over 10,000 for RUC reviewed codes and over 1,000 for Harvard valued and CMS/Other source codes. For CY 2019, we are proposing the RUC-recommended work RVU of 0.75 for CPT code 85390. Because this is a work only code, the RUC did not recommend, and we did not propose any direct PE inputs for CPT code 85390.

The following is a summary of the public comments we received on our proposals involving CPT code 85390.

Comment: A commenter expressed support for our proposal to accept the RUC-recommended work RVU for this code.

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

After consideration of the public comments, we are finalizing our proposal to accept the RUC-recommended work RVU for this code.

(50) Electroretinography (CPT Codes 92273, 92274, and 0509T)

CPT code 92275 (Electroretinography with interpretation and report) was identified in 2016 on a high expenditure services screen across specialties with Medicare allowed charges of $10 million or more. In January 2016, the specialty society noted that they became aware of inappropriate use of CPT code 92275 for a less intensive version of this test for diagnosis and indications that are not clinically proven and for which less expensive and less intensive tests already exist. CPT changes were necessary to ensure that the service for which CPT code 92275 was intended was clearly described, as well as an accurate vignette and work descriptor were developed. In September 2017, the CPT Editorial Panel deleted CPT code 92275 and replaced it with two new codes to describe electroretinography full field and multi focal. A category III code was retained for pattern electroretinography.

For CPT code 92273 (Electroretinography (ERG) with interpretation and report; full field (e.g., ffERG, flash ERG, Ganzfeld ERG)), we disagreed with the recommended work RVU of 0.80 and we instead proposed a work RVU of 0.69 based on a direct crosswalk to CPT code 88172 (Cytopathology, evaluation of fine needle aspirate; immediate cytohistologic study to determine adequacy for diagnosis, first evaluation episode, each site). CPT code 88172 is another interpretation procedure with the same 20 minutes of intraservice time, which we believe is a more accurate comparison for CPT code 92273 than the two reference codes chosen by the survey participants due to their significantly higher and lower intraservice times. We noted that the recommended intraservice time for CPT code 92273 as compared to its predecessor CPT code 92275 is decreasing from 45 minutes to 20 minutes (56 percent reduction), and the recommended total time is decreasing from 71 minutes to 22 minutes (69 percent reduction); however, the work RVU is only decreasing from 1.01 to 0.80, which is a reduction of just over 20 percent. Although we did not imply that the decreases in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs. In the case of CPT code 92273, we have reason to believe that the significant drops in surveyed work time as compared to CPT code 92275 are a result of improvements in technology since the predecessor code was reviewed. The older machines used for electroretinography were slower and more cumbersome, and now the same work for the service can be performed in significantly less time. Therefore, we proposed a work RVU of 0.69 based on the direct crosswalk to CPT code 88172, which we believe more accurately accounts for these decreases in surveyed work time.

For CPT code 92274 (Electroretinography (ERG) with interpretation and report; multifocal (mfERG)), we disagreed with the RUC-recommended work RVU of 0.72 and proposed a work RVU of 0.61. We concurred that the relative difference in work between CPT code 92273 and 92274 is equivalent to the recommended interval of 0.08 RVUs. Therefore, we proposed a work RVU of 0.61 for CPT code 92274, based on the recommended interval of 0.08 fewer RVUs below our proposed work RVU of 0.69 for CPT code 92273. The proposed work RVU is also based on the use of two crosswalk codes: CPT code 88387 (Macroscopic examination, dissection, and preparation of tissue for non-microscopic analytical studies; each tissue preparation); and CPT code 92100 (Serial tonometry (separate procedure) with multiple measurements of intraocular pressure over an extended time period with interpretation and report, same day). Both codes share the same 20 minutes of intraservice and 20 minutes of total time, with a work RVU of 0.62 for CPT code 88387 and a work RVU of 0.61 for CPT code 92100.

The recommendations for this code family also include CPT Category III code 0509T (Electroretinography (ERG) with interpretation and report, pattern (PERG)). We typically assign contractor pricing for Category III codes since they are temporary codes assigned to emerging technology and services. However, in cases where there is an unusually high volume of services that will be performed under a Category III code, we have sometimes assigned an active status to the procedure and developed RVUs before a formal CPT code is created. In the case of CPT code 0509T, the recommendations indicate that approximately 80 percent of the services currently reported under CPT code 92275 will be reported under the new Category III code. Since this will involve an estimated 100,000 services for CY 2019, we believe that the interests of relativity would be better served by assigning an active status to CPT code 0509T and creating RVUs through the use of a proxy crosswalk to a similar existing service. Therefore, we proposed to assign an active status to CPT Category III code 0509T for CY 2019, with a work RVU and work time values crosswalked from CPT code 92250 (Fundus photography with interpretation and report). CPT code 92250 is a clinically similar procedure that was recently reviewed during the CY 2017 rule cycle. We proposed a work RVU of 0.40 and work times of 10 minutes of intraservice and 12 minutes of total time for CPT code 0509T based on this crosswalk to CPT code 92250.

For the direct PE inputs, we proposed to remove the preservice clinical labor in the facility setting for CPT codes 92273 and 92274. Both of these codes are diagnostic tests under which the professional (26 modifier) and technical (TC modifier) components will be separately billable, and codes that have these professional and technical components typically will not have direct PE inputs in the facility setting since the technical component is only valued in the nonfacility setting. We also noted on this subject that the predecessor code, CPT code 92275, does not currently include any preservice clinical labor, nor any facility direct PE inputs.

We proposed to remove the clinical labor time for the “Greet patient, provide gowning, ensure appropriate medical records are available” (CA009) and the “Provide education/obtain consent” (CA011) activities for CPT codes 92273 and 92274. Both of these CPT codes will typically be reported with a same day E/M service, and we believe that these clinical labor tasks will be carried out during the E/M service. We believe that their inclusion in CPT codes 92273 and 92274 would be duplicative. We also proposed to refine the clinical labor time for the “Prepare room, equipment and supplies” (CA013) activity to 3 minutes and to refine the clinical labor time for the “Confirm order, protocol exam” (CA014) activity to 0 minutes for both codes. The predecessor CPT code 92275 did not previously have clinical labor time assigned for the “Confirm order, protocol exam” clinical labor task, and we did not have any reason to believe that the services being furnished by the clinical staff had changed in the new codes, only the way in which this clinical labor time has been presented on the PE worksheets. We also noted that there is no effect on the total clinical labor direct costs in these situations since the same 3 minutes of clinical labor time is still being furnished.

We proposed to refine the clinical labor time for the “Clean room/equipment by clinical staff” (CA024) activity from 12 minutes to 8 minutes for CPT codes 92273 and 92274. The recommendations for these codes stated that cleaning is carried out in several steps: The patient is first cleaned for 2 minutes, followed by wires and electrodes being scrubbed carefully with detergent, soaked, and then rinsed with sterile water. We agree with the need for 2 minutes of patient cleaning time and for the cleaning of the wires and electrodes to take place in two different steps. However, our standard clinical labor time for room/equipment cleaning is 3 minutes, and therefore, we proposed a total time of 8 minutes for these codes, based on 2 minutes for patient cleaning and then 3 minutes for each of the two steps of wire and electrode cleaning.

We proposed to refine the clinical labor time for the “Technologist QC's images in PACS, checking for all images, reformats, and dose page” (CA030) activity from 10 minutes to 3 minutes for CPT codes 92273 and 92274. We finalized in the CY 2017 PFS final rule (81 FR 80184-80186) a range of appropriate standard minutes for this clinical labor activity, ranging from 2 minutes for simple services up to 5 minutes for highly complex services. We believe that the complexity of the imaging in CPT codes 92273 and 92274 is comparable to the CT and magnetic resonance (MR) codes that have been recently reviewed, such as CPT code 76391 (Magnetic resonance (e.g., vibration) elastography). Therefore, in order to maintain relativity, we proposed the same clinical labor time of 3 minutes for CPT codes 92273 and 92274 that has been recommended for these CT and MR codes. We also proposed to refine the clinical labor time for the “Review examination with interpreting MD/DO” (CA031) activity from 5 minutes to 2 minutes for CPT codes 92273 and 92274. We also finalized in the CY 2017 PFS final rule a standard time of 2 minutes for reviewing examinations with the interpreting MD, and we have no reason to believe that these codes would typically require additional clinical labor at more than double the standard time.

We noted that the new equipment item “Contact lens electrode for mfERG and ffERG” (EQ391) was listed twice for CPT code 92273 but only a single time for CPT code 92274. We solicited additional information about whether the recommendations intended this equipment item to be listed twice, with one contact intended for each eye, or whether this was a clerical mistake. We are also interested in additional information as to why the contact lens electrode was listed twice for CPT code 92273 but only a single time for CPT code 92274. Finally, we also proposed to refine the equipment times in accordance with our standard equipment time formulas.

We proposed to use the direct PE inputs for CPT code 92274, including the refinements detailed above, as a proxy for CPT Category III code 0509T until it can be separately reviewed by the RUC.

The following is a summary of the public comments we received on our proposals involving the Electroretinography family of codes.

Comment: Many commenters disagreed with the proposed work RVU of 0.69 for CPT code 92273 and stated that CMS should finalize the RUC-recommended work RVU of 0.80. Commenters stated that the RUC-recommended work RVU was based on the survey 25th percentile and CMS should use survey data in establishing the work RVU. Commenters stated that the decrease in intraservice work time of deleted CPT code 92275 from when it was last surveyed in 1995 was due to the fact that the physician no longer participates in the acquisition of the data or performing the test on the patient, which has become the technician's work. Commenters stated that the RUC determined that the physician work is not the same as it was with CPT code 92275 and the recommended decrease in work RVUs appropriately addresses the decrease in physician time to perform this service.

Response: We disagree with the commenters that the RUC-recommended decrease in work RVUs appropriately addresses the decrease in physician time to perform this service. As we stated in the proposed rule, the recommended intraservice time for CPT code 92273 as compared to its predecessor CPT code 92275 is decreasing from 45 minutes to 20 minutes (56 percent reduction), and the recommended total time is decreasing from 71 minutes to 22 minutes (69 percent reduction); however, the RUC-recommended work RVU is only decreasing from 1.01 to 0.80, which is a reduction of just over 20 percent. Although we did not imply that the decreases in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs. As a result, we believe that our proposed work RVU of 0.69 more accurately captures the changes in work that have taken place since the previous survey.

Comment: Several commenters stated that while the time required for CPT code 92273 is less than the time required for CPT code 92275, the code it replaced, the intensity and complexity of the work involved in interpreting the test has increased significantly. Commenters stated that the newer machines are easily programmed to produce more images and numbers for interpretation (double or more) than the machines in use in 1995 when the procedure was last valued and that advances in medical knowledge have identified more specific retinal dystrophy diagnoses with specific genotypes that the clinician must consider when interpreting the test. Commenters emphasized that while the machine may be more efficient as stated by CMS, the cognitive work required by the physician interpreting the test has increased significantly.

Response: We disagree with the commenters that all of the efficiencies gained in work time via improved technology would be offset via higher intensity (that is, greater cognitive work on the part of the practitioner). While the incorporation of new technology can sometimes make services more complex and difficult to perform, it can also have the opposite effect by making services less reliant on manual skill and technique. At the RUC-recommended work RVU of 0.80, the intensity of CPT code 92273 would increase by nearly 300 percent, and we do not agree that the cognitive intensity of the procedure would have increased by this amount. We continue to believe that our proposed work RVU of 0.69 more accurately captures the changes in work taking place as a result of greater technological efficiencies in the service.

Comment: Many commenters disagreed with the proposed work RVU of 0.61 for CPT code 92274 and stated that CMS should finalize the RUC-recommended work RVU of 0.72. Commenters stated that CMS should use valid methods of evaluating services, such as survey data and magnitude estimation, instead of relying on an incremental difference in work RVUs between codes 92273 and 92274.

Response: We believe the use of an incremental difference between codes is a valid methodology for setting values, especially in valuing services within a family of revised codes where it is important to maintain appropriate intra-family relativity. Historically, we have frequently utilized an incremental methodology in which we value a code based upon its incremental difference between another code or another family of codes. We note that the RUC has also used the same incremental methodology on occasion when it was unable to produce valid survey data for a service. We further note that we did not rely solely on an increment for our proposed work RVU for CPT code 92274, as the proposed work RVU was also based on the use of a reference code (CPT code 88387) and a crosswalk code (CPT code 92100). Both codes share the same 20 minutes of intraservice and 20 minutes of total time, with a work RVU of 0.62 for CPT code 88387 and a work RVU of 0.61 for CPT code 92100.

Comment: Several commenters stated that while there was no predecessor code for direct comparison, the intensity and complexity of the work involved in interpreting the test has increased significantly compared to 1995, when CPT code 92275 was last valued. Commenters restated the same arguments they expressed for CPT code 92273: The new machines used in CPT code 92274 have become more efficient but the cognitive work required by the physician interpreting the test has increased significantly.

Response: As we stated with regard to CPT code 92273, we continue to disagree with the commenters that all of the efficiencies gained in work time via improved technology would be offset via higher intensity (that is, greater cognitive work on the part of the practitioner). At the RUC-recommended work RVU of 0.72, the intensity of CPT code 92274 would also increase by nearly 300 percent, and we do not agree that the cognitive intensity of the procedure would have increased by this amount. We continue to believe that our proposed work RVU of 0.61 more accurately captures the changes in work taking place as a result of greater technological efficiencies in the service.

Comment: Several commenters stated that CPT code 92274 requires more physician work than the crosswalks we identified. Commenters stated that CPT code 88387 is a straightforward manual dissection that does not require interpretation of multiple images and numeric values to arrive at a diagnosis. Commenters stated that CPT code 92100 also requires less physician work, as CPT code 92274 requires interpretation of significantly more data and consideration of many more diagnostic possibilities.

Response: We disagree with the commenters that our reference and crosswalk codes require less work than CPT code 92274. While it is true that CPT code 88387 does not require interpretation of multiple images and numeric values, this is because it is not an imaging service, and it is inappropriate to state that the work of CPT code 88387 is lower than CPT code 92274 based on this criteria. We do not agree that the macroscopic examination, dissection, and preparation of tissue taking place in CPT code 88387 would inherently constitute less work than CPT code 92274. Similarly, we do not agree that the serial tonometry with multiple measurements of intraocular pressure taking place in CPT code 92100 would involve less work than CPT code 92274, especially due to the nearly identical intraservice and total work times shared by these procedures.

Comment: One commenter disagreed with our proposal to assign active pricing to Category III code 0509T. The commenter stated that this code should go through the regular vetting process that other new technology typically follows, including development of appropriate clinical literature that would qualify it for elevation to a full Category I CPT code, and then a RUC survey in order to develop accurate valuation for work and practice expense. The commenter was concerned that CMS would single out and put forward a value for a technology that has not gone through the same scrutiny as other new technologies.

Response: We understand the concerns expressed by the commenter. As we stated in the proposed rule, we typically assign contractor pricing for Category III codes since they are temporary codes assigned to emerging technology and services. However, in cases where there is an unusually high volume of services that will be performed under a Category III code, we have sometimes assigned an active status to the procedure, and in the case of Category III code 0509T the recommendations indicated that approximately 80 percent of the services currently reported under CPT code 92275 will be reported under the new Category III code. Since this will involve an estimated 100,000 services for CY 2019, we continue to believe that the interests of relativity would be better served by assigning an active status to Category III code 0509T and creating RVUs through the use of a proxy crosswalk to a similar existing service. We agree with the commenter that this code should still go through the regular vetting process that other new technology typically follows, and we look forward to receiving recommendations for work and practice expense inputs in the future.

Comment: One commenter stated that many of the proposed changes to the direct PE inputs were made with the intent to standardize inputs. The commenter stated that although the RUC has created many standards, they have always acknowledged that there are and will be exceptions to those standards. The commenter stated that these important diagnostic tests are unusual services that require significant amounts of preservice clinical labor time in whichever setting they are performed, and that the recommended direct PE inputs were carefully prepared based upon documented personal observation and time motion studies. The commenter stated that the predecessor CPT code 92275 had an over-simplified PE spreadsheet with very few data inputs, each comprising substantial amounts of time that are now broken out into separate inputs, and as a result the work required had not changed substantially but there had been additional granularity in the direct PE inputs.

Response: As we noted in the CY 2015 PFS final rule with comment period (79 FR 67640 through 67641), we continue to make improvements to the direct PE input database to provide the number of clinical labor minutes assigned for each task for every code in the database instead of only including the number of clinical labor minutes for the preservice, service, and postservice periods for each code. We have stated that we believe this additional level of detail helps to facilitate transparency, allows us to more easily compare clinical labor times across the PFS to maintain relativity, and helps in maintaining standard times for particular clinical labor tasks that can be applied consistently to many codes as they are valued over several years. However, we have always recognized that standards for clinical labor cannot be applied universally due to the differences between individual services, and we have frequently finalized clinical labor times above the standard values where we believed that there was sufficient reason to establish these values as the typical case. In the case of CPT code 92273 and 92274, we detailed our rationale in the proposed rule for why we believed that some of the RUC-recommended direct PE inputs should be refined to a standard clinical labor time. We also note that we did not propose the standard clinical labor time for all activities, such as the “Clean room/equipment by clinical staff” (CA024) activity.

Comment: Several commenters disagreed with the proposal to remove the preservice clinical labor in the facility setting for CPT codes 92273 and 92274. Commenters stated that these procedures, when done in a facility, must be scheduled in the operating room. Commenters stated that these procedures would typically be done in the facility only when it is not clinically appropriate for them to be performed in the clinic, such as for children or the cognitively impaired; and it takes substantial amounts of time for the staff to accomplish this coordination of care for these higher-needs patients.

Response: We recognize that these procedures are rarely performed in the facility setting, with approximately 1 percent of the utilization of predecessor CPT code 92275 taking place in this setting. However, we disagree that these procedures would typically be performed in the operating room when furnished in the facility, and therefore, we do not agree that these procedures would typically require preservice clinical labor for coordination of care. We also noted on this subject that the predecessor code, CPT code 92275, does not currently include any preservice clinical labor, nor any facility direct PE inputs, and we did not receive an explanation from the commenters as to why this was the case. Furthermore, both of these codes are diagnostic tests under which the professional (26 modifier) and technical (TC modifier) components will be separately billable, and codes that have these professional and technical components typically will not have direct PE inputs in the facility setting since the technical component is only valued in the nonfacility setting.

Comment: Several commenters disagreed with the proposal to remove the clinical labor time for the “Greet patient, provide gowning, ensure appropriate medical records are available” (CA009) and the “Provide education/obtain consent” (CA011) activities for CPT codes 92273 and 92274. Commenters stated that although slightly more than 50 percent of these services are done on the same day as an office visit, the clinical staff time involved is completely divorced from the office visit and the staff performing the test are different from the staff assisting in the office visit. Commenters stated that the machine used for these procedures is housed in a different room, the patient needs to be transported from the ophthalmic exam lane to the ERG room and back, additional instructions are required that are never done during a typical office visit, and the nature of this test requires extra supplies and work in addition to those used for the office visit. Commenters emphasized that these clinical tasks are not duplicative with an E/M, as they represent separate actions by a different technician in a different room.

Response: We disagree with the commenters and continue to believe that this clinical labor would be duplicative with the same day E/M office visit. While it is true that there is a different clinical labor staff type used by CPT codes 92273 and 92274, we are not suggesting that all clinical labor is duplicative with the same day E/M visit, only that clinical labor activities such as greeting and gowning the patient would only be done a single time. We also note that we do not include patient transportation as a form of direct PE, as it is not individually allocable to a single service and would instead be classified as an administrative task under indirect PE. However, we do agree with the commenters that additional instructions would be required for these electroretinography services, and as a result we will restore the 1 minute of clinical labor time for the “Provide education/obtain consent” (CA011) activity. We agree that this would not be duplicative with the same day E/M office visit.

Comment: Several commenters stated that in our refinements to the direct PE inputs for CPT codes 92273 and 92274, CMS proposed to remove 1 minute from the CA014 activity code and proposed to add 1 minute to the CA013 activity code. The commenter stated that this refinement was inaccurate and encouraged CMS to modify this proposal by finalizing the RUC-recommended direct PE inputs for clinical labor. One commenter stated that this work is done by a different technician in a different room typically in a busy clinical setting and this work was separate from that being done during the office visit.

Response: We addressed this subject in detail in the PE section of this final rule under the Changes to Direct PE Inputs for Specific Services heading (section II.B.3. of this final rule). For CPT codes 92273 and 92274, we are finalizing these clinical labor refinements as proposed. We also note in response to the one commenter that our refinements to the CA013 and CA014 clinical labor activities were not based on the premise on being duplicative with the same day E/M visit.

Comment: Several commenters disagreed with the proposal to refine the clinical labor time for the “Clean room/equipment by clinical staff” (CA024) activity from 12 minutes to 8 minutes for CPT codes 92273 and 92274. Commenters stated that this was the time that the specialty society found when directly shadowing the process to clean the patient and the equipment. Commenters stated that the technician needs to clean the patient's skin, rinse their eyes, and clean around the patient and escort them out. Commenters stated that the expensive and delicate eye electrodes require a significant amount of time to remove and clean the conductive paste and Goniosol without damaging the electrodes, which needs to be performed after each procedure so that the electrodes can be re-used for the next procedure. Commenters emphasized that the equipment cleaning process requires meticulous care and a significant amount of technician time.

Response: We agree with the commenters that these procedures require more time for cleaning the room and equipment than the standard for the CA024 activity. This is the reason we proposed 8 minutes of clinical labor time instead of 3 minutes, almost triple the standard value for this activity code. As we stated in the proposed rule, we agreed with the need for 2 minutes of patient cleaning time and for the cleaning of the wires and electrodes to take place in two different steps. Since our standard clinical labor time for room/equipment cleaning is 3 minutes, we therefore proposed a total time of 8 minutes for these codes, based on 2 minutes for patient cleaning and then 3 minutes for each of the two steps of wire and electrode cleaning. We continue to believe that 8 minutes would be the typical amount of clinical labor used for these procedures.

Comment: Several commenters disagreed with the proposal to refine the clinical labor time for the “Technologist QC's images in PACS, checking for all images, reformats, and dose page” (CA030) activity from 10 minutes to 3 minutes for CPT codes 92273 and 92274. Commenters stated that the machine used for the ERG codes is not typically integrated into the clinic's electronic medical record. Commenters stated that this machine requires printing all images created by the testing machine and uploading them into the EMR for subsequent review by the physician and that it is not unusual for re-printing using a different scale or limits to be necessary. Commenters stated that this clinical labor differed from a typical radiology scenario because the procedure is in fact different from a typical imaging study.

Response: We disagree with the commenters that the full recommended time of 10 minutes would be typical for this clinical labor activity. We do not agree that it would be typical to physically print out all of the images produced by the machine, and note that we do not include additional direct PE inputs for inefficiencies in practice operations. We continue to believe that the complexity of the imaging in CPT codes 92273 and 92274 is comparable to the CT and magnetic resonance (MR) codes, and that in order to maintain relativity, we proposed the same clinical labor time of 3 minutes.

Comment: Several commenters disagreed with the proposal to refine the clinical labor time for the “Review examination with interpreting MD/DO” (CA031) activity from 5 minutes to 2 minutes for CPT codes 92273 and 92274. Commenters stated that this input was calculated by direct observation of typical procedures with a stopwatch. Commenters stated that this test is performed in a different room than the office visit, and the technician needs to take time to find the ordering/interpreting physician and review the quality of the gain and results.

Response: We disagree with the commenters that the full recommended time of 5 minutes would be typical for this clinical labor activity. We note again that we do not include additional direct PE inputs for inefficiencies in practice operations, and that we would not increase the clinical labor to include time that the technician needs to find the ordering/interpreting physician. We finalized in the CY 2017 PFS final rule a standard time of 2 minutes for reviewing examinations with the interpreting MD, and we have no reason to believe that these codes would typically require additional clinical labor at more than double the standard time.

Comment: Several commenters responded to the comment solicitation regarding additional information about whether the recommendations for the “Contact lens electrode for mfERG and ffERG” (EQ391) equipment intended this equipment item to be listed twice, with one contact intended for each eye, or whether this was a clerical mistake. Commenters stated that this was not an error but was intentional and reflects typical practice. Commenters stated that the test carried out in CPT code 92273 is performed with two contact lenses in place (one in each eye at the same time) in a simultaneous testing fashion. Commenters stated that the test carried out in CPT code 92274 is typically performed sequentially one eye at a time, re-using the same contact lens for each eye. Commenters stated that this discrepancy is primarily due to the dark and light-adaptation needs for the ffERG, which if done sequentially would double the amount of clinical time.

Response: We appreciate the additional information supplied by the commenters in response to our comment solicitation.

Comment: One commenter stated that the highly technical equipment formula should be used for the mfERG and ffERG electrodiagnostic unit (EQ390) equipment item.

Response: We did not propose to classify the EQ390 equipment as highly technical. We note that if we were to use the highly technical equipment formula for the EQ390 equipment, the total equipment time for this item would decrease, and we do not believe that this was what the commenter intended.

After consideration of the public comments, we are finalizing the work RVUs for the codes in the Electroretinography family of codes as proposed. We are also finalizing the direct PE inputs as proposed, with the exception of the CA011 clinical labor activity as described above.

(51) Cardiac Output Measurement (CPT Codes 93561 and 93562)

CPT codes 93561 (Indicator dilution studies such as dye or thermodilution, including arterial and/or venous catheterization; with cardiac output measurement) and 93562 (Indicator dilution studies such as dye or thermodilution, including arterial and/or venous catheterization; subsequent measurement of cardiac output) were identified as potentially misvalued on a screen of codes with a negative IWPUT, with 2016 estimated Medicare utilization over 10,000 for RUC reviewed codes and over 1,000 for Harvard valued and CMS/Other source codes. The specialty societies noted that CPT codes 93561 and 93562 are primarily performed in the pediatric population, thus the Medicare utilization for these Harvard-source services is not over 1,000. However, the specialty societies requested and the RUC agreed that these services should be reviewed under this negative IWPUT screen.

For CPT code 93561, we disagreed with the RUC-recommended work RVU of 0.95 and we proposed a work RVU of 0.60 based on a crosswalk to CPT code 77003 (Fluoroscopic guidance and localization of needle or catheter tip for spine or paraspinous diagnostic or therapeutic injection procedures (epidural or subarachnoid)). CPT Code 77003 is another recently-reviewed add-on global code with the same 15 minutes of intraservice time and 2 additional minutes of preservice evaluation time. In our review of CPT code 93561, we found that there was a particularly unusual relationship between the surveyed work times and the RUC-recommended work RVU. We noted that the recommended intraservice time for CPT code 93561 was decreasing from 29 minutes to 15 minutes (48 percent reduction), and the recommended total time for CPT code 93561 was decreasing from 78 minutes to 15 minutes (81 percent reduction); however, the recommended work RVU was instead increasing from 0.25 to 0.95, which is an increase of nearly 300 percent. Although we did not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should typically be reflected in decreases to work RVUs, not increases in valuation. We recognized that CPT code 93561 is an unusual case, as it is shifting from 0-day global status to add-on code status. However, when the work time for a code is going down and the unit of service is being reduced, we would not expect to see an increased work RVU under these circumstances, and especially not such a large work RVU increase. Therefore, we proposed instead to crosswalk CPT code 93561 to CPT code 77003 at a work RVU of 0.60, which we believe is a more accurate valuation in relation to other recently-reviewed add-on codes on the PFS. We believe that this proposed work RVU of 0.60 better preserves relativity with other clinically similar codes with similar surveyed work times.

For CPT code 93562, we disagreed with the recommended work RVU of 0.77 and proposed a work RVU of 0.48 based on the intraservice time ratio with CPT code 93561. We observed a similar pattern taking place with CPT code 93562 as with the first code in the family, noting that the recommended intraservice time was decreasing from 16 minutes to 12 minutes (25 percent reduction), and the recommended total time was decreasing from 44 minutes to 12 minutes (73 percent reduction); however, the RUC-recommended work RVU was instead increasing from 0.01 to 0.77. We recognized that CPT code 93562 is another unusual case, as it is also shifting from 0-day global status to add-on code status, and the current work RVU of 0.01 is a decrease from the code's former valuation of 0.16 following the removal of moderate sedation in the CY 2017 rule cycle. However, when the work time for a code is going down and the unit of service is being reduced, we typically would not expect to see a work RVU increase under these circumstances, and especially not such a large work RVU increase. Therefore, we proposed instead to apply the intraservice time ratio from CPT code 93561, for a ratio of 0.80 (12 minutes divided by 15 minutes) multiplied by the proposed work RVU of 0.60 for CPT code 93561, which results in the proposed work RVU of 0.48 for CPT code 93562. We noted that the RUC-recommended work values also line up according to the same intraservice time ratio, with the recommended work RVU of 0.77 for CPT code 93562 existing in a ratio of 0.81 with the recommended work RVU of 0.95 for CPT code 93561. We believe that this provides further rationale for our proposal to value the work RVU of CPT code 93562 at 80 percent of the work RVU of CPT code 93561.

There are no recommended direct PE inputs for the codes in this family and we did not propose any direct PE inputs.

The following is a summary of the public comments we received on our proposals involving the Cardiac Output Measurement family of codes.

Comment: Commenters stated that there were three intertwined flawed assumptions that CMS considered when proposing values for CPT codes 93561 and 93562, which if finalized would lead to continued misvaluation of these services. Commenters stated that the first of these flawed assumptions was a comparison of the survey data to Harvard data: The current time data for these codes came from the Harvard studies, has zero validity and should not be used to compare to current valid survey data. Commenters stated that the second of these flawed assumptions was a comparison of the recommended physician work RVUs to old work RVUs: The negative intensity of these codes confirmed that this previous methodology in which the current work RVU was derived from is flawed. Commenters stated that the third of these flawed assumptions was the use of an intraservice time ratio: This inaccurately treated all components of the physician time as having identical intensity and is incorrect. Other commenters identified changes in the global period from 0-day to add-on status and changes in the patient population from adult patients to pediatric patients as a rationale for why the increases in valuation were appropriate.

Many commenters disagreed with the proposed work RVU of 0.60 for CPT code 93561 and stated that CMS should finalize the RUC-recommended work RVU of 0.95. Commenters disagreed with the CMS crosswalk to CPT code 77003, stating that it was not a good crosswalk despite having the same intraservice work time. Commenters stated that CPT code 77003 is the imaging guidance code for needle placement for the epidural injection, and that placing a catheter in the heart and lungs of a child is not merely an imaging procedure. Commenters stated that a more appropriate injection procedure comparison would be the actual epidural injection procedure code, CPT code 62320 (Injection(s), of diagnostic or therapeutic substance(s) (e.g., anesthetic, antispasmodic, opioid, steroid, other solution), not including neurolytic substances, including needle or catheter placement, interlaminar epidural or subarachnoid, cervical or thoracic; without imaging guidance) at a work RVU of 1.80 or to the top key reference CPT code 93567 (Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for supravalvular aortography) at a work RVU of 0.97.

Many commenters also disagreed with the proposed work RVU of 0.48 for CPT code 93562 and stated that CMS should finalize the RUC-recommended work RVU of 0.77. Commenters stated that using an incremental approach in lieu of strong crosswalks and input from the RUC and physicians providing these services was an unfounded methodology. Commenters stated that CMS should rely on the survey data instead of the use of an increment, and commenters listed the reference codes chosen by the RUC which they stated were more appropriate for valuation.

Response: We appreciate the detailed feedback from the commenters regarding CPT Codes 93561 and 93562. We agree with the commenters that the proposed crosswalk to CPT code 77003 would result in an inappropriately low intensity for CPT code 93561.

After consideration of the public comments, we are finalizing the RUC-recommended work RVU of 0.95 for CPT code 93561 and the RUC-recommended work RVU of 0.77 for CPT code 93562. We are also finalizing our proposal to have no direct PE inputs for these codes.

(52) Coronary Flow Reserve Measurement (CPT Codes 93571 and 93572)

CPT code 93571 (Intravascular Doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; initial vessel) was identified on a list of all services with total Medicare utilization of 10,000 or more that have increased by at least 100 percent from 2009 through 2014. CPT code 93572 (Intravascular Doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; each additional vessel) was also included for review as part of the same family of CPT codes. The RUC recommended a work RVU of 1.50 for CPT code 93571, which is lower than the current work RVU of 1.80. The total time for this service decreased by 5 minutes from 20 minutes to 15 minutes. The RUC's recommendation is based on a crosswalk to CPT code 15136 (Dermal autograft, face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits; each additional 100 sq cm, or each additional 1% of body area of infants and children, or part thereof), which has an identical intraservice and total time as CPT code 93571 of 15 minutes.

We disagreed with the recommended work RVU of 1.50 for this CPT code because we did not believe that a reduction in work RVU from 1.80 to 1.50 was commensurate with the reduction in time for this service of 5 minutes. Using the building block methodology, we believed the work RVU for CPT code 93571 should be 1.35. We believe that a crosswalk to CPT code 61517 (Implantation of brain intracavitary chemotherapy agent (List separately in addition to CPT code for primary procedure)) with a work RVU of 1.38 was more appropriate because it has an identical intraservice and total time (15 minutes) as CPT code 93571, described work that is similar, and was closer to the calculations for intraservice time ratio, total time ratio, and the building block method. Therefore, we proposed a work RVU of 1.38 for CPT code 93571.

We proposed the RUC-recommended work RVU for CPT code 93572 (Intravascular Doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; each additional vessel) of 1.00.

Both of these codes are facility-only procedures with no recommended direct PE inputs.

The following is a summary of the public comments we received on our proposals involving the Coronary Flow Reserve Measurement family of codes.

Comment: We received several comments regarding our proposed work RVU of 1.38 for CPT 93571. Commenters generally did not agree with the use of time based metrics in our assessment of the work RVU for this code. In particular, they opposed CMS's reduction of work RVUs in proportion to the total reduction in time for furnishing this service. This methodology, they maintain, ignores the fact that the time reduction of 5 minutes in furnishing this service is associated with the low intensity portion of the work.

Response: We do not agree that a reduction in work RVU proportional to the total time decrease for this code, which has essentially only one time parameter since the intraservice time and total time are the same, is not appropriate. We continue to believe that this calculated value of 1.35 (a 75 percent reduction in both time and work RVU) accounts more appropriately for the reduction in time for a service in which the work to perform the service has not changed. We therefore continue to believe that our crosswalk to CPT code 61517 is similar in both work and time to CPT code 93571, and we are finalizing our proposed work RVU for CPT code 93571 of 1.38.

Comment: We received support from commenters regarding our proposed work RVU of 1.00 for CPT code 93572.

Response: We appreciate the support and are finalizing a work RVU of 1.00 for CPT code 93572 as proposed.

After consideration of the public comments, we are finalizing the work RVUs for the codes in the Coronary Flow Reserve Measurement family of codes as proposed.

(53) Peripheral Artery Disease (PAD) Rehabilitation (CPT Code 93668)

During 2017, we issued a national coverage determination (NCD) for Medicare coverage of supervised exercise therapy (SET) for the treatment of peripheral artery disease (PAD). Previously, the service had been assigned noncovered status under the PFS. CPT code 93668 (Peripheral arterial disease (PAD) rehabilitation, per session) was payable before the end of CY 2017, retroactive to the effective date of the NCD (May 25, 2017), and for CY 2018, CMS made payment for Medicare-covered SET for the treatment of PAD, consistent with the NCD, reported with CPT code 93668. We used the most recent RUC-recommended work and direct PE inputs and requested that the RUC review the service, which had not been reviewed since 2001, for direct PE inputs. The RUC did not recommend a work RVU for CPT code 93668 due to the belief that there is no physician work involved in this service. After reviewing this code, we proposed a work RVU of 0.00 for CPT code 93668 and proposed to continue valuing the code for PE only.

The following is a summary of the public comments we received on our proposals involving CPT code 93688.

Comment: Commenters were supportive of our proposal of the RUC-recommended work RVUs and PE inputs.

Response: We thank commenters for their support.

Comment: Several commenters noted that the proposed reductions in payment would impact their ability to perform the service in an office setting and that this would force them to perform the service in a hospital setting. They further noted that this would ultimately increase costs and impact patient satisfaction as well as impact their ability to provide the service to rural and under insured patients.

Response: We appreciate the feedback these commenters provided. We note that we accepted the RUC-recommended work RVU of 0.00 and the RUC-recommended direct PE inputs without refinements for CPT code 93668. We further note that the RUC has generally provided recommendations on work, work time, and direct PE inputs. We do not believe that the work or direct PE inputs assigned to these services are inaccurate. We further note that if commenters believe an additional RUC review would serve to address the issues they identified in our proposal, we would consider this information or recommendations from other interested stakeholders for future rulemaking.

After consideration of the public comments received, we are finalizing the RUC-recommended work RVUs and direct PE inputs for CPT code 93668 as proposed.

(54) Home Sleep Apnea Testing (CPT Codes 95800, 95801, and 95806)

CPT codes 95800 (Sleep study, unattended, simultaneous recording; heart rate, oxygen saturation, respiratory analysis (e.g., by airflow or peripheral arterial tone), and sleep time), 95801 (Sleep study, unattended, simultaneous recording; minimum of heart rate, oxygen saturation, and respiratory analysis (e.g., by airflow or peripheral arterial tone)), and 95806 (Sleep study, unattended, simultaneous recording of, heart rate, oxygen saturation, respiratory airflow, and respiratory effort (e.g., thoracoabdominal movement)) were flagged by the CPT Editorial Panel and reviewed at the October 2014 Relativity Assessment Workgroup meeting. Due to rapid growth in service volume, the RUC recommended that these services be reviewed after 2 more years of Medicare utilization data (2014 and 2015 data). These three codes were surveyed for the April 2017 RUC meeting and new recommendations for work and direct PE inputs were submitted to CMS.

For CPT code 95800, the RUC recommended a work RVU of 1.00 based on the survey 25th percentile value. We disagreed with the recommended value and proposed a work RVU of 0.85 based on a pair of crosswalk codes: CPT code 93281 (Programming device evaluation (in person) with iterative adjustment of the implantable device to test the function of the device and select optimal permanent programmed values with analysis, review and report by a physician or other qualified health care professional; multiple lead pacemaker system) and CPT code 93260 (Programming device evaluation (in person) with iterative adjustment of the implantable device to test the function of the device and select optimal permanent programmed values with analysis, review and report by a physician or other qualified health care professional; implantable subcutaneous lead defibrillator system). Both of these codes have a work RVU of 0.85, as well as having the same intraservice time of 15 minutes, similar total times to CPT code 95800, and recent review dates within the last few years.

In reviewing CPT code 95800, we noted that the recommended intraservice time is decreasing from 20 minutes to 15 minutes (25 percent reduction), and the recommended total time is decreasing from 50 minutes to 31 minutes (38 percent reduction); however, the RUC-recommended work RVU is only decreasing from 1.05 to 1.00, which is a reduction of less than 5 percent. Although we did not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs. In the case of CPT code 95800, we believe that it would be more accurate to propose a work RVU of 0.85 based on the aforementioned crosswalk codes to account for these decreases in the surveyed work time. We also noted that in this case where the surveyed times are decreasing and the utilization of CPT code 95800 is increasingly significantly (quadrupling in the last 5 years), we had reason to believe that practitioners are becoming more efficient at performing the procedure, which, under the resource-based nature of the RVU system, lends further support for a reduction in the work RVU.

For CPT code 95801, the RUC proposed a work RVU of 1.00 again based on the survey 25th percentile. We disagreed with the recommended value and we proposed a work RVU of 0.85 based on the same pair of crosswalk codes, CPT codes 93281 and 93260. We noted that CPT codes 95800 and 95801 had identical recommended work RVUs and identical recommended survey work times. Given that these two codes also have extremely similar work descriptors, we interpreted this to mean that the two codes could have the same work RVU, and therefore, we proposed the same work RVU of 0.85 for both codes.

For CPT code 95806, the RUC recommended a work RVU of 1.08 based on a crosswalk to CPT code 95819 (Electroencephalogram (EEG); including recording awake and asleep). Although we disagreed with the RUC-recommended work RVU of 1.08, we concurred that the relative difference in work between CPT codes 95800 and 95801 and CPT code 95806 was equivalent to the recommended interval of 0.08 RVUs. Therefore, we proposed a work RVU of 0.93 for CPT code 95806, based on the recommended interval of 0.08 additional RVUs above our proposed work RVU of 0.85 for CPT codes 95800 and 95801. We also noted that CPT code 95806 is experiencing a similar change in the recommended work and time values comparable to CPT code 95800. The recommended intraservice time for CPT code 95806 is decreasing from 25 minutes to 15 minutes (40 percent), and the recommended total time is decreasing from 50 minutes to 31 minutes (38 percent); however, the recommended work RVU is only decreasing from 1.25 to 1.08, which is a reduction of only 14 percent. As we stated for CPT code 95800, we do not believe that decreases in work time must equate to a one-to-one or linear decrease in the valuation of work RVUs, but we do believe that these changes in surveyed work time suggest that practitioners are becoming more efficient at performing the procedure, and that it would be more accurate to maintain the recommended work interval with CPT codes 95800 and 95801 by proposing a work RVU of 0.93 for CPT code 95806.

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving the Home Sleep Apnea Testing family of codes.

Comment: One commenter stated that the obesity epidemic has contributed to the rising prevalence of obstructive sleep apnea, and sleep centers have already worked to reduce costs in diagnosis of obstructive sleep apnea by utilizing out-of-center, or home, sleep apnea testing. The commenter stated that further reduction in work RVUs, and hence payments for home sleep apnea testing services, may endanger the sustainability of sleep centers to provide this service to Medicare beneficiaries and may thus deny beneficiaries access to testing for obstructive sleep apnea. A different commenter stated that a reduction in work RVUs for home sleep apnea testing services will discourage vendors from producing technically better home sleep apnea testing devices and software.

Response: We agree with the commenter regarding the importance of sleep centers in helping to diagnose and treat the occurrence of obstructive sleep apnea. However, we remind the commenter that we are obligated under the statute to consider both time and intensity in establishing work RVUs for PFS services. As explained in the CY 2017 PFS final rule (81 FR 80272 through 80277), we recognize that adjusting work RVUs for changes in time is not always a straightforward process, so we have applied various methodologies to identify several potential work values for individual codes. When the recommended work RVUs do not appear to account for significant changes in time, we have employed the different approaches to identify potential values that reconcile the recommended work RVUs with the recommended time values. For the codes in the Home Sleep Apnea Testing family, we believe that the decreases in the surveyed work times should be reflected in decreases to the work RVUs.

Comment: Many commenters disagreed with the proposed work RVU of 0.85 for CPT codes 95800 and 95801, and stated that CMS should finalize the RUC-recommended work RVU of 1.00 for these services. Commenters stated that it was unclear why CMS chose to employ the crosswalk to CPT codes 93281 and 93260, which the commenters stated were not at all similar to the home sleep apnea test codes and are cardiovascular implantable recording device codes, not diagnostic studies.

Response: We continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes with clinically similar services are sometimes stronger comparator codes, we do not agree that codes must both constitute diagnostic studies to be used as a crosswalk. In the case of our specific crosswalk to CPT codes 93281 and 93260, we noted in the proposed rule that both of these codes have a work RVU of 0.85, as well as having the same intraservice time of 15 minutes and similar total times to CPT codes 95800 and 95801, and recent review dates within the last few years.

Comment: Several commenters stated that the existing times for CPT codes 95800 and 95801 were likely an overestimate due to the lack of experience providing these services when they were first valued as new codes in April 2010. Commenters stated that physicians are now more familiar with home sleep apnea testing and the new survey times were more reflective of this family of services.

Response: This information from the commenters appears to suggest that the current work RVUs for CPT codes 95800 and 95801 are also overestimates. If practitioners have become more familiar and efficient in the practice of home sleep apnea testing, we believe that the work RVUs should also be decreased to reflect the fact that the procedures can now be performed faster. We remind the commenters that we are obligated under the statute to consider both time and intensity in establishing work RVUs for PFS services, and we have no reason to believe that the intensity of these procedures has increased to the point of offsetting these gains in time efficiency.

Comment: Several commenters stated that, despite the fact that we indicated we did not intend to imply that the decrease in time should equate to a linear decrease in the valuation of work RVUs, this seems to be the approach taken in the proposed rule. Commenters stated that modifications to work RVUs should be based on empirical evidence, gathered through the survey process, which takes into consideration the amount of time required to provide a service as well as the complexity and intensity of each service.

Response: We disagree with the commenters, and we note that the proposed work RVUs for both CPT codes 95800 and 95801 were not based on pure time ratios on a one-to-one or linear basis. For CPT code 95800, use of the intraservice time ratio alone would have yielded a work RVU of 0.79 and the total time ratio would have yielded a work RVU of 0.65. For CPT code 95801, use of the intraservice time ratio would have yielded a work RVU of 1.00 and the total time ratio would have yielded a work RVU of 0.78. We did not propose these values and instead proposed a work RVU of 0.85 for both codes specifically because the consideration of time ratios is only one component of our review process. We believe that our proposed work RVU of 0.85 for these services based on a pair of crosswalk codes, CPT codes 93281 and 93260 is appropriate, and note that we recognized that the use of pure time ratios at a one-to-one or linear basis would not accurately capture the changes in work taking place in these codes since their last valuation.

Comment: Many commenters disagreed with the proposed work RVU of 0.93 for CPT code 95806, and stated that CMS should finalize the RUC-recommended work RVU of 1.08. Commenters stated that the survey process values a service compared to other similar services, and that using an incremental approach in lieu of strong crosswalks and input from the RUC and physicians providing these services was unfounded.

Response: We believe the use of an incremental difference between codes is a valid methodology for setting values, especially in valuing services within a family of revised codes where it is important to maintain appropriate intra-family relativity. Historically, we have frequently utilized an incremental methodology in which we value a code based upon its incremental difference between another code or another family of codes. We note that the RUC has also used the same incremental methodology on occasion when it was unable to produce valid survey data for a service. We continue to believe that the proposed work RVU of 0.93 would be the most accurate valuation for CPT code 95806.

Comment: Several commenters stated that CPT code 95806 has become a more complex study and requires more time as well as greater levels of skill and training to perform the interpretation for this study. Commenters stated that more complex patients with a wider variety of sleep problems and more severe conditions are being studied with this modality, which means that the skills and continuing updates to education required to interpret these studies have dramatically increased.

Response: We agree with the commenters that due to the decreasing surveyed work times and rapidly increasing utilization for these codes, we had reason to believe that practitioners are becoming more efficient at performing the procedure. While the incorporation of new technology can sometimes make services more complex and difficult to perform, it can also have the opposite effect by making services less reliant on manual skill and technique. We do not agree with the commenter that the need for additional training to use the equipment would necessarily be grounds for an increase in the work RVU, as improvements in technology are commonplace across many different services and are not specific to this procedure. As detailed above, we also have reason to believe that the improved technology has led to greater efficiencies in the procedure which, under the resource-based nature of the RVU system, lends further support for a reduction in the work RVU.

After consideration of the public comments, we are finalizing the work RVUs and the direct PE inputs for the codes in the Home Sleep Apnea Testing family of codes as proposed.

(55) Neurostimulator Services (CPT Codes 95970, 95976, 95977, 95983, and 95984)

In October 2013, CPT code 95971 (Electronic analysis of implanted neurostimulator pulse generator system; simple spinal cord, or peripheral (i.e., peripheral nerve, sacral nerve, neuromuscular) neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming) was identified in the second iteration of the High Volume Growth screen. In January 2014, the RUC recommended that CPT codes 95971, 95972 (Electronic analysis of implanted neurostimulator pulse generator system; complex spinal cord, or peripheral (i.e., peripheral nerve, sacral nerve, neuromuscular) (except cranial nerve) neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming) and 95974 (Electronic analysis of implanted neurostimulator pulse generator system; complex cranial nerve neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming, with or without nerve interface testing, first hour) be referred to the CPT Editorial Panel to address the entire family regarding the time referenced in the CPT code descriptors. In June 2017, the CPT Editorial Panel revised CPT codes 95970, 95971, and 95972, deleted CPT codes 95974, 95975 (Electronic analysis of implanted neurostimulator pulse generator system; complex cranial nerve neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming, each additional 30 minutes after first hour), 95978 (Electronic analysis of implanted neurostimulator pulse generator system, complex deep brain neurostimulator pulse generator/transmitter, with initial or subsequent programming; first hour), and 95979 (Electronic analysis of implanted neurostimulator pulse generator system, complex deep brain neurostimulator pulse generator/transmitter, with initial or subsequent programming; each additional 30 minutes after first hour) and created four new CPT codes for analysis and programming of implanted cranial nerve neurostimulator pulse generator, analysis, and programming of brain neurostimulator pulse generator systems and analysis of stored neurophysiology recording data.

The RUC recommended a work RVU of 0.45 for CPT code 95970 (Electronic analysis of implanted neurostimulator pulse generator/transmitter (e.g., contact group(s),interleaving, amplitude, pulse width, frequency (Hz), on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters by physician or other qualified health care professional; with brain, cranial nerve, spinal cord, peripheral nerve, or sacral nerve neurostimulator pulse generator/transmitter, without programming)), which is identical to the current work RVU for this CPT code. The descriptor for this CPT code has been modified slightly, but the specialty societies affirmed that the work itself has not changed. To justify its recommendation, the RUC provided two references: CPT code 62368 (Electronic analysis of programmable, implanted pump for intrathecal or epidural drug infusion (includes evaluation of reservoir status, alarm status, drug prescription status); with reprogramming), with intraservice time of 15 minutes, total time of 27 minutes, and a work RVU of 0.67; and CPT code 99213 (Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: An expanded problem focused history; An expanded problem focused examination; or Medical decision making of low complexity. Counseling and 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 low to moderate severity. Typically, 15 minutes are spent face-to-face with the patient and/or family), with intraservice time of 15 minutes, total time of 23 minutes, and a work RVU of 0.97.

We disagreed with the RUC's recommendation because we did not believe that maintaining the work RVU, given a decrease of four minutes in total time, was appropriate. In addition, we noted that the reference CPT codes chosen have much higher intraservice and total times than CPT code 95970, and also have higher work RVUs, making them poor comparisons. Instead, we identified a crosswalk to CPT code 95930 (Visual evoked potential (VEP) checkerboard or flash testing, central nervous system except glaucoma, with interpretation and report) with 10 minutes intraservice time, 14 minutes total time, and a work RVU of 0.35. Therefore, we proposed a work RVU of 0.35 for CPT code 95970.

CPT code 95976 (Electronic analysis of implanted neurostimulator pulse generator/transmitter (e.g., contact group(s), interleaving, amplitude, pulse width, frequency (Hz), on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with simple cranial nerve neurostimulator pulse generator/transmitter programming by physician or other qualified health care professional) is a new CPT code replacing CPT code 95974 (Electronic analysis of implanted neurostimulator pulse generator system (e.g., rate, pulse amplitude, pulse duration, configuration of wave form, battery status, electrode selectability, output modulation, cycling, impedance and patient compliance measurements); complex cranial nerve neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming, with or without nerve interface testing, first hour). The description of the work involved in furnishing CPT code 95976 differs from that of the deleted CPT code in a few important ways, notably that the time parameter has been removed so that the CPT code no longer describes the first hour of programming. In addition, the new CPT code refers to simple rather than complex programming. Accordingly, the intraservice and total times for this CPT code are substantively different from those of the deleted CPT code. CPT code 95976 has an intraservice time of 11 minutes and a total time of 24 minutes, while CPT code 95974 has an intraservice time of 60 minutes and a total time of 110 minutes. The RUC recommended a work RVU of 0.95 for CPT code 95976. The RUC's top reference CPT code as chosen by the RUC survey participants was CPT code 95816 (Electroencephalogram (EEG); including recording awake and drowsy), with an intraservice time of 15 minutes, 26 minutes total time, and a work RVU of 1.08. The RUC indicated that the service is similar, but somewhat more complex than CPT code 95976.

We disagreed with the RUC's recommended work RVU for this CPT code because we did not believe that the large difference in time between the new CPT code and CPT code 95974 was reflected in the slightly smaller proportional decrease in work RVUs. The reduction in total time, from 110 minutes to 24 minutes is nearly 80 percent. However, the RUC's recommended work RVU reflects a reduction of just under 70 percent. We believe that a more appropriate crosswalk would be CPT code 76641 (Ultrasound, breast, unilateral, real time with image documentation, including axilla when performed; complete) with intraservice time of 12 minutes, total time of 22 minutes, and a work RVU of 0.73. Therefore, we proposed a work RVU of 0.73 for CPT code 95976.

CPT code 95977 describes the same work as CPT code 95976, but with complex rather than simple programming. The CPT Editorial Panel refers to simple programming of a neurostimulator pulse generator/transmitter as the adjustment of one to three parameter(s), while complex programming includes adjustment of more than three parameters. For purposes of applying the building block methodology and calculating intraservice and total time ratios, the RUC compared CPT code 94X84 with CPT code 95975 (Electronic analysis of implanted neurostimulator pulse generator system (e.g., rate, pulse amplitude, pulse duration, configuration of wave form, battery status, electrode selectability, output modulation, cycling, impedance and patient compliance measurements); complex cranial nerve neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming, each additional 30 minutes after first hour), which is being deleted by the CPT Editorial Panel. We believe that this was an inappropriate comparison since it is time based (first hour of programming) and is an add-on code. Instead we believe that the RUC intended to compare CPT code 95977 with CPT code 95974 (Electronic analysis of implanted neurostimulator pulse generator system (e.g., rate, pulse amplitude, pulse duration, configuration of wave form, battery status, electrode selectability, output modulation, cycling, impedance and patient compliance measurements); complex cranial nerve neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming, with or without nerve interface testing, first hour), which has been recommended for deletion by the CPT Editorial Panel and is also the comparison for CPT code 95976. The RUC recommended a work RVU of 1.19 for CPT code 95977. The RUC disagreed with the two top reference services CPT code 99215 (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 comprehensive history; A comprehensive examination; or Medical decision making of high complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of moderate to high severity. Typically, 40 minutes are spent face-to-face with the patient and/or family) and CPT code 99202 (Office or other outpatient visit for the evaluation and management of a new patient, which requires these 3 key components: An expanded problem focused history; an expanded problem focused examination; or straightforward medical decision making. 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 low to moderate severity. Typically, 20 minutes are spent face-to-face with the patient and/or family) and instead compared CPT code 95977 to CPT code 99308 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: An expanded problem focused interval history; An expanded problem focused examination; or Medical decision making of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Typically, 15 minutes are spent at the bedside and on the patient's facility floor or unit.) with total time of 31 minutes, intraservice time of 15 minutes, and a work RVU of 1.16; and CPT code 12013 (Simple repair of superficial wounds of face, ears, eyelids, nose, lips and/or mucous membranes; 2.6 cm to 5.0 cm), with total time of 27 minutes, intraservice time of 15 minutes, and a work RVU of 1.22.

We disagreed with the RUC's recommended work RVU of 1.19 for CPT code 95977. Once the comparison CPT code is corrected to CPT code 95974, the reverse building block calculation indicates that a lower work RVU (close to 0.82) would be a better reflection of the work involved in furnishing this service. As an alternative to the RUC's recommendation, we added the difference in RUC-recommended work RVUs between CPT codes 95976 and 95977 (0.24 RVUs) to the proposed work RVU of 0.73 for CPT code 95976. Therefore, we proposed a work RVU of 0.97 for CPT code 95977.

CPT code 95983 (Electronic analysis of implanted neurostimulator pulse generator/transmitter (e.g., contact group(s), interleaving, amplitude, pulse width, frequency (Hz), on/off cycling, burst, magnet mode, doe lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with brain neurostimulator pulse generator/transmitter programming, first 15 minutes face-to-face time with physician or other qualified health care professional) is the base code for add-on CPT code 95984 (Electronic analysis of implanted neurostimulator pulse generator/transmitter (e.g., contact group(s), interleaving, amplitude, pulse width, frequency (Hz), on/off cycling, burst, magnet mode, doe lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with brain neurostimulator pulse generator/transmitter programming, each additional 15 minutes face-to-face time with physician or other qualified health care professional), which is an add-on CPT code and can only be billed with CPT code 95983. The RUC compared CPT code 95983 with CPT code 95978 (Electronic analysis of implanted neurostimulator pulse generator system (e.g., rate, pulse amplitude and duration, battery status, electrode selectability and polarity, impedance and patient compliance measurements), complex deep brain neurostimulator pulse generator/transmitter, with initial or subsequent programming; first hour), which the CPT Editorial Panel is recommending for deletion. The primary distinction between the new and old CPT codes is that the new CPT code describes the first 15 minutes of programming while the deleted CPT code describes up to one hour of programming. The RUC recommended a work RVU of 1.25 for CPT code 95983 and a work RVU of 1.00 for CPT code 95984. For CPT code 95983, the RUC's recommendation is based on reference CPT codes 12013 (Simple repair of superficial wounds of face, ears, eyelids, nose, lips and/or mucous membranes; 2.6 cm to 5.0 cm), with total time of 27 minutes, intraservice time of 15 minutes, and a work RVU of 1.22; and CPT code 70470 (Computed tomography, head or brain; without contrast material, followed by contrast material(s) and further sections) with 25 minutes of total time, 15 minutes of intraservice time, and a work RVU of 1.27.

We disagreed with the RUC's recommended work RVU for CPT code 95983 because we did not believe that the reduction in work RVU reflected the change in time described by the CPT code. Using the reverse building block methodology, we estimated that a work RVU of nearer to 1.11 would be more appropriate. In addition, if we were to sum the RUC-recommended RVUs for a single hour of programming using one of the base CPT codes and three of the 15 minute follow-on CPT codes, 1 hour of programming would be valued at 4.25 work RVUs. This contrasts sharply from the work RVU of 3.50 for 1 hour of programming using the deleted CPT code 95978. We believe that a more appropriate valuation of the work involved in furnishing this service is reflected by a crosswalk to CPT code 93886 (Transcranial Doppler study of the intracranial arteries; complete study), with total time 27 minutes, intraservice time of 17 minutes, and a work RVU of 0.91. Therefore, we proposed a work RVU of 0.91 for CPT code 95983.

The RUC's recommended work RVU of 1.00 for CPT code 95984 is based on the key reference service CPT code 64645 (Chemodenervation of one extremity; each additional extremity, 5 or more muscles), which has total time of 26 minutes, intraservice time of 25 minutes, and a work RVU 1.39. This new CPT code is replacing CPT code 95978 (Electronic analysis of implanted neurostimulator pulse generator system (e.g., rate, pulse amplitude and duration, battery status, electrode selectability and polarity, impedance and patient compliance measurements), complex deep brain neurostimulator pulse generator/transmitter, with initial or subsequent programming; first hour), which is being deleted by the CPT Editorial Panel. If we were to add the incremental difference between CPT codes 95983 and 95984 to the proposed value for the base CPT code (95983, work RVU = 0.91), we estimated that this add-on CPT code would have a work RVU of 0.75. The building block methodology results in a recommendation of a slightly higher work RVU of 0.82. We proposed a work RVU of 0.80 for CPT code 95984, which falls between the calculated value using incremental differences and the calculation from the reverse building block, and is supported by a crosswalk to CPT code 51797 (Voiding pressure studies, intra-abdominal (ie, rectal, gastric, intraperitoneal)), which is an add-on CPT code with identical total and intraservice times (15 minutes) as CPT code 95984.

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving the Neurostimulator Services family of codes.

Comment: We received a number of comments regarding our proposed work RVUs for CPT codes 95970, 95976, 95977, 95983, and 95984. Commenters suggested that CMS misunderstood the role of reference codes in the RUC's process, and that CMS should not be comparing the times for the surveyed code to the reference codes because they are not specifically intended to match in time.

Response: We appreciate the opportunity to clarify that we do not believe the reference codes provided by the RUC in the summary documents are being provided as a crosswalk. We did not state that we thought the two top reference codes, CPT code 62368 (total time of 27 minutes) and CPT code 99213 (total time of 23 minutes) were being used by the RUC as crosswalk codes (as that term is used in the RUC process). Instead, we pointed out that the two reference codes are generally not a particularly good comparison for a survey code with 15 minutes of total time. We understand that survey respondents, not the RUC, chose the reference codes, and that survey respondents do not have the physician times readily available when choosing from among services that they are familiar with. Nonetheless, we expect reference codes to generally have physician work times that are more similar to the survey code than an 80 percent difference (in the case of CPT code 62368). When we make such an observation with regard to the times for reference codes in relation to a survey code, we are not disregarding parameters other than time. We also note that the RUC compares reference codes in terms of time or intensity relative to the survey code as a matter of common practice. We understand those comparisons to be intended by the RUC as one of several dimensions of a code's work RVU valuation.

As we have stated in the past, we believe that practitioners become more efficient at furnishing some services over time, shortening the amount of clinical time required. We still believe this is the case with regard to CPT code 95970, which has decreased in time without a significant change in intensity. We maintain that our crosswalk to CPT code 95930 with a work RVU of 0.35 for this CPT code is appropriate.

Comment: A commenter stated that, since CMS acknowledges that CPT code 95976 is different from CPT code 95974, which is being deleted, CMS should not compare the two codes for purpose of evaluating whether the decreased work time in the new code is appropriate in relation to the work involved in furnishing CPT code 95930. The commenter urged CMS to finalize the work RVU proposed by the RUC, which is 0.95.

Response: The major difference in the description of work involved in furnishing CPT code 95974 and CPT code 95976 involves a change from `complex' to `simple' programming. We do not believe that this change, which indicates a lower level of intensity for new CPT code 95976 than for deleted CPT code 95974, precludes us from using the deleted CPT code as the basis for evaluating whether the comparatively lower time involved in furnishing CPT code 95976 is adequately reflected by the RUC-recommended work RVU for this new CPT code. We continue to believe that the lower time in furnishing the work described by CPT code 95976, compared with the time in furnishing the service described by deleted CPT code 95974, should result in a lower work RVU than the value recommended by the RUC. Therefore, we are finalizing the work RVU for CPT code 95976 of 0.73 based on a crosswalk to CPT code 76641.

Comment: A commenter clarified that we incorrectly stated that the RUC compared the new CPT code 95977 with deleted CPT code 95975, which is an add-on code and would therefore not be an acceptable point of comparison.

Response: We appreciate the commenter informing us of the error and we agree that the RUC did not compare CPT code 95977 with the deleted code, CPT code 95975. Instead, the RUC compared the new code with several other codes: CPT code 99308 (Subsequent nursing facility care, per day, for the evaluation and management of a patient) with a work RVU of 1.16, 15 minutes of intra-service time and 31 minutes total time and CPT code 12013 (Simple repair of superficial wounds of face, ears, eyelids, nose, lips and/or mucous membranes; 2.6 cm to 5.0 cm) with a work RVU of 1.22, 15 minutes of intra-service time and 27 minutes total time. The RUC also cited the following two CPT codes for support: CPT code 93975 (Duplex scan of arterial inflow and venous outflow of abdominal, pelvic, scrotal contents and/or retroperitoneal organs; complete study) with a work RVU of 1.16, 20 minutes of intra-service time and 30 minutes total time, and 67810 (Incisional biopsy of eyelid skin including lid margin), with a work RVU of 1.18, 13 minutes of intra-service time and 27 minutes total time. Despite having cited these numerous CPT codes as support for their recommended work RVU for CPT code 95977, we do not see why CPT code 95974 is not an entirely appropriate point of comparison for CPT code 95977 as we explained in making our proposal. The only difference between new CPT code 95977 and new CPT code 95976 is complex vs. simple programming and, since as we explained in response to comments above, we believe it is appropriate to use the deleted CPT code 95974 for a time comparison with CPT code 95976, we believe that code is equally valid as the basis for comparison to CPT code 95977. The building block methodology between CPT code 95977 and CPT code 95974 suggests that a work RVU in the area of 0.82 would better reflect both the time and intensity of furnishing this service. In identifying a more appropriate work RVU, we looked at the difference in the RUC-recommended work RVU between CPT codes 95976 and 95977, which differ by simple vs. complex programming, and added the increment to our proposed value for CPT code 95976. We continue to believe the use of an incremental difference between codes is a valid methodology for setting values, especially in valuing services within a family of revised codes where it is important to maintain appropriate intra-family relativity. Given that we are finalizing our proposed work RVU for CPT code 95976 of 0.73, we believe a work RVU of 0.97 for CPT code 95977 is appropriate. We are finalizing a work RVU of 0.97 for CPT code 95977 as proposed.

Comment: A commenter expressed opposition to our use of the reverse building block methodology to evaluate the RUC-recommended work RVU for CPT code 95983 and to identify possible alternative crosswalk CPT codes. Consequently, the commenter stated that our crosswalk of CPT code 93886 is based on invalid reasoning about how the time parameter factors into the code valuation. The work involved in furnishing the service described by the crosswalk code, according to the commenter, is less intense than the work described by the survey code.

Response: We disagree with the commenter that the reverse building block methodology not an appropriate approach to assessing whether the RUC-recommended work RVU for a code is appropriate. We employed a reverse building block methodology to assess the reasonableness of the RUC's recommendation, not to value the code in the first instance. As the commenter noted, the work described by new CPT code 95983 is difficult to value in relation to both the deleted code and other codes on the fee schedule because of the 15 minute time parameter. However, having looked carefully at the work involved in furnishing the service described by our crosswalk code, CPT code 93886, we do not believe it is less intense than the survey code. The service described by CPT code 93886 is performed on patients with recent brain hemorrhage, which we believe is as complex to study as the work involved in programming adjustments to multiple parameters in real time. We continue to believe that CPT code 93886 is an appropriate crosswalk for CPT code 95983, and we are finalizing a work RVU for this code of 0.91.

Comment: A commenter stated that our approach for valuing CPT code 95984 ignored physician work intensity and complexity in favor of a random calculation involving code increments, which is a flawed methodology. CMS's choice of crosswalk code, according to the commenter, is invalid because it is based on this incorrect approach.

Response: We disagree that the use of incremental differences in work RVU between codes that have an established pattern of intensity or time, is inappropriate. We remind the commenter that our calculation of increments is based on the RUC's recommended work RVUs for the relevant CPT codes. We continue to believe that this approach is necessary to maintain intra-family relativity of the PFS, and we maintain that CPT code 51797 is an appropriate crosswalk to the add-on CPT code 95984. We are finalizing a work RVU for CPT 95984 of 0.80.

Comment: One commenter stated that CMS reduced the nonfacility service cost for clinical labor for CPT code 95970 to zero. The commenter stated that this may be a potential oversight, given that the RUC recommended nonfacility clinical labor time be reduced from 44 to 15 minutes. The commenter stated that it was not consistent for CMS to recommend a nonfacility service cost of zero in light of the nonfacility exam table (EF023) equipment time of 15 minutes, and that this clinical labor should still be reflected in this service.

Response: We disagree with the commenter and note that the RUC did not recommend any clinical labor time for CPT code 95970, as we proposed the RUC-recommended direct PE inputs without refinement. We believe that the equipment time assigned for the exam table (EF023) and the neurostimulator programmer (EQ209) indicate that these equipment items are in use by the practitioner and not the clinical staff.

After consideration of the public comments, we are finalizing the work RVUs and direct PE inputs for the codes in the Neurostimulator Services family of codes as proposed.

(56) Psychological and Neuropsychological Testing (CPT Codes 96105, 96110, 96116, 96125, 96127, 96112, 96113, 96121, 96130, 96131, 96132, 96133, 96136, 96137, 9613896138, 96139, 96X11, and 96146)

In CY 2016, the Psychological and Neuropsychological Testing family of codes were identified as potentially misvalued using a high expenditure services screen across specialties with Medicare allowed charges of $10 million or more. The entire family of codes was referred to the CPT Editorial Panel to be revised, as the testing practices had been significantly altered by the growth and availability of technology, leading to confusion about how to report the codes. In June 2017, the CPT Editorial Panel revised five existing codes, added 13 codes to provide better description of psychological and neuropsychological testing, and deleted CPT codes 96101, 96102, 96103, 96111, 96118, 96119, and 96120. The RUC and HCPAC submitted recommendations for the 13 new codes and for the existing CPT codes 96105, 96110, 96116, 96125, and 96127.

We proposed the RUC- and HCPAC-recommend work RVUs for several of the CPT codes in this family: A work RVU of 1.75 for CPT code 96105; a work RVU of 1.86 for CPT code 96116; a work RVU of 1.70 for CPT code 96125; a work RVU of 1.71 for CPT code 96121; a work RVU of 0.55 for CPT code 96136; a work RVU of 0.46 for CPT code 96137; and a work RVU of 0.51 for CPT code 96X11. CPT codes 96110, 96127, 96138, 96139, and 96146 were valued by the RUC for PE only.

This code family contains a subset of codes that describe psychological and neuropsychological testing administration and evaluation, not including assessment of aphasia, developmental screening, or developmental testing. The CPT Editorial Panel's recommended coding for this subset of services consists of seven new codes: Two that describe either psychological or neuropsychological testing when administered by physicians or other qualified health professionals (CPT codes 96136 and 96137), and two for either type of testing when administered by technicians (CPT codes 96138 and 96139); and four new codes that describe testing evaluation by physicians or other qualified health care professionals (CPT codes 96130 through 96133). This new coding effectively unbundles codes that currently report the full course of testing into separate codes for testing administration (CPT codes 96136, 96137, 96138, and 96139) and evaluation (CPT codes 96130, 96131, and 96132). According to a stakeholder that represents the psychologist and neuropsychologist community, this new coding will result in significant reductions in payment for these services due to the unbundling of the testing codes into codes for physician-administered tests and technician-administered tests. The stakeholder noted that because the new coding includes testing codes with zero work RVUs for the technician administered tests and the work RVUs are lower than they believe to be accurate, this new valuation would ignore the clinical evaluation and decision making performed by the physician or other qualified health professional during the course of testing administration and evaluation. Furthermore, the net result of the code valuations for these new codes is a reduction in the overall work RVUs for this family of codes. In other words, the stakeholder's analysis found that the RUC recommendations result in a reduction in total work RVUs, even though the actual physician work of a testing battery has not changed.

In the interest of payment stability for these high-volume services, we proposed to implement work RVUs for this code family, which would eliminate the approximately 2 percent reduction in work spending. We proposed to achieve work neutrality for this code family by scaling the work RVUs upward from the RUC-recommended values so that the size of the pool of work RVUs would be essentially unchanged for this family of services. Therefore, we proposed: A work RVU of 2.56 for CPT code 96112, rather than the RUC-recommended work RVU of 2.50; a work RVU of 1.16 for CPT code 96113, rather than the RUC-recommended work RVU of 1.10; a work RVU of 2.56 for CPT code 96130, rather than the RUC-recommended work RVU of 2.50; a work RVU of 1.96 for CPT code 96131, rather than the RUC-recommended work RVU of 1.90; a work RVU of 2.56 for CPT code 96132, rather than the RUC-recommended work RVU of 2.50; and a work RVU of 1.96 for CPT code 96133, rather than the RUC-recommended work RVU of 1.90. We saw no evidence that the typical practice for these services has changed to merit a reduction in valuation of professional services.

The RUC made several revisions to the recommended direct PE inputs for the administration codes from their respective predecessor codes, including revisions to quantities of testing forms. For the supply item, “psych testing forms, average” there is a quantity of 0.10 in the predecessor CPT code 96101, and a quantity of 0.33 in the predecessor CPT code 96102. For the supply item “neurobehavioral status forms, average,” there is a quantity of 1.0 in the predecessor CPT code 96118 and a quantity of 0.30 for predecessor CPT code 96119, and for the supply item “aphasia assessment forms, average,” there is a quantity of 1.0 in the predecessor CPT code 96118 and a quantity of 0.30 in predecessor CPT code 96119. The RUC recommendation does not include any forms for CPT codes 96132 and 96133. The RUC has replaced the corresponding predecessor supply items with new items “WAIS-IV Record Form,” “WAIS-IV Response Booklet #1,” and “WAIS-IV Response Booklet #2,” and assigned quantities of 0.165 for each of these new supply items for CPT codes 96136 through 96139. In our analysis, we found that the RUC-recommended direct PE refinements contributed significantly to the reduction in the overall payment for this code family. We saw no compelling evidence that the quantities of testing forms used in a typical course of testing would have been reduced dramatically and, in the interest of payment stability, we proposed to refine the direct PE inputs for CPT codes 96132 through 96139 by including 1.0 quantity each of the supply items “WAIS-IV Record Form,” “WAIS-IV Response Booklet #1”, and “WAIS-IV Response Booklet #2.” We believe that a typical course of testing would involve use of one booklet for each of the relevant codes. In addition, these proposed refinements would largely mitigate potentially destabilizing payment reductions for these services. We solicited comments on our proposed work RVUs and proposed PE refinements for this family of services.

We also proposed to remove the equipment time for the CANTAB Mobile (ED055) equipment item from CPT code 96146. This item was listed at different points in the recommendations as a supply item with a cost of $28 per assessment and as an equipment item for a software license with a cost of $2,800 that could be used for up to 100 assessments. We were unclear as to how the CANTAB Mobile would typically be used in this procedure, and we proposed to remove the equipment time pending the submission of more data about the item. We solicited additional information about the use of this item and how it should best be included into the PE methodology. We were also interested in information as to whether the submitted invoice refers to the cost of the mobile device itself, or the cost of user licenses for the mobile device, which was unclear from the information submitted with the recommendations.

The following is a summary of the comments we received regarding our proposed work RVUs and proposed direct PE refinements for this family of services.

Comment: Many commenters supported our proposal to increase payment from the RUC recommendations in the interest of payment stability. These commenters stated this proposal will help mitigate reductions in reimbursement rates for psychologists.

According to some commenters, some psychologists will see slight decreases for neuropsychological testing services due to the new coding structure, which they say aligns psychological and neuropsychological testing services with other testing services in the program. Some commenters said that, due to the new coding structure, reimbursement will be lower for neuropsychological evaluation services that are provided by physicians than those provided by technicians. These commenters stated that physicians should not be reimbursed at a lesser rate than EEG or MRI technicians or other physician extenders.

Response: We note that our proposed values for the evaluation CPT codes 96130 through 96133 and the administration and scoring CPT codes 96136 through 96139 are generally higher for the physician-administered codes than for the analogous technician-administered codes. According to our proposed rates, however, the valuation of the add-on code for each additional 30 minutes of administration and scoring when performed by a technician reported with CPT code 96139 is, however, slightly higher than the valuation of the add-on code for each additional 30 minutes of administration and scoring when performed by a physician or other qualified health care professional, reported with CPT code 96137. We thank commenters for bringing this potential rank-order anomaly to our attention. We believe that clinical staff will typically be providing some support when the physician or other qualified health care professional is performing testing administration as described by CPT codes 96136 and 96137. We are therefore refining the direct PE inputs for these services by adding 10 minutes of clinical labor time for the CA021 clinical labor activity, “Perform procedure/service—NOT directly related to physician work time” for these codes. We believe this will more accurately reflect the clinical staff support that is typical when a physician is performing test administration, and it will preserve appropriate rank-order among this subset of services, while mitigating reductions to payment rates for testing administration services.

Comment: The RUC noted that in the February 5, 2018 RUC submission to CMS, the RUC rescinded its interim recommendation from October 2017, and stated that CPT code 96X11 is deleted and will not be a CPT code for CPT 2019. The RUC recommended that CMS delete this service and work RVU recommendation for the 2019 PFS.

Response: As CPT code 96X11 will not be a CPT code for CY 2019, we are deleting this code. Based on the RUC-recommended utilization crosswalk, our proposed rates included utilization assumptions that for all services currently reported with CPT codes 96103 and 96120, half of these services will be reported with the new CPT code 96X11 and half will be reported with CPT code 96146. As we are not finalizing 96X11, for the purposes of ratesetting, our utilization for these service will include the assumption that half of the services currently reported with 96103 and 96120 will be reported with CPT code 96136 and half with CPT code 96146.

Comment: A commenter requested clarification on how much time is considered typical for the neuropsychologist to perform record review and test selection in newly created CPT codes 96132 and 96133.

Response: For CPT code 96132, we proposed the RUC-recommended 5 minutes of pre-service work time which reflects activities such as preliminary selection of tests and record review. As CPT code 96133 is an add-on code for reporting each additional hour, it does not include additional pre-service work time, as the latter would be considered to be included in the corresponding base code.

Comment: Several commenters disagreed with the proposal to remove the equipment time for the CANTAB Mobile (ED055) equipment item from CPT code 96146. Commenters stated that the PE Subcommittee determined that this was a software license and it would be more appropriately classified as equipment than as a supply. Commenters stated that they had submitted paid invoices for two additional software license-based automated instruments typically used when furnishing CPT code 96146, and that they were resubmitting these same invoices with their comment letter.

Response: We appreciate the feedback from the commenter that the CANTAB Mobile (ED055) equipment item referred to a software license. We continue to believe that software licenses would typically be classified as a form of indirect PE under our methodology, and as a result we are finalizing our proposal to remove this equipment time from CPT code 96146.

Comment: A commenter requested clarification on why new CPT codes 96138, 96139, and 96146 do not include a facility fee, despite the fact that their respective source CPT codes 96102, 96119, 96103, and 96120 do have RVUs in the facility setting.

Response: The source codes mentioned by the commenter have associated work RVUs, while the new CPT codes do not, and they do not include physician work time. The new CPT coding effectively unbundles professional and technical services for some of these codes. Codes that do not have a physician work component would typically not be valued in the facility setting.

After consideration of the public comments, we are finalizing the work RVUs for the codes in the Psychological and Neuropsychological Testing family of codes as proposed. We are also finalizing the direct PE inputs as proposed, with the exception of the refinement to the CA021 clinical labor for CPT codes 96136 and 96137 as detailed above.

(57) Electrocorticography (CPT Code 95836)

CPT Code 95829 is used for Electrocorticogram performed at the time of surgery; however, a new code was needed to account for this non-face-to-face service for the review of a month's worth or more of stored data. CPT code 95836 (Electrocorticogram from an implanted brain neurostimulator pulse generator/transmitter, including recording, with interpretation and written report, up to 30 days) is a new code approved at the September 2017 CPT Editorial Panel Meeting to describe this service.

We disagreed with the RUC-recommended work RVU of 2.30 for CPT code 95836 and proposed a work RVU of 1.98 based on a direct crosswalk to the top reference, CPT code 95957 (Digital analysis of electroencephalogram (EEG) (e.g., for epileptic spike analysis)). This is a recently-reviewed code with the same intraservice time of 30 minutes and a total time only 2 minutes lower than CPT code 95836. We agreed with the survey respondents that CPT code 95957 was an accurate valuation for this new code, and due to the clinically similar nature of the two procedures and their near-identical time values, we proposed to value both of them at the same work RVU of 1.98.

The RUC did not recommend, and we did not propose, any direct PE inputs for CPT code 95836.

The following is a summary of the public comments we received on our proposals involving CPT code 95836.

Comment: Many commenters disagreed with the proposed work RVU of 1.98 for CPT code 95836 and stated that CMS should finalize the RUC-recommended work RVU of 2.30. Commenters stated that the survey respondents chose CPT code 95957 as a reference service and not as a direct crosswalk. Commenters stated that the survey respondents pick from a list of 10-20 services to use as a comparison and then recommend a work RVU based on the intensity, complexity and physician time required to perform the surveyed code. Commenters stated that the median survey work RVU was actually 2.97, much higher than the key reference service, and that the respondents specifically indicated that CPT code 95836 is more intense and complex than CPT code 95957 on all measures.

Response: We disagree with the commenters that the key reference service of CPT code 95957 would be an inappropriate choice for a direct crosswalk, not least because the RUC commonly uses one of the key reference services in exactly this fashion. While it is true that the median survey work RVU was 2.97, we note that the RUC did not recommend this work valuation either, instead choosing to recommend a work RVU of 2.30 in recognition that the survey median would be a value that is too high to maintain relativity. Similarly, while the survey respondents specifically indicated that CPT code 95836 is more intense and complex than CPT code 95957 on all measures, we note that the survey respondents also indicated that CPT code 95836 is more intense and complex than the second key reference code, CPT code 95810 (Polysomnography; age 6 years or older, sleep staging with 4 or more additional parameters of sleep, attended by a technologist) which has a work RVU of 2.50. We proposed to use a crosswalk to CPT code 95957 not only because it was selected by the survey participants as the top key reference, but also because it is a recently-reviewed code with the same intraservice time of 30 minutes and a total time only 2 minutes lower than CPT code 95836. We continue to believe that this is the most accurate choice for work valuation.

Comment: Several commenters stated that although the specialty society did not submit any direct PE inputs, it is not a facility only code. Commenters stated that CPT code 95836 can be performed in both the nonfacility and the facility setting, and that the nonfacility is actually the typical setting for this service. Commenters stated that they understood that there would be no direct staffing, equipment or supply costs associated with this service and that indirect costs would be similar regardless of the setting in which the service is performed, but there would still be indirect practice expense associated with providing the service in the nonfacility. Commenters apologized for the misunderstanding and requested that CPT code 95836 should be valued in the nonfacility setting.

Response: We appreciate the additional information supplied by the commenters on this issue. We will remove the “NA” designation from the nonfacility setting for CPT code 95836. Due to the fact that there are no direct PE inputs for CPT code 95836, the PE RVU will be the same in both the nonfacility and facility settings because it is based solely on the indirect PE methodology.

After consideration of the public comments, we are finalizing the work RVU for CPT code 95836 as proposed. We are not finalizing any direct PE inputs for this code, but we will value it in both the facility and nonfacility settings as noted above.

(58) Chronic Care Remote Physiologic Monitoring (CPT Codes 99453, 99454, and 99457)

In the CY 2018 PFS final rule, we finalized separate payment for CPT code 99091 (Collection and interpretation of physiologic data (e.g., ECG, blood pressure, glucose monitoring) digitally stored and/or transmitted by the patient and/or caregiver to the physician or other qualified health care professional, qualified by education, training, licensure/regulation (when applicable) requiring a minimum of 30 minutes of time) (82 FR 53014). In that rule, we indicated that there would be new coding describing remote monitoring forthcoming from the CPT Editorial Panel and the RUC (82 FR 53014). In September 2017, the CPT Editorial Panel revised one code and created three new codes to describe remote physiologic monitoring and management, and the RUC provided valuation recommendations through our standard rulemaking process.

CPT codes 99453 (Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; set-up and patient education on use of equipment) and 99454 (Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; device(s) supply with daily recording(s) or programmed alert(s) transmission, each 30 days) are both PE-only codes. We proposed the RUC-recommended work RVU of 0.61 for CPT code 99457 (Remote physiologic monitoring treatment management services, 20 minutes or more of clinical staff/physician/other qualified healthcare professional time in a calendar month requiring interactive communication with the patient/caregiver during the month).

For the direct PE inputs, we proposed to accept the RUC-recommended direct PE inputs for CPT code 99453 and to remove the “Monthly cellular and licensing service fee” supply from CPT code 99454. We do not believe that these licensing fees will be allocated to the use of an individual patient for an individual service, and instead believe they can be better understood as forms of indirect costs similar to office rent or administrative expenses. Therefore, we proposed to remove this supply input as a form of indirect PE. We proposed the direct PE inputs for CPT code 99457 without refinement.

The following is a summary of the public comments we received on our proposals involving the Chronic Care Remote Physiologic Monitoring family of codes.

Comment: Commenters were very supportive of CMS making separate payment for these services. Several commenters supported the proposal of the RUC-recommended work RVU of 0.61 for CPT code 99457. A few commenters stated that the proposed rates for these services were too low, and that given industry standards, reimbursement should be increased.

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

Comment: Several commenters disagreed with the proposal to remove the “Monthly cellular and licensing service fee” supply from CPT code 99454. Commenters stated that the monthly cellular and licensing service fee was a direct practice expense input as it is allocable to the patient for this service. Commenters stated that this fee is not a license for the entire practice; rather it is an individually allocable fee for the period that the patients is monitored and the physician would not incur such fees if the patient did have the wireless monitor. Commenters clarified that the fee is comprised of the monthly cost associated with encryption of data for safe HIPAA compliant transfer, programmed alerts, and the monthly cost of pre-loaded connectivity used to transmit patient generated physiological data from a specific patient to the provider's software. Commenters stated that reliance upon a patient's cellular connectivity or WIFI, which may or may not be operating based on patient technology capabilities, was not reliable for medical delivery purposes.

Response: We disagree with the commenters and we continue to believe that the monthly cellular and licensing service fee constitutes a form of indirect PE. We believe that licensing and data costs are administrative costs that are not unique to individual procedures, in the same fashion that we do not assign separate direct PE for higher electricity costs to diagnostic imaging procedures as compared to cognitive evaluation procedures. We continue to believe that these data costs are appropriately captured via the indirect PE methodology as opposed to being included as a separate direct PE input. We also note that other services that require around-the-clock monitoring, such as the home PT/INR monitoring described in HCPCS code G0249 (Provision of test materials and equipment for home inr monitoring of patient with either mechanical heart valve(s), chronic atrial fibrillation, or venous thromboembolism who meets Medicare coverage criteria; includes: Provision of materials for use in the home and reporting of test results to physician; testing not occurring more frequently than once a week; testing materials, billing units of service include 4 tests), do not include additional direct PE inputs for data costs, and we do not believe it would be appropriate to include them for CPT code 99454.

Comment: One commenter stated that CMS should add the cost of equipment sanitation and reprocessing as a one-time cost that is directly attributable to a patient. The commenter stated that FDA device guidelines require that a reusable medical device be reprocessed, which includes sanitation or sterilization and ensuring that all personal data is `wiped' or removed from the device. The commenter stated that this cost was not considered by the RUC, however, it is routinely part of the `set up' costs that are onetime costs directly attributable to a patient.

Response: We disagree with the commenter that these expenses would constitute a separate form of direct PE. We agree with the RUC, which discussed the specialty society's recommended supply items, shipping costs and a device reprocessing fee, and determined that these expenses are not specifically allocable to the patient for this service, and would be considered indirect practice expenses.

Comment: One commenter stated that there was direct time spent by pharmacists for each patient, and the commenter requested that CMS factor pharmacist time into the PE valuation for CPT codes 99453, 99454, 99091, and 99457.

Response: We typically do not consider time spent by a pharmacist to be a part of the clinical labor time for purposes of direct PE. For additional information, we direct readers to the Practice Expense portion of this final rule (section II.B. of this final rule).

Comment: Many commenters pointed out that beneficiary cost sharing is a significant barrier to the use of non-face-to-face services, like remote patient monitoring. Commenters requested that CMS waive the cost sharing requirements for these codes.

Response: We do not have the authority to make changes to the applicable beneficiary cost sharing for most physicians' services, including these.

Comment: Many commenters requested that CMS clarify the kinds of technology covered under CPT codes 99453, 99454, and 99457. Commenters provided examples of the kinds of technology these codes should cover including software applications that could be integrated into a beneficiary's smart phone, Holter-Monitors, Fit-Bits, or artificial intelligence messaging. One commenter suggested that behavioral health data and data from wellness applications be included as well. Another commenter stated that the descriptor should include results of patients' self-care tasks. Many commenters stated that CMS should clarify certain elements in the scope of service and code descriptors and issue appropriate sub-regulatory guidance. Commenters inquired as to whether CPT code 99453 can be furnished via telecommunication technology, if it can be billed again if the number of parameters changed in the future. Commenters requested that CMS clarify the meaning of “programmed alerts transmission” in the descriptor for CPT code 99454, and whether it included transmissions that occurred other than daily. Commenters also encouraged CMS to allow flexibility in the time frame covered by these services.

Response: We plan to issue guidance to help inform practitioners and stakeholders on these issues.

Comment: Commenters requested that CMS clarify whether CPT code 99457 can be billed incident to a practitioner's professional services and asked that CMS make an exception to the direct supervision requirements, stating that general supervision is sufficient for these services.

Response: We note that CPT code 99457 describes professional time and therefore cannot be furnished by auxiliary personnel incident to a practitioner's professional services.

Comment: A few commenters suggested that additional medical professionals, including pharmacists, paramedics, chiropractors, physical therapists, occupational therapists and dentists should be allowed to bill Medicare for these services. Other commenters requested that CMS clarify the practitioners referred to as “other qualified healthcare professionals” in the code descriptor.

Response: We note that all practitioners must practice in accordance with applicable state law and scope of practice laws, and that some of the practitioners identified by the commenters are not authorized to bill Medicare independently for their services. We note that the term, “other qualified healthcare professionals,” used in the code descriptor is a defined by CPT, and that definition can be found in the CPT Codebook.

Comment: A few commenters provided specific suggestions for revising the code descriptors, including the addition of secure messaging platforms, revision of the time thresholds, specifying that the follow-up should be written in all instances, including “for medical consultative discussion and review” in the descriptor for CPT codes 99446 through 99449, and striking “referral services” and rather, including language similar to the other codes regarding “assessment and management” services. Other commenters requested CMS clarify the definition of “health record assessment” in the descriptors for CPT codes 99451 and 99452. One commenter suggested that CMS add language about use of EHR to the existing CPT codes, rather than finalize separate payment for CPT codes 99451 and 99452.

Response: While we appreciate all of the specific suggestions regarding the code descriptions, we defer to the CPT to maintain code descriptors for CPT codes. Where additional clarification is needed, we may provide guidance in the future.

Comment: A few commenters urged CMS not to be prescriptive regarding the technology that could be used to perform consultations, including real-time video, a store-and-forward visit, or simply a patient-provider message via a patient portal.

Response: While we are sympathetic to the commenters' desire not to be overly prescriptive about the technology used to furnish these services, especially given the speed at which technology evolves, we note that we refer to the CPT code descriptors and guidance to ascertain the scope of technology that is used to furnish these services.

Comment: One commenter asked whether there were geographic restrictions on these services.

Response: There are no geographic restrictions, as these services are not Medicare telehealth services.

After considering the public comments, we are finalizing the RUC-recommended work RVU of 0.61 for CPT code 99457 and the direct PE inputs for all three codes as proposed.

(59) Interprofessional Internet Consultation (CPT Codes 99451, 99452, 99446, 99447, 99448, and 99449)

In September 2017, the CPT Editorial Panel revised four codes and created two codes to describe interprofessional telephone/internet/electronic medical record consultation services. CPT codes 99446 (Interprofessional telephone/internet assessment and management service provided by a consultative physician including a verbal and written report to the patient's treating/requesting physician or other qualified health care professional; 5-10 minutes of medical consultative discussion and review), 99447 (Interprofessional telephone/internet assessment and management service provided by a consultative physician including a verbal and written report to the patient's treating/requesting physician or other qualified health care professional; 11-20 minutes of medical consultative discussion and review), 99448 (Interprofessional telephone/internet assessment and management service provided by a consultative physician including a verbal and written report to the patient's treating/requesting physician or other qualified health care professional; 21-30 minutes of medical consultative discussion and review), and 99449 (Interprofessional telephone/internet assessment and management service provided by a consultative physician including a verbal and written report to the patient's treating/requesting physician or other qualified health care professional; 31 minutes or more of medical consultative discussion and review) describe assessment and management services in which a patient's treating physician or other qualified healthcare professional requests the opinion and/or treatment advice of a physician with specific specialty expertise to assist with the diagnosis and/or management of the patient's problem without the need for the face-to-face interaction between the patient and the consultant. These CPT codes are currently assigned a procedure status of B (bundled) and are not separately payable under Medicare. The CPT Editorial Panel revised these codes to include electronic health record consultations, and the RUC reaffirmed the work RVUs it had previously submitted for these codes. We reevaluated the submitted recommendations and, in light of changes in medical practice and technology, we proposed to change the procedure status for CPT codes 99446, 99447, 99448, and 99449 from B (bundled) to A (active). We also proposed the RUC re-affirmed work RVUs of 0.35 for CPT code 99446, 0.70 for CPT code 99447, 1.05 for CPT code 99448, and 1.40 for CPT code 99449.

The CPT Editorial Panel also created two new codes, CPT code 99452 (Interprofessional telephone/internet/electronic health record referral service(s) provided by a treating/requesting physician or qualified health care professional, 30 minutes) and CPT code 99451 (Interprofessional telephone/internet/electronic health record assessment and management service provided by a consultative physician including a written report to the patient's treating/requesting physician or other qualified health care professional, 5 or more minutes of medical consultative time). The RUC-recommended work RVUs are 0.50 for CPT code 99452 and 0.70 for 99451. Since the CPT code for the treating/requesting physician or qualified healthcare professional and the CPT code for the consultative physician have similar intraservice times, we believe that these CPT codes should have equal values for work. Therefore, we proposed a work RVU of 0.50 for both CPT codes 99452 and 99451.

We welcomed comments on this proposal. We also direct readers to section II.D. of this final rule, Modernizing Medicare Physician Payment by Recognizing Communication Technology-Based Services, which includes additional detail regarding our policies for modernizing Medicare physician payment by recognizing communication technology-based services.

There are no recommended direct PE inputs for the codes in this family.

The following is a summary of the public comments we received on our proposals involving the Interprofessional Internet Consultation family of codes.

Comment: Almost all commenters were supportive of CMS' proposal to unbundle CPT codes 99446 through 99449 and make separate payment for CPT codes 99452 and 99451. Almost all commenters did not support lowering the RVU of CPT code 99451 to 0.50 as the work of the consulting physician in CPT code 99451 is more intense than the work of the treating physician in CPT code 99452. Commenters stated that the consulting practitioner exercises greater effort, both in judgment and technical skill to make a recommendation for the treatment of a previously unknown patient than the treating physician does in conveying the relevant information. A few commenters expressed concern that the proposed work RVU for CPT code 99452 is too low, and does not accurately reflect the resources associated with the work of the treating physician.

Response: We agree with commenters that the work of the consulting physician is significant, and we are persuaded by the additional descriptions of that work provided by commenters. We also agree with the commenters who suggested that the proposed work RVU of 0.50 for CPT code 99452 undervalues the work associated with aggregating patient information, communicating with the consulting practitioner, and implementing the results of the consultation. We continue, however, to have concerns regarding the valuation of these services. We note that there are instances where the patient would not be new to the consulting practitioner, and therefore the intensity of the work would be reduced. We are also concerned that, given the similarity of intraservice times, CPT code 99452 is undervalued relative to CPT code 99451, especially since the code descriptor for CPT code 99452 specifies that the consulting practitioner can spend a minimum of 5 minutes providing the consultation. We believe that a work RVU of 0.50 more accurately describes the work associated with both services. Given the similarity of intraservice times and the information indicating that both codes may be undervalued at 0.50 RVUs, we are finalizing a work RVU of 0.70 for CPT codes 99451 and 99452.

Comment: A few commenters expressed concern that these codes were only payable in the facility setting.

Response: These codes are payable in both facility and non-facility settings.

Comment: One commenter requested that CMS include pharmacists as clinical staff in the direct PE.

Response: We direct readers to the discussion of this issue in the PE section of the rule (Section II.B. of this final rule). We also note that these codes do not have direct PE inputs.

(60) Chronic Care Management Services (CPT Code 99491)

In February 2017, the CPT Editorial Panel created a new code to describe at least 30 minutes of chronic care management services performed personally by the physician or qualified health care professional over one calendar month. CMS began making separate payment for CPT code 99490 (Chronic care management services, at least 20 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month, with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; comprehensive care plan established, implemented, revised, or monitored) in CY 2015 (79 FR 67715). CPT code 99490 describes 20 minutes of clinical staff time spent on care management services for patients with 2 or more chronic conditions. CPT code 99490 also includes 15 minutes of physician time for supervision of clinical staff. For CY 2019, the CPT Editorial Panel created CPT code 99491 (Chronic care management services, provided personally by a physician or other qualified health care professional, at least 30 minutes of physician or other qualified health care professional time, per calendar month, with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; comprehensive care plan established, implemented, revised, or monitored) to describe situations when the billing practitioner is doing the care coordination work that is attributed to clinical staff in CPT code 99490. For CPT code 99491, the RUC recommended a work RVU of 1.45 for 30 minutes of physician time.

We believe this work RVU overvalues the resource costs associated with the physician performing the same care coordination activities that are performed by clinical staff in the service described by CPT code 99490. Additionally, this valuation of the work is higher than that of CPT code 99487 (Complex chronic care management services, with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline, establishment or substantial revision of a comprehensive care plan, moderate or high complexity medical decision making; 60 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month), which includes 60 minutes of clinical staff time, creating a rank order anomaly within the family of codes if we were to accept the RUC-recommended value.

CPT code 99490 has a work RVU of 0.61 for 15 minutes of physician time. Therefore, as CPT code 99491 describes 30 minutes of physician time, we proposed a work RVU of 1.22, which is double the work RVU of CPT code 99490.

We did not propose any direct PE refinements for this code family.

The following is a summary of the public comments we received on our proposals involving CPT code 99491.

Comment: Almost all commenters recommended that CMS finalize the RUC-recommended work value of 1.45 for 99491. The RUC stated that CPT code 99491 is different from the existing chronic care management (CCM) services codes because those codes are performed by clinical staff under the supervision of a physician, while CPT code 99491 is performed by the physicians themselves. Commenters also stated that the typical patient requiring that the physician personally perform the care management services is of greater acuity than the typical patient for whom CCM may be performed by clinical staff. Additionally, CPT code 99491 cannot be reported with CPT code 99490 or CPT code 99487, and must therefore account for all of the care management work in the month. Commenters also pointed out that there are multiple examples of CMS valuing the work of a physician more highly than clinical staff when they perform the same services, for example CPT codes 96101 (Psychological testing (includes psychodiagnostic assessment of emotionality, intellectual abilities, personality and psychopathology, e.g., MMPI, Rorschach, WAIS), per hour of the psychologist's or physician's time, both face-to-face time administering tests to the patient and time interpreting these test results and preparing the report) and 96102 (Psychological testing (includes psychodiagnostic assessment of emotionality, intellectual abilities, personality and psychopathology, e.g., MMPI and WAIS), with qualified health care professional interpretation and report, administered by technician, per hour of technician time, face-to-face.)

Response: We agree with commenters that a work RVU of 1.45 accurately captures the resources associated when a physician furnishes CCM. We agree that in most cases, the physician would perform CCM on patients with higher acuity and therefore the care planning and medical decision making would be of greater intensity. We also agree with commenters that the work associated with personally performing CCM as opposed to supervising clinical staff is also of greater intensity. Therefore, we are finalizing that value based on our review of comments received.

Comment: A few commenters requested that CMS clarify that CPT code 99491 can be performed incident to a practitioner's professional services.

Response: CPT code 99491 is specifically for use when the billing practitioner personally performs care management services, so this code cannot be furnished incident to a practitioner's professional services.

(61) Diabetes Management Training (HCPCS Codes G0108 and G0109)

HCPCS codes G0108 (Diabetes outpatient self-management training services, individual, per 30 minutes) and G0109 (Diabetes outpatient self-management training services, group session (2 or more), per 30 minutes) were identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. For CY 2019, we proposed the HCPAC-recommended work RVU of 0.90 for HCPCS code G0108 and the HCPAC-recommended work RVU of 0.25 for HCPCS code G0109.

For the direct PE inputs, we noted that there was a significant disparity between the specialty recommendation and the final recommendation submitted by the HCPAC. We were concerned about the significant decreases in direct PE inputs in the final recommendation when compared to the current makeup of the two codes. The final HCPAC recommendation removed a series of different syringes and the patient education booklet that currently accompanies the procedure. We believe that injection training is part of these services and that the supplies associated with that training would typically be included in the procedures. Due to these concerns, we proposed to maintain the current direct PE inputs for HCPCS codes G0108 and G0109. Therefore, we proposed not to add the new supply item “20x30 inch self-stick easel pad, white, 30 sheets/pad” (SK129) to HCPCS code G0109 that was included in the final HCPAC recommendation, as it was not a current supply for HCPCS code G0109; however, we proposed to accept the submitted invoice price and to add the supply to our direct PE database.

The following is a summary of the public comments we received on our proposals involving the Diabetes Management Training family of codes.

Comment: Several commenters supported the proposal of the HCPAC-recommended work RVUs. Commenters also stated that they applauded CMS for recognizing and addressing the significant disparity in direct PE inputs between the specialty recommendations and the final recommendations submitted to CMS by the HCPAC.

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

Comment: One commenter expressed disappointment that CMS did not address barriers in Medicare that impact beneficiary utilization of the diabetes self-management training (DSMT) benefit. The commenter stated that CMS solicited comments from stakeholders in the CY 2017 PFS proposed rule on this subject, and the commenter has been part of ongoing conversations with CMS about this issue, through in-person meetings and written communications, over the past two years. The commenter stated that they were hopeful CMS would use this opportunity to address barriers to DSMT given that utilization of the DSMT benefit stands at only 5 percent of eligible Medicare beneficiaries.

Response: We appreciate the feedback from the commenter, and we will consider these issues for future rulemaking. However, we note that we did not specifically make any proposals associated with these subjects in the CY 2019 proposed rule.

Comment: One commenter stated that the final HCPAC recommendations removed a series of different syringes and the patient education booklet that currently accompany these procedures. The commenter stated that several anti-glycemic medications other than insulin require injection with a syringe and a significant number of persons with both type 1 and type 2 diabetes are prescribed these medications, however the list of supplies in the current direct PE inputs does not include syringes. The commenter therefore recommended that CMS add a series of different syringes to the direct PE inputs for HCPCS codes G0108 and G0109.

Response: We proposed to maintain the current direct PE inputs for HCPCS codes G0108 and G0109, which do not currently include the syringe supplies described by the commenter (supply codes SC051, SC052, and SC055). Although we are sensitive to the concerns raised by the commenter, we do not believe that adding these syringe supplies to the procedures would be consistent with our policy of maintaining the current direct PE inputs.

After consideration of the public comments, we are finalizing the work RVUs and the direct PE inputs for the codes in the Diabetes Management Training family of codes as proposed.

(62) External Counterpulsation (HCPCS Code G0166)

HCPCS code G0166 (External counterpulsation, per treatment session) was identified on a screen of CMS or Other source codes with Medicare utilization greater than 100,000 services annually. The RUC is not recommending a work RVU for HCPCS code G0166 because they found that there is no physician work involved in this service. After reviewing this code, we proposed a work RVU of 0.00 for HCPCS code G0166, and proposed to make the code valued for PE only. For the direct PE inputs, we proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving HCPCS code G0166.

Comment: A commenter agreed with the proposal that an individual treatment session would have no physician work and supported the proposed direct PE inputs. However, the commenter stated that future coding solutions may be necessary to recognize management of these services that is additional to that captured by E/M coding.

Response: We appreciate the feedback from the commenter, and we will consider this information for future rulemaking.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for HCPCS code G0166 as proposed.

(63) Wound Closure by Adhesive (HCPCS Code G0168)

HCPCS code G0168 (Wound closure utilizing tissue adhesive(s) only) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. For CY 2019, the RUC recommended a work RVU of 0.45 based on maintaining the current work RVU.

We disagreed with the recommended value and we proposed a work RVU of 0.31 for HCPCS code G0168 based on a direct crosswalk to CPT code 93293 (Transtelephonic rhythm strip pacemaker evaluation(s) single, dual, or multiple lead pacemaker system, includes recording with and without magnet application with analysis, review and report(s) by a physician or other qualified health care professional, up to 90 days). CPT code 93293 is a recently-reviewed code with the same 5 minutes of intraservice time and 1 fewer minute of total time. In reviewing HCPCS code G0168, the recommendations stated that the work involved in the service had not changed even though the surveyed intraservice time was decreasing by 50 percent, from 10 minutes to 5 minutes. Although we did not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs. In the case of HCPCS code G0168, we believe that it would be more accurate to propose a work RVU of 0.31 based on the aforementioned crosswalk to CPT code 93293 to account for these decreases in the surveyed work time. Maintaining the current work RVU of 0.45 despite a 50 percent decrease in the surveyed intraservice time would result in a significant increase in the intensity of HCPCS code G0168, and we have no reason to believe that the procedure has increased in intensity since the last time that it was valued.

For the direct PE inputs, we proposed to refine the equipment times in accordance with our standard equipment time formulas.

The following is a summary of the public comments we received on our proposals involving HCPCS code G0168.

Comment: Many commenters disagreed with the proposed work RVU of 0.31 for HCPCS code G0168 and stated that CMS should finalize the HCPAC-recommended work RVU of 0.45. Commenters stated that CMS should not compare the valid survey time to the current work time because the initial CMS/Other source data is flawed and maintains zero validity for comparison. Commenters stated that surveyed time was never obtained from physicians who perform this service and should not be used as a comparison.

Response: 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 also 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 element 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 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. However, we want to reiterate that we believe it would be irresponsible to ignore changes in time based on the best data available and that we are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. For additional information regarding the use of old work time values in our methodology, we refer readers to our discussion of the subject in the CY 2017 final rule (81 FR 80273 through 80274).

Comment: Several commenters stated that HCPCS code G0168 should not be crosswalked to CPT code 93293, as this is an evaluation of pacemaker strips over a 90 day period. Commenters stated that the skill of closing a facial laceration, typically near the eye, using a surgical tissue adhesive for HCPCS code G0168 is more intense and complex to perform than CPT code 93293 and thus should be valued higher. Commenters stated that CPT code 51702 (Insertion of temporary indwelling bladder catheter; simple (e.g., Foley)) would be a better reference service.

Response: We disagree with the commenters that CPT code 93293 would be an inappropriate choice for a crosswalk. CPT code 93293 describes a transtelephonic rhythm strip pacemaker evaluation(s) for a single, dual, or multiple lead pacemaker system. We do not agree that this crosswalk code has lower intensity or complexity due to the cognitive work involved in evaluating the patient correctly. Both CPT code 93293 and HCPCS code G0168 require skill on the part of the practitioner, only of different types. We also believe that our crosswalk to CPT code 92393 is a more accurate choice because it has the same intraservice work time (5 minutes) closely matches the total work time (13 minutes as opposed to 14 minutes) of HCPCS code G0168. By contrast, CPT code 51702 has nearly double the total work time at 25 minutes, which accounts for its higher work RVU of 0.50.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for HCPCS code G0168 as proposed.

(64) Removal of Impacted Cerumen (HCPCS Code G0268)

HCPCS code G0268 (Removal of impacted cerumen (one or both ears) by physician on same date of service as audiologic function testing) was identified as potentially misvalued on a screen of 0-day global services reported with an E/M visit 50 percent of the time or more, on the same day of service by the same patient and the same practitioner, that have not been reviewed in the last 5 years with Medicare utilization greater than 20,000. For CY 2019, we proposed the RUC-recommended work RVU of 0.61 for HCPCS code G0268.

For the direct PE inputs, we proposed to remove the clinical labor time for the “Clean surgical instrument package” (CA026) activity. There is no surgical instrument pack included in the recommended equipment for HCPCS code G0268, and this code already includes the standard 3 minutes allocated for cleaning the room and equipment. In addition, all of the instruments used in the procedure appear to be disposable supplies that would not require cleaning since they would only be used a single time.

The following is a summary of the public comments we received on our proposals involving HCPCS code G0268.

Comment: Several commenters supported our proposal of the HCPAC-recommended work RVU as well as the refinement to the direct PE inputs.

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

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for HCPCS code G0268 as proposed.

(65) Structured Assessment, Brief Intervention, and Referral to Treatment for Substance Use Disorders (HCPCS Codes G0396, G0397, and G2011)

In response to the Request for Information in the CY 2018 PFS proposed rule (82 FR 34172), commenters requested that CMS pay separately for assessment and referral related to substance use disorders. In the CY 2008 PFS final rule (72 FR 66371), we created two G-codes to allow for appropriate Medicare reporting and payment for alcohol and substance abuse assessment and intervention services that are not provided as screening services, but that are performed in the context of the diagnosis or treatment of illness or injury. The codes are HCPCS code G0396 (Alcohol and/or substance (other than tobacco) abuse structured assessment (e.g., AUDIT, DAST) and brief intervention, 15 to 30 minutes)) and HCPCS code G0397 (Alcohol and/or substance (other than tobacco) abuse structured assessment (e.g., AUDIT, DAST) and intervention greater than 30 minutes)). In 2008, we instructed Medicare contractors to pay for these codes only when the services were considered reasonable and necessary.

Given the ongoing opioid epidemic and the current needs of the Medicare population, we expect that these services would often be reasonable and necessary. However, the utilization for these services is relatively low, which we believe is in part due to the service-specific documentation requirements for these codes (the current requirements are available at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/SBIRT_Factsheet_ICN904084.pdf). We believe that removing the additional documentation requirements will also ease the administrative burden on providers. Therefore, for CY 2019, we proposed to eliminate the service-specific documentation requirements for HCPCS codes G0397 and G0398. We welcomed comments on our proposal to change the documentation requirements for these codes.

The following is a summary of the comments we received regarding our proposal to change the documentation requirements for these codes.

Comment: The majority of commenters were supportive of this proposal, some noting that this will ease administrative burden and some noting that this will incentivize providers to deliver SBIRT services, thereby increasing access to this service. One commenter stated they believe that practitioners are not utilizing SBIRT for illicit drug use due to the absence of conclusive evidence to support use of this service for illicit drug use and therefore, support removing the service documentation requirements for SBIRT when used to screen for unhealthy alcohol use, but not when used to screen for illicit drug use.

Response: We thank the commenters for their feedback. We note that the services described by HCPCS codes G0397 and G0398 describe services for alcohol and/or substance abuse; we believe it would be administratively burdensome for practitioners were we to create varying rules for different diagnoses. Additionally, it is our intention to increase access to care for services that may be of use in addressing all substance use disorders, especially in light of the ongoing opioid epidemic. Therefore, we are finalizing our proposal to eliminate the service-specific documentation requirements for HCPCS codes G0397 and G0398.

Additionally, we proposed to create a third HCPCS code G2011with a lower time threshold in order to accurately account for the resource costs when practitioners furnish these services, but do not meet the minimum time requirements of the existing codes. We note that in the proposed rule we referred to this service as HCPCS code GSBR1, which was a placeholder code. The code will be described as G2011: Alcohol and/or substance (other than tobacco) abuse structured assessment (e.g., AUDIT, DAST), and brief intervention, 5-14 minutes. We proposed a work RVU of 0.33, based on the intraservice time ratio between HCPCS codes G0396 and G0397. We welcomed comments on this code descriptor and proposed valuation for HCPCS code G2011.

The following is a summary of the comments we received on this code descriptor and proposed valuation for HCPCS code G2011.

Comment: Commenters were supportive of creating this code and the valuation proposed, and noted the lower time threshold will allow physicians the opportunity to provide brief counseling rather than 15 or more minutes of discussion, which requires extended interest from a patient who may not yet be ready for prolonged discussion and/or is receptive to being referred to another health care provider for treatment. One commenter recommended finalizing guidance that allows the newly proposed SBIRT HCPCS code to be used for alcohol, but not illicit drug use.

Response: We thank the commenters for their feedback. After considering these comments, we are finalizing the code descriptor and valuation for HCPCS code G2011 as proposed. We believe the code descriptor and guidance for this new SBIRT HCPCS code should be consistent with the existing SBIRT HCPCS codes. For future rulemaking we would consider recommendations on how to refine this family of codes under our standard process of reviewing codes.

(66) Prolonged Services (HCPCS Code GPRO1)

CPT codes 99354 (Prolonged evaluation and management or psychotherapy service(s) (beyond the typical service time of the primary procedure) in the office or other outpatient setting requiring direct patient contact beyond the usual service; first hour (List separately in addition to code for office or other outpatient Evaluation and Management or psychotherapy service)) and 99355 (Prolonged evaluation and management or psychotherapy service(s) (beyond the typical service time of the primary procedure) in the office or other outpatient setting requiring direct patient contact beyond the usual service; each additional 30 minutes (List separately in addition to code for prolonged service)) describe additional time spent face-to-face with a patient. Stakeholders have shared with us that the threshold of 60 minutes for CPT code 99354 is difficult to meet and is an impediment to billing these codes. In response to stakeholder feedback and as part of our proposal as discussed in section II.I. of this final rule, Evaluation and Management Services, to implement a single PFS rate for E/M visit levels 2-5 while maintaining payment stability across the specialties, we proposed HCPCS code GPRO1 (Prolonged evaluation and management or psychotherapy service(s) (beyond the typical service time of the primary procedure) in the office or other outpatient setting requiring direct patient contact beyond the usual service; 30 minutes (List separately in addition to code for office or other outpatient Evaluation and Management or psychotherapy service)), which could be billed with any level of E/M code. We noted that we did not propose to make any changes to CPT codes 99354 and 99355, which can still be billed, as needed, when their time thresholds and all other requirements are met. We proposed a work RVU of 1.17, which is equal to half of the work RVU assigned to CPT code 99354. Additionally, we proposed direct PE inputs for HCPCS code GPRO1 that are equal to one half of the values assigned to CPT code 99354, which can be found in the Direct PE Inputs public use file for this final rule.

Comment: As almost all commenters did not support the overall E/M coding and payment proposals, we did not receive many comments with specific suggestions on valuation for HCPCS code GPRO1. Of the commenters that supported creation of the code, most supported the proposed valuation while others, while supporting the creation of a 30-minute prolonged services code in principle, encouraged CMS to wait for recommendations from the CPT Editorial Panel and the RUC.

Response: For CY 2021, we are finalizing the proposed add-on code for HCPCS code GPRO1 using the input values, as proposed. We note that prior to implementation for 2021, we could consider, through rulemaking, the code and its valuation in the context of any potential changes to CPT codes and/or recommendations offered by stakeholders, including the RUC, as part of our annual process for valuing PFS services. See section II.I. of this final rule for further discussion of the E/M policy.

(67) Remote Pre-Recorded Services (HCPCS Code G2010)

For CY 2019, we proposed to make separate payment for remote evaluation services when a physician uses pre-recorded video and/or images submitted by a patient in order to evaluate a patient's condition through new HCPCS G-code G2010 (Remote evaluation of recorded video and/or images submitted by the patient (e.g., store and forward), including interpretation with verbal follow-up with the patient within 24 business hours, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment). We proposed to value this service by a direct crosswalk to CPT code 93793 (Anticoagulant management for a patient taking warfarin, must include review and interpretation of a new home, office, or lab international normalized ratio (INR) test result, patient instructions, dosage adjustment (as needed), and scheduling of additional test(s), when performed), as we believe the work described is similar in kind and intensity to the work performed as part of HCPCS code G2010. Therefore, we proposed a work RVU of 0.18, preservice time of 3 minutes, intraservice time of 4 minutes, and post service time of 2 minutes. We also proposed to add 6 minutes of clinical labor (L037D) in the service period. We solicited comment on the code descriptor and valuation for HCPCS code G2010. We direct readers to section II.D. of this final rule, which includes additional detail regarding our proposed policies for modernizing Medicare physician payment by recognizing communication technology-based services.

The following is a summary of the comments we received on the code descriptor and valuation for HCPCS code G2010.

Comment: Several commenters stated that the proposed payment rate is too low, citing that it is below market compared to the rate many asynchronous telemedicine companies pay their contracted/employed physician staff, and noted that new patients in particular require more resources, whereas others stated that the proposed valuation was appropriate.

Response: We believe that the proposed valuation accurately reflects the resources involved in furnishing this service and note that we are finalizing limiting this service to established patients. We also note that we plan to monitor the utilization of this code and routinely address recommended changes in values for codes paid under the PFS.

After considering the public comments, we are finalizing the work RVU and direct PE inputs for HCPCS code G2010 as proposed.

(68) Brief Communication Technology-Based Service, e.g. Virtual Check-In (HCPCS Code G2012)

We proposed to create a G-code, HCPCS code G2012 (Brief communication technology based service, e.g. virtual check-in, by a physician or other qualified health care professional who may report evaluation and management services provided to an established patient, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 5-10 minutes of medical discussion) to facilitate payment for these brief communication technology-based services. We proposed to base the code descriptor and valuation for HCPCS code G2012 on existing CPT code 99441 (Telephone evaluation and management service by a physician or other qualified health care professional who may report evaluation and management services provided to an established patient, parent, or guardian not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 5-10 minutes of medical discussion), which is currently not separately payable under the PFS. As CPT code 99441 only describes telephone calls, we are proposing to create a new HCPCS code G2012 to encompass a broader array of communication modalities. We do, however, believe that the resource assumptions for CPT code 99441 would accurately account for the costs associated with providing the proposed virtual check-in service, regardless of the technology. We proposed a work RVU of 0.25, based on a direct crosswalk to CPT code 99441. For the direct PE inputs for HCPCS code G2012, we also proposed the direct PE inputs assigned to CPT code 99441. Given the breadth of technologies that could be described as telecommunications, we anticipated receiving public comments and working with the CPT Editorial Panel and the RUC to evaluate whether separate coding and payment is needed to account for differentiation between communication modalities. We solicited comment on the code descriptor, as well as the proposed valuation for HCPCS code G2012. We direct readers to section II.D. of this final rule, which includes additional detail regarding our proposed policies for modernizing Medicare physician payment by recognizing communication technology-based services.

The following is a summary of the comments we received on the code descriptor, as well as the proposed valuation for HCPCS code G2012.

Comment: Several commenters stated that the proposed payment rate would be inadequate for modalities that are both audio and visual capable, whereas other commenters stated that the proposed valuation was appropriate.

Response: We appreciate the input provided by the commenters. As noted in section II.D. of this final rule, we are finalizing the valuation for this service as proposed. We note that we are finalizing allowing audio-only real-time telephone interactions in addition to synchronous, two-way audio interactions that are enhanced with video or other kinds of data transmission. We believe the proposed valuation reflects the low work time and intensity and accounts for the resource costs and efficiencies associated with the use of communication technology. We recognize that the valuation of this service is relatively modest, especially compared to in-person services, however, we believe that the proposed valuation accurately reflects the resources involved in furnishing this service.

We plan to monitor the utilization of this code and note that we routinely address recommended changes in values for codes paid under the PFS and would expect to do this in future rulemaking.

After consideration of the public comments, we are finalizing the work RVU and direct PE inputs for HCPCS code G2012 as proposed.

(69) Visit Complexity Inherent to Certain Specialist Visits (HCPCS Code GCG0X)

We proposed to create a HCPCS G-code to be reported with an E/M service to describe the additional resource costs for specialties for whom E/M visit codes make up a large percentage of their total allowed charges and who we believe primarily bill level 4 and level 5 visits. The treatment approaches for these specialties generally do not have separate coding and are generally reported using the E/M visit codes. We proposed to create HCPCS code, GCG0X (Visit complexity inherent to evaluation and management associated with endocrinology, rheumatology, hematology/oncology, urology, neurology, obstetrics/gynecology, allergy/immunology, otolaryngology, or interventional pain management-centered care (Add-on code, list separately in addition to an evaluation and management visit)). We proposed a valuation for HCPCS code GCG0X based on a crosswalk to 75 percent of the work RVU and time of CPT code 90785 (Interactive complexity), which would result in a proposed work RVU of 0.25 and a physician time of 8.25 minutes for HCPCS code GCG0X. CPT code 90785 has no direct PE inputs. Interactive complexity is an add-on code that may be billed when a psychotherapy or psychiatric service requires more work due to the complexity of the patient. We believe that this work RVU and physician time would be an accurate representation of the additional work associated with the higher level complex visits. For further discussion of proposals relating to this code, see section II.I. of this final rule. We solicited comment on the code descriptor, as well as the proposed valuation for HCPCS code GCG0X.

The following is a summary of the comments we received on the code descriptor, as well as the proposed valuation for HCPCS code GCG0X.

Comment: As almost all commenters did not support the overall E/M coding and payment proposals, we did not receive comments with specific suggestions on valuation for HCPCS code GCG0X.

Response: For CY 2021, we are finalizing the proposed add-on code for visit complexity inherent to non-procedural specialty care using the input values, as proposed. We note that prior to implementation for CY 2021, we could consider, through rulemaking, the code and its valuation in the context of any potential changes to CPT codes and/or recommendations offered by stakeholders, including the RUC, as part of our annual process for valuing PFS services. See section II.I. of this final rule for further discussion of the E/M policy.

(70) Visit Complexity Inherent to Primary Care Services (HCPCS Code GPC1X)

We proposed to create a HCPCS G-code for primary care services, GPC1X (Visit complexity inherent to evaluation and management associated with primary medical care services that serve as the continuing focal point for all needed health care services (Add-on code, list separately in addition to an evaluation and management visit)). This code describes furnishing a visit to a new or existing patient, and can include aspects of care management, counseling, or treatment of acute or chronic conditions not accounted for by other coding. HCPCS code GPC1X would be billed in addition to the E/M visit code when the visit involved primary care-focused services. We proposed a work RVU of 0.07, physician time of 1.75 minutes. This proposed valuation accounts for the additional work resource costs associated with furnishing primary care that distinguishes E/M primary care visits from other types of E/M visits and maintains work budget neutrality across the office/outpatient E/M code set. For further discussion of proposals relating to this code, see section II.I. of this final rule. We solicited comment on the code descriptor, as well as the proposed valuation for HCPCS code GPC1X.

The following is a summary of the comments we received on the code descriptor, as well as the proposed valuation for HCPCS code GPC1X.

Comment: We received a few comments suggesting that the primary care add-on was undervalued, particularly in comparison to the add-on code for specialty visit complexity. A few commenters suggested that, at the very least, we should equalize the value for these codes.

Response: We agree that the proposed inputs do not reflect the resources associated with furnishing primary care visits. For CY 2021, we are finalizing the proposed add-on code for visit complexity inherent to primary care using the inputs associated with HCPCS code GCG1X: A work RVU of 0.25 and a physician time of 8.25 minutes. We note that prior to implementation for 2021, we could consider, through rulemaking, the code and its valuation in the context of any potential changes to CPT codes and/or recommendations offered by stakeholders, including the RUC, as part of our annual process for valuing PFS services. See section II.I. of this final rule for further discussion of the E/M policy.

(71) Podiatric Evaluation and Management Services (HCPCS Codes GPD0X and GPD1X)

We proposed to create two HCPCS G-codes, HCPCS codes GPD0X (Podiatry services, medical examination and evaluation with initiation of diagnostic and treatment program, new patient) and GPD1X (Podiatry services, medical examination and evaluation with initiation of diagnostic and treatment program, established patient), to describe podiatric evaluation and management services. We proposed a work RVU of 1.36, a physician time of 28.19 minutes, and direct costs summing to $21.29 for HCPCS code GPD0X, and a work RVU of 0.85, physician time of 21.73 minutes, and direct costs summing to $15.87 for HCPCS code GPD1X. These values are based on the average rate for CPT codes 99201-99203 and CPT codes 99211-99212 respectively, weighted by podiatric volume. For further discussion of proposals relating to these codes, see section II.I. of this final rule.

Comment: As almost all commenters did not support the overall E/M coding and payment proposals and these codes specifically, we did not receive comments with specific suggestions on valuation.

Response: In response to comments, we are not finalizing HCPCS codes GPD0X and GPD1X for CY 2019. See section X of this final rule for further discussion of the E/M policy.

(72) Comment Solicitation on Superficial Radiation Treatment Planning and Management

In the CY 2015 PFS final rule with comment period (79 FR 67666 through 67667), we noted that changes to the CPT prefatory language limited the codes that could be reported when describing services associated with superficial radiation treatment (SRT) delivery, described by CPT code 77401 (radiation treatment delivery, superficial and/or ortho voltage, per day). The changes effectively meant that many other related services were bundled with CPT code 77401, instead of being separately reported. For example, CPT guidance clarified that certain codes used to describe clinical treatment planning, treatment devices, isodose planning, physics consultation, and radiation treatment management cannot be reported when furnished in association with SRT. Stakeholders informed us that these changes to the CPT prefatory language prevented them from billing Medicare for codes that were previously frequently billed with CPT code 77401. We solicited comments as to whether the revised bundled coding for SRT allowed for accurate reporting of the associated services. In the CY 2016 PFS final rule with comment period (80 FR 70955), we noted that the RUC did not review the inputs for SRT procedures, and therefore, did not assess whether changes in valuation were appropriate in light of the bundling of associated services. In addition, we solicited recommendations from stakeholders regarding whether it would be appropriate to add physician work for this service, even though physician work is not included in other radiation treatment services. In the CY 2018 PFS proposed rule (82 FR 34012) and the CY 2018 PFS final rule (82 FR 53082), we noted that the 2016 National Correct Coding Initiative (NCCI) Policy Manual for Medicare Services states that radiation oncology services may not be separately reported with E/M codes. While this NCCI edit is no longer active stakeholders have stated that MACs have denied claims for E/M services associated with SRT based on the NCCI policy manual language. According to stakeholders, the bundling of SRT with associated services, as well as coding confusion regarding the appropriate use of E/M coding to report associated physician work, meant that practitioners were not being paid appropriately for planning and treatment management associated with furnishing SRT. Due to these concerns regarding reporting of services associated with SRT, in the CY 2018 PFS proposed rule (82 FR 34012 through 34013), we proposed to make separate payment for the professional planning and management associated with SRT using HCPCS code GRRR1 (Superficial radiation treatment planning and management related services, including but not limited to, when performed, clinical treatment planning (for example, 77261, 77262, 77263), therapeutic radiology simulation-aided field setting (for example, 77280, 77285, 77290, 77293), basic radiation dosimetry calculation (for example, 77300), treatment devices (for example, 77332, 77333, 77334), isodose planning (for example, 77306, 77307, 77316, 77317, 77318), radiation treatment management (for example, 77427, 77431, 77432, 77435, 77469, 77470, 77499), and associated E/M per course of treatment). We proposed that this code would describe the range of professional services associated with a course of SRT, including services similar to those not otherwise separately reportable under CPT guidance. Furthermore, we proposed that this code would have included several inputs associated with related professional services such as treatment planning, treatment devices, and treatment management. Many commenters did not support our proposal to make separate payment for HCPCS code GRRR1 for CY 2018, stating that our proposed valuation of HCPCS code GRRR1 would represent a significant payment reduction for the associated services as compared with the list of services that they could previously bill in association with SRT. Commenters voiced concern that the proposed coding would inhibit access to care and discourage the use of SRT as a non-surgical alternative to Mohs surgery. We received comments recommending a variety of potential coding solutions but without a consistent preferred alternative. In the CY 2018 PFS final rule (82 FR 53081-53083), we solicited further comment, and stated that we would continue our dialogue with stakeholders to address appropriate coding and payment for professional services associated with SRT.

Given stakeholder feedback that we have continued to receive following the publication of the CY 2018 PFS final rule, we continue to believe that there are potential coding gaps for SRT-related professional services. We generally rely on the CPT process to determine coding specificity, and we believe that deferring to this process in addressing potential coding gaps is generally preferable. As our previous attempt at designing a coding solution in the CY 2018 PFS proposed rule did not gain stakeholder consensus, and given that there were various, in some cases diverging, suggestions on a coding solution from stakeholders, we did not propose changes relating to SRT coding, SRT-related professional codes, or payment policies for CY 2019. However, we solicited comment on the possibility of creating multiple G-codes specific to services associated with SRT, as was suggested by one stakeholder following the CY 2018 PFS final rule. These codes would be used separately to report services including SRT planning, initial patient simulation visit, treatment device design and construction associated with SRT, SRT management, and medical physics consultation. We solicited comment on whether we should create such G-codes to separately report each of the services described previously, mirroring the coding of other types of radiation treatment delivery. For instance, HCPCS code G6003 (Radiation treatment delivery, single treatment area, single port or parallel opposed ports, simple blocks or no blocks: Up to 5 mev) is used to report radiation treatment delivery, while associated professional services are billed with codes such as CPT codes 77427 (Radiation treatment management, 5 treatments), 77261 (Therapeutic radiology treatment planning; simple), 77332 (Treatment devices, design and construction; simple (simple block, simple bolus), and 77300 (Basic radiation dosimetry calculation, central axis depth dose calculation, TDF, NSD, gap calculation, off axis factor, tissue inhomogeneity factors, calculation of non-ionizing radiation surface and depth dose, as required during course of treatment, only when prescribed by the treating physician).

We stated that we consider contractor pricing such codes for CY 2019 because we believe that the preferable method to develop new coding is with multi-specialty input through the CPT and RUC process, and we prefer to defer nationally pricing such codes pending input from the CPT Editorial Panel and the RUC process to assist in determining the appropriate level of coding specificity for SRT-related professional services. Based on stakeholder feedback, we continue to believe there may be a coding gap for these services, and therefore, we solicited comment on whether we should create these G-codes and allow them to be contractor priced for CY 2019. This would be an interim approach for addressing the potential coding gap until the CPT Editorial Panel and the RUC can address coding for SRT and SRT-related professional services, giving the CPT Editorial Panel and the RUC an opportunity to develop a coding solution that could be addressed in future rulemaking.

The following is a summary of the comments we received on the possibility of creating multiple G-codes specific to services associated with SRT, which could be used separately to report services including SRT planning, initial patient simulation visit, treatment device design and construction associated with SRT, SRT management, and medical physics consultation, which would be contractor priced for CY 2019.

Comment: Many commenters urged CMS to make appropriate payment for SRT-related services, stating that it is a vital non-surgical alternative treatment for skin cancer. Many commenters also said that coding should recognize newer generation, Image Guided Superficial Radiation (IGSRT), stating that IGSRT is the most advanced form of this technology, and has far better outcomes compared to those achieved with SRT.

Some commenters recommended implementation of G-codes for SRT-related professional services, and they submitted alternative G-code scenarios that they believe would be preferable to adopting contractor-priced G-codes. These scenarios include one in which there would be one code for SRT-related treatment planning, with a value based on a crosswalk to CPT code 77261 (Therapeutic radiology treatment planning; simple), a code for SRT treatment device construction, with a value based on a crosswalk to CPT code 77332 (Treatment devices, design and construction; simple (simple block, simple bolus), and a code for SRT treatment management billed once per treatment, valued with a crosswalk to CPT code 99213 (Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: An expanded problem focused history; An expanded problem focused examination; Medical decision making of low complexity. Counseling and 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 low to moderate severity. Typically, 15 minutes are spent face-to-face with the patient and/or family.). According to this commenter, image guidance and tracking should not be billed with superficial treatments. Another commenter suggested a single code bundling SRT-related treatment management with SRT-related device construction as well as a code for SRT-related radiation treatment management, and a code representing treatment for multiple lesions. This commenter also urged us to either revalue CPT code 77401 or to create an additional G-code billable with CPT code 77401 to represent professional services associated with SRT. Another commenter suggested a code for SRT-related radiology treatment planning, and an SRT management code including five treatments. A commenter suggested a coding structure that recognizes Image-Guided Superficial Radiation Therapy as a newer generation of SRT, and would consist of CPT code 77401 for practitioners that utilize the SRT technologies; relying on human visualization for lesion(s) simulation, treatment and tracking, and a new G-code for providers who provide the newer generation technology relying on image-guided lesion simulation, treatment and tracking per fraction with Record and Verify precision tracking of treatment progress.

A commenter stated that any codes utilized as part of superficial radiation treatment delivery that include medical physics time should require that a qualified medical physicist perform the physics work.

A commenter stated that adopting contractor-priced G codes would be appropriate. Some other commenters, however, did not support our suggested adoption of contractor-priced codes. According to these commenters, we are correct in our belief that there are coding gaps in the current reimbursement structure, however a fuller evaluation that does not defer to Medicare contractors in determining reimbursement rates is appropriate. According to a commenter, contractor pricing creates unnecessary work for the Medicare Administrative Contractors and can also lead to wide variances in the valuing of codes across jurisdictions. Commenters expressed preference that coding for these services be developed through the CPT and RUC processes. Many commenters urged us not to change coding for CY 2019 for these services.

Response: We expect to take these comments into consideration for future rulemaking and we hope to continue a dialogue with stakeholders on these important services. We reiterate that we believe multi-specialty input through the CPT and RUC processes is the ideal way to develop coding specificity and evaluation, and we are not making any changes to payment policy based on this comment solicitation. In the interim, we refer readers to CPT guidance that states that CPT code 77401, when performed, may be reported with appropriate E/M codes, and this is the appropriate way to currently report professional work associated with SRT. Going forward, we will attempt to determine whether MACs are inappropriately denying billing of E/M codes with CPT code 77401, and we will instruct MACs accordingly.

(73) Adaptive Behavior Analysis Services

We note that we intended to assign a contractor price status in the Addendum B file of the proposed rule for the following CPT codes that describe adaptive behavior analysis services: CPT codes 97151, 97152, 97153, 97154, 97155, 97156, 97157, and 97158. These codes are formerly contractor priced Category III CPT codes that were converted to Category I for CY 2019. We inadvertently excluded these codes in the Addendum B file of the proposed rule, and have updated the Addendum B file for this final rule.

I. Evaluation & Management (E/M) Visits

1. Background

a. E/M Visits Coding Structure

Physicians and other practitioners paid under the PFS bill for common office visits for evaluation and management (E/M) services under a relatively generic set of CPT codes (Level I HCPCS codes) that distinguish visits based on the level of complexity, site of service, and whether the patient is new or established. The CPT codes have three key components:

• History of Present Illness (History),
• Physical Examination (Exam) and
• Medical Decision Making (MDM).

These codes are broadly referred to as E/M visit codes. There are three to five E/M visit code levels, depending on site of service and the extent of the three components of history, exam and MDM. For example, there are three to four levels of E/M visit codes in the inpatient hospital and nursing facility settings, based on a relatively narrow degree of complexity in those settings. In contrast, there are five levels of E/M visit codes in the office or other outpatient setting based on a broader range of complexity in those settings.

Current PFS payment rates for E/M visit codes increase with the level of visit billed. As for all services under the PFS, the rates are based on the resources in terms of work (time and intensity), PE and malpractice expense required to furnish the typical case of the service. The current payment rates reflect typical service times for each code that are based on RUC recommendations.

In total, E/M visits comprise approximately 40 percent of allowed charges for PFS services, and office/outpatient E/M visits comprise approximately 20 percent of allowed charges for PFS services. Within these percentages, there is significant variation among specialties. According to Medicare claims data, E/M visits are furnished by nearly all specialties, but represent a greater share of total allowed services for physicians and other practitioners who do not routinely furnish procedural interventions or diagnostic tests. Generally, these practitioners include both primary care practitioners and specialists such as neurologists, endocrinologists and rheumatologists. Certain specialties, such as podiatry, tend to furnish lower level E/M visits more often than higher level E/M visits. Some specialties, such as dermatology and otolaryngology, tend to bill more E/M visits on the same day as they bill minor procedures.

Potential misvaluation of E/M codes is an issue that we have been carefully considering for several years. We have discussed at length in our recent PFS proposed and final rules that the E/M visit code set is outdated and needs to be revised and revalued (for example: 81 FR 46200 and 76 FR 42793). We have noted that this code set represents a high proportion of PFS expenditures, but has not been recently revalued to account for significant changes in the disease burden of the Medicare patient population and changes in health care practice that are underway to meet the Medicare population's health care needs (81 FR 46200). In the CY 2012 PFS proposed rule, we proposed to refer all E/M codes to the RUC for review as potentially misvalued (76 FR 42793). Many commenters to that rule were concerned about the possible inadequacies of the current E/M coding and documentation structure to address evolving chronic care management and to support primary care (76 FR 73060 through 73064). We did not finalize our proposal to refer the E/M codes for RUC review at that time. Instead, we stated that we would allow time for consideration of the findings of certain demonstrations and other initiatives to provide improved information for the valuation of chronic care management, primary care, and care transitions. We stated that we would also continue to consider the numerous policy alternatives that commenters offered, such as separate E/M codes for established visits for patients with chronic disease versus a post-surgical follow-up office visit.

Many stakeholders continue to similarly express to us through letters, meetings, public comments in past rulemaking cycles, and other avenues, that the E/M code set is outdated and needs to be revised. For example, some stakeholders recommend an extensive research effort to revise and revalue E/M services, especially physician work inputs (CY 2017 PFS final rule, 81 FR 80227-80228). In recent years, we have continued to consider the best ways to recognize the significant changes in health care practice, especially innovations in the active management and ongoing care of chronically ill patients, under the PFS. We have been engaged in an ongoing, incremental effort to identify gaps in appropriate coding and payment.

b. E/M Documentation Guidelines

For coding and billing E/M visits to Medicare, practitioners may use one of two versions of the E/M Documentation Guidelines for a patient encounter, commonly referenced based on the year of their release: the “1995” or “1997” E/M Documentation Guidelines. These guidelines are available on the CMS website. They specify the medical record information within each of the three key components (such as number of body systems reviewed) that serves as support for billing a given level of E/M visit. The 1995 and 1997 guidelines are very similar to the guidelines that reside within the AMA's CPT codebook for E/M visits. For example, the core structure of what comprises or defines the different levels of history, exam, and medical decision-making are the same. However, the 1995 and 1997 guidelines include extensive examples of clinical work that comprise different levels of medical decision-making and do not appear in the AMA's CPT codebook. Also, the 1995 and 1997 guidelines do not contain references to preventive care that appear in the AMA's CPT codebook. We provide an example of how the 1995 and 1997 guidelines distinguish between level 2 and level 3 E/M visits in Table 18.

According to both Medicare claims processing manual instructions and CPT coding rules, when counseling and/or coordination of care accounts for more than 50 percent of the face-to-face physician/patient encounter (or, in the case of inpatient E/M services, the floor time) the duration of the visit can be used as an alternative basis to select the appropriate E/M visit level (Pub. L. 100-04, Medicare Claims Processing Manual, Chapter 12, Section 30.6.1.C available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf; see also 2017 CPT Codebook Evaluation and Management Services Guidelines, page 10). Public Law 100-04, Medicare Claims Processing Manual, Chapter 12, Section 30.6.1.B states, “Instruct physicians to select the code for the service based upon the content of the service. The duration of the visit is an ancillary factor and does not control the level of the service to be billed unless more than 50 percent of the face-to-face time (for non-inpatient services) or more than 50 percent of the floor time (for inpatient services) is spent providing counseling or coordination of care as described in subsection C.” Subsection C states that “the physician may document time spent with the patient in conjunction with the medical decision-making involved and a description of the coordination of care or counseling provided. Documentation must be in sufficient detail to support the claim.” The example included in subsection C further states, “The code selection is based on the total time of the face-to-face encounter or floor time, not just the counseling time. The medical record must be documented in sufficient detail to justify the selection of the specific code if time is the basis for selection of the code.”

Both the 1995 and 1997 E/M guidelines contain guidelines that address time, which state that “In the case where counseling and/or coordination of care dominates (more than 50 percent of) the physician/patient and/or family encounter (face-to-face time in the office or other outpatient setting or floor/unit time in the hospital or nursing facility), time is considered the key or controlling factor to qualify for a particular level of E/M services.” The guidelines go on to state that “If the physician elects to report the level of service based on counseling and/or coordination of care, the total length of time of the encounter (face-to-face or floor time, as appropriate) should be documented and the record should describe the counseling and/or activities to coordinate care.”

We note that other manual provisions regarding E/M visits that are cited in this final rule are housed separately within Medicare's Internet-Only Manuals, and are not contained within the 1995 or 1997 E/M documentation guidelines.

In accordance with section 1862(a)(1)(A) of the Act, which requires services paid under Medicare Part B to be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, medical necessity is a prerequisite to Medicare payment for E/M visits. The Medicare Claims Processing Manual states, “Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT code. It would not be medically necessary or appropriate to bill a higher level of evaluation and management service when a lower level of service is warranted. The volume of documentation should not be the primary influence upon which a specific level of service is billed. Documentation should support the level of service reported” (Pub. L. 100-04, Medicare Claims Processing Manual, Chapter 12, Section 30.6.1.A., available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf).

Stakeholders have long maintained that all of the E/M documentation guidelines are administratively burdensome and outdated with respect to the practice of medicine. Stakeholders have provided CMS with examples of such outdated material (on history, exam and MDM) that can be found within all versions of the E/M guidelines (the AMA's CPT codebook, the 1995 guidelines and the 1997 guidelines). Stakeholders have told CMS that they believe the guidelines are too complex, ambiguous, fail to meaningfully distinguish differences among code levels, and are not updated for changes in technology, especially electronic health record (EHR) use. Prior attempts to revise the E/M guidelines were unsuccessful or resulted in additional complexity due to lack of stakeholder consensus (with widely varying views among specialties), and differing perspectives on whether code revaluation would be necessary under the PFS as a result of revising the guidelines, which contributed another layer of complexity to the considerations. For example, an early attempt to revise the guidelines resulted in an additional version designed for use by certain specialties (the 1997 version), and in CMS allowing the use of either the 1995 or 1997 versions for purposes of documentation and billing to Medicare. Another complication in revising the guidelines is that they are also used by many other payers, which have their own payment rules and audit protocols. Moreover, stakeholders have suggested that there is sometimes variation in how Medicare's own contractors (Medicare Administrative Contractors (MACs)) interpret and apply the guidelines as part of their audit processes.

As previously mentioned, in recent years, some clinicians and other stakeholders have requested a major CMS research initiative to overhaul not only the E/M documentation guidelines, but also the underlying coding structure and valuation. Stakeholders have reported to CMS that they believe the E/M visit codes themselves need substantial updating and revaluation to reflect changes in the practice of medicine, and that revising the documentation guidelines without addressing the codes themselves simply preserves an antiquated framework for payment of E/M services.

Last year, CMS sought public comment on potential changes to the E/M documentation rules, deferring making any changes to E/M coding itself in order to immediately focus on revision of the E/M guidelines to reduce unnecessary administrative burden (82 FR 34078 through 34080). In the CY 2018 PFS final rule (82 FR 53163 through 53166), we summarized the public comments we received and stated that we would take that feedback into consideration for future rulemaking. In response to commenters' request that we provide additional venues for stakeholder input, we held a listening session this year on March 18, 2018 (transcript and materials are available on the CMS website at https://www.cms.gov/Outreach-and-Education/Outreach/NPC/National-Provider-Calls-and-Events-Items/2018-03-21-Documentation-Guidelines-and-Burden-Reduction.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=descending). We also sought input by participating in several listening sessions recently hosted by the Office of the National Coordinator for Health Information Technology (ONC) in the course of implementing section 4001(a) of the 21st Century Cures Act (Pub. L. 114-255). This provision requires the Department of Health and Human Services to establish a goal, develop a strategy, and make recommendations to reduce regulatory or administrative burdens relating to the use of EHRs. The ONC listening sessions sought public input on the E/M guidelines as one part of broader, related and unrelated burdens associated with EHRs.

Several themes emerged from this recent stakeholder input. Stakeholders commended CMS for undertaking efforts to revise the E/M guidelines and recommended a multi-year process. Many commenters advised CMS to obtain further input across specialties. They recommended town halls, open door forums or a task force that would come up with replacement guidelines that would work for all specialties over the course of several years. They urged CMS to proceed cautiously given the magnitude of the undertaking; past failed reform attempts by the AMA, CMS, and other payers; and the wide-ranging impact of any changes (for example, how other payers approach the issue).

We received substantially different recommendations by specialty. Based on this feedback, it is clear that any changes would have meaningful specialty-specific impacts, both clinical and financial. Based on this feedback, it also seems that the history and exam portions of the guidelines are most significantly outdated with respect to current clinical practice.

A few stakeholders seemed to indicate that the documentation guidelines on history and exam should be kept in their current form. Many stakeholders believed they should be simplified or reduced, but not eliminated. Some stakeholders indicated that the documentation guidelines on history and exam could be eliminated altogether, and/or that documentation of these parts of an E/M visit could be left to practitioner discretion. We also heard from stakeholders that the degree to which an extended history and exam enables a given practitioner to reach a certain level of coding (and payment) varies according to their specialty. Many commenters advised CMS to increase reliance on medical decision-making (MDM) and time in determining the appropriate level of E/M visit, or to use MDM by itself, but many of these commenters noted that the MDM portions of the guidelines would need to be altered before being used alone. Commenters were divided on the role of time in distinguishing among E/M visit levels, and expressed some concern about potential abuse or inequities among more- or less-efficient practitioners. Some commenters expressed support for simplifying E/M coding generally into three levels such as low, medium and high, and potentially distinguishing those levels on the basis of time.

2. CY 2019 Final Policies

a. Overview

Having considered the public feedback to the CY 2018 PFS proposed rule (82 FR 53163 through 53166) and our other outreach efforts described above, in our CY 2019 proposed rule, we proposed several changes to E/M visit documentation and payment. We proposed that the changes would only apply to office/outpatient visit codes (CPT codes 99201 through 99215), except where we specify otherwise. We agreed with commenters that we should take a step-wise approach to these issues, and therefore, we limited proposed changes to the office/outpatient E/M code set. We understood from commenters that there are more unique issues to consider for the E/M code sets used in other settings such as inpatient hospital or emergency department care, such as unique clinical and legal issues and the potential intersection with hospital Conditions of Participation (CoPs). We may consider expanding our efforts more broadly to address sections of the E/M code set beyond the office/outpatient codes in future years.

We emphasized that, this year, we included our proposed E/M documentation changes in a proposed rule due to the longstanding nature of our instruction that practitioners may use either the 1995 or 1997 versions of the E/M guidelines to document E/M visits billed to Medicare, the magnitude of the proposed changes, and the associated payment policy proposals that require notice and comment rulemaking. We believed our proposed documentation changes for E/M visits were intrinsically related to our proposal to alter PFS payment for E/M visits, and the PFS payment proposal for E/M visits required notice and comment rulemaking. We noted that we were proposing a relatively broad outline of changes, and anticipated that many details related to program integrity and ongoing refinement would need to be developed over time through subregulatory guidance. This would afford flexibility and enable us to more nimbly and quickly make ongoing clarifications, changes and refinements in response to continued practitioner experience moving forward.

We put forth a key proposal that, at its core, strived to reduce the significant burden associated with documentation for payment purposes by eliminating the payment rules associated with the current primary means of varying payment among office/outpatient visits. Specifically, we proposed to develop single payment rates for the office/outpatient E/M visit levels 2 through 5 (one rate for established patients, and one rate for new patients), in order to mitigate the need for physicians and other practitioners to adhere to complex payment-specific documentation rules for each and every visit furnished to a Medicare beneficiary. If there were minimal payment variation based on the level of visit billed, then there would be minimal need to engage with the burdensome and outdated documentation guidelines and E/M visit coding to justify that the appropriate level visit was reported. Though we acknowledged a continued need to document information in the medical record for clinical and other purposes, our understanding based on extensive feedback from medical professionals was that the documentation specific to justifying the visit level reported to payers, including Medicare, was unduly and disproportionately burdensome among the many administrative burdens in current medical practice. To avoid the administrative burden and disruption of establishing a new G code to describe the level 2 through 5 combined visit, under our proposal practitioners would continue to report on the claim the CPT code associated with the level of visit the practitioner believed they furnished.

Along with eliminating payment variation for office/outpatient E/M visit levels 2 through 5, we proposed a series of corollary policies intended to vary payment for these visits based on a more meaningful set of attributes for visits. Our goal was that these payment variations, accomplished through new add-on and other coding changes, and multiple procedure payment reductions, would reflect the relative resource costs of furnishing E/M visits without requiring detailed documentation for purposes of justifying particular payment rates. We also expected these adjustments to offset some of the more significant potentially redistributive impacts of this proposal, especially among physicians and practitioners of different specialties. The potential redistributive impacts helped us to determine potential, initial values for the proposed add-on codes providing for the adjustments. Again, these proposals were intended to provide a more meaningful avenue for payment variation that would ease the documentation burdens currently faced by clinicians to justify the visit level that is reported for each and every visit with a beneficiary. These proposals reflected our longstanding beliefs that: There are certain complexities inherent in furnishing some kinds of E/M visits that are not currently accounted for in valuations for the current E/M code set, there are unaccounted-for efficiencies when E/M visits are billed on the same day as global procedure codes that are already valued to include resources associated with E/M services, and the current E/M coding system does not fully account for the variety of legitimate circumstances when the needs of individual patients require more time with their physicians. We also proposed to establish unique E/M visit codes for podiatric care and make changes to the PE methodology in order to standardize the amount of PE RVUs allocated for this series of codes, regardless of which specialties were assumed to bill them.

In conjunction with our proposal to effectively eliminate the variation in payment of choosing from among E/M visit levels 2 through 5 for office/outpatient visits, we proposed a minimum level of associated documentation that would apply for payment purposes across all level 2 through 5 office/outpatient E/M visits. We also proposed to allow practitioners a choice regarding the basis for their documentation for these visits: Current documentation guidelines (history, exam and MDM); MDM alone; or time alone. We proposed that, when using current documentation guidelines or MDM, the current guidelines for level 2 visits would apply. When using time to document a visit, the practitioner would be required to demonstrate the medical necessity of the visit and report the total amount of face-to-face time they spent with the beneficiary. We solicited public comment on what the total time requirement should be when using time to document a level 2 through 5 visit. We presented several alternatives for determining the amount of time associated with each visit level: The new intra-service times associated with setting the payment rate for the visit codes, the midpoint of these new times, or the typical time for the CPT code reported on the claim (the time listed in the AMA/CPT codebook for that code) (83 FR 35837).

We sought feedback in particular on the option to document using time when prolonged E/M services are billed. We proposed that when a practitioner uses time to document the visit and also reports prolonged E/M services, we would require the practitioner to document that the typical time required for the base or “companion” visit is exceeded by the amount required to report prolonged services (83 FR 35837). We did not propose any changes to CPT codes 99354 and 99355, and under our proposal these codes could still be billed, as needed, when their time thresholds and all other requirements are met (83 FR 35774).

Since we proposed to create a single payment rate under the PFS that would be paid for services billed using the current CPT codes for level 2 through 5 visits, it would not be material to Medicare's payment decision which CPT code (of levels 2 through 5) would be reported on the claim, except to justify billing a level 2 or higher visit in comparison to a level 1 visit (providing the visit itself was reasonable and necessary) and when using certain potential approaches to documenting the visit using time (83 FR 35836 through 35837). However, we expected that for record keeping purposes or to meet requirements of other payers, practitioners would continue to choose and report the level of E/M visit they believed to be appropriate under the current CPT coding structure.

We also proposed to remove an existing manual provision for home visits requiring documentation in the patient's medical record of the medical necessity of furnishing the visit in the home. For all office/outpatient E/M visits, we also proposed several simplifications centered on reducing the need for duplicative, redundant data entry in the medical record.

Several thousand commenters responded to this series of proposals. Generally, the commenters stated appreciation for CMS' goal of reducing administrative burden and reforming E/M coding and payment, but expressed concern about many impacts of the proposals. Commenters largely objected to our proposal to eliminate payment differences for office/outpatient E/M visit levels 2 through 5 based on the level of visit complexity. Many commenters stated that they would experience payment cuts relative to the current payment structure. Commenters generally stated that the implementation timeframe for the changes as proposed was too aggressive, especially since stakeholders were uncertain as to whether other payers would follow Medicare's proposed policies. Many commenters suggested that CMS could implement the proposed documentation reduction without the coding/payment policies, or that these policies could be adopted on separate timeframes.

Many commenters suggested that the proposals did not specify the circumstances in which the proposed add-on codes for office/outpatient E/M visits could be used, and what documentation requirements might be adopted for them. Many commenters stated that it would be better if the physician community could consider a range of alternative coding and payment options to be modeled and thoroughly evaluated over several years instead of a single alternative during a 60-day public comment period.

Many commenters opposed our proposal to establish that clinicians billing an office/outpatient E/M visit level 2 through 5 need only document medical necessity as specified for a level 2 visit (unless time is used as the basis for the visit level). Some commenters supported allowing a choice of documentation methodologies, while others opposed it. The vast majority of commenters did not support having only a single payment level to distinguish visit complexity (other than level 1), despite the associated minimum documentation that we proposed for these codes. Most commenters noted that CMS did not provide enough specificity in its proposals for how clinicians would document using time, and that because the definitions and billing rules regarding the add-on codes were ambiguous, they questioned whether the codes would have clinical validity. Regarding the valuation of these services, some commenters stated that the proposal did not follow the statutory requirement regarding using relative resources to set PFS rates. Others perceived that some of the newly proposed codes would be required or restricted based on physician specialty, and that such limitations would violate statutory provisions prohibiting varying payment for the same physicians' service by physician specialty.

Many commenters recommended that CMS finalize the documentation proposals regarding home visits and redundant data recording for 2019, but defer other documentation reforms to future years after stakeholders provide additional input. Some commenters recommended that CMS finalize the proposed choice among documentation methodologies while stakeholders work with CMS to refine what the coding and payment changes should be.

After considering the comments, for 2019 we are finalizing several of our documentation proposals that will provide some significant and immediate burden reduction, but are unrelated to changes to payment and coding. Specifically, we are finalizing the proposals regarding home visits and redundant data recording (discussed further in this section), as proposed, effective January 1, 2019.

After considering the comments, especially those suggesting that implementation of significant payment and coding changes requires time for practitioners, vendors, health systems, and other stakeholders to prepare, we are finalizing modified changes in payment coding, and associated documentation rules for E/M office/outpatient visits for 2021. These changes, detailed below, incorporate many significant changes from our proposals based on suggestions from the many comments we received. In brief summation, we are finalizing a significant reduction in the current payment variation in office/outpatient E/M visit levels by paying a single rate for E/M office/outpatient visit levels 2, 3, and 4 (one for established and another for new patients) beginning in 2021. However, we are not finalizing the inclusion of E/M office/outpatient level 5 visits in the single payment rate, to better account for the care and needs of particularly complex patients. Also, after consideration of public comments, we are not finalizing aspects of our proposal that would have: Reduced payment when E/M office/outpatient visits are furnished on the same day as procedures, established separate podiatric E/M visit codes, or standardized the allocation of PE RVUs for the codes that describe these services. We are finalizing a policy for 2021 to adopt add-on codes that describe the additional resources inherent in visits for primary care and particular kinds of specialized medical care. As discussed further below, these codes will only be reportable with E/M office/outpatient level 2 through 4 visits, and their use generally will not impose new per-visit documentation requirements. These codes are neither required nor restricted by physician specialty, though we acknowledge that, like many other physicians' services for which payment is made under the PFS, they are specifically intended to describe services that clinicians practicing in some specialties are more likely to perform than those in other specialties. We are also finalizing a policy for 2021 to adopt a new “extended visit” add-on code for use only with E/M office/outpatient level 2 through 4 visits to account for the additional resources required when practitioners need to spend extended time with the patient.

For CY 2019 and 2020, we will continue the current coding and payment structure for E/M office/outpatient visits, and, therefore, practitioners should continue to use either the 1995 or 1997 versions of the E/M guidelines to document E/M office/outpatient visits billed to Medicare for 2019 and 2020 (with the exception of our final policy to eliminate redundant data recording).

Beginning in 2021, for E/M office/outpatient levels 2 through 5 visits, we will allow for flexibility in how visit levels are documented, specifically a choice to use the current framework, MDM or time. For E/M office/outpatient level 2 through 4 visits, beginning in 2021 we will also apply a minimum supporting documentation standard associated with level 2 visits when practitioners use the current framework or MDM to document the visit.

We intend to engage in further discussions with the public over the next several years to potentially further refine our policies, through future notice and comment rulemaking, for 2021. We discuss the public comments, our responses to the specific concerns and perspectives offered by commenters, and final policies in greater detail in this section.

b. Public Comments and Responses

(1) Lifting Restrictions Related to E/M Documentation

(a) Eliminating Extra Documentation Requirements for Home Visits

Medicare pays for E/M visits furnished in the home (a private residence) under CPT codes 99341 through 99350. The payment rates for these codes are slightly more than for office visits (for example, approximately $30 more for a level 5 established patient, non-facility). The beneficiary need not be confined to the home to be eligible for such a visit. However, there is a Medicare Claims Processing Manual provision requiring that the medical record must document the medical necessity of the home visit made in lieu of an office or outpatient visit (Pub. 100-04, Medicare Claims Processing Manual, Chapter 12, Section 30.6.14.1.B., available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf). Stakeholders have suggested that whether a visit occurs in the home or the office is best determined by the practitioner and the patient without applying additional rules. We agreed, so we proposed to remove the requirement that the medical record must document the medical necessity of furnishing the visit in the home rather than in the office. We welcomed public comments on this proposal, including any potential, unintended consequences of eliminating this requirement.

Comment: Commenters were generally supportive of our proposal to remove the requirement that the medical record must document the medical necessity of furnishing the visit in the home rather than in the office. Many commenters included this proposal in a list of appropriate changes CMS should make immediately regarding documentation of E/M visits, effective January 1, 2019.

Response: We are finalizing this policy change to remove the requirement that the medical record must document the medical necessity of furnishing the visit in the home rather than in the office, as proposed, effective January 1, 2019.

(b) Public Comment Solicitation on Eliminating Prohibition on Billing Same-Day Visits by Practitioners of the Same Group and Specialty

The Medicare Claims Processing Manual states, “As for all other E/M services except where specifically noted, the Medicare Administrative Contractors (MACs) may not pay two E/M office visits billed by a physician (or physician of the same specialty from the same group practice) for the same beneficiary on the same day unless the physician documents that the visits were for unrelated problems in the office, off campus-outpatient hospital, or on campus-outpatient hospital setting which could not be provided during the same encounter” (Pub. 100-04, Medicare Claims Processing Manual, Chapter 12, Section 30.6.7.B., available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf).

This instruction was intended to reflect the idea that multiple visits with the same practitioner, or by practitioners in the same or very similar specialties within a group practice, on the same day as another E/M service would not be medically necessary. However, stakeholders have provided a few examples where this policy does not make sense with respect to the current practice of medicine as the Medicare enrollment specialty does not always coincide with all areas of medical expertise possessed by a practitioner—for example, a practitioner with the Medicare enrollment specialty of geriatrics may also be an endocrinologist. If such a practitioner was one of many geriatricians in the same group practice, they would not be able to bill separately for an E/M visit focused on a patient's endocrinological issue if that patient had another more generalized E/M visit by another geriatrician on the same day. Stakeholders have pointed out that in these circumstances, practitioners often respond to this instruction by scheduling the E/M visits on two separate days, which could unnecessarily inconvenience the patient. Given that the number and granularity of practitioner specialties recognized for purposes of Medicare enrollment continue to increase over time (consistent with the medical community's requests), the value to the Medicare program of the prohibition on same-day E/M visits billed by physicians in the same group and medical specialty may be diminishing, especially as we believe it is becoming more common for practitioners to have multiple specialty affiliations, but would have only one primary Medicare enrollment specialty. We believe that eliminating this policy may better recognize the changing practice of medicine while reducing administrative burden. The impact of this proposal on program expenditures and beneficiary cost sharing is unclear. To the extent that many of these services are currently merely scheduled and furnished on different days in response to the instruction, eliminating this manual provision may not significantly increase utilization, Medicare spending and beneficiary cost sharing.

We solicited public comment on whether we should eliminate the manual provision given the changes in the practice of medicine or whether there is concern that eliminating it might have unintended consequences for practitioners and beneficiaries.

We recognize that this instruction may be appropriate only in certain clinical situations, so we also solicited public comments on whether and how we should consider creating exceptions to, or modify this manual provision rather than eliminating it entirely. We also requested that the public provide additional examples and situations in which the current instruction is not clinically appropriate.

Comment: We received many comments in response to this solicitation.

Response: We thank the commenters for all of the information submitted, and will review the many public comments we received on this topic and consider this issue further for potential future rulemaking.

(2) Documentation Changes for Office or Other Outpatient E/M Visits and Home Visits

(a) Providing Choices in Documentation—Medical Decision-Making, Time or Current Framework

Informed by comments and examples that we have received stating that the current E/M documentation guidelines are outdated with respect to the current practice of medicine, and in our efforts to simplify documentation for the purposes of coding E/M visit levels, we proposed to allow practitioners to choose, as an alternative to the current framework specified under the 1995 or 1997 guidelines, either MDM or time as a basis to determine the appropriate level of E/M visit. This would allow different practitioners in different specialties to choose to document the factor(s) that matter most given the nature of their clinical practice. It would also reduce the impact Medicare may have on the standardized recording of history, exam and MDM data in medical records, since practitioners could choose to no longer document many aspects of an E/M visit that they currently document under the 1995 or 1997 guidelines for history, physical exam and MDM. Although we initially considered reducing the number of key components that practitioners needed to document in choosing the appropriate level of E/M service to bill, feedback from the stakeholder community led us to believe that offering practitioners a choice to either retain the current framework or choose among new options that involve a reduced level of documentation would be less burdensome for practitioners, and would allow more stability for practitioners who may need time to prepare for any potential new documentation framework.

We sought to be clear that as part of this proposal, practitioners could use MDM, or time, or they could continue to use the current framework to document an E/M visit. In other words, we would be offering the practitioner the choice to continue to use the current framework by applying the 1995 or 1997 documentation guidelines for all three key components. However, our proposals on payment for office-based/outpatient E/M visits described later in this section would apply to all practitioners, regardless of their selected documentation approach. Under our proposal, all practitioners, even those choosing to retain the current documentation framework, would be paid at the proposed new payment rate described in the CY 2019 PFS proposed rule (one rate for new patients and another for established patients), and could also report applicable G-codes as we proposed (83 FR 35839 through 35843).

We also sought to be clear that we proposed to retain the current CPT coding structure for E/M visits (along with our proposal to create new replacement codes for podiatry office/outpatient E/M visits). Practitioners would report on the professional claim whatever level of visit (1 through 5) they believe they furnished using CPT codes 99201-99215. Because we believed the adoption of replacement G-codes to describe the visit levels 2 through 5 might result in unnecessary disruption to current billing systems and practices, we did not propose to modify the existing CPT coding structure for E/M visits. Since we proposed to create a single rate under the PFS that would be paid for services billed using the current CPT codes for level 2 through 5 E/M visits, under our proposal, it would not have been material to Medicare's payment decision which CPT code (of levels 2 through 5) is reported on the claim, except to justify billing a level 2 or higher visit in comparison to a level 1 visit (provided the visit itself was reasonable and necessary). We stated that we expected that, for record keeping purposes or to meet requirements of other payers, many practitioners would continue to choose and report the level of E/M visit they believed to be appropriate under the CPT coding structure.

Even though under our proposal, there would have been no payment differential for E/M visits based on which of the codes describing visit levels 2 through 5 were reported, we believed we would still need to simplify and change our documentation requirements to better align with the current practice of medicine and eliminate unnecessary aspects of the current documentation framework. As a corollary to our proposal to adopt a single payment amount for office/outpatient E/M visit levels 2 through 5 (83 FR 35839 through 35843), we proposed to apply a minimum documentation standard where, for the purposes of PFS payment for an office/outpatient E/M visit, practitioners would only need to meet documentation requirements currently associated with a level 2 visit for history, exam and/or MDM, except when using time to document the service. Practitioners could choose to document more information for clinical, legal, operational or other purposes, and we anticipated that for those reasons, practitioners would continue generally to seek to document medical record information that is consistent with the level of care furnished. For purposes of our medical review, however, for practitioners using the current documentation framework or, as we proposed, MDM, Medicare would only require documentation to support the medical necessity of the visit and the documentation that is associated with the current level 2 CPT visit code.

For example, for a practitioner choosing to document using the current framework (1995 or 1997 guidelines), our proposed minimum documentation for any billed level of E/M visit from levels 2 through 5 could include: (1) A problem-focused history that does not include a review of systems or a past, family, or social history; (2) a limited examination of the affected body area or organ system; and (3) straightforward medical decision making measured by minimal problems, data review, and risk (two of these three). If the practitioner was choosing to document based on MDM alone, Medicare would only require documentation supporting straightforward medical decision-making measured by minimal problems, data review, and risk (two of these three).

Some commenters had suggested that the current framework of guidelines for the MDM component of visits would need to be changed before MDM could be relied upon by itself to distinguish visit levels. We proposed to allow practitioners to rely on MDM in its current form to document their visit, and solicited public comment on whether and how guidelines for MDM might be changed in subsequent years.

As described earlier, we currently allow time or duration of visit to be used as the governing factor in selecting the appropriate E/M visit level only when counseling and/or coordination of care accounts for more than 50 percent of the face-to-face physician/patient encounter (or, in the case of inpatient E/M services, the floor time). Our proposal to allow practitioners the choice of using time to document office/outpatient E/M visits would have meant that this time-based standard is not limited to E/M visits in which counseling and/or care coordination accounts for more than 50 percent of the face-to-face practitioner/patient encounter. Rather, the amount of time personally spent by the billing practitioner face-to-face with the patient could be used to document the E/M visit regardless of the amount of counseling and/or care coordination furnished as part of the face-to-face encounter.

Some commenters had raised concerns with reliance on time to distinguish visit levels, for example the potential for abuse, inequities among more- or less-efficient practitioners, and specialties for which time is less of a factor in determining visit complexity. We noted in the proposed rule that relying on time as the basis for identifying the E/M visit level would also raise the issue of what would be required by way of supporting documentation; for example, what amount of time should be documented, and whether the specific activities comprising the time need to be documented and to what degree. However, a number of stakeholders had suggested that, within their specialties, time is a good indicator of the complexity of the visit or patient, and requested that we allow practitioners to use time as the single factor in all E/M visits, not just when counseling or care coordination dominate a visit. We agreed that for some practitioners and patients, time may be a good indicator of complexity of the visit, and proposed to allow practitioners the option to use time as the single factor in selecting visit level and documenting the E/M visit, regardless of whether counseling or care coordination dominate the visit. We stated that if finalized, we would monitor the results of this policy for any program integrity issues, administrative burden or other issues.

For practitioners choosing to support their coding and payment for an E/M visit by documenting the amount of time spent with the patient, we proposed to require the practitioner to document the medical necessity of the visit and show the total amount of time spent by the billing practitioner face-to-face with the patient. We solicited public comment on what that total time should be for payment of the single, new rate for E/M visits levels 2 through 5. We presented the typical time for our proposed new single payment for E/M visit levels 2 through 5 (the weighted average of the intra-service times across the current E/M visit utilization) and suggested we could use this time. We noted that currently the PFS does not require the practitioner to spend or document a specified amount of time with a given patient in order to receive payment for an E/M visit, unless the visit is dominated by counseling/care coordination and, on that account, the practitioner is using time as the basis for code selection. The times for E/M visits and most other PFS services in the physician time files, which are used to set PFS rates, are typical times rather than requirements, and were recommended by the AMA RUC and then reviewed and either adopted or adjusted for Medicare through our usual ratesetting process as “typical,” but not strictly required.

We presented a potential alternative to apply the AMA's CPT codebook provision that, for timed services, a unit of time is attained when the mid-point is passed, such that we would require documentation that at least 16 minutes for an established patient (more than half of 31 minutes) and at least 20 minutes for a new patient (more than half of 38 minutes) were spent face-to-face by the billing practitioner with the patient, to support making payment at the proposed single rate for visit levels 2 through 5 when the practitioner chose to document the visit using time.

We presented another potential alternative to require documentation that the typical time for the CPT code that is reported (which is also the typical time listed in the AMA's CPT codebook for that code) was spent face-to-face by the billing practitioner with the patient. For example, a practitioner reporting CPT code 99212 (a level 2 established patient visit) would be required to document having spent a minimum of 10 minutes, and a practitioner reporting CPT code 99214 (a level 4 established patient visit) would be required to document having spent a minimum of 25 minutes. Under this approach, the total amount of time spent by the billing practitioner face-to-face with the patient would inform the level of E/M visit (of levels 2 through 5) coded by the billing practitioner. We noted that in contrast to other proposed documentation approaches discussed above, this approach of requiring documentation of the typical time associated with the CPT visit code reported on the claim would introduce unique payment implications for reporting that code, especially when the time associated with the billed E/M code is the basis for reporting prolonged E/M services.

We solicited public comments on the use of time as a framework for documentation of office/outpatient E/M visits, and whether we should adopt any of these approaches or specify other requirements with respect to the proposed option for documentation using time.

In providing us with feedback, we requested that commenters take into consideration ways in which the time associated with, or required for, the billing of any add-on codes (especially the proposed prolonged E/M visit add-on code(s) described in the CY 2019 PFS proposed rule (83 FR 35844)) would intersect with the time spent for the base E/M visit, when the practitioner is documenting the E/M visit using only time. Currently, when reporting prolonged E/M services, we expect the practitioner to exceed the typical time assigned for the base E/M visit code (also commonly referred to as the companion code). For example, in the CY 2017 PFS final rule (81 FR 80229), we expressed appreciation for the commenters' suggestion to display the typical times associated with relevant services. We also discussed, and in response to those comments, decided to post a file annually that notes the times assumed to be typical for purposes of PFS ratesetting for practitioners to use as a reference in deciding whether time requirements for reporting prolonged E/M services are met. We stated that although these typical times are not required for a practitioner to bill the displayed base codes, we expect that only time spent in excess of these times will be reported using a non-face-to-face prolonged service code. We proposed to formalize this policy in the case where a practitioner uses time to document a visit, since there would be a stricter time requirement associated with the base E/M code. Specifically, we proposed that, when a practitioner chooses to document using time and also reports prolonged E/M services, we would require the practitioner to document that the typical time required for the base or “companion” visit is exceeded by the amount required to report prolonged services. Further discussion of our proposal regarding reporting prolonged E/M services is available in the CY 2019 PFS proposed rule (83 FR 35844).

We believed that allowing practitioners to choose the most appropriate basis for distinguishing among the levels of E/M visits and applying a minimum documentation requirement, together with reducing the payment variation among E/M visit levels, would significantly reduce administrative burden for practitioners, and would avoid the current need to make coding and documentation decisions based on codes and documentation guidelines that are not a good fit with current medical practice. The practitioner could choose to use MDM, time or the current documentation framework, and could also apply the proposed policies discussed below regarding redundancy and who can document information in the medical record.

We solicited public comment on these proposals to provide practitioners choice in the basis for documenting E/M visits in an effort to allow for documentation alternatives that better reflect the current practice of medicine and to alleviate documentation burden. We stated our interest in receiving public comments on practitioners' ability to avail themselves of these choices for how they would impact clinical workflows, EHR templates, and other aspects of practitioner work.

Stakeholders had requested that CMS not merely shift burden by implementing another framework that might avoid issues caused by the current guidelines, but that would be equally complex and burdensome. Our primary goal was to reduce administrative burden so that the practitioner can focus on the patient, and we were interested in commenters' opinions as to whether our E/M visit proposals would, in fact, support and further this goal. We believed our proposals would allow practitioners to exercise greater clinical judgment and discretion in what they document, focusing on what is clinically relevant and medically necessary for the patient rather than what will illustrate that the appropriate visit level was reported. Although we proposed to no longer apply much of the E/M documentation guidelines involving history, physical exam and, for those choosing to document based on time, documentation of medical decision-making, we stated our expectation that practitioners would continue to perform as medically necessary for the patient and document E/M visits to ensure quality and continuity of care. For example, we believed that it remains an important part of care for the practitioner to understand the patient's social history, even though certain documentation options we proposed would no longer require that history to be re-documented to bill Medicare for the visit.

Comment: Many commenters supported the proposal to allow choice in documentation between the current framework, medical decision making or time. However, some commenters stated that such a policy would introduce too much variation in medical record format and content, or too many potential frameworks against which an auditor might review a claim. Commenters were unsure whether CMS envisioned the choice being made on a case-by-case basis or with some regularity. Other commenters noted that time alone is not an accurate measure of visit complexity or would be subject to gaming, or that CMS did not provide enough detail regarding time thresholds and documentation requirements to allow them to assess potential impact.

Many of the commenters did not support the proposal, as a corollary to our proposal to adopt a single payment amount for office-outpatient E/M visit levels 2 through 5, to apply a minimum level 2 documentation standard. These commenters were concerned that this standard would result in inadequate documentation for patient care, legal and other purposes. They noted that CMS overestimated the associated reduction in burden that would result from this proposal, and instead believe the level 2 documentation standard would reduce burden to a lesser degree than we estimated, or potentially increase burden. They indicated that there would be costs in terms of time and resources to update EHRs and train staff, and that they expected there would be the need to continue documenting many elements included in the current code definitions for patient care and other purposes, including other payers. Many commenters expressed concern that the documentation could potentially increase due to misalignment in documentation rules between payers, as they presume that Medicaid, commercial payers and secondary payers would not likely adopt Medicare's payment changes, at least not immediately. Several commercial payers or their associations expressed similar concerns and recommended implementing a more limited set of documentation changes and ongoing monitoring.

MedPAC and a few other commenters recommended paying for visits on the basis of time alone. MedPAC recommended requiring the time spent to be reported on the claim so CMS can collect data on current times actually spent and use it to more accurately set rates in the future.

A few commenters indicated what the time requirement should be when using time to document. Most of these commenters noted that CMS should require the typical time associated with the CPT code reported on the claim. One commenter who opposed the single payment rate stated that if CMS did finalize a single payment rate, then CMS should require only the time associated with the level 2 CPT codes (10 minutes for an established patient and 20 minutes for a new patient). Some commenters expressed support for requiring that this time be spent by the billing practitioner face-to-face with the patient, and a few commenters expressed support for allowing time spent by individuals other than the billing practitioner and/or time spent furnishing non-face-to-face care to count.

Response: For CY 2019 and 2020, we will continue the current coding and payment structure for E/M office/outpatient visits, and, therefore, practitioners should continue to use either the 1995 or 1997 versions of the E/M guidelines to document E/M office/outpatient visits billed to Medicare for 2019 and 2020 (with the exception of our final policy to eliminate redundant data recording).

We appreciate the issues raised by commenters but continue to believe our proposals allowing for flexibility in how E/M office/outpatient visit levels are documented and the applying of a minimum documentation standard as a corollary to establishing single payment rates for E/M office/outpatient visits will significantly reduce burden for clinicians and support them in making coding and documentation decisions that better align with current medical practice. Beginning in 2021, for E/M office/outpatient levels 2 through 5 visits, we will allow for flexibility in how visit levels are documented, allowing billing practitioners the choice to use the current framework, MDM or time. Specifically, for level 5 visits, for PFS payment purposes a practitioner can use the current framework with the documentation requirements applicable to a level 5 visit or the current definition of level 5 MDM. As an another alternative, the practitioner can document using time, which will require documentation of the medical necessity of the visit and that the billing practitioner personally spent at least the typical time associated with the level 5 CPT code that is reported face-to-face with the patient (40 minutes for an established patient and 60 minutes for a new patient). Since there will be no new intra-service time associated with the level 5 visit codes, we are finalizing our proposed alternative to use the typical time associated with the CPT code reported on the claim, consistent with current policy when counseling and/or coordination of care accounts for more than 50 percent of the face-to-face physician/patient encounter.

For E/M office/outpatient level 2 through 4 visits, in 2021 we will also allow choice of documentation methodology (current framework, MDM or time). For practitioners using the current documentation framework or MDM, for PFS payment purposes, we will apply a minimum supporting documentation standard associated with E/M office/outpatient level 2 visits such that we only require documentation that is associated with the current level 2 CPT visit code (new or established patient, as applicable). For example, if the practitioner is choosing to document based on MDM alone, for PFS payment purposes we will only require documentation supporting straight forward medical decision-making measured by minimal problems, data review, and risk (two of these three). If choosing to document using time, for PFS payment purposes we will require the billing practitioner to document that the visit was medically reasonable and necessary and that the billing practitioner personally spent the current typical time for the CPT code reported (for example, 15 minutes when reporting CPT code 99213 (a level 3 established patient visit)). For administrative simplicity, it may be most straight forward to track to the typical time for the CPT code.

We address the public comments on our burden reduction estimate and changes to our estimate based on our final policies further below (see section VII. of this final rule, Regulatory Impact Analysis). We intend to engage in further discussions with the public over the next several years to potentially further refine our policies for 2021.

As we noted in the CY 2019 PFS proposed rule, we heard from a few commenters on the CY 2018 PFS proposed rule that some practitioners rely on unofficial Marshfield clinic or other criteria to help them document E/M visit levels. These commenters conveyed that the Marshfield “point system” is commonly used to supplement the E/M documentation guidelines, because of a lack of concrete criteria for certain elements of medical decision making in the 1995 and 1997 guidelines or in CPT guidance. Accordingly, in the CY 2019 PFS proposed rule, we solicited public comment on whether Medicare should use or adopt any aspects of other E/M documentation systems that may be in use among practitioners, such as the Marshfield tool. We were interested in feedback as to whether the 1995 and 1997 guidelines contain adequate information for practitioners to use in documenting visits under our proposals, or whether these versions of the guidelines would need to be supplemented in any way.

The following is a summary of the comments we received on whether Medicare should use or adopt any aspects of other E/M documentation systems that may be in use among practitioners, such as the Marshfield tool, and also whether the 1995 and 1997 guidelines contain adequate information for practitioners to use in documenting visits under our proposals, or whether these versions of the guidelines would need to be supplemented in any way.

Comment: We received a few comments clarifying how the Marshfield tool is currently used, but the commenters provided reasons not to use it as a replacement standard for current measures of visit complexity specified in the 1995 and 1997 documentation guidelines. A few commenters suggested new methods that could be used to support the level of E/M visit reported, such as risk adjustment with CMS's Hierarchical Condition Category scores used in Medicare Advantage; and some commenters recommended that CMS use medical decision making alone or in combination with time to distinguish visit/patient complexity. A few commenters recommended ways in which medical decision making could be relied upon, and ways that it should be changed, suggesting that history and physical exam might be incorporated with medical decision making. Many commenters recommended that CMS should continue to work with the AMA/CPT, specialty associations and other stakeholders to come up with revised measures of visit complexity, recommending between three to five levels.

Response: We appreciate commenters' feedback on this solicitation, and we considered it in the context of making a final decision. As stated previously, we are finalizing a significant reduction in the current payment variation in office/outpatient E/M visit levels by paying a single rate for E/M office/outpatient visit levels 2, 3, and 4 (one for established and another for new patients). However, we are not finalizing the inclusion of E/M office/outpatient level 5 visits in the single payment rate, in order to better account for the care and needs of particularly complex patients. Beginning in 2021, for E/M office/outpatient levels 2 through 5 visits, we will allow for flexibility in how visit levels are documented, specifically a choice to use the current framework, MDM or time, discussed previously. For E/M office/outpatient level 2 through 4 visits, in 2021 we will also apply a minimum supporting documentation standard associated with level 2 visits, also discussed previously. We intend to engage in further discussions with the public over the next several years to potentially further refine our policies for 2021.

(b) Removing Redundancy in E/M Visit Documentation

Stakeholders have recently expressed that CMS should not require documentation of information in the billing practitioner's note that is already present in the medical record, particularly with regard to history and exam. Currently, both the 1995 and 1997 guidelines provide such flexibility for certain parts of the history for established patients, stating, “A Review of Systems “ROS” and/or a pertinent past, family, and/or social history (PFSH) obtained during an earlier encounter does not need to be re-recorded if there is evidence that the physician reviewed and updated the previous information. This may occur when a physician updates his/her own record or in an institutional setting or group practice where many physicians use a common record. The review and update may be documented by:

• Describing any new ROS and/or PFSH information or noting there has been no change in the information; and
• Noting the date and location of the earlier ROS and/or PFSH.

Documentation Guidelines “DG”: The ROS and/or PFSH may be recorded by ancillary staff or on a form completed by the patient. To document that the physician reviewed the information, there must be a notation supplementing or confirming the information recorded by others (https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNEdWebGuide/Downloads/95Docguidelines.pdf; https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNEdWebGuide/Downloads/97Docguidelines.pdf).

We proposed to expand this policy to further simplify the documentation of history and exam for established patients such that, for both of these key components, when relevant information is already contained in the medical record, practitioners would only be required to focus their documentation on what has changed since the last visit or on pertinent items that have not changed, rather than re-documenting a defined list of required elements such as review of a specified number of systems and family/social history. Practitioners would still review prior data, update as necessary, and indicate in the medical record that they had done so. Practitioners would conduct clinically relevant and medically necessary elements of history and physical exam, and conform to the general principles of medical record documentation in the 1995 and 1997 guidelines. However, practitioners would not need to re-record these elements (or parts thereof) if there is evidence that the practitioner reviewed and updated the previous information.

Comment: Commenters were very supportive of this proposal. Many commenters included this proposal in a list of appropriate changes CMS should make immediately regarding documentation of E/M visits, effective January 1, 2019.

Response: We are finalizing this policy to simplify the documentation of history and exam for established patients for E/M office/outpatient visits as proposed, effective January 1, 2019. Accordingly, when relevant information is already contained in the medical record, practitioners may choose to focus their documentation on what has changed since the last visit, or on pertinent items that have not changed, and need not re-record the defined list of required elements if there is evidence that the practitioner reviewed the previous information and updated it as needed. Practitioners should still review prior data, update as necessary, and indicate in the medical record that they have done so. We note that this policy to simplify and reduce redundancy in documentation is optional for practitioners, and they may choose to continue the current process of entering, re-entering and bringing forward information (83 FR 35838). The option to continue current documentation processes may be particularly important for practitioners who lack time to adjust workflows, templates and other aspects of their work by January 1, 2019.

We solicited comment on whether there may be ways to implement a similar provision for any aspects of medical decision-making, or for new patients, such as when prior data is available to the billing practitioner through an interoperable EHR or other data exchange. We stated our belief that there would be special challenges in realizing documentation efficiencies with new patients, since they may not have received exams or histories that were complete or relevant to the current complaint(s), and the information in the transferred record could be more likely to be incomplete, outdated or inaccurate.

Comment: A few commenters indicated that there might be ways to recognize some documentation efficiencies for referred new patients or situations where data are available through an interoperable EHR, but did not provide detail about what kinds of data are commonly available and how they might be relevant to the receiving practitioner for purposes of visit documentation.

Response: We appreciate the commenters' feedback in this area and will continue to consider this issue.

We similarly proposed that for both new and established patients, practitioners would no longer be required to re-enter information in the medical record regarding the chief complaint and history that are already entered by ancillary staff or the beneficiary. The practitioner could simply indicate in the medical record that they reviewed and verified this information. Our goal was to allow practitioners more flexibility to exercise greater clinical judgment and discretion in what they document, focusing on what is clinically relevant and medically necessary for the patient.

Comment: Commenters were very supportive of this proposal. Many commenters included this proposal in a list of appropriate changes CMS should make immediately regarding documentation of E/M visits, effective January 1, 2019.

Response: We are finalizing our proposal that, effective January 1, 2019, for new and established patients for E/M office/outpatient visits, practitioners need not re-enter in the medical record information on the patient's chief complaint and history that has already been entered by ancillary staff or the beneficiary. The practitioner may simply indicate in the medical record that he or she reviewed and verified this information. We note that this policy to simplify and reduce redundancy in documentation is optional for practitioners, and they may choose to continue the current process of entering, re-entering and bringing forward information (83 FR 35838). The option to continue current documentation processes may be particularly important for practitioners who lack time to adjust workflows, templates and other aspects of their work by January 1, 2019.

(c) Podiatry Visits

As described in the CY 2019 PFS proposed rule (83 FR 35843), as part of our proposal to improve payment accuracy by creating a single PFS payment rate for E/M visit levels 2 through 5 (with one proposed rate for new patients and one proposed rate for established patients), we proposed to create separate coding for podiatry visits that are currently reported as E/M office/outpatient visits. We proposed that, rather than reporting visits under the general E/M office/outpatient visit code set, podiatrists would instead report visits under new G-codes that more specifically identify and value their services. We proposed to apply substantially the same documentation standards for these proposed new podiatry-specific codes as we proposed for other office/outpatient E/M visits.

If a practitioner chose to use time to document a podiatry office/outpatient E/M visit, we proposed to apply substantially the same rules as those we proposed for documenting on the basis of time for other office/outpatient E/M visits. For practitioners choosing to use time to provide supporting documentation for the podiatry visit, we would require documentation supporting the medical necessity of the visit and showing the total amount of time spent by the billing practitioner face-to-face with the patient. We solicited public comment on what that total time would be for payment of the proposed new podiatry G-codes. The typical times for these proposed codes were 22 minutes for an established patient and 28 minutes for a new patient, and we noted we could use these times. Alternatively, we noted we could apply the AMA's CPT codebook provision that, for timed services, a unit of time is attained when the mid-point is passed, such that we would require documentation that at least 12 minutes for an established patient (more than half of 22 minutes) or at least 15 minutes for a new patient (more than half of 28 minutes) were spent face-to-face by the billing practitioner with the patient, to support making payment for these codes when the practitioner chose to document the visit using time. We solicited comment on the use of time as a basis for documentation of our proposed podiatric E/M visit codes, and whether we should adopt any of these approaches or further specify other requirements with respect to this proposed option for podiatric practitioners to document their visits using time.

Comment: We did not receive any comments on how the proposed podiatric codes should be documented. A few commenters noted that our proposal to apply the same documentation rules to the proposed new podiatric codes as for all other office/outpatient E/M visits demonstrated that these visits were essentially the same, and that podiatry should not be singled out for the creation of separate codes.

Response: We believe the absence of comments on our proposals for documentation of the proposed podiatric codes is due to a lack of general support for creation of the new codes to describe podiatric E/M visits, as noted below in the comment summary on that topic. As discussed below, we are not finalizing our proposal to create new codes to describe podiatric E/M visits, and accordingly, we are not finalizing any rules regarding documentation of those codes.

(3) Minimizing Documentation Requirements by Simplifying Payment Amounts

As we have explained above, and in prior rulemaking, we believe that the coding, payment, and documentation requirements for E/M visits are overly burdensome and no longer aligned with the current practice of medicine. We believe the current set of 10 CPT codes for new and established office-based and outpatient E/M visits and their respective payment rates no longer appropriately reflect the complete range of services and resource costs associated with furnishing E/M services to all patients across the different physician specialties, and that documenting these services using the current guidelines has become burdensome and out of step with the current practice of medicine. To alleviate the effects and mitigate the burden associated with continued use of the outdated CPT code set, we proposed to simplify the office-based and outpatient E/M payment rates and documentation requirements, and create new add-on codes to better capture the differential resources involved in furnishing certain types of E/M visits.

In conjunction with our proposal to reduce the documentation requirements for E/M visit levels 2 through 5, we proposed to simplify the payment for those services by paying a single rate for the level 2 through 5 E/M visits. The visit level of the E/M service is tied to the documentation requirements in the 1995 and 1997 Documentation Guidelines for E/M Services, which may not be reflective of changes in technology or, in particular, the ways that electronic medical records have changed documentation and the patient's medical record. Additionally, current documentation requirements may not account for changes in care delivery, such as a growing emphasis on team based care, increases in the number of recognized chronic conditions, or increased emphasis on access to behavioral health care. However, based on the feedback we have received from stakeholders, it was clear to us that the burdens associated with documenting the selection of the level of E/M service arise from not only the documentation guidelines, but also from the coding structure itself. Like the documentation guidelines, the distinctions between visit levels reflect a reasonable assessment of variations in care, effort, and resource costs as identified and articulated several decades ago. We believed that the most important distinctions between the kinds of visits furnished to Medicare beneficiaries are not well reflected by the current E/M visit coding. Most significantly, we have understood from stakeholders that current E/M coding does not reflect important distinctions in services and differences in resources. At present, we believed the current payment for E/M visit levels, generally distinguished by common elements of patient history, physical exam, and MDM, that may have been good approximations for important distinctions in resource costs between kinds of visits in the 1990s, when the CPT developed the E/M code set, are increasingly outdated in the context of changing models of care and information technologies.

As described earlier in this section, we proposed to change the documentation requirements for E/M levels such that practitioners have the choice to use the 1995 guidelines, 1997 guidelines, time, or MDM to determine the E/M level. We believed that these proposed changes would better reflect the current practice of medicine and represent significant reductions in burdens associated with documenting visits using the current set of E/M codes.

In alignment with our proposed documentation changes, we proposed to develop a single set of RVUs under the PFS for E/M office-based and outpatient visit levels 2 through 5 for new patients (CPT codes 99202 through 99205) and a single set of RVUs for visit levels 2 through 5 for established patients (CPT codes 99212 through 99215). Although we considered creating new HCPCS G-codes that would describe the services associated with these proposed payment rates, given the wide and longstanding use of these visit codes by both Medicare and private payers, we believed it would have created unnecessary administrative burden to propose new coding. Therefore, we instead proposed to maintain the current code set. Of the five levels of office-based and outpatient E/M visits, the vast majority of visits are reported as levels 3 and 4. In CY 2016, CPT codes 99203 and 99204 (or E/M visit level 3 and level 4 for new patients) made up around 32 percent and 44 percent, respectively, of the total allowed charges for CPT codes 99201-99205. In the same year, CPT codes 99213 and 99214 (or E/M visit level 3 and 4 for established patients) made up around 39 percent and 50 percent, respectively, of the allowed charges for CPT codes 99211-99215. If our proposals to simplify the documentation requirements and to pay a single PFS rate for new patient E/M visit levels 2 through 5 and a single rate for established patient E/M visit levels 2 through 5 were finalized, practitioners would still bill the CPT code for whichever level of E/M service they furnished and they would be paid at the single PFS rate. However, we believed that eliminating the distinction in payment between visit levels 2 through 5 would eliminate the need to audit against the visit levels, and therefore, would provide immediate relief from the burden of documentation. A single payment rate would also eliminate the increasingly outdated distinction between the kinds of visits that are reflected in the current CPT code levels in both the coding and the associated documentation rules.

In order to set RVUs for the proposed single payment rate for new and established patient office/outpatient E/M visit codes, we proposed to develop resource inputs based on the current inputs for the individual E/M codes, generally weighted by the frequency at which they are currently billed, based on the 5 most recent years of Medicare claims data (CY 2012 through CY 2017). Specifically, we proposed a work RVU of 1.90 for CPT codes 99202 through 99205, a physician time of 37.79 minutes, and direct PE inputs that sum to $24.98, each based on an average of the current inputs for the individual codes weighted by 5 years of accumulated utilization data. Similarly, we proposed a work RVU of 1.22 for CPT codes 99212 through 99215, with a physician time of 31.31 minutes and direct PE inputs that sum to $20.70. These inputs were based on an average of the inputs for the individual codes, weighted by volume based on utilization data from the past 5 years (CY 2012 through CY 2017). Tables 19 and 20 reflect the payment rates in dollars that would result from the approach described above were it to have been implemented for CY 2018. In other words, the dollar amounts in the charts below reflect how the changes we proposed for CY 2019 would have impacted payment rates for CY 2018.

Although we believed that the proposed rates for E/M visit levels 2 through 5 represent the valuation of a typical E/M service, we also recognized that the current E/M code set itself does not appropriately reflect differences in resource costs between certain types of E/M visits. As a result, we believed that the way we currently value the resource costs for E/M services through the existing HCPCS CPT code set for office-based and outpatient E/M visits does not appropriately reflect the resources used in furnishing the range of E/M services that are provided through the current the practice of medicine. Based on stakeholder comments and examples and our review of the literature on E/M services, we identified three types of E/M visits that differ from the typical E/M visit and are not appropriately reflected in the current office/outpatient E/M code set and valuation. Rather, these three types of E/M visits can be distinguished by the mode of care provided and, as a result, have different resource costs. The three types of E/M visits that differ from the typical E/M service are (1) separately identifiable E/M visits furnished in conjunction with a global procedure, (2) primary care E/M visits for continuous patient care, and (3) certain types of specialist E/M visits, including those with inherent visit complexity. We addressed each of these distinguishable visit types in the proposed rule.

The following is a summary of the comments we received on the proposed blended payment rate for new and established office/outpatient E/M visit levels 2 through 5.

Comment: While many commenters agreed that the current E/M coding for office/outpatient visits is flawed and some agreed that the current coding and valuation systematically undervalues primary care visits and visits furnished in the context of non-procedural specialty care, most commenters opposed this proposal. Many commenters stated that using a single payment rate for new and established office/outpatient E/M visit levels 2 through 5 could have highly variable negative repercussions at the specialty, practice, and practitioner level. Some commenters suggested that the proposed single payment rate for these visits was inherently not resource-based. Many commenters stated that the proposed single payment rate that did not vary based on patient complexity from levels 2 through 5 was insufficient to account for the resource differential associated with treating complex patients, and that, without accurate payment, physicians would be likely to either schedule multiple visits or stop taking on complex patients all together.

The few commenters who supported the proposal stated that the negative payment implications of the single proposed payment rate are outweighed by the reduction in documentation burden. While acknowledging that the initial years following adoption of a single payment rate for the level 2 through 5 E/M visit codes would be challenging, these commenters noted that over time, potential reductions in payment would be offset by the time saved from unnecessary documentation. Other commenters, while urging CMS not to finalize the proposed single payment rate for these codes, did provide suggested alternative coding structures. Of these comments, there was a consensus that three levels of coding for office and outpatient E/M services is preferable to two, whether that be accomplished through blended payment rates for levels 2 through 3 and 4 through 5, or through a blended rate for levels 2 through 4. Most commenters pointed to the joint CPT/AMA E/M workgroup formed in response to CMS' proposal, and urged CMS to wait for forthcoming coding and documentation definitions generated by that group and recommendations regarding valuation developed through the RUC process.

Response: We appreciate the number and broad range of interested commenters who responded to our proposal. After reviewing all of the comments received, we understand the broad consensus regarding the potential negative implications of the proposal for patients with the most complex needs and the clinicians who serve them. In attempting to eliminate the reliance on the current outmoded E/M coding structure as it is used for purposes of payment, we recognize that the alternative coding and payment structure we proposed lacked an element that we agree is critical in making accurate payment: Namely, accounting for resource costs for the most complex patients. While we believe that our proposal to address the inherent complexity involved in furnishing certain kinds of care combined with our proposed payment for visits that take additional time might have accounted for a significant portion of the resource costs associated with particularly complex patients, we recognize the concerns expressed by commenters that these payment adjustments might be insufficient in some cases. We also recognize the potential negative consequences to clinicians and access to care that could result if we do not ensure that coding and payment appropriately account for patients with the most complex needs.

We do not believe, however, that appropriate care for complex patients currently requiring visit levels 2 through 4 are nearly as dependent on the current payment variations for these services. Given that the significant majority of the volume is concentrated in the level 3 and 4 new and established patient visits, we believe the concerns expressed by commenters about potential shifts in practitioner behavior would be likely to occur. We believe it would simply not be practical for clinicians to prioritize seeing the relatively few potential patients requiring level 2 visits in order to maximize their revenue relative to per patient costs. Likewise, because the level 4 established patient E/M visit is the most commonly reported code among the 5 levels for both new and established patients, any effort to avoid treating patients requiring care that is currently reported as a level 4 visit would likely result in significantly reduced volume and overall revenue for physician practices. We will, however, monitor utilization of these services and make any necessary adjustments through future rulemaking. Additionally, we recognize that because level 5 visits represent a very small proportion of visits reported under current E/M coding, maintaining differential payment rates and documentation for these visits will strike an appropriate balance, simplifying and reducing the burden in distinguishing among CPT codes for the vast majority of E/M visits, while retaining a separate payment rate for the level of care furnished to the most complex patients.

On that basis, we are finalizing for 2021, a single payment rate for levels 2 through 4 E/M office/outpatient visits (one rate for new, and one for established patients) and maintaining separate payment rates for new and established patients for level 5 E/M office/outpatient visits to account for the most complex patients and visits. We are finalizing a policy, modified from our proposal, to develop a set of single payment rates for visit levels 2 through 4 (one each for new and established patients), instead of levels 2 through 5, as proposed. We are finalizing development of payment rates for levels 2 through 4 visits using the weighted average of the current inputs (work RVUs, direct PE inputs, time and specialty mix) assigned to the individual codes, based on the most recent 5 years of utilization for each of the constituent codes. For the level 1 and level 5 office/outpatient E/M visits we are finalizing payment rates that rely on current inputs. The inputs we will use (in the absence of intervening changes to CPT coding or the development of other considerations) to develop proposed values for these services for 2021 appear in the Table 21.

We are also finalizing separate, add-on payments for visit complexity inherently associated with primary care and non-procedural specialty care, as well as separate payment for extended visits via HCPCS G-codes. These codes and the associated policies will be discussed in greater detail in the discussion below. We recognize that many commenters, including the AMA, the RUC, and specialties that participate as members in those committees, have stated intentions of the AMA and the CPT Editorial Panel to revisit coding for E/M office/outpatient services in the immediate future. We note that the 2-year delay in implementation will provide the opportunity for us to respond to the work done by the AMA and the CPT Editorial Panel, as well as other stakeholders. We will consider any changes that are made to CPT coding for E/M services, and recommendations regarding appropriate valuation of new or revised codes, through our annual rulemaking process.

(4) Recognizing the Resource Costs for Different Types of E/M Visits

As a corollary to our proposal to adopt a single payment rate for office and outpatient E/M services for level 2 through 5 E/M visits, we stated that we could better capture differential resource costs and minimize reporting and documentation burden by proposing several additional payment policies and ratesetting adjustments. These additional proposals were intended to reflect the important distinctions between the kinds of visits furnished to Medicare beneficiaries, and to reduce the burden of billing and documentation rules to effectuate payment.

In response to the CY 2018 comment solicitation on burden reduction for E/M visits (82 FR 53163 through 53166), we received several comments that highlighted the inadequacy of the E/M code set to accurately pay for the resources associated with furnishing visits, particularly for primary care visits, and visits associated with treating patients with particular conditions for which there is not additional procedural coding. One commenter stated that the current structure and valuation of the E/M code set inadequately describes the range of services provided by different specialties, and in particular primary care services. This commenter noted that although the 10 office/outpatient E/M codes make up the bulk of the services reported by primary care practitioners, the valuation does not reflect their particular resource costs. Another commenter pointed out that for specialties that principally rely on E/M visit codes to bill for their professional services, the complex medical decision making and the intensity of their visits is not reflected in the E/M code set or documentation guidelines.

In view of the comments we received, we proposed the following adjustments to better capture the variety of resource costs associated with different types of care provided in E/M visits: (1) An E/M multiple procedure payment adjustment to account for duplicative resource costs when E/M visits and procedures with global periods are furnished together; (2) HCPCS G-code add-ons to recognize additional relative resources for primary care visits and inherent visit complexity that require additional work beyond that which is accounted for in the single payment rates for new and established patient levels 2 through level 5 visits; (3) HCPCS G-codes to describe podiatric E/M visits; (4) an additional prolonged face-to-face services add-on HCPCS G-code; and (5) a technical modification to the PE methodology to stabilize the allocation of indirect PE for visit services.

(a) Accounting for E/M Resource Overlap Between Stand-Alone Visits and Global Periods

Under the PFS, E/M services are generally paid in one of two ways: As standalone visits using E/M visit codes, or included in global procedural codes. In both cases, RVUs are allocated to the services to account for the estimated relative resources involved in furnishing professional E/M services. In the case of procedural codes with global periods, the overall resource inputs reflect the costs of the E/M work considered to be typically furnished with the procedure. Therefore, the standalone E/M visit codes are not billable on the same day as the procedure codes unless the billing professional specifically indicates that the visit is separately identifiable from the procedure.

In cases where a physician furnishes a separately identifiable E/M visit to a beneficiary on the same day as a procedure, payment for the procedure and the E/M visit is based on rates generally developed under the assumption that these services are typically furnished independently. In CY 2017 PFS rulemaking, we noted that the current valuation for services with global periods may not accurately reflect much of the overlap in resource costs (81 FR 80209). We were particularly concerned that when a standalone E/M visit occurs on the same day as a 0-day global procedure, there are significant overlapping resource costs that are not accounted for. We believe that separately identifiable visits occurring on the same day as 0-day global procedures have resources that are sufficiently distinct from the costs associated with furnishing one of the 10 office/outpatient E/M visits to warrant payment adjustment. There are other existing policies under the PFS where we reduce payments if multiple procedures are furnished on the same day to the same patient. Medicare has a longstanding policy to reduce payment by 50 percent for the second and subsequent surgical procedures furnished to the same patient by the same physician on the same day, largely based on the presence of efficiencies in PE and pre- and post-surgical physician work. Effective January 1, 1995, the MPPR policy, with the same percentage reduction, was extended to nuclear medicine diagnostic procedures (CPT codes 78306, 78320, 78802, 78803, 78806, and 78807). In the CY 1995 PFS final rule with comment period (59 FR 63410), we indicated that we would consider applying the policy to other diagnostic tests in the future. In the CYs 2009 and 2010 PFS proposed rules (73 FR 38586 and 74 FR 33554, respectively), we stated that we planned to analyze nonsurgical services commonly furnished together (for example, 60 to 75 percent of the time) to assess whether an expansion of the MPPR policy could be warranted. MedPAC encouraged us to consider duplicative physician work, as well as PE, in any expansion of the MPPR policy. Finally, in the CY 2011 PFS final rule with comment period, CMS finalized the application of the MPPR to always-therapy services on the justification that there was significant overlap in the PE portion of these services (75 FR 73233).

Using the surgical MPPR as a template, we proposed that, as part of our proposal to make payment for the E/M levels 2 through 5 at a single PFS rate, we would reduce payment by 50 percent for the least expensive global procedure or visit that the same physician (or a physician in the same group practice) furnishes on the same day as a separately identifiable E/M visit, currently identified on the claim by an appended modifier -25. We believed that the efficiencies associated with furnishing an E/M visit in combination with a same-day global procedure were similar enough to those accounted for by the surgical MPPR to merit a reduction in the relative resources of 50 percent. We estimated that, based on CY 2017 Medicare claims data, applying a 50 percent MPPR to E/M visits furnished as separately identifiable services on the same day as a global procedure would reduce expenditures under the PFS by approximately 6.7 million RVUs. To accurately reflect resource costs of the different types of E/M visits that we previously identified while maintaining work budget neutrality within this proposal, we proposed to allocate those RVUs toward the values of the add-on codes that reflect the additional resources associated with E/M visits for primary care and inherent visit complexity, similar to existing policies. As we articulated in the CY 2012 PFS final rule with comment period, where the aggregate work RVUs within a code family change but the overall actual physician work associated with those services does not change, we make work budget neutrality adjustments to hold the aggregate work RVUs constant within the code family, while maintaining the relativity of values for the individual codes within that set (76 FR 73105).

Comment: Many commenters opposed this proposal. Commenters generally objected to the underlying principle of the application of an MPPR to office/outpatient E/M codes billed on the same day as a minor procedure. Many of these commenters stated that the current billing rules allow these services to be billed only when modifier -25 is used, and that modifier makes it clear that the visits are significant and separately identifiable. Consequently, these commenters stated that no payment adjustment should apply. Many commenters pointed to the RUC review process wherein procedures that are typically furnished with a same day visit are subject to adjustments to account for any resource costs that the RUC considers to be typically duplicative. Commenters stated that by applying an MPPR adjustment to these services, CMS was making an unwarranted second adjustment to account for efficiencies the RUC already considers to be addressed. A few commenters stated that CMS provided insufficient rationale for the choice to propose a 50 percent payment reduction instead of other potential adjustments. Several commenters also pointed out that there are a number of 0-day global procedure codes that are valued not to include any evaluation and management, such as CPT codes 98925-98929 (Osteopathic manipulative treatment (OMT)). Commenters urged CMS to exempt these codes from the MPPR adjustment.

Many commenters, including both physician specialty organizations and patient advocacy groups, expressed concerns about how physicians would respond to the financial incentives resulting from the application of an MPPR adjustment in the context of patient care. Commenters noted that it is often convenient for both the beneficiary and the practitioner to address multiple concerns in a single visit. Many commenters stated that there would be a strong financial incentive to bring patients back for necessary visits on a different day so as to avoid triggering the payment reduction. This would result in inconvenience to the beneficiary, as they would experience treatment delays and be forced to return for a visit. Some commenters suggested this approach would result in additional cost sharing for patients.

Several commenters also highlighted programmatic concerns, stating that an MPPR adjustment would incentivize fractured care and undermine the goals of patient-centered and value-based care. Commenters also requested that CMS clarify whether certain other visits, such as the annual wellness visit, would also be subject to the MPPR adjustment. Others stated that inconsistent guidance, differing policies, and varying edits among the MACs would result in confusion and administrative burden in the implementation of this proposal.

A few commenters, including MedPAC, supported the proposal. MedPAC stated that when a standalone E/M visit occurs on the same day as a procedure, there are efficiencies (for example, in pre-service and post-service clinician work and practice expense) that are not accounted for in the current payment system. MedPAC concluded that applying an MPPR to the procedure or visit would account for these efficiencies. Additional commenters suggested alternative percentages for the reduction, such as 5 percent or 25 percent. A few commenters stated that, if the MPPR were to be implemented, services performed by primary care specialties such as internal medicine, family practice, geriatrics, and pediatrics should be exempt.

Response: We appreciate commenters' feedback on this aspect of the proposal, particularly the comments regarding the potentially troublesome incentives and undesirable consequences associated with the financial incentives.

We continue to have significant concerns about the appropriate payment when codes with global periods, especially 0 and 10-day global periods, are billed on the same day as an E/M visit. Generally, we understand that the global codes are valued to include the typical amount of evaluation and management furnished to patients as part of the service. We understand that when these codes are reported, the -25 modifier is used with an E/M code to report a significant, separately identifiable E/M visit that is furnished on the same day. We also note that the CPT descriptor of the -25 modifier includes language suggesting that the modifier can be used whenever care beyond the usual preoperative and postoperative care associated with the procedure is performed. We note further that the values for global codes are intended to incorporate the typical amount of pre- and post-operative care. However, given the CPT description of the -25 modifier, a separately reportable visit could be billed in any case where the pre- or post-operative care exceeds the typical amount. In contrast, there does not appear to be a way to similarly account for cases where the needs of a particular patient require less than the typical amount of preoperative and postoperative work.

Although many commenters suggested that the overlapping resource costs between global codes and E/M visits billed on the same day have already been accounted for, we are not persuaded by the statements that the RUC process has achieved this goal, and we agree with MedPAC's assessment of the significant problem with valuation of codes that describe global services. We acknowledge and appreciate the efforts of the RUC to address overlaps when they recognize that a code is usually reported with a same day E/M visit. However, as observers to the RUC process, we have noted a general tendency for the RUC to recommend only minor adjustments in physician time and direct PE inputs to account for overlap. We also often make adjustments to the RUC recommended valuation in cases where the agency believes there is overlap between services frequently billed together that has not been adequately addressed through the RUC process. More importantly, even if the RUC valuation process better accounted for the overlapping resource costs, those adjustments would be made to national valuation of particular codes based on snapshot, national claims data for a given year, and would apply to all physicians reporting the services regardless of whether or not these particular physicians were achieving the efficiencies that occur when visits are reported on the same day as codes with global periods. Because this dynamic is an inherent part of valuation based on the typical case for discrete services, we routinely prioritize review of high-volume services. However, we believe the application of this methodology in valuing global services is particularly problematic because there are several thousand codes with global periods and it is impractical to conduct these kinds of code-level reviews as frequently as would be necessary to improve the accuracy of accounting for these efficiencies.

We agree with commenters that if practitioners began deliberately scheduling visits on separate days, when they could be furnished together on the same day, in order to avoid the payment adjustment that could create a significant undue burden for beneficiaries. We have heard this concern before regarding other MPPRs. We note that we have major concerns about this kind of manipulation of patient scheduling, especially as it relates to the fundamental requirement that Medicare payment may be made only for reasonable and necessary medical care, and intend to consider this concern more broadly for future rulemaking. Because we are obligated to develop PFS payments based on the relative resources involved in furnishing services, we believe the total of payments to practitioners for physicians' services from both Medicare and beneficiaries should reflect efficiencies inherent in furnishing two services that can be furnished together without prompting manipulative scheduling practices that result in inconvenience and potential medical risks to Medicare beneficiaries.

After consideration of the public comments, we recognize that we must balance concerns about appropriate valuation with the potential disruptions to patient care suggested by commenters. Though we find the possible practice of scheduling medical services to maximize payment without regard to patient needs or costs to be highly problematic, we take these concerns seriously given the broad-based consensus within the medical and stakeholder community regarding likely behavioral changes in response to the proposal. After weighing these concerns, we are not finalizing the proposal to apply an MPPR to a separately identifiable office/outpatient E/M visit furnished on the same day as a global procedure. We intend to consider ways to address the practice of scheduling patients to avoid payment adjustments in future rulemaking.

Given the variety of comments we received regarding the valuation of specific codes, especially codes with global periods that are perceived to include no resource costs associated with evaluation and management, we intend to reconsider the appropriate global period assigned to certain services. We welcome stakeholder input regarding appropriate global period assignment through our routine valuation processes. We will also continue to consider how to address what we believe to be a significant problem of accurately accounting for duplicative resource costs in ways that will protect Medicare beneficiaries' access to appropriate care.

(b) HCPCS G-Code Add-Ons To Recognize Additional Relative Resources for Certain Kinds of Visits

The distribution of E/M visits is not uniform across medical specialties. We have found that certain specialists, like neurologists and endocrinologists, for example, bill higher level E/M codes more frequently than procedural specialists, such as dermatologists. We believed this tendency reflects a significant and important distinction between the kinds of E/M visits furnished by professionals whose treatment approaches are primarily reported using visit codes versus those professionals whose treatment approaches are primarily reported using available procedural or testing codes. However, based on feedback we received from the medical professionals who furnish primary care and have visits with greater complexity, we did not believe the current visit definitions and the associated documentation burdens are the most accurate descriptions of the variation in work. Instead, we believed these professionals have been particularly burdened by the documentation requirements, given that so much of their medical treatment is described imperfectly by relatively generic visit codes.

Similarly, stakeholders such as the commenters responding to the CY 2018 PFS proposed rule have articulated persuasively that visits furnished for the purpose of primary care also involve distinct resource costs. In developing this proposal, we consulted a variety of resources, including the American Academy of Family Physicians (AAFP) definition of primary care that states that the resource costs associated with furnishing primary care services particularly include time spent coordinating patient care, collaborating with other physicians, and communicating with patients (see https://www.aafp.org/about/policies/all/primary-care.html). Despite our efforts in recent years to pay separately for certain aspects of primary care services, such as through the chronic care management or the transitional care management services, the currently available coding still does not adequately reflect the full range of primary care services, nor does it allow payment to fully capture the resource costs involved in furnishing a face-to-face primary care E/M visit. We recognized that primary care services frequently involve substantial non-face-to-face work, and noted that there is currently coding available to account for many of those resources, such as chronic care management (CCM), behavioral health integration (BHI), and prolonged non-face-to-face services. In light of the existing coding, our proposal only addressed the additional resources involved in furnishing the face-to-face portion of a primary care service. As the point of entry for many patients into the healthcare system, primary care visits frequently require additional time for communicating with the patient, patient education, consideration and review of the patient's medical needs. We believed the proposed value for the single payment rate for the E/M levels 2 through 5 new and established patient visit codes does not reflect these additional resources inherent to primary care visits, as evidenced by the fact that primary care visits are generally reported using level 4 E/M codes. Therefore, to more accurately account for the type and intensity of E/M work performed in primary care-focused visits, we proposed to create a HCPCS add-on G-code that could be billed with the generic E/M code set to adjust payment to account for additional costs beyond the typical resources accounted for in the single payment rate for the levels 2 through 5 visits.

We proposed to create a HCPCS G-code for primary care services, HCPCS code GPC1X (Visit complexity inherent to evaluation and management associated with primary medical care services that serve as the continuing focal point for all needed health care services (Add-on code, list separately in addition to an established patient evaluation and management visit)). As we believe a primary care visit is partially defined by an ongoing relationship with the patient, this code would describe furnishing a visit to an established patient. HCPCS code GPC1X could also be reported for other forms of face-to-face care management, counseling, or treatment of acute or chronic conditions not accounted for by other coding. We noted that we believed the additional resources to address inherent complexity in E/M visits associated with primary care services are associated only with stand-alone E/M visits as opposed to separately identifiable visits furnished within the global period of a procedure. Separately identifiable visits furnished within a global period are identified on the claim using modifier -25, and would be subject to the MPPR. We noted that we created separate coding that describes non-face-to-face care management and coordination, such as CCM and BHI; however, these services describe non-face-to-face care and can be provided by any specialty as long as they meet the requirements for those codes. HCPCS code GPC1X was intended to capture the additional resource costs, beyond those involved in the base E/M codes, of providing face-to-face primary care services for established patients. HCPCS code GPC1X would be billed in addition to the E/M visit for an established patient when the visit includes primary care services. For HCPCS code GPC1X, we proposed a work RVU of 0.07, physician time of 1.75 minutes, no direct PE inputs, and an MP RVU of 0.01. This proposed valuation accounted for the additional resource costs associated with furnishing primary care that distinguishes E/M primary care visits from other types of E/M visits, and would maintain work budget neutrality across the office/outpatient E/M code set. Furthermore, the proposed add-on G-code for primary care-focused E/M services would help to mitigate potential payment instability that could result from our adoption of single payment rates that apply for E/M code levels 2 through 5. As this add-on G-code would account for the inherent resource costs associated with furnishing primary care E/M services, we anticipated that it would be billed with every primary care-focused E/M visit for an established patient. Although we expected that this code would mostly be utilized by the primary care specialties, such as family practice or pediatrics, we were also aware that, in some instances, certain specialists function as primary care practitioners—for example, an OB/GYN or a cardiologist. Although the definition of primary care is widely agreed upon by the medical community and we intended for this G-code to account for the resource costs of performing those types of visits, regardless of Medicare enrollment specialty, we also solicited comment on how best to identify whether or not a primary care visit was furnished, particularly in cases where a specialist is providing those services. For especially complex patients, we also expected that this G-code would be billed alongside the new code we proposed for prolonged E/M services described later in this section.

We also solicited comment on whether this policy adequately addresses the deficiencies in CPT coding for E/M services in describing current medical practice, and concerns about the impact on payment for primary care and other services under the PFS.

We also proposed to create a HCPCS G-code to be reported with an E/M service to describe the additional resource costs for specialty professionals for whom E/M visit codes make up a large percentage of their overall allowed charges and whose treatment approaches we believed are generally reported using the level 4 and level 5 E/M visit codes rather than procedural coding. Due to these factors, the proposed single payment rate for E/M levels 2 through 5 visit codes would not necessarily reflect the resource costs of those types of visits. Therefore, we proposed to create a new HCPCS code GCG0X (Visit complexity inherent to evaluation and management associated with endocrinology, rheumatology, hematology/oncology, urology, neurology, obstetrics/gynecology, allergy/immunology, otolaryngology, cardiology, or interventional pain management-centered care (Add-on code, list separately in addition to an evaluation and management visit)). Given their billing patterns, we believed that these are specialties that apply predominantly non-procedural approaches to complex conditions that are intrinsically diffuse to multi-organ or neurologic diseases. Although some of these specialties are surgical in nature, we believed these surgical specialties are providing increased non-procedural care of high complexity in the Medicare population. The high complexity of these services is reflected in the large proportion of level 4 and level 5 visits that we believed are reported by these specialties, and the extent to which E/M visits are a high proportion of these specialties' total allowed charges. Consequently, these are specialties for which the resource costs of the visits they typically perform are not fully captured in the proposed single payment rate for the levels 2 through level 5 office/outpatient visit codes. When billed in conjunction with standalone office/outpatient E/M visits for new and established patients, the combined valuation more accurately accounts for the intensity associated with higher level E/M visits. To establish a value for this add-on service to be applied with a standalone E/M visit, we proposed a crosswalk to 75 percent of the work and time of CPT code 90785 (Interactive complexity), which would result in a work RVU of 0.25, no direct PE inputs, and an MP RVU of 0.01, as well as 8.25 minutes of physician time based on the CY 2018 valuation for CPT code 90785. Interactive complexity is an add-on code that may be billed when a psychotherapy or psychiatric service requires more resources due to the complexity of the patient. We believed that the proposed valuation for CPT code 90785 would be an accurate representation of the additional work associated with the higher level complex visits. We noted that we believed the additional resources to address inherent complexity in E/M visits are associated with stand-alone E/M visits. Additionally, we acknowledged that resource costs for primary care are reflected with the proposed HCPCS code GPC1X, as opposed to the proposed HCPCS code GCG0X. We note that there are additional codes available that include face-to-face and non-face-to-face work, depending on the code, that previously would have been considered part of an E/M visit, such as the codes for CCM, BHI, and CPT code 99483 (Assessment of and care planning for a patient with cognitive impairment, requiring an independent historian, in the office or other outpatient, home or domiciliary or rest home, with all of the following required elements: Cognition-focused evaluation including a pertinent history and examination; Medical decision making of moderate or high complexity; Functional assessment (e.g., basic and instrumental activities of daily living), including decision-making capacity; Use of standardized instruments for staging of dementia (e.g., functional assessment staging test [FAST], clinical dementia rating [CDR]); Medication reconciliation and review for high-risk medications; Evaluation for neuropsychiatric and behavioral symptoms, including depression, including use of standardized screening instrument(s); Evaluation of safety (e.g., home), including motor vehicle operation; Identification of caregiver(s), caregiver knowledge, caregiver needs, social supports, and the willingness of caregiver to take on caregiving tasks; Development, updating or revision, or review of an Advance Care Plan; Creation of a written care plan, including initial plans to address any neuropsychiatric symptoms, neuro-cognitive symptoms, functional limitations, and referral to community resources as needed (e.g., rehabilitation services, adult day programs, support groups) shared with the patient and/or caregiver with initial education and support. Typically, 50 minutes are spent face-to-face with the patient and/or family or caregiver), which were developed to reflect the additional work of those practitioners furnishing primary care visits. Likewise, we proposed that practitioners in the specialty of psychiatry would not use either add-on code because psychiatrists may utilize CPT code 90785 to describe work that might otherwise be reported with a level 4 or level 5 E/M visit.

Given the broad scope of our proposals related to E/M services, we solicited feedback on any unintended consequences of those proposals. We also solicited comment on any other concerns related to primary care that we might consider for future rulemaking.

Comment: Many commenters stated that CMS needed to clarify the definition of primary care services that would fall under the scope of the primary care complexity add-on.

Some commenters suggested that ambiguity around the definition of the primary care add-on would create additional documentation burden and concern regarding audit risk. For example, many commenters presented examples of physicians of many different specialties furnishing particular services that might be considered to be primary care, such as when a dermatologist prescribes an anti-hypertensive medication, and what documentation would be required to justify billing of the add-on code.

In response to CMS' solicitation for accepted definitions of primary care, the AAFP stated that primary care services are performed by practitioners “specifically trained for and skilled in comprehensive first contact and continuing care for persons with any undiagnosed sign, symptom, or health concern.” The primary care physician “provides definitive care to the undifferentiated patient at the point of first contact and takes continuing responsibility for providing the patient's comprehensive care.” Because the definition of a primary care service hinges on the ongoing relationship with the patient, the AAFP recommended that the add-on code not be limited to established patients, but expanded to new patients when the physician has an expectation that an ongoing relationship will develop.

In response to CMS' request for comment on the circumstances when it would be appropriate for a specialist to bill for primary care services, the AAFP stated that while physicians who are not trained in the core primary care specialties can provide services focused on “specific patient care needs related to prevention, health maintenance, acute care, chronic care, or rehabilitation” but not within the context of “comprehensive, first contact, and continuing care.” Therefore, the AAFP stated that these practitioners were not providing primary care.

Response: We are appreciative of the concerns commenters shared regarding the potential risks of ambiguity in knowing when the code, as proposed, would be appropriately reported, and how the documentation would need to justify its appropriateness. The proposal to use an add-on code to account for the inherent complexity associated with primary care visits was intended to account for appropriate resource variation between primary care and other kinds of visits without imposing additional documentation to justify its being reported for each and every visit with a beneficiary. We note that this proposal was in keeping with our longstanding assessment that there are certain complexities inherent in furnishing some kinds of E/M visits that the current E/M coding and visit levels do not fully recognize. We also believe that in almost all cases where physicians and other professionals are furnishing primary care, information already in the medical record or on the claim, such as physician specialty, diagnosis codes, other service codes billed (chronic care or transitional care management services), or patient relationship codes would serve as sufficient documentation that the furnished visit met the primary care description. For example, we would expect that most practitioners enrolled in such specialties as family medicine, internal medicine, pediatrics, and geriatrics would be billing the primary care visit complexity add-on with every office/outpatient E/M visit. The visits themselves would still need to be medically reasonable and necessary in order for the practitioner to report the service, and the documentation would need to illustrate medical necessity of the visit, but we believe the appropriateness of using the primary care add-on to the visit would not necessitate additional documentation. We also agree with the AAFP that billing this code should not be limited to established patients, as a primary care visit may also be a new patient visit where the expectation of an ongoing relationship is present.

For example, a 68-year-old woman with progressive congestive heart failure (CHF), diabetes and gout on multiple medications transfers care to a new primary care clinician. During a visit to establish care, the clinician discusses the patient's current health issues that includes confirmation that her CHF symptoms have remained stable over the past 3 months. She also denies symptoms to suggest hyper or hypoglycemia, but does note pain in her right wrist and knee. Based on the patient's history, physical exam findings and discussion, the clinician adjusts the dosage of some of the patient's medications, instructs the patient to take acetaminophen for her joint pain, request copies of prior diagnostic studies from his former providers, and orders laboratory tests to assess glycemic control, metabolic status and kidney function. The practitioner also discusses age appropriate prevention with the patient and orders a pneumonia vaccination and screening colonoscopy.

In this case, since the practitioner is furnishing care for conditions across a spectrum of diagnoses and organ systems and coordinating the patient's care among multiple health care providers, the practitioner would report the primary care resource add-on with the appropriate E/M code. We anticipate that the issues addressed by a physician will often track with the physician's specialty training. Therefore, it would not be unexpected for this physician to be reporting the primary care resource add-on code for almost all E/M visits, provided they are furnishing primary care during those visits. We would expect that claims records would include the billing physician's specialty and that the medical record would include the diagnoses for the patient, and the clinician's assessment and plan for that visit. This information would serve as sufficient documentation that the furnished visit met the primary care complexity description and so there would be no need to provide additional documentation.

We agree with AAFP that the vast majority of visits billed with the primary care complexity add-on would be performed by the previously mentioned specialties; however, we also recognize that there is not consensus among medical specialties on this definition. We also believe that there are clinical scenarios when a specialist may perform primary care. For example:

A cardiologist serving beneficiaries in a rural location provides care for complex cardiac conditions as well as primary care in her clinical practice. This practitioner sees a 75-year-old female with hypertension, coronary artery disease, and osteoarthritis for routine follow up care. During the visit, the patient describes a worsening pain in her hip and dizziness for the past month. The clinician notes gait instability and painful motion of her hip, and significant orthostasis upon standing. The clinician observes that the patient has made errors in filling her pill box, and has a new counter anti-histamine that the patient obtained from her friend to help with sleep. The clinician conducts a brief cognitive test, ascertains that the patient had not fallen, and recommends stopping the anti-cholinergic medication, and adjustment of her blood pressure medications with close follow-up monitoring. In addition to reviewing the patients' cardiac status, initiating imaging to evaluate the hip, the clinician also recommends a home safety evaluation and schedules a follow-up visit to include her adult daughter who lives nearby. In this case, since the clinician is furnishing primary care services as well as specialty cardiology services, the physician would appropriately be reporting the primary care complexity add-on in addition to the appropriate E/M visit code. We would expect that the claims record would include the billing physician's specialty. The medical record would also include the diagnoses for the patient and clinician's assessment and plan for that visit.

This information would serve as sufficient documentation that the furnished visit met the primary care and non-procedural specialty care complexity adjustment descriptions and so there would be no need to provide additional documentation.

Comment: Some commenters supported the creation of an add-on code for primary care visit complexity, but pointed out that, as proposed, the primary care add-on code was significantly undervalued, particularly in comparison to the add-on code for visit complexity associated with specialty care. Commenters were critical of the approach CMS used to value the proposed primary care add-on code. A few commenters suggested that CMS should equalize the values between the two add-on codes.

The AAFP did not support the add-on code, and instead suggested that CMS provide a 15 percent increase in payment to physicians who list their primary practice designation as family medicine, internal medicine, pediatrics, or geriatrics.

Response: The proposed valuation for the primary care complexity add-on code was based on the application of family budget neutrality to the proposed changes in other codes and payment policies—most notably applying an MPPR to E/M office/outpatient visit codes furnished in the same day as a procedure. While we continue to believe that budget neutrality within the code family can be an appropriate approach to assess relative resources under the PFS, we appreciate and agree with commenters' concerns regarding the asymmetry between the proposed values for the add-on codes for non-procedural specialty care complexity and primary care complexity. We also note that we are not finalizing the proposed multiple procedure payment adjustment for these E/M office/outpatient visit codes.

Comment: Many commenters did not support separate payment for an add-on code to account for the resource costs for the inherent complexity associated with furnishing non-procedural specialty visits. Commenters assumed that billing the visit complexity add-on code was limited to the specialties included in the code descriptor, constituting specialty-specific payment prohibited by statute. Commenters also stated that CMS was unclear about the rationale for which specialties were included in the code descriptor, and that the explanation provided was ambiguous and not clinically derived. Several commenters expressed concern that CMS did not include the work of a number of specialties that routinely furnish non-procedural specialist care and that primarily report that care through the office/outpatient E/M code set. Many commenters representing these specialties requested that CMS include them in the code descriptor. These include: Nephrology, infectious disease, gastroenterology, psychiatry, ophthalmology, pediatric ophthalmology, orthopedic surgery, sports medicine, neuro-ophthalmology, hepatology, interventional radiology, pulmonology, dermatology, medical oncology, Hematopoietic Cell Transplantation and Cellular Therapy (HCTCT), hospice, and palliative medicine. Some commenters also noted that nurse practitioners are frequently specialized and recommended that they be eligible to bill for the specialty complexity add-on. A few commenters stated that Medicare enrollment specialty was a poor proxy for patient complexity, and that instead, CMS should rely on the patient's diagnosis. Several commenters did not agree with the proposed values for the add-on code, but none provided alternatives for CMS to consider.

Many commenters were also concerned about the documentation requirements that would be associated with the new coding, stating that CMS was replacing the burden of documenting the level of E/M visit with the burden of documenting proper use of the visit complexity add-ons. A few commenters did support the add-on codes in concept as a useful way of adjusting payment for different types of visits, although several commenters pointed out that the add-on codes were not valued sufficiently to overcome any reduction in payment due to the proposed single payment rate for visit levels. Commenters requested that CMS clarify whether the add-on codes could be billed concurrently for the same visit.

Response: We are appreciative of the concerns commenters shared regarding the potential risks of ambiguity in knowing when the code, as proposed, would be appropriately reported, and how the documentation would need to justify its appropriateness. The proposal to use an add-on code to account for the inherent complexity associated with non-procedural specialty care visits was intended to account for appropriate resource variation between non-procedural specialty care and other kinds of visits without imposing additional documentation to justify its being reported for each and every visit with a beneficiary. We noted that this proposal was in keeping with our longstanding assessment that there are certain complexities inherent in furnishing some kinds of E/M visits that the visit levels do not fully recognize. We also believed that in almost all cases where physicians and other professionals are furnishing specialty care that is centered around separately reportable office/outpatient visit codes (as opposed to procedural codes with global periods, for example), information already in the medical record or in the claims history for that practitioner, such as physician specialty, diagnosis codes, and/or other service codes billed (chemotherapy administration) would serve as sufficient documentation that the furnished visit met the description of non-procedural specialty care. For example, we would expect that most practitioners enrolled in the specialties used as descriptive examples in the proposed descriptor would report the complexity add-on with every office/outpatient E/M visit. The visits themselves would still need to be medically reasonable and necessary in order for the practitioner to report the service, and the documentation would need to illustrate medical necessity of the visit, but we believe the appropriateness of routinely using the add-on to the visit would not necessitate additional documentation for each and every visit.

A clinical scenario for the use of this proposed add-on code would be a 72-year-old female with colon cancer who sees her oncologist to discuss her treatment plan, including surgical and chemotherapeutic options. Since this E/M visit focuses on oncologic care, the physician would report the specialty care add-on in addition to the appropriate E/M visit code. It would not be unexpected for this physician to be reporting the non-procedural specialty care complexity add-on code for almost all E/M visits, provided they are providing oncologic care during those visits. We would expect that the claims record would include the billing physician's specialty. The medical record would also include the diagnoses for the patient and clinician's assessment and plan for that visit. This information would serve as sufficient documentation that the furnished visit met the description of non-procedural specialty care complexity and so there would be no need to provide additional documentation.

We also agree with commenters that the code descriptor omitted several specialties that provide this type of visit, such as nephrology, psychiatry, pulmonology, infectious disease, and hospice and palliative care medicine. We also believe that there are circumstances where specialties not included in the code descriptor would appropriately bill this add-on code for inherent visit complexity. As discussed previously, appropriate reporting of the specialty care resource add-on code should be apparent based on the nature of the clinical issues addressed at the E/M visit, and not limited by the practitioner's specialty.

In cases where appropriate reporting of the add-on code is not as apparent, we understand that some degree of visit-specific documentation might be necessary for purposes of demonstrating that the add-on code was reported appropriately. For example, a physician enrolled in Medicare as a pathologist may serve a broader role in a rural community, including furnishing primary care. In this instance, we expect that there would be documentation in the medical record to illustrate that it was appropriate for this physician to bill using the primary care complexity add-on. However, we do not believe that such scenarios would represent the majority of instances of appropriate use of the code. Additionally, we note that information usually included in medical documentation, combined with diagnosis coding, would likely suffice for purposes of documentation.

After consideration of the comments, we are finalizing for 2021 the proposal to introduce add-on codes that would adjust payment for new and established E/M office/outpatient visits to account for inherent complexity in primary care and non-procedural specialty care. We are finalizing the code descriptor for the add-on code for inherent complexity of E/M furnished primary care (HCPCS code GPC1X) as described in Table 22. We are also finalizing the code descriptor for the add-on code for inherent complexity of E/M furnished with non-procedural specialty care (HCPCS code GCG0X) in Table 22, and we note that we have included refinements to refer to additional kinds of non-procedural specialty care as suggested by commenters and clarifying that it could be reported for both new and established patients. We note that we are not including in the descriptor references to specialty care that routinely involves significant procedural interventions, such as interventional radiology and dermatology, since we do not agree with commenters that these kinds of specialty care are routinely considered to be “non-procedural specialist care.” However, we note that when clinical circumstances support it, practitioners not enrolled among the specialties expressly listed within the code descriptor may bill the inherent visit complexity add-on codes. We are also finalizing as proposed the code descriptor for inherent complexity of E/M furnished with primary care (HCPCS code GPC1X) with the refinement of including that it could be reported for both new and established patients. The add-on codes to account for inherent complexity in primary care and non-procedural specialty care could only be reported with E/M office/outpatient levels 2 through 4 visits. We note that for this and the other HCPCS G-codes we are finalizing for CY 2021, we are retaining the placeholder HCPCS code numbers until they are replaced through our standard process.

We again note that we are finalizing the add-on codes for primary care and non-procedural specialized care complexity adjustment, as well as other payment and coding changes to be implemented for E/M office/outpatient visits for CY 2021. We are specifying the later date, in great part, so that we have an opportunity to fully consider public comments and other important input from stakeholders on potential refinements in code and service definitions that can be used with ease, when appropriate, and by practitioners whom we currently believe are disproportionately burdened under the current coding and documentation requirements and, more generally, other important information involving coding and payment for E/M services.

After considering the public comments, we agree that the complexity associated with furnishing a primary care visit is equivalent to that associated with furnishing a non-procedural specialty care visit, and therefore, the two codes should be valued equally. We are finalizing, for 2021, the input values for these two codes as reflected in Table 23.

We note that these inputs reflect our proposed valuation of the non-procedural specialty complexity code, based on a modified crosswalk from CPT code 90785 as discussed in the CY 2019 PFS proposed rule (83 FR 35842).

We also note that, while our policy will result in our inclusion of these input values in developing proposed rates for CY 2021, we also recognize that we routinely accept recommendations from the RUC and other stakeholders regarding appropriate valuation for PFS services, and would consider such recommendations regarding appropriate valuation for these services under our usual, annual process for receiving recommendations for PFS services.

In response to the commenters' concerns regarding the interactions between this code and the other codes that describe more complex E/M visits, we are clarifying that these add-on codes are intended to serve as a corollary to the single payment rate for E/M office/outpatient visit codes defined as levels 2 through 4 to provide for more appropriate recognition of the variations in resources involved in furnishing those services, and not to be used in association with E/M office/outpatient level 1 or level 5 visits.

While we believe that in most cases practitioners would only be reporting either the primary care complexity code or non-procedural specialty care complexity code, we believe there are some very rare circumstances where use of both codes might be appropriate. We return to our example of the cardiologist serving beneficiaries in a rural location who provides care for complex cardiac conditions as well as primary care in her clinical practice. Since the needs of the community prompt this physician to provide primary care services as well as specialty cardiology services, we would expect that she would report the primary care complexity add-on code and non-procedural specialty care complexity add-on code in addition to the appropriate E/M visit code when both primary care and non-procedural specialty care are furnished in connection with E/M visits.

(c) HCPCS G-Coded To Describe Podiatric E/M Visits

As described earlier, the vast majority of podiatric visits are reported using lower level E/M codes, with most E/M visits billed at a level 2 or 3, reflecting the type of work done by podiatrists as part of an E/M visit. Therefore, while the proposed consolidation of documentation and payment for E/M code levels 2 through 5 was intended to better reflect the universal elements of E/M visits across specialties and patients, we believed that podiatric E/M visits were not accurately represented by the consolidated E/M structure. In order for payment to reflect the resource costs of podiatric visits, we proposed to create two HCPCS G codes, HCPCS codes GPD0X (Podiatry services, medical examination and evaluation with initiation of diagnostic and treatment program, new patient) and GPD1X (Podiatry services, medical examination and evaluation with initiation of diagnostic and treatment program, established patient), to describe podiatric E/M services. Under this proposal, podiatric E/M services would be billed using these G-codes instead of the generic office/outpatient E/M visit codes (CPT codes 99201 through 99205 and 99211 through 99215). We proposed to create these separate G-codes for podiatric E/M services to differentiate the resources associated with podiatric E/M visits rather than propose a negative add-on adjustment relative to the proposed single payment rates for the generic E/M levels 2 through 5 codes. Therefore, we proposed to create separate coding to describe these services, taking into account that most podiatric visits are billed as level 2 or 3 E/M codes. We based the coding structure and code descriptor on CPT codes 92004 (Ophthalmological services: Medical examination and evaluation with initiation of diagnostic and treatment program; comprehensive, new patient, 1 or more visits) and 92012 (Ophthalmological services: Medical examination and evaluation, with initiation or continuation of diagnostic and treatment program; intermediate, established patient), which describe visits specific to ophthalmology. To accurately reflect payment for the resource costs associated with podiatric E/M visits, we proposed a work RVU of 1.35, a physician time of 28.11 minutes, and direct PE inputs totaling $22.53 for HCPCS code GPD0X, and a work RVU of 0.85, physician time of 21.60 minutes, and direct PE inputs totaling $17.07 for HCPCS code GPD1X. These values were based on the average rate for the level 2 and 3 E/M codes (CPT codes 99201-99203 and CPT codes 99211-99212, respectively), weighted by podiatric volume.

Comment: Commenters opposed making separate payment for podiatric E/M visits using distinct coding. Commenters stated that, by creating separate coding and payment to describe these types of visits, CMS was singling out podiatrists and devaluing podiatric physicians' status among their peer physicians. Some commenters questioned the legality of our proposal since it would effectively pay physicians of different specialties different amounts for services that CPT considers to be the same. Furthermore, commenters stated that the proposed rates for podiatric E/M visits did not reflect the resource costs associated with providing podiatric care. Commenters also objected to the use of the ophthalmology visit codes as a precedent, stating that the significant practice expense associated with ophthalmologic visits was the impetus for separate coding for those services.

Response: Based on our consideration of the information presented by commenters, we are persuaded that there could be a perceived devaluation of the breadth and value of care associated with podiatric visits by use of separate coding for these visits. Given these potential negative consequences, we are not finalizing the proposal to adopt separate coding for podiatric E/M visits. However, as our discussion in the preceding sections reflects, we do not agree with the commenters that all office/outpatient visits furnished by physicians are only distinguishable by visit levels under the current CPT definitions. Instead, we believe that, like procedural services, visit services and their associated relative resource costs can vary greatly by the kind of care that is provided by particular physicians. We also believe that physician specialties can often reflect different approaches to medical care, and that the nomenclature used to describe and define various clinical specialties is useful for purposes of distinguishing among the types of services, including visits, furnished by physicians using these different approaches.

We also acknowledge that our proposal should have clearly articulated that we were not proposing to prohibit podiatrists from reporting the E/M office/outpatient visit codes under circumstances where those codes more accurately described visits with particular patients or, more broadly, visits generally furnished by particular podiatrists.

We also would like to note that our analysis of claims data indicates that the vast majority of podiatric visits are reported as level 2 and 3 visits. We believe that these claims data are an important piece of evidence regarding the relative resource costs of office/outpatient visits that are podiatric in nature. Therefore, we do not agree with the commenters that stated that our proposal did not reflect resource-based valuation, since we consider Medicare claims data to be one of the best sources of data regarding the resources involved in furnishing PFS services.

After considering the comments regarding this proposal, we are not finalizing our proposal to create separate coding for podiatric E/M services and establish payment rates for podiatric E/M visits based on historical billing patterns. We acknowledge the commenters' concerns that creating specific coding as we proposed could suggest a devaluation of services furnished by podiatrists. Therefore, we are not finalizing creation of specific coding and payment values for podiatric E/M visits. For CY 2021, podiatric E/M visits would be reported and paid using the E/M coding and payment structure applicable to other E/M office/outpatient visits.

(d) Adjustment to the PE/HR Calculation

As we explain in section II.B. of this final rule, Determination of Practice Expense (PE) Relative Value Units (RVUs), we generally allocate indirect costs for each code on the basis of the direct costs specifically associated with a code and the greater of either the clinical labor costs or the work RVUs. Indirect expenses include administrative labor, office expense, and all other PEs that are not directly attributable to a particular service for a particular patient. Generally, the proportion of indirect PE allocated to a service is determined by calculating a PE/HR based upon the mix of specialties that bill for a service.

As described earlier, E/M visits comprise a significant portion of allowable charges under the PFS and are used broadly across specialties such that our proposed changes can greatly impact the change in payment at the specialty level and at the practitioner level. Our proposals sought to simplify payment for E/M visit levels 2 through 5, and to additionally take into consideration that there are inherent differences in primary care-focused E/M services and in more complex E/M services such that those visits involve greater relative resources, while seeking to maintain overall payment stability across specialties. However, establishing a single PFS rate for new and established patient E/M levels 2 through 5 would have a large and unintended effect on many specialties due to the way that indirect PE is allocated based on the mixture of specialties that furnish a service. The single payment rates proposed for E/M levels 2 through 5 could not reflect the indirect PE previously allocated differentially across those 8 codes. Historically, a broad blend of specialties and associated PE/HR has been used in the allocation of indirect PE and MP RVUs to E/M services to determine payment rates for these services. As this proposal would have significantly altered the PE/HR allocation for the office/outpatient E/M codes and any previous opportunities for the public to comment on the data would not have applied to these kinds of E/M services, we did not believe it was in the public interest to allow the allocation of indirect PE to have such an outsized impact on the payment rates for this proposal. Due to the magnitude of the proposed coding and payment changes for E/M visits, it was unclear how the distribution of specialties across E/M services would change. We were concerned that such changes could produce anomalous results for indirect PE allocations since we did not yet know the extent to which specialties would utilize the proposed simplified E/M codes and proposed G-codes. In the past, when utilization data are not available or do not accurately reflect the expected specialty mix of a new service, we have proposed to crosswalk the PE/HR value from another specialty (76 FR 73036). As such, we proposed to create a single PE/HR value for E/M visits (including all of the proposed HCPCS G-codes discussed above) of approximately $136, based on an average of the PE/HR across all specialties that bill these E/M codes, weighted by the volume of those specialties' allowed E/M services. We believed that this was consistent with the methodology used to develop the inputs for the proposed simplified E/M payment for the levels 2 through 5 E/M visit codes, and that, for purposes of consistency, the new PE/HR should be applied across the additional E/M codes. We believed a new PE/HR value would more accurately reflect the mix of specialties billing both the generic E/M code set and the add-on codes. If we finalized this proposal, we would have considered revisiting the PE/HR after several years of claims data become available.

The following is a summary of the comments we received on this proposal.

Comment: Many commenters noted that the application of a single PE/HR value to E/M visit codes had significant, if unintended, consequences for the allocation of indirect PE across the PFS. Commenters also stated that CMS did not provide enough information as to how we arrived at the PE/HR value, which resulted in difficulty among external stakeholders in modeling the proposal.

Response: We appreciate commenters highlighting the broad ramifications of this proposal.

After consideration of these comments, we will not be finalizing a separate PE/HR for office/outpatient E/M visits.

(e) HCPCS G-Code for Extended Visit Services

Time is often an important determining factor in the level of care, which we consider in our proposal described earlier that physicians and other practitioners can use time as the basis for documenting and billing the appropriate level of E/M visit for purposes of Medicare payment. Currently there is inadequate coding to describe services where the primary resource of a service is physician time. CPT codes 99354 (Prolonged evaluation and management or psychotherapy service(s) (beyond the typical service time of the primary procedure) in the office or other outpatient setting requiring direct patient contact beyond the usual service; first hour (List separately in addition to code for office or other outpatient Evaluation and Management or psychotherapy service)) and 99355 (Prolonged evaluation and management or psychotherapy service(s) (beyond the typical service time of the primary procedure) in the office or other outpatient setting requiring direct patient contact beyond the usual service; each additional 30 minutes (List separately in addition to code for prolonged service)) describe additional time spent face-to-face with a patient and may be billed when the applicable amount of time exceeds the typical service time of the primary procedure.

Stakeholders have informed CMS that the “first hour” time threshold in the descriptor for CPT code 99354 is difficult to meet and is an impediment to billing these codes (81 FR 80228). In response to stakeholder feedback and as part of our proposal to implement a single payment rate for E/M visit levels 2 through 5 while maintaining payment accuracy across the specialties, we proposed to create a new HCPCS code GPRO1 (Prolonged evaluation and management or psychotherapy service(s) (beyond the typical service time of the primary procedure) in the office or other outpatient setting requiring direct patient contact beyond the usual service; 30 minutes (List separately in addition to code for office or other outpatient Evaluation and Management or psychotherapy service)). Given that the physician time of HCPCS code GPRO1 is half of the physician time assigned to CPT code 99354, we proposed a work RVU of 1.17, which is half the work RVU of CPT code 99354.

Comment: Many commenters, including the AMA, were supportive of the creation of this code in isolation from the rest of the E/M coding and payment proposals. Other commenters stated that the code was unnecessary, that current coding was sufficient to account for additional time spent with patients, and that it was unrealistic to expect that most physicians would be able to meet the time threshold in enough volume to offset the negative impacts of the single payment rate for E/M office/outpatient new and established patient visit levels 2 through 5. Some commenters suggested more documentation would be necessary to bill this new code. Many commenters also stated that referring to this code as “prolonged services” was inconsistent with coding conventions and CPT definitions, as the CPT Editorial Panel defined prolonged services as an unusual amount of time spent beyond the typical time and these commenters understood from the proposal that the code was intended to be reported more frequently. Many commenters stated that it would be difficult to assess how the code might be used without more specific guidelines regarding how time would be counted, particularly with regard to how many minutes would be assumed to be associated with the companion visit code and whether or not we adopt the usual CPT coding convention for appropriate reporting of the time-based code when over half the number of minutes (16 in this case) have been spent. Several commenters suggested that 16 minutes beyond the time associated with the proposed single payment rate (31 minutes as described by many of these commenters) would mean that the code could only be reported after 47 minutes spent with an established patient. These commenters suggested that that threshold would likely result in the code being used rarely.

Response: We agree with commenters that current coding describing prolonged services is not sufficient to capture additional time spent with patients, especially in the context of creating a single payment rate for office/outpatient E/M levels 2 through 4. We believe that time is a critical resource cost for physicians and other practitioners, and the time spent with patients is a great benefit to Medicare beneficiaries. We also note that we are required by statute to consider time, along with intensity, in establishing the work relative value units that determine PFS payments. We are therefore finalizing for 2021 separate payment for HCPCS code GPRO1, and are finalizing the input values as proposed.

We appreciate commenters' concerns regarding the current definitions and use of “prolonged” as applying to unusually long visits. We believe that time spent with patients ought to vary based on the particular needs of the patient and that variations in time spent face-to-face with the patient can be critical in defining differences between the services being furnished. Consequently, we agree that for many practitioners, times that extend beyond what we, or the CPT Editorial Panel, consider to be typical under the current visit code descriptors and definitions, might, in actual practice, be routine. We also note that many services, such as psychotherapy, are currently defined and paid based on the duration of the service.

However, since commenters have suggested that the term “prolonged” has been established in coding convention as applying only to unusually long visits as opposed to use in describing routine variations in the amount of time spent during visits with patients, we believe using an alternative term, like “extended visit” may serve to underscore our expectation that the length of some visits might exceed the typical length, but would not be unusual for certain practices or patients.

We also note that, for audit purposes, we would expect the medical record to reflect that the billing practitioner actually spent the amount of time with the patient described by the code and that the visit itself, in its entirety, was medically necessary; but we would not expect additional documentation to demonstrate that the difference in time between the visit code and the extended visit code was, in isolation of the visit, medically necessary.

For CY 2021, we are finalizing a coding and payment policy to account for the additional resources required when practitioners need to spend extended time with their patients during particular E/M office/outpatient level 2 through 4 visits, regardless of the kind of care the practitioner is furnishing or whether or not the medical complexity of the visit is the determining factor for the length of visit. After considering the comments, we believe that 30 additional minutes (which, in accordance with CPT coding conventions for timed codes, can be reported after 15 additional minutes is spent with the patient) is an appropriate interval of time after which to reflect the additional resource costs associated with patient visits that require more time than is typical for the visit. After considering the questions and concerns expressed by commenters about how the new add-on code would be used, and in particular, the number of minutes that would serve as the basis for counting time toward an extended visit (for example, whether we would look to the typical time for the companion E/M code level and use the CPT coding convention for time-based codes), we acknowledge that it would not be workable to use the same conventions as are used for the prolonged service codes.

Under the current conventions used in reporting the existing prolonged service codes, the prolonged codes are defined by a set number of additional minutes beyond time associated with individual companion visit codes. For example, the initial prolonged services code describes 60 minutes of prolonged time beyond the time associated with the individual companion visit code. The current level 5 existing patient code is described by CPT as typically requiring 40 minutes with the patient, so that when reporting 99215 with the prolonged service code, the time being described is a total of 100 minutes (40 minutes for the level 5 code and 60 minutes for the initial prolonged code). Under applicable coding conventions, the code is reportable, when at least half the number of described minutes for the prolonged code is spent. This means that the initial prolonged service code can be reported with a level 5 existing patient code after 70 minutes (40 minutes for the full time associated with the level 5 visit and 30 minutes for half the number of minutes described by the initial prolonged service code).

We recognize that to implement use of either new or even the existing prolonged services code in the context of using a single payment rate for codes of varying levels, we would need to be clear about what time should be used for the companion visit codes. Currently, practitioners rely on the CPT “typical” times to determine the time for the visit codes of varying levels. This means that the thresholds for visit time required before the prolonged services can be reported are higher when higher level visits are reported in comparison to lower level visits. Under current payment rates, this situation is offset to some degree by the higher overall payment in circumstances where the higher level visit code is reported.

Because we are finalizing a single payment rate for levels 2-4, however, use of the “typical” CPT times as the basis for reporting add-on codes that describe additional time would mean that lower level visits that take more time would be paid at higher rates than higher visit rates that take the same amount of time. We believe that because we are paying a single rate for these services (as each of the codes describe a single “typical” for purposes of payment), we should also use a single number of minutes for purposes of reporting time-based add-on codes: The weighted average of the “typical” times associated with each of the codes that comprise the single payment rate.

One approach to implementing this would be to revise our billing rules to instruct practitioners to use the weighted average of the “typical” times associated with each of the codes that comprise the single payment rate, instead of the “typical” CPT times associated with the individual billed codes. We could apply this definition broadly to specify use of the weighted average typical times for level 2-4 codes regardless of whether or not they are being reported with time-based add-on codes, but we do not want to prevent practitioners from appropriately reporting visits based on the time defined as typical under the CPT code descriptors for office/outpatient E/M visits, especially since we are adopting a policy to allow clinicians to use time as the basis for documentation and code selection. Alternatively, we could require practitioners to use the weighted average of the “typical” times associated with each of the codes that comprise the single payment rate only in cases where time-based add-on codes are also being reported. However, we believe using two separate rules, especially one that deviates from the typical times established for the different visit levels that will continue to be routinely reported by a wide range of practitioners, would be likely to cause confusion.

After consideration of these issues and considering the alternatives, we are finalizing a code descriptor for the extended visit code that describes a single range of minutes that applies to the overall duration of face-to-face time during the visit, without regard to which level 2, 3, or 4 E/M office/outpatient visit was reported. This range is 34 to 69 minutes, so that the add-on code for extended visits would be appropriately reported in any case where a medically necessary E/M office/outpatient visit, reported using levels 2 through 4, required between 34 and 69 minutes (for established patients) and between 38 and 89 minutes (for new patients) of face-to-face time with the billing practitioner. We calculated the lower end of the range by summing the weighted average of intraservice times for the component codes that make up the single payment rate for level 2 through 4 visits (23 minutes for new and 19 minutes for established) and the additional amount of time required to bill the proposed add-on code (15 minutes under coding convention for prolonged services). The upper range of the use of the extended visit code is 69 minutes for established patients and 89 minutes for new patients.

We note that to report the current prolonged codes or the new extended services code, practitioners need to note that the requisite number of minutes were spent with the patient. We also note that we are finalizing the policy to allow practitioners the choice to use time as the basis for code selection for level 2 through 5 all office/outpatient E/M codes beginning in 2021 regardless of whether or not counseling and/or coordination of care accounts for more than 50 percent of the face-to-face physician/patient encounter. Under the new policy, then, any visits that exceed the length of the time ranges of the level 2 through 4 visit codes plus the extended visit code, could be reported using the level 5 visit code and the existing prolonged services code. Table 24A illustrates these rules:

The new extended services code will be described as GPRO1 (Extended time for evaluation and management service(s) in the office or other outpatient setting, when the visit requires direct patient contact of 34-69 total face-to-face minutes overall for an existing patient or 38-89 minutes for a new patient (List separately in addition to code for level 2 through 4 office or other outpatient Evaluation and Management service)). We again note that we are finalizing payment and coding changes to be implemented for E/M office/outpatient visits for CY 2021. We will consider any changes that are made to CPT coding, including for prolonged services, and recommendations regarding appropriate valuation of new or revised codes, through our annual rulemaking process.

In order to estimate the potential impact of the proposed changes in the proposed rule, we modeled the results of several options and examined the estimated resulting impacts in overall Medicare allowed charges by physician specialty. Because we are not finalizing many of the changes for CY 2019 as proposed, we believe the inclusion of those same discussions in this final rule is unnecessary and could potentially be confusing. We point readers to the CY 2019 PFS proposed rule, (83 FR 35844 through 35847) for discussion of the analyses relevant to the proposals. For analysis regarding the potential impacts of the alternatives considered in development of this final rule, we direct readers to the section VII. of this final rule, Regulatory Impact Analysis, in addition to the discussion that follows.

To compare the overall payment impact for the changes in payment for visit services between the current policy as of 2018 and the policies we are finalizing starting in 2021, we provide a narrative example in the paragraph below and Table 24B. In CY 2018, a physician would bill a level 4 E/M visit and document using the existing documentation framework for a level 4 E/M visit. The payment rate would be approximately $109 in the office setting. In CY 2021, the physician would bill the same visit code for a level 4 E/M visit, with the option to document the visit according to the minimum documentation requirements for a level 2 E/M visit if they choose to document based on MDM, or the 1995 or 1997 guidelines, or to document on the basis of time. The physician might also bill either of the proposed add-on codes (HCPCS codes GPC1X or GCG0X) depending on the type of patient care furnished, and could bill the extended services code if she met the time threshold for this code. The combined payment rate for the E/M visit code, plus the extended services code, and either HCPCS code GPC1X or GCG0X would be approximately $170.

(f) Alternatives Considered

We considered a number of other options for simplifying coding and payment for E/M services to align with the proposed reduction in documentation requirements and to better account for the resources associated with inherent complexity, visit complexity, and visits furnished on the same day as a 0-day global procedure. As we are finalizing a policy very similar to one of the alternatives we considered for the proposed rule, we believe it would be confusing to include a detailed discussion of that policy as an alternative considered. We therefore direct interested readers to the CY 2019 PFS proposed rule (83 FR 35847).

Section 101(f) of the MACRA added a new subsection (r) under section 1848 of the Act entitled Collaborating with the Physician, Practitioner, and Other Stakeholder Communities to Improve Resource Use Measurement. Section 1848(r) of the Act requires the establishment and use of classification code sets: Care episode and patient condition groups and codes; and patient relationship categories and codes. As described in the CY 2018 PFS final rule, we finalized use of Level II HCPCS Modifiers as the patient relationship codes and finalized that Medicare claims submitted for items and services furnished by a physician or applicable practitioner on or after January 1, 2018, should include the applicable patient relationship codes, as well as the NPI of the ordering physician or applicable practitioner (if different from the billing physician or applicable practitioner). We noted that for CY 2018, reporting of the patient relationship modifiers would be voluntary and the use and selection of the modifiers would not be a condition of payment (82 FR 53234). The patient relationship codes are as follows: X1: Continuous/broad; X2: Continuous/focused; X3: Episodic/focused; X4: Episodic/broad; and X5: Only as ordered by another physician. These codes are to be used to help define and distinguish the relationship and responsibility of a clinician with a patient at the time of furnishing an item or service, facilitate the attribution of patients and episodes to one or more clinicians, and to allow clinicians to self-identify their patient relationships.

We considered proposing the use of the care episode and patient relationship codes to adjust payment for E/M visits to the extent that these codes are indicative of differentiated resources provided in E/M visits, and we considered using these codes as an alternative to the proposed use of G-codes to reflect visit complexity inherent to evaluation and management in primary care and certain other specialist services, as a way to more accurately reflect the resource costs associated with furnishing different kinds of E/M visits. We solicited comment on this alternative. We were particularly interested in whether the modifiers would accurately reflect the differences between resources for E/M visits across specialties and would therefore be useful to adjust payment differentially for the different types of E/M visits that we previously identified. The following is a summary of the comments we received on these items.

Comment: AAFP urged CMS not to use the patient relationship codes for the purposes of making differential payment, stating that these modifiers were never intended to adjust payment or reflect visit complexity, only to denote the relationship of the beneficiary and practitioner at any given encounter. One commenter stated that using patient relationship codes to adjust payment was an intriguing idea that should be researched further.

Response: We thank commenters for their input and will consider whether to adopt these codes for use to adjust payment at a later date through notice and comment rulemaking. We note, however, that we believe the use of the continuous care patient relationship codes stands as a good example of evidence in the claims record to support use of the primary care inherent complexity add-on code, as discussed previously.

In Table 24C, we estimate the specialty level impacts of the E/M payment and coding policies we are finalizing for 2021, calculated as if they were implemented for CY 2019.

Table 24C illustrates the estimated specialty level impacts associated with implementing our finalized policies for E/M coding and payment in CY 2019, rather than delaying until CY 2021. Table 24C shows the estimated impacts of adopting single payment rates for new and established patient E/M office/outpatient visit levels 2 through 4 (with the rates determined using input values that reflect the 5 year weighted average of current inputs for codes describing those visit levels), keeping separate rates for new and established patient E/M visit level 5 (with the rates determined using the current input values for level 5 visits), and adopting add-on codes with equal rates to adjust for the inherent visit complexity of primary care and non-procedural specialty care (with the rates determined using the input values from the proposed rule for the non-procedural specialty care complexity code). Under our finalized policies, specialties who disproportionately report lower level visits, such as podiatry, and specialties that report office/outpatient visits in conjunction with minor procedures, such as dermatology, would see the significant increases. Specialties that predominantly furnish higher level visits would have their payment decreases significantly mitigated by the maintenance of the level 5 visit and the add-on codes for inherent visit complexity for primary and non-procedural specialty care. Specialties that do not furnish office/outpatient visits generally would see modest reductions in overall payment.

We note that because our original proposal was developed more generally to maintain overall RVUs within the range of codes describing office/outpatient E/M visits, but, in response to public comment, we are not finalizing several elements of those proposals including, and especially, the multiple procedure payment reduction relating to global services billed with same day E/M services, the overall number of RVUs allocated to office/outpatient services would be increased relative to other PFS services. Under our established methodology and consistent with the governing statute, we usually apply a budget neutrality adjustment in the PFS conversion factor to account for the changes in overall RVUs. This adjustment would apply to all PFS services, and we are not finalizing any deviation from that approach for 2021. However, we also note that in some cases, we have proposed and finalized inputs for particular services that are designed to maintain the overall RVUs for those services despite changes in coding. For more detailed information on this approach to addressing valuation for families of services, we direct readers to the CY 2012 PFS final rule with comment period (76 FR 73105). We also note that while it has been our standard practice to avoid scaling the full set of work RVUs to maintain budget neutrality, we could also consider that alternative given the significance of office/outpatient visit codes in PFS relativity. Were we to consider either of these alternative approaches for 2021, we would address them through future rulemaking.

g. Emergency Department and Other E/M Visit Settings

As we mentioned above, the E/M visit code set is comprised of individual subsets of codes that are specific to various clinical settings including office/outpatient, observation, hospital inpatient, emergency department, critical care, nursing facility, domiciliary or rest home, and home services. Some of these code subsets have three E/M levels of care, while others have five. Some of these E/M code subsets distinguish among levels based heavily on time, while others do not. Recent public comments have noted that some E/M code subsets intersect more heavily than others with hospital conditions of participation (CoP). For example, the American Psychiatric Association (APA) submitted a letter to CMS indicating that Medicare requires specific documentation in the medical record as part of the CoPs for inpatient psychiatric facilities. The APA believed that the required initial psychiatric evaluation for inpatients currently closely follows the E/M criteria for CPT codes 99221-99223, which are the codes that would be used to bill for these services. The APA stated that any changes in these E/M codes, without corresponding changes in the CoPs, could lead to the unintended consequence of adding to the burden of documentation by essentially requiring two different sets of data or areas of focus to be included, or two different documentation formats being required.

Regarding emergency department visits (CPT codes 99281-99285), we received more recent feedback through our coordinated efforts with ONC this year, emphasizing that these codes may benefit from a coding or payment compression into fewer levels of codes, or that documentation rules may need to be reduced or altered. However, in public comments to the CY 2018 PFS proposed rule, commenters noted several issues unique to the emergency department setting that we believe require further consideration. For example, commenters stated that intensity, and not time, is the main determinant of code level in emergency departments. They requested that CMS use caution in changing required elements for documentation so that medical information used for legal purposes (for example, meeting the prudent layperson standard) is not lost. They urged caution and requested that CMS not immediately implement any major changes. They recommended refocusing documentation on presenting conditions and medical decision-making. Some commenters were supportive of leaving it largely to the discretion of individual practitioners to determine the degree to which they should perform and document the history and physical exam in the emergency department setting. Other commenters suggested that CMS encourage use of standardized guidelines and minimum documentation requirements to facilitate post-treatment evaluation, as well as analysis of records for various clinical, legal, operational and other purposes. The commenters discussed the importance of extensive histories and exams in emergency departments, where usually there is no established relationship with the patient and differential diagnosis is critical to rule out many life-threatening conditions. They were cognizant of the need for a clear record of services rendered and the medical necessity for each service, procedure, diagnostic test, and MDM performed for every patient encounter.

In addition, although the RUC is in the process of revaluing this code set, some commenters stated that the main issue is not that the emergency department visit codes themselves are undervalued. Rather, these commenters noted that a greater percentage of emergency department visits are at a higher acuity level, yet payers often do not pay at a higher level of care and the visit is often inappropriately down-coded based on retrospective review. These commenters noted that the documentation needed to support a higher level of care is too burdensome or subjective. In addition, it seems that policy proposals regarding emergency department visits billed by physicians might best be coordinated with parallel changes to payment policy for facility billing of these codes, which would require more time and analyses.

Accordingly, we did not propose any changes to the emergency department E/M code set or to the E/M code sets for settings of care other than office-based and outpatient settings at this time. However, we solicited public comment on whether we should make any changes to it in future years, whether by way of documentation, coding, and/or payment and, if so, what the changes should be.

Consistent with public feedback to date, we are taking a step-wise approach and limiting our policy proposals this year to the office/outpatient E/M code set (and the limited proposal above regarding documentation of medical necessity for home visits in lieu of office visits). We may consider expanding our efforts more broadly to additional sections of the E/M visit code set in future years, and solicited public comment broadly on how we might proceed in this regard.

We received a few comments on this solicitation. We thank the commenters for their feedback and will take it into account for future rulemaking.

(h) Implementation Date

We proposed that our proposed E/M visit policies would be effective January 1, 2019. However, we were sensitive to commenters' suggestions that we should consider a multi-year process and proceed cautiously, allowing adequate time to educate practitioners and their staff; and to transition clinical workflows, EHR templates, institutional processes and policies (such as those for provider-based practitioners), and other aspects of practitioner work that would be impacted by these policy changes. We emphasized that our proposed documentation changes for office/outpatient E/M visits would be optional, and practitioners could choose to continue to document these visits using the current framework and rules, which may reduce the need for a delayed implementation. Nevertheless, practitioners who choose a new documentation framework may need time to deploy it. A delayed implementation date for our documentation proposals would also allow the AMA time to develop changes to the CPT coding definitions and guidance prior to our implementation, such as changes to MDM or code definitions that we could then consider for adoption. It would also allow other payers time to react and potentially adjust their policies. Accordingly, we solicited comment on whether a delayed implementation date, such as January 1, 2020, would be appropriate for our proposals.

Comment: With the exception of several documentation proposals, most of the commenters urged us not to finalize the E/M visit proposals, or to delay their implementation by at least one year. With the exception of our proposals regarding home E/M visits and reducing redundant recording of data, most commenters recommended that CMS engage in further work with the AMA and other stakeholders in the coming months to develop alternative approaches. Many commenters noted that our proposals regarding home E/M visits and reducing redundant recording of data would not impact payment or require extensive training or other extended preparatory time. The commenters largely recommended that CMS finalize these proposals for 2019, but defer other documentation, coding and payment reforms to future years after obtaining additional stakeholder input. Some commenters did recommend that CMS finalize the proposed policy to allow choice among documentation methodologies while working with stakeholders to refine any coding and payment changes. A few commenters were supportive of a minimum level 2 documentation standard and intimated that this could be accomplished without changes to coding or payment, but other commenters opposed this approach.

Many stakeholders, including some commercial insurers and EHR-related associations, commented that if CMS were to finalize its proposals, the industry would need more time to prepare and CMS should delay implementation a year or more. Some commenters noted that CMS should consider not setting a date for implementation until the necessary structure is in place. Most commenters, including some insurers, urged CMS to work with the AMA or other stakeholders on alternative policies. For example, some insurers were concerned that the proposals would not allow them to understand the true complexity of care being delivered and recommended that documentation requirements should continue to be linked to complexity and, if the proposal were finalized, CMS would need to monitor various program integrity issues. They were concerned that the collapsed payment rate for level 2 through 5 E/M visits would disincentivize treatment of complex patients. Some health plans expressed concern that medical record data used to inform their payments and risk adjustment and HEDIS scores might be impacted. In response to our proposed rule, several organizations stated they are forming workgroups to conduct data analysis and develop policy alternatives, including the AMA and the Cognitive Care Alliance. The American Health Insurance Plans believed documentation requirements should continue to be linked to complexity.

Commenters were concerned there would not be enough time for developers and clinicians to make changes, leading to confusion in the market and disparate systems with other payers, in addition to other concerns about the coding and payment proposals discussed further below. The commenters were concerned about not having enough time to develop differing documentation based on payer status, and said that the burden on the clinician to determine which payer and which documentation method should not be underestimated.

Response: After consideration of public comments, we are not finalizing aspects of our proposal that would have reduced payment when E/M office/outpatient visits are furnished on the same day as certain procedures, established separate podiatric E/M visit codes, or standardized the allocation of PE RVUs for E/M visit codes. After considering the comments, for 2019 we are finalizing several of our documentation proposals that will provide some significant and immediate burden reduction but are unrelated to changes to payment and coding. Specifically, we are finalizing the proposals regarding home visits and redundant data recording (discussed above), as proposed and effective January 1, 2019. We are delaying implementation of our other final policies relating to payment for E/M visits to January 1, 2021.

J. Teaching Physician Documentation Requirements for Evaluation and Management Services

1. Background

Per 42 CFR part 415, subpart D, Medicare Part B makes payment under the PFS for teaching physician services when certain conditions are met, including that medical record documentation must reflect the teaching physician's participation in the review and direction of services performed by residents in teaching settings. Under § 415.172(b), for certain procedural services, the participation of the teaching physician may be demonstrated by the notes in the medical records made by a physician, resident, or nurse; and for E/M visits, the teaching physician is required to personally document their participation in the medical record. We received stakeholder feedback suggesting that documentation requirements for E/M services furnished by teaching physicians are burdensome and duplicative of notations that may have previously been included in the medical records by residents or other members of the medical team.

2. Implementation

We proposed to revise our regulations to eliminate potentially duplicative requirements for notations that may have previously been included in the medical records by residents or other members of the medical team. These modifications are intended to align and simplify teaching physician E/M service documentation requirements. We believed these changes would reduce burden and duplication of effort for teaching physicians. We proposed to amend § 415.172(b) to provide that, except for services furnished as set forth in §§ 415.174 (concerning an exception for services furnished in hospital outpatient and certain other ambulatory settings), 415.176 (concerning renal dialysis services), and 415.184 (concerning psychiatric services), the medical records must document that the teaching physician was present at the time the service is furnished. Additionally, the revised paragraph would specify that the presence of the teaching physician during procedures and E/M services may be demonstrated by the notes in the medical records made by a physician, resident, or nurse. We also proposed to amend § 415.174, by deleting paragraph (a)(3)(v) which requires the teaching physician to document the extent of their participation in the review and direction of the services furnished to each beneficiary. We proposed to add new paragraph (a)(6) to § 415.174 to provide that the medical record must document the extent of the teaching physician's participation in the review and direction of services furnished to each beneficiary, and that the extent of the teaching physician's participation may be demonstrated by the notes in the medical records made by a physician, resident, or nurse.

Comment: Many commenters supported the proposed regulatory changes without modifications.

Response: We appreciate the commenters' support of our proposals.

Comment: Some commenters disagreed with the proposed changes and indicated teaching physicians should continue to be personally responsible for documenting their physical presence and for verification with patients of all medical team members' documentation as it relates to the patient encounters. The commenters were concerned that the proposed changes would shift the documentation burden and responsibility from the teaching physician to the resident or nurse who has a limited number of hours of work. One commenter stated that the nurse would not be an inherent party to the teaching physician's or resident's involvement in an E/M service.

Response: While we appreciate the commenters' concerns, the purpose of these revisions to the regulations is to eliminate potentially duplicative requirements for notations that may have previously been included in the medical records by residents or other members of the medical team. The teaching physician continues to be responsible for reviewing and verifying the accuracy of notations previously included by residents and members of the medical team, along with further documenting the medical record if the notations previously provided did not accurately demonstrate the teaching physician's involvement in an E/M service. After consideration of the comments received, we are finalizing the proposed changes to §§ 415.172(b) and 415.174 without modification.

K. GPCI Comment Solicitation

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)(D) of the Act requires us to establish the GPCIs using the most recent data available. The last GPCI update was implemented in CY 2017; therefore, we are required to review and make any necessary revisions to the GPCIs for CY 2020. 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). Some commenters have continued to express concerns regarding some of the data sources used in developing the indices for PFS geographic adjustment purposes, specifically that we use residential rent data as a proxy for commercial rent in the rent index component of the PE GPCI—that is, the data that are used to develop the office rent component of the PE GPCI. We will continue our efforts to identify a nationally representative commercial rent data source that could be made available to CMS. In support of that effort, we were particularly interested in, and solicited comments regarding potential sources of commercial rent data for potential use in the next GPCI update for CY 2020.

We received a few comments in response to the comment solicitation, and we appreciate the commenters' feedback and input. We will consider the suggestions and information received for future rulemaking, and in particular for the CY 2020 statutorily required update to the GPCIs.

L. Therapy Services

1. Repeal of the Therapy Caps and Limitation To Ensure Appropriate Therapy

Section 50202 of the Bipartisan Budget Act of 2018 amended section 1833(g) of the Act, effective January 1, 2018, to repeal the application of the Medicare outpatient therapy caps and the therapy cap exceptions process while retaining and adding limitations to ensure therapy services are furnished when appropriate. Section 50202 also adds section 1833(g)(7)(A) of the Act which requires that after expenses incurred for the beneficiary's outpatient therapy services for the year have exceeded one or both of the previous therapy cap amounts, all therapy suppliers and providers must continue to use an appropriate modifier such as the KX modifier on claims for subsequent services in order for Medicare to pay for the services. We implemented this provision by continuing to use the existing KX modifier. By applying the KX modifier to the claim, the therapist or therapy provider is confirming that the services are medically necessary as justified by appropriate documentation in the medical record. Just as with the incurred expenses for the prior therapy cap amounts, there is one amount for physical therapy (PT) and speech language pathology (SLP) services combined and a separate amount for occupational therapy (OT) services. These KX modifier threshold amounts are indexed annually by the Medicare Economic Index (MEI). For CY 2018, the KX modifier threshold amount was $2,010 for PT and SLP services combined, and $2,010 for OT. After the beneficiary's incurred expenditures for outpatient therapy services exceed the KX modifier threshold amount for the year, claims for outpatient therapy services without the KX modifier are denied.

Along with the KX modifier thresholds, section 50202 also adds section 1833(g)(7)(B) of the Act that retains the targeted medical review (MR) process (first established through section 202 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)), but at a lower threshold amount of $3,000. For CY 2018 (and each successive calendar year until 2028, at which time it is indexed annually by the MEI), the MR threshold is $3,000 for PT and SLP services and $3,000 for OT services. The targeted MR process means that not all claims exceeding the MR threshold amount are subject to review as they once were.

Section 1833(g)(8) of the Act, as re-designated by section 50202 of the Bipartisan Budget Act of 2018, retains the provider liability procedures which first became effective January 1, 2013, extending limitation of liability protections to beneficiaries who receive outpatient therapy services, when services are denied for certain reasons, including failure to include a necessary KX modifier.

2. Payment for Outpatient PT and OT Services Furnished by Therapy Assistants

Section 53107 of the Bipartisan Budget Act of 2018 (BBA of 2018) amended the Act to add a new subsection 1834(v) that addresses payment for outpatient therapy services for which payment is made under section 1848 or section 1834(k) of the Act that are furnished on or after January 1, 2022, in whole or in part by a therapy assistant (as defined by the Secretary). The new section 1834(v)(1) of the Act provides for payment of those services at 85 percent of the otherwise applicable Part B payment amount for the service. In accordance with section 1834(v)(1) of the Act, the reduced payment amount for such outpatient therapy services is applicable when payment is made directly under the PFS as specified in section 1848 of the Act, for example when payment is made to therapists in private practice (TPPs); and when payment is made based on the PFS as specified in section 1834(k)(3) of the Act, for example, when payment is made for outpatient therapy services identified in sections 1833(a)(8) and (9) of the Act, including payment to providers that submit institutional claims for therapy services such as outpatient hospitals, rehabilitation agencies, skilled nursing facilities, home health agencies and comprehensive outpatient rehabilitation facilities (CORFs). The reduced payment rate under section 1834(v)(1) of the Act for outpatient therapy services when furnished in whole or in part by a therapy assistant is not applicable to outpatient therapy services furnished by critical access hospitals for which payment is made as specified in section 1834(g) of the Act.

To implement this payment reduction, section 1834(v)(2)(A) of the Act requires us to establish a new modifier, in a form and manner specified by the Secretary, by January 1, 2019 to indicate, in the case of an outpatient therapy service furnished in whole or in part by a therapy assistant, that the service was furnished by a therapy assistant. Although we generally consider all genres of outpatient therapy services together (PT/OT/SLP), we did not believe there are therapy assistants in the case of SLP services, so we proposed to apply the new modifier only to services furnished in whole or in part by a physical therapist assistant (PTA) or an occupational therapy assistant (OTA). Section 1834(v)(2)(B) of the Act requires that each request for payment or bill submitted for an outpatient PT or OT service furnished in whole or in part by a therapy assistant on or after January 1, 2020, must include the established modifier. As such, the modifier will be required to be reported on claims for outpatient PT and OT services with dates of service on and after January 1, 2020, when the service is furnished in whole or in part by a therapy assistant, regardless of whether the reduced payment under section 1834(v)(1) of the Act is applicable. However, the required payment reductions do not apply for these services until January 1, 2022, as required by section 1834(v)(1) of the Act.

To implement this provision, we proposed to establish two new modifiers to separately identify PT and OT services that are furnished in whole or in part by PTAs and OTAs, respectively. We proposed to establish two modifiers because the incurred expenses for PT and OT services are tracked and accrued separately in order to apply the two different KX modifier threshold amounts as specified by section 1833(g)(2) of the Act; and the use of the two proposed modifiers would facilitate appropriate tracking and accrual of services furnished in whole or in part by PTAs and OTAs. We additionally proposed that these two new therapy modifiers would be added to the existing three therapy modifiers—GP, GO, and GN—that are currently used to identify all therapy services delivered under a PT, OT or SLP plan of care, respectively. The addition of the two new modifiers as therapy modifiers would bring the total to five therapy modifiers, with four therapy modifiers used to report and track PT and OT services, instead of two. The GP, GO, and GN modifiers have existed since 1998 to track outpatient therapy services that were subject to the therapy caps. Although the therapy caps were repealed through amendments made to section 1833(g) of the Act by section 50202 of the Bipartisan Budget Act of 2018, as discussed in the above section, the statute continues to require that we track and accrue incurred expenses for all PT, OT, and SLP services, including those above the specified per beneficiary amounts for medically necessary therapy services for each calendar year; one amount for PT and SLP services combined, and another for OT services.

For purposes of implementing section 1834(v) of the Act through rulemaking as required under section 1834(v)(2)(C) of the Act, we proposed to define therapy assistant as an individual who meets the personnel qualifications set forth at § 484.4 of our regulations for a PTA and OTA. We proposed that the two new therapy modifiers would be used to identify services furnished in whole or in part by a PTA or an OTA; and, that these new therapy modifiers would be used instead of the GP and GO modifiers that are currently used to report PT and OT services delivered under the respective plan of care whenever the service is furnished in whole or in part by a PTA or OTA.

Effective for dates of service on and after January 1, 2020, the new therapy modifiers that identify services furnished in whole or in part by a PTA or OTA would be required to be used on all therapy claims instead of the existing modifiers GP and GO, respectively. As a result, in order to implement the provisions of the new subsection 1834(v) of the Act and carry out the continuing provisions of section 1833(g) of the Act as amended, we proposed that, beginning in CY 2020, five therapy modifiers be used to track outpatient therapy services instead of the current three. These five therapy modifiers would include two new therapy modifiers to identify PT and OT services furnished by PTAs and OTAs, respectively, and three existing therapy modifiers—GP, GO and GN—that will be used when PT, OT, and SLP services, respectively, are fully furnished by therapists or when fully furnished by or incident to physicians and NPPs.

The creation of therapy modifiers specific to PT or OT services delivered under a plan of care and furnished in whole or in part by a PTA or OTA would necessitate that we make changes to the descriptors of the existing GP and GO modifiers to clarify which qualified professionals, for example, therapist, physician, or NPP, can furnish the PT and OT services identified by these modifiers, and to differentiate them from the therapy modifiers specific to the services of PTAs and OTAs. We also proposed to revise the GN modifier descriptor to conform to the changes to the GP and GO modifiers by clarifying the qualified professionals that furnish SLP therapy services.

We proposed to define the two new therapy modifiers for services furnished in whole or in part by therapy assistants and to revise the existing therapy modifier descriptors as follows:

• New PT Assistant services modifier (to be used instead of the GP modifier currently reported when a PTA furnishes services in whole or in part): Services furnished in whole or in part by a physical therapist assistant under an outpatient physical therapy plan of care;
• New OT Assistant services modifier (to be used instead of the GO modifier currently reported when an OTA furnishes services in whole or in part): Services furnished in whole or in part by occupational therapy assistant under an outpatient occupational therapy plan of care.

We proposed that the existing GP modifier, “Services delivered under an outpatient physical therapy plan of care” would be revised to read as follows:

• Revised GP modifier: Services fully furnished by a physical therapist or by or incident to the services of another qualified clinician—that is, physician, nurse practitioner, certified clinical nurse specialist, or physician assistant—under an outpatient physical therapy plan of care.

We proposed that the existing GO modifier, “Services delivered under an outpatient occupational therapy plan of care” would be revised to read as follows:

• Revised GO modifier: Services fully furnished by an occupational therapist or by or incident to the services of another qualified clinician—that is, physician, nurse practitioner, certified clinical nurse specialist, or physician assistant—under an outpatient occupational therapy plan of care.

We proposed that the existing GN modifier, “Services delivered under an outpatient speech-language pathology plan of care” would be revised to be consistent with the revisions to the GP and GO modifiers to read as follows:

• Revised GN modifier: Services fully furnished by a speech-language pathologist or by or incident to the services of another qualified clinician—that is, physician, nurse practitioner, certified clinical nurse specialist, or physician assistant—under an outpatient speech-language pathology plan of care.

As finalized in CY 2005 PFS final rule with comment period (69 FR 66351 through 66354), and as required as a condition of payment under our regulations at §§ 410.59(a)(3)(iii), 410.60(a)(3)(iii), and 410.62(a)(3)(iii), the person furnishing outpatient therapy services incident to the physician, PA, NP or CNS service must meet the therapist personnel qualification and standards at § 484.4, except for licensure per section 1862(a)(20) of the Act. As such, we noted that only a therapist, not a therapy assistant, can furnish outpatient therapy services incident to the services of a physician or a non-physician practitioner (NPP), so the new PT- and OT-Assistant therapy modifiers cannot be used on the line of service when the rendering practitioner identified on the claim is a physician or an NPP. For therapy services billed by physicians or NPPs, whether furnished personally or incident to their professional services, the GP or GO modifier is required for those PT or OT services furnished under an outpatient therapy plan.

We proposed that all services that are furnished in whole or in part by a PTA or OTA are subject to the use of the new therapy modifiers. A new therapy modifier would be required to be used whenever a PTA or OTA furnishes all or part of any covered outpatient therapy service. However, we did not believe the provisions of section 1834(v) of the Act were intended to apply when a PTA or OTA performs portions of the service such as administrative tasks that are not related to their qualifications as a PTA or OTA. Rather, we believed the provisions of section 1834(v) of the Act were meant to apply when a PTA or OTA is involved in providing some or all of the therapeutic portions of an outpatient therapy service. We proposed to define “in part,” for purposes of the proposed new modifiers, to mean any minute of the outpatient therapy service that is therapeutic in nature, and that is provided by the PTA or OTA when acting as an extension of the therapist. Therefore, a service furnished in part by a therapy assistant would not include a service for which the PTA or OTA furnished only non-therapeutic services that others without the PTA's or OTA's training can do, such as scheduling the next appointment, greeting and gowning the patient, and preparing or cleaning the room. We remind therapists and therapy providers that we do not recognize PTAs and OTAs to wholly furnish PT and OT evaluations and reevaluations, that is, CPT codes 97161 through 97164 for PT and CPT codes 97165 through 97168 for OT, but to the extent that they do furnish part of an evaluative service, the appropriate therapy modifier must be used on the claim to signal that the service was furnished in part by the PTA or OTA, and the payment reduction should be applied once it goes into effect. We continue to believe that the clinical judgment and decision making involved in furnishing an evaluation or re-evaluation is similar to that involved with establishing the therapy plan that can only be established by a therapist, physician, or NPP (NP, CNS, or PA) as specified in § 410.61 of our regulations. In addition, PTAs and OTAs are not recognized separately in the statute to enroll as practitioners for purposes of independently billing for their services under the Medicare program. For these reasons, Pub. 100-02, Medicare Benefits Policy Manual, Chapter 15, sections 230.1 and 230.2 state that PTAs and OTAs may not provide evaluative or assessment services, make clinical judgments or decisions; develop, manage, or furnish skilled maintenance program services; or take responsibility for the service. Although we expect that the therapist will continue to furnish the majority of an evaluative procedure service, section 1834(v)(1) of the Act requires that the adjusted payment amount (85 percent of the otherwise applicable Part B payment amount) be applied when a therapy assistant furnishes a therapy service in part, including part of an evaluative service.

Additionally, we would like to clarify that the requirements for evaluations, including those for documentation, are separate and distinct from those for plans of care (plans). The plan is a statutory requirement under section 1861(p) of the Act for outpatient PT services (and through sections 1861(g) and 1861(ll)(2) of the Act for outpatient OT and SLP services, respectively) and may only be established by a therapist or physician. Through § 410.61(b)(5), NPs, CNSs, and PAs are also permitted to establish the plan. This means that if the evaluative procedure is furnished in part by an assistant, the new therapy modifiers that distinguish services furnished by PTAs or OTAs must be applied to the claim; however, the plan, which is not separately reported or paid, must be established by the supervising therapist who furnished part of the evaluation services as specified at § 410.61(b). When an evaluative therapy service is billed by a physician or an NPP as the rendering provider, either the physician/NPP or the therapist furnishing the service incident to the services of the physician or NPP, may establish the therapy plan in accordance with § 410.61(b). All regulatory and subregulatory plan requirements continue to apply.

To implement the new statutory provision at section 1834(v)(2)(A) of the Act, we proposed to establish two new therapy modifiers to identify the services furnished in whole or in part by PTAs and OTAs. As required under section 1834(v)(2)(B) of the Act, claims from all providers of PT and OT services furnished on and after January 1, 2020, will be required to include these new PT- and OT-Assistant therapy modifiers for services furnished in whole or in part by a PTA or OTA. We proposed that these therapy modifiers would be required, when applicable, in place of the GP and GO modifiers currently used to identify all PT and OT services furnished under an outpatient plan of care, including the services furnished by PTAs and OTAs. To test our systems ahead of the required implementation date of January 1, 2020, we anticipated allowing voluntary reporting of the new modifiers at some point during CY 2019, which we would announce to our contractors, therapists and therapy providers through a Change Request, as part of our usual change management process.

We solicited comments on these proposals.

The following is a summary of the comments we received on these proposals.

Comment: Some commenters opposed paying differently for the services furnished in whole or in part by OTAs and PTAs while other commenters supported the payment differential, with a few comparing it to the 85 percent payment rate for certain NPPs.

Response: While we appreciate hearing various commenters' views, the new statutory provision at section 1834(v) of the Act added by section 53107 of the Bipartisan Budget Act of 2018 (Pub. L. 115-123, enacted February 9, 2018) requires CMS to implement through notice and comment rulemaking a reduced rate for the services furnished on or after January 1, 2022, in whole or in part by therapy assistants at 85 percent of the otherwise applicable Part B payment amount for the service. Section 1834(v) of the Act further requires that we establish a modifier to identify services furnished in whole or in part by a therapy assistant by January 1, 2019, and that claims for outpatient therapy services furnished in whole or in part by therapy assistant on or after January 1, 2020, must include the modifier. As such, we are following statutory directives to implement section 1834(v) of the Act.

Comment: Some commenters supported our proposal to establish two modifiers, instead of one, to separately identify PT and OT services that are furnished in whole or in part by PTAs and OTAs, respectively. Several commenters expressed support for our proposal defining therapy assistant as an individual who meets the personnel qualifications set forth in § 484.4 of our regulations for PTAs and OTAs.

Response: We thank the many commenters who supported our proposals to (a) establish two new modifiers instead of one to separately define therapy assistant services furnished by PTAs and OTAs, and (b) to define the PTA and OTA as individuals who meet the personnel qualifications set forth in regulations at 42 CFR part 484. Although we stated that these personnel qualifications were located at § 484.4, we note that, effective January 13, 2018, the personnel qualifications for PTAs and OTAs were moved from § 484.4 and redesignated without changes at §§ 484.115(g) and (i), respectively (82 FR 4504, January 13, 2017).

Comment: Most commenters did not choose to comment specifically about our proposal to establish the two new modifiers as therapy modifiers for services furnished by PTAs and OTAs that are to be used instead of the current GP and GO modifiers used to capture the these services. However, several commenters opposed the structure we proposed for the modifiers that would be required on therapy claims when services are furnished by PTAs and OTAs which would change from the current two therapy modifiers, GP and GO, to identify all therapy services delivered under an outpatient PT or OT plan of care, to four therapy modifiers. Instead, they urged us to adopt new modifiers that would be used in tandem with, rather than replace, the respective existing GP and GO therapy modifiers on the same claim line of service to identify services delivered in whole or in part by PTAs and OTAs. The commenters stated that their suggested approach would mitigate administrative burden for all PT and OT professionals, as well as therapy assistants. Specifically, commenters stated that their therapists and therapy assistants use the same chargemasters, and their charge systems are hardcoded to default to either the PT or OT therapy modifier (GP or GO) that are now required on these claims, which saves both the therapists and therapy assistants from having to add the GP or GO therapy modifier to each claim line for the services they furnish. According to the commenters, under our proposal, both therapists and assistants would have to add one of the four modifiers for PT and OT services to the claim line and they would no longer be able to default their charge systems to report the GP or GO modifiers. This would mean that new PTA- and OTA-specific systems would need to be duplicated, creating undue chargemaster confusion and adding training and education burden to both therapists and therapy assistants for reporting one the four therapy modifiers. The commenters stated that adopting their proposal to add the new therapy assistant modifiers to the same claim line of service alongside the existing GP and GO modifiers eliminates the administrative burden on therapists since only therapy assistants would be required to use the new modifiers, and charge systems could remain hardcoded to default to the GP or GO modifiers as they are now to include all PT and OT services.

Response: We appreciate the commenters' concerns and agree that their suggested approach to use the new modifiers for services furnished in whole or in part by PTAs and OTAs on the same line of service as the existing GP and GO therapy modifiers, instead of replacing them, has merit, since it preserves the current use of the GP and GO therapy modifiers to identify outpatient therapy services furnished by both therapists and therapy assistants under a PT or OT plan of care. We also agree that adding the new therapy assistant modifiers to the same claim line of service alongside the existing GP and GO modifiers will prevent undue burden for physical therapists and occupational therapists, as only PTAs and OTAs will add the new modifiers to the claim line of service.

After considering the comments on the establishment and use of the new modifiers, the statutory changes, and our other payment policies for therapy services, we are not finalizing the new modifiers for therapy assistant services as therapy modifiers as proposed. Instead, we will use the two new modifiers for therapy assistant services as a type of payment modifier that will be used alongside of, instead of replacing, the GP and GO therapy modifiers, to identify the services furnished in whole or in part by PTAs or OTAs that will be tied to the reduced payment for the respective PT or OT discipline in CY 2022. By using the new modifiers for therapy assistants as payment modifiers, rather than therapy modifiers, services furnished by PTAs and OTAs will continue to be captured by the GP and GO therapy modifiers, as they are now, when delivered under the an outpatient PT or OT plan of care, respectively. We considered the commenters' requests not to use the two new modifiers for services furnished by PTAs and OTAs as therapy modifiers in addition to the current two therapy modifiers, GP and GO, respectively. We took into account their concerns about the reporting burden for both therapists and therapy assistants that would result if we were to double the number of therapy modifiers used to report the services delivered under PT and OT plans of care. We also considered the unintended consequences that could result from changing the long-standing nature of our three existing discipline-specific therapy modifiers used to report all services delivered under an outpatient plan of care for PT, OT, and SLP services. These consequences could be significant, especially since the existing modifiers are used by many other government payers and private insurers. Additionally, our claims processing systems have numerous edits tied to the therapy modifiers because these modifiers are used to track and accrue incurred costs of therapy services furnished under the outpatient therapy benefit by therapists and their assistants, as well as those services that physicians and NPPs furnish and bill as therapy services. Consequently, we agree with commenters that it is preferable to use the two new modifiers as payment modifiers to identify the services furnished in whole or in part by therapy assistants, instead of changing the overall configuration of our therapy modifiers established through CY 1998 rulemaking and designed to track services to the then therapy cap amounts for outpatient therapy services furnished under PT, OT, and SLP plans of care.

This approach—using payment modifiers rather than therapy modifiers—necessitates revisions to the descriptors we proposed for the new therapy assistant modifiers. As therapy modifiers, the new modifiers were proposed to define the PTA or OTA services delivered under an outpatient PT or OT plan of care, respectively. Modifying our proposal to instead use the two new modifiers as payment modifiers, we are removing references to the services being delivered under an outpatient PT or OT plan of care because the plan is specific to the GP and GO therapy modifiers. We also retained the terminology of “in whole or in part” as part of the definition of these therapy assistant payment modifiers, as specified at section 1834(v) of the Act, and clarified the therapy assistants' services are included as part of the corresponding PT or OT discipline. As a result, we are finalizing the two new payment modifiers to identify services furnished in whole or in part by a PTA and OTA, modifiers CQ and CO (C, capital letter O), respectively as follows.

• PTA Modifier CQ: Outpatient physical therapy services furnished in whole or in part by a physical therapist assistant.
• OTA Modifier CO: Outpatient occupational therapy services furnished in whole or in part by an occupational therapy assistant.

Because we are establishing the two new modifiers for the services furnished in whole or in part by a PTA or OTA as payment modifiers instead of as therapy modifiers, it is no longer necessary to revise the existing GP, GO, and GN therapy modifiers as we initially proposed to differentiate which professionals may furnish services using the GP, GO, and GN therapy modifiers in the absence of therapy modifiers used specifically to identify services furnished in whole or in part by PTAs and OTAs. As a result, we are not finalizing our proposal to change the descriptors for the current therapy modifiers: GP, GO and GN—their descriptors and their use remains unchanged, as follows:

• GP—services delivered under an outpatient physical therapy plan of care.
• GO—services delivered under an outpatient occupational therapy plan of care.
• GN—services delivered under an outpatient speech-language pathology plan of care.

As part of the proposed rule, we noted that therapy assistants are precluded from furnishing outpatient therapy services incident to the services of a physician or NPP, and as such, the new PTA and OTA modifiers cannot be used on the line of service of the professional claim when the rendering NPI identified on the claim is a physician or an NPP. This is because PTAs and OTAs don't meet the qualifications of a physical or occupational therapist that is set forth as conditions of payment in the regulatory provisions at §§ 410.59(a)(3)(iii) and 410.60(a)(3)(iii). We are clarifying that this payment policy applies similarly when the CQ and CO modifiers are used as payment modifiers. We plan to revise our manual provisions at Pub. 100-02, Medicare Benefit Policy Manual, Chapter 15, section 230, as appropriate, to reference the new CQ and CO modifiers that will be used to identify services furnished in whole or in part by a PTA or OTA starting in CY 2020.

Comment: Several commenters referenced therapist and therapy assistant shortages, and stated that this discounted payment rate for services furnished in whole or in part by therapy assistants will increase financial hardships to retain therapists and therapy assistants. Commenters requested that CMS exempt therapy services furnished in rural areas, health professional shortage areas (HPSAs), and medically underserved areas (MUAs) from application of the reduced payment rate when a therapy assistant is involved.

Response: We understand the commenters' concerns. Given the parameters of the statute at section 1834(v) of the Act, we do not have authority to exempt services furnished in whole or in part by therapy assistants from application of the reduced payment rate when furnished in rural areas, HPSAs, and MUAs. As we do for other services, we will monitor for potential access issues and consider how to address them should they arise. We do not currently have information on the geographic distribution or quantity of services furnished in whole or in part by PTAs and OTAs, and look forward to reviewing this information as it becomes available after January 1, 2020, when the new therapy assistant modifiers are required to be reported on claims.

Comment: Many commenters expressed concerns about different aspects of our proposed interpretation of the statutory reference to services furnished “in whole or in part” by PTAs and OTAs. Commenters also expressed concern about our proposal to define “in part” to mean any minute of therapeutic services delivered by a PTA or OTA. Several commenters raised concerns about the reduced payment associated with the future use of the new modifiers to describe services furnished in whole or in part by PTAs and OTAs, and asked us to consider the practical day-to-day implications of using these modifiers. These commenters stated that requiring the new modifiers to be applied when any minute of outpatient therapy is delivered by the PTA or OTA has serious implications for beneficiary access to care.

Some commenters stated that documenting in the medical record the therapy services that are delivered in part by a therapy assistant will be burdensome for those services not fully or wholly furnished by an OTA or PTA, and some suggested that the reduced payment rates should only apply when the PTA or OTA furnishes the entire service.

Many commenters objected to our definition of “in part” and offered several alternatives. Some commenters suggested that we should not define when a PTA or OTA furnishes a service in whole or in part, but instead consider whether a therapist furnishes a service in whole or in part, stating that the PTA/OTA modifiers should not apply in cases where the therapist, not the assistant, furnishes the majority of the service.

Several commenters were concerned that applying the modifier when any minute of outpatient therapy is delivered by a therapy assistant has serious implications for beneficiary access to care and asked us to not finalize the definition of “in part” until CY 2020 rulemaking, when the new modifiers for services of therapy assistants are required on claims. The commenters stated that this delay would allow CMS additional time to engage in an extensive discussion with various external stakeholders in order to consider their input before CY 2020 rulemaking. Instead of waiting to define “in part” during CY 2020 rulemaking, one commenter suggested that we adopt a blended fee schedule rate for services furnished for more than 50 percent of the time by a therapist, including the services of both the 15-minute timed codes or untimed service-based codes, meaning that the rate paid would be 92.5 percent, halfway between 85 and 100 percent. Other commenters stated that the modifiers to identify services of PTAs and OTAs should not apply when the therapist fully furnished the services and the assistant merely lent a second pair of hands during the treatment for example, for safety reasons, such as where the patient is morbidly obese or has flaccid limb(s) and the completion of such services require more than one therapy professional.

Many commenters raised concerns about the application of our definition of “in part” when therapists and therapy assistants work together collaboratively. Some commenters raised concerns about applying the modifier for therapy assistant services when therapists and their assistants work interchangeably without a clear line between when the physical therapist might stop delivering treatment and the therapy assistant resumes treatment, and when the assistant acts as a second pair of hands to the therapist. Some commenters stated that when a therapist and assistant work together in a team-based approach, regardless of the amount of time the PTA or OTA contributes, that the new modifiers identifying services for application of the discounted payment rate should not apply. Some of these commenters requested that we exclude the use of new modifiers for therapy evaluations and re-evaluations because a therapy assistant is not permitted to fully furnish these services and these services require the therapist's clinical skill, judgment, and decision-making throughout. Others commenters requested that the modifiers should not apply for group therapy services, which are often provided collaboratively between the assistant and therapist because it is not fair to affix the discounted payment modifier to every patient in the group when a PTA or OTA furnishes one minute of the group service. Some commenters suggested we apply an 8-minute rule to the codes defined by 15-minute increments, stating that the modifiers should apply only when the PTA/OTA furnishes at least 8 minutes of the service, while other commenters asked us not to apply the assistant modifiers when these intervention services are furnished collaboratively by the therapist and assistant. Several commenters recommended that CMS allow for reporting of the same code on the same day for the same beneficiary on two different claim lines to distinguish between those code units furnished by a therapist and those furnished by a therapy assistant in reference to the 15-minute timed intervention codes and the group therapy code (CPT code 97150).

Response: We acknowledge the views of the many commenters regarding our proposed interpretation of the statutory reference to therapy services furnished in whole or “in part” by PTAs and OTAs as part of the requirement that we establish a modifier to identify such services on claims beginning January 1, 2020, and apply a discounted payment rate to those services beginning January 1, 2022. We offer clarification on some of the commenters' concerns and alternatives, as follows. We do not agree that the statutory provision at section 1834(v) of the Act, which specifies a discounted payment rate for services furnished “in whole or in part” by a therapy assistant, could be interpreted to apply only when the therapy assistant furnishes the entire service. We also clarify that the modifiers would not apply to those services that are exclusively furnished by therapists without the assistance of PTAs or OTAs. However, the extent to which the modifiers apply to clinical scenarios in which the therapist and therapy assistant work together to furnish services collaboratively may be dependent on whether the therapy assistant's services are furnished in the absence of the therapist, whose time could then no longer be attributed to that patient. We do not agree that services in which the therapist and therapy assistant work collaboratively or in tandem are necessarily services that are not furnished “in part” by a therapy assistant. Rather, when a therapist and therapy assistant work together in furnishing a therapy service, we would generally view that service as being furnished in part by a therapy assistant, especially when the therapist is absent for a portion of the service, as explained above. We recognize there are other clinical scenarios and types of services where it is less obvious whether the service should be considered furnished “in part” by a therapy assistant when a therapist and therapy assistant work collaboratively together to treat one patient, and we anticipate addressing applicability of the modifiers in additional clinical scenarios through further rulemaking for CY 2020. We also clarify that the statutory provision at section 1834(v) of the Act requiring the reduced payment at 85 percent for services furnished in whole or in part by a therapy assistant beginning in CY 2022, does not permit us to make payment at 92.5 percent, as suggested by some commenters. We also note the concerns of the few commenters requesting that we allow the same procedure code for the same patient on the same day to appear on multiple claim lines, some of which might include the new modifier for therapy assistant services and others of which would not. CMS claims processing systems already allow, when not constrained by other policies such as Medically Unlikely Edits (MUEs), the same procedure code to be reported on two different claim lines as long as there is a different modifier used to uniquely identify the service and prevent the service from being considered a duplicate. For example, if a therapy assistant furnished one unit (15 minutes) and the therapist furnished 2 units (30 minutes) of the same procedure code that is defined to be billable in 15-minute increments, one unit of the procedure code would be billed on the claim line with the modifier for the therapy assistant's services and two units of the procedure code would be billed on another claim line without the assistant modifier.

We do not agree with the commenters' suggestion that we define “in part” to mean a therapy service for which a PTA or OTA furnishes 50 percent or a majority of the service, or an otherwise substantial part of the service. The discounted payment rate specified under section 1834(v)(1) of the Act is required to be applied for services furnished “in whole or in part” by a therapy assistant. We do not believe “in whole or in part” means that the discounted payment rate would apply only to services for which 50 percent or more of the service was furnished by a therapy assistant.

In our review of section 1834(v)(1) of the Act, we believe that the phrase “in part” could be read to mean that if a therapy assistant participates only in a very small (so insubstantial as to not be meaningful) portion of the service, the discounted payment rate would not apply. In the proposed rule, we proposed that “in part” would not include the non-therapeutic portions of a service that could be performed by others without the training of PTAs or OTAs. Along those same lines, after further consideration of the public comments explaining the fluid nature of clinical practice between therapists and therapy assistants and the complexity of identifying and documenting when a service is furnished in part by a therapy assistant, we believe it would be appropriate to define a therapy assistant's participation in furnishing a therapy service “in part” to mean that the therapy assistant furnished more than a de minimis portion of the therapy service. Specifically, we believe it would be appropriate to specify that a therapy assistant is considered to furnish a therapy service “in part” when they perform more than 10 percent of the service. If, instead of specifying as we proposed that the modifiers are applicable when any minute of a therapeutic service is furnished by a PTA or OTA, we specified that the modifiers apply when more than 10 percent of a service is furnished by the therapy assistant, 1.5 minutes of a 15-minute unit could be furnished by the PTA or OTA without being subject to the discounted payment rate. If this 10 percent de minimis standard is applied to an untimed service, for example to a therapy evaluation for which the typical time is 45 minutes, the PTA or OTA could furnish up to 4.5 minutes of the service before the modifier and discounted payment rate would apply. We anticipate addressing applicability of the ten percent de minimis standard for other clinical scenarios in further rulemaking for CY 2020.

After consideration of the public comments, the following reflects a full summary of our finalized policies.

We are finalizing the establishment of two modifiers, one to identify services furnished in whole or in part by PTAs and the other to identify services furnished in whole or in part by OTAs. We are also finalizing our proposal to define PTAs and OTAs as those individuals meeting the personnel qualifications set forth in part 484.

Instead of finalizing the new modifiers to identify services furnished by PTAs and OTAs as therapy modifiers, we are adopting a final policy to use these new modifiers as a payment modifier that will be appended on the same line of service with the respective PT or OT therapy modifier. This modified approach necessitates revisions to the proposed descriptors of the new CQ and CO modifiers, and allows us to proceed without making the proposed revisions to the current descriptors for the three therapy modifiers—GP, GO and GN. We are finalizing the new payment modifiers as follows.

• CQ Modifier: Outpatient physical therapy services furnished in whole or in part by a physical therapist assistant.
• CO Modifier: Outpatient occupational therapy services furnished in whole or in part by an occupational therapy assistant.

We are not revising the three therapy modifiers as we had proposed. Instead, they will continue in effect, unmodified, as follows:

• GP—services delivered under an outpatient physical therapy plan of care.
• GO—services delivered under an outpatient occupational therapy plan of care.
• GN—services delivered under an outpatient speech-language pathology plan of care.

Instead of finalizing our proposed definition of a service that is furnished in whole or in part by a PTA or OTA as a service for which any minute of a therapeutic service is furnished by a PTA or OTA, we are finalizing a de minimis standard under which a service is furnished in whole or in part by a PTA or OTA when more than 10 percent of the service is furnished by the PTA or OTA. We anticipate addressing application of the therapy assistant modifiers and the 10 percent standard more specifically, including their application for different scenarios and types of services, in rulemaking for CY 2020.

3. Functional Reporting Modifications

Since January 1, 2013, all providers of outpatient therapy services, including PT, OT, and SLP services, have been required to include functional status information on claims for therapy services. In response to the Request for Information (RFI) on CMS Flexibilities and Efficiencies that was issued in the CY 2018 PFS proposed rule (82 FR 34172 through 34173), we received comments requesting burden reduction related to the functional reporting requirements that were adopted to implement section 3005(g) of the Middle Class Tax Relief and Jobs Creation Act (MCTRJCA) of 2012 (Pub. L. 112-96, January 1, 2013). More information about these requirements can be found in the CY 2019 PFS proposed rule (83 FR 35852).

We proposed to discontinue the functional reporting requirements for services furnished on or after January 1, 2019. Specifically, we proposed to amend our regulations by removing the following: (1) Conditions of payment at §§ 410.59(a)(4), 410.60(a)(4), 410.62(a)(4), and 410.105(d) that require claims for OT, PT, SLP, and Comprehensive Outpatient Rehabilitation Facility (CORF) PT, OT, and SLP services, respectively, to contain prescribed information on patient functional limitations; and, (2) the functional reporting-related phrase that requires the plan's goals to be consistent with functional information on the claim at § 410.61(c) for outpatient PT, OT, and SLP services and at § 410.105(c)(1)(ii) for the PT, OT, and SLP services in CORFs. In addition, we would (1) remove the functional reporting subregulatory requirements implemented primarily through Change Request 8005 last issued on December 21, 2012, via Transmittal 2622, (2) eliminate the functional reporting standard systems edits we have applied to claims, and (3) remove the functional reporting requirement provisions in our internet Only Manual (IOM) provisions including the Medicare Claims Processing Manual, Chapter 5 and the functional reporting requirements in Chapters 12 and 15 of the Medicare Benefits Policy Manual.

Our proposal would end the requirements for the reporting and documentation of functional limitation G-codes (HCPCS codes G8978 through G8999 and G9158 through G9186) and severity modifiers (in the range CH through CN) for outpatient therapy claims with dates of service on and after January 1, 2019. Accordingly, with the conclusion of our functional reporting system for dates of service after December 31, 2018, we proposed to delete the applicable non-payable HCPCS G-codes specifically developed to implement that system through the CY 2013 PFS final rule with comment period (77 FR 68598 through 68978).

We sought comment on these proposals. The following is a summary of the comments we received on these proposals.

Comment: Many commenters supported the proposal to eliminate the functional reporting requirements for outpatient therapy services and urged us to end these requirements for reporting and documenting the G-codes and severity modifiers on claims for PT, OT, and SLP services beginning January 1, 2019. Many commenters agreed that these requirements are overly complex and burdensome for therapy providers.

Response: We appreciate the commenters' support of our proposal to end the reporting and documentation requirements effective January 1, 2019.

Comment: Some commenters disagreed with our proposal to end the functional reporting and documentation requirements beginning in CY 2019. One commenter who liked our functional reporting system suggested that we retain a reduced version of it. Two other commenters supported our requirement for assessment tools or outcome measures to be used to quantify the severity of dysfunction or disability. One commenter representing a software developer supported the flexibility in our rules permitting professional judgment of therapists to select from a composite outcome measure a single functional measure that reflects a more accurate disability rating. Another commenter representing a large private payer asked us to retain our functional reporting requirements because they believe that information about functional status of therapy patients remains an essential source of information for health plan care management activities such as health plan care coordination programs and to accurately complete risk adjustment requirements. This commenter also noted that the end of Medicare functional reporting requirements may cause therapists to stop documenting information about their patients' functional status, and this, along with the repeal of the therapy caps, could instead prompt therapists to furnish non-covered long-term custodial care services that are not medically necessary.

Response: We appreciate the commenters' support for the claims-based functional reporting system requirements currently in place including the use by the private payer of the functional status information reported on claims for health plan care management activities. While we acknowledge that functional status will no longer be required to be reported on Medicare claims and, thus, will not be available for use on claims for health plan care management activities, we do not share the commenter's concern though that the lack of a functional reporting requirement to document the non-payable HCPCS codes and related severity modifiers or the repeal of the therapy caps will cause therapists to begin furnishing therapy services that do not meet the statutory requirement for reasonable and necessary services or keep them from documenting other information required about patients' physical status in medical records. The documentation requirements specified in Pub. 100-02, Medicare Benefit Policy Manual, Chapter 15, section 220.3 titled Documentation Requirements for Therapy Services, in subsection C. for Evaluation/Re-Evaluation and Plan of Care, which were established prior to the MCTRJCA provisions' mandate, would remain in place. These documentation instructions continue to require that therapists document in the beneficiary's medical record, either in the evaluation or in the plan of care containing the evaluation, objective, measurable beneficiary physical function. In order to meet these requirements, therapists may use one of four measurement instruments, including National Outcomes Measurement System (NOMS) by the American Speech-Language Hearing Association, Activity Measure—Post Acute Care (AM-PAC), Patient Inquiry by Focus On Therapeutic Outcomes, Inc. (FOTO), or OPTIMAL by Cedaron through the American Physical Therapy Association; or, when one of these tools is not used, they may use (a) functional assessment individual item and summary scores from commercially available therapy outcomes instruments, (b) functional assessment scores from tests and measurements validated in the professional literature that are appropriate for the condition/function being measured; or (c) other measurable progress towards identified goals for functioning in the home environment at the conclusion of the therapy episode of care. For these reasons, we believe therapists will continue to use the measurement tools they have used in the past to identify measureable physical functional status even after we discontinue the claims-based functional reporting requirements.

After consideration of the public comments, we are finalizing our proposed changes to discontinue the functional reporting requirements for outpatient therapy services furnished on or after January 1, 2019. Specifically, we are removing the following regulatory requirements: (1) Conditions of payment at §§ 410.59(a)(4), 410.60(a)(4), 410.62(a)(4), and 410.105(d) that require claims for OT, PT, SLP, and Comprehensive Outpatient Rehabilitation Facility (CORF) PT, OT, and SLP services, respectively, to contain prescribed information on patient functional limitations; and, (2) the functional reporting-related phrase that requires the plan's goals to be consistent with functional information on the claim at § 410.61(c) for outpatient PT, OT, and SLP services and at § 410.105(c)(1)(ii) for the PT, OT, and SLP services in CORFs.

In addition to amending these regulations, we are ending the requirements for the reporting and documentation of functional limitation G-codes (HCPCS codes G8978 through G8999 and G9158 through G9186) and severity modifiers (in the range CH through CN) for outpatient therapy claims with dates of service on and after January 1, 2019.

Instead of deleting the HCPCS G-codes effective for CY 2019 as proposed, we are finalizing a modification of that proposal to retain the set of 42 non-payable HCPCS G-codes until CY 2020 as this will allow time for therapy providers and other private insurers who currently use these HCPCS G-codes for purposes of functional reporting to update their billing systems and policies. This will avoid a situation where claims that inadvertently contain any of these G-codes during CY 2019 can be processed, and are not unnecessarily returned or rejected. The retention of HCPCS G-codes through CY 2019 will also allow physical and occupational therapists to report six of these non-payable HCPCS G-codes and the measures developed from them for purposes of meeting the MIPS program requirements which are found in section III.I.3. of this final rule.

We also intend to revise our manuals regarding the application of the functional reporting requirements in our IOM, Pub. 100-02, Medicare Benefits Policy Manual, Chapters 12 and 15, and Pub. 100-04, Medicare Claims Processing Manual, Chapter 5.

4. Therapy KX Threshold Amounts

As noted above in this section, the KX modifier thresholds were established through section 50202 of the Bipartisan Budget Act of 2018. These KX modifier thresholds were formerly referred to as therapy caps and are a permanent provision of the law, meaning that the statute does not specify an end date. These per-beneficiary amounts under section 1833(g) of the Act (as amended by section 4541 of the Balanced Budget Act of 1997) (Pub. L. 105-33, August 5, 1997) are updated each year based on the MEI. Specifically, these amounts are calculated by updating the previous year's amount by the MEI for the upcoming calendar year and rounding to the nearest $10.00. Increasing the CY 2018 KX modifier threshold amount of $2,010 by the CY 2019 MEI of 1.5 percent and rounding to the nearest $10.00 results in a CY 2019 KX threshold amount of $2,040 for PT and SLP services combined and $2,040 for OT services.

Along with the KX modifier thresholds, section 50202 of the Bipartisan Budget Act of 2018 also added section 1833(g)(7)(B) of the Act which retains the targeted medical review process, but at a lower threshold amount of $3,000 (until CY 2028) as detailed previously in this section. For CY 2018, the MR threshold is $3,000 for PT and SLP services combined and $3,000 for OT services. Under the established targeted review process, some, but not all claims exceeding the MR threshold amount are subject to review. For information on the targeted manual medical review process, go to https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/TherapyCap.html.

CMS tracks each beneficiary's incurred expenses for therapy services annually and counts them toward the KX modifier and MR thresholds by applying the PFS rate for each service less any applicable multiple procedure payment reduction (MPPR) amount for services of CMS-designated “always therapy” services.

As required by section 1833(g)(6)(B) of the Act, added by section 603(b) of the American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240, January 2, 2013) and extended by subsequent legislation, including section 50202 of the Bipartisan Budget Act of 2018, the PFS-rate accrual process is applied to outpatient therapy services furnished by critical access hospitals (CAHs) even though they may be paid on a cost basis (effective January 1, 2014).

For Maryland hospitals paid under the Maryland All-Payer Model, currently being tested under the authority of section 1115A of the Act (effective January 1, 2016), we use the submitted charge amounts to accrue to the KX modifier and MR thresholds.

After expenses incurred for the beneficiary's outpatient therapy services for the year have exceeded one or both of the KX modifier thresholds, therapy suppliers and providers use the KX modifier on claims for subsequent medically necessary services. By using the KX modifier, the therapist is attesting that the services above the KX modifier thresholds are reasonable and necessary and that there is documentation of medical necessity for the services in the beneficiary's medical record. Claims for outpatient therapy services that exceed the KX modifier thresholds but do not include the KX modifier are denied.

M. Part B Drugs: Application of an Add-On Percentage for Certain Wholesale Acquisition Cost (WAC)-Based Payments

Consistent with statutory provisions in section 1847A of the Act, many current Medicare Fee-For-Service (FFS) payments for separately payable drugs and biologicals furnished by providers and suppliers include an add-on set at 6 percent of the volume-weighted average sales price (ASP) or wholesale acquisition cost (WAC) for the drug or biological (the “6 percent add-on”). Although section 1847A of the Act does not specifically state what the 6 percent add-on represents, it is widely believed to include services associated with drug acquisition that are not separately paid for, such as handling, storage, other overhead, as well as additional mark-ups in drug distribution channels. The 6 percent add-on described in section 1847A of the Act has raised concerns because more revenue can be generated from percentage-based add-on payments for expensive drugs, and an opportunity to generate more revenue may create an incentive for the use of more expensive drugs (MedPAC Report to the Congress: Medicare and the Health Care Delivery System June 2015, http://medpac.gov/docs/default-source/reports/june-2015-report-to-the-congress-medicare-and-the-health-care-delivery-system.pdf, pages 65 through 72). Also, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) March 8, 2016, Issue Briefing pointed out that administrative complexity and overhead costs are not exactly proportional to the price of a drug (https://aspe.hhs.gov/pdf-report/medicare-part-b-drugs-pricing-and-incentives). Thus, the suitability of using a percentage of the volume-weighted ASP or WAC of the drug or biological for an add-on payment may vary depending on the price of the drug or how the payment rate has been determined.

Although the add-on percentage for drug payments made under section 1847A of the Act is typically applied to the ASP, a 6 percent add-on is also applied to the WAC to determine the Part B drug payment allowances in the following situations. First, for single source drugs, as authorized in section 1847A(b)(4) of the Act, payment is made using the lesser of ASP or WAC; and section 1847A(b)(1) of the Act requires that a 6 percent add-on be applied regardless of whether WAC or ASP is less. Second, for drugs and biologicals where the ASP during first quarter of sales is unavailable, section 1847A(c)(4) of the Act allows the Secretary to determine the payment amount for the drug or biological based on the WAC or payment methodologies in effect on November 1, 2003. We note that this provision does not specify that an add-on percentage be applied if WAC-based payment is used, nor is an add-on percentage specified in the implementing regulations at § 414.904(e)(4). The application of the add-on percentage to WAC-based payments during a period where partial quarter ASP data was available was discussed in the 2011 PFS final rule with comment (75 FR 73465 through 73466). Third, in situations where Medicare Administrative Contractors (MACs) determine pricing for drugs that do not appear on the ASP pricing files and for new drugs, WAC-based payment amounts may also be used, as discussed in Chapter 17, Section 20.1.3 of the Medicare Claims Processing Manual. This section of the manual describes the use of a 6 percent add-on.

The incorporation of discounts in the determination of payment amounts made for Part B drug varies. Most Part B drug payments are based on the drug's or biological's ASP; as provided in section 1847A(c)(3) of the Act, the ASP is net of many discounts such as volume discounts, prompt pay discounts, cash discounts, free goods that are contingent on any purchase, chargebacks, and rebates (other than rebates under Medicaid drug rebate program). In contrast, the WAC of a drug or biological is defined in section 1847A(c)(6)(B) of the Act as the manufacturer's list price for the drug or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug or biological pricing data. Because the WAC does not include discounts, it typically exceeds ASP, and the use of a WAC-based payment amount for the same drug results in higher dollar payments than the use of an ASP-based payment amount.

Although discussions about the add-on tend to focus on ASP-based payments (because ASP-based payments are more common than WAC-based payments), the add-on for WAC-based payments has also been raised in the June 2017 MedPAC Report to the Congress (http://www.medpac.gov/docs/default-source/reports/jun17_reporttocongress_sec.pdf, pages 42 through 44). The MedPAC report focused on how the 2 quarter lag in payments determined under section 1847A of the Act led to a situation where undiscounted WAC-based payment amounts determined using information from 2 quarters earlier were used to pay for drugs that providers purchased at a discount. To determine the extent of the discounts, MedPAC sampled new, high-expenditure Part B drugs and found that these drugs' ASPs were generally lower than their WACs. Seven out of the 8 drugs showed pricing declines from initial WAC to ASP one year after being listed in the ASP pricing files with the remaining product showing no change, which suggests purchasers received discounts that WAC did not reflect. MedPAC further cited a 2014 OIG report (OIG, Limitations in Manufacturer Reporting of Average Sales Price Data for Part B Drugs, (OEI-12-13-00040), July 2014) to illustrate that there may be differences between WAC and ASP in other instances in which CMS utilizes WAC instead of ASP and noted that OIG found that “WACs often do not reflect actual market prices for drugs.” MedPAC also characterized Part B payments based on undiscounted list prices for products that were available at a discount as excessive. The report suggested that greater parity between ASP-based acquisition costs and WAC-based payments for Part B drugs could be achieved and recommended changing the 6 percent add-on for WAC-based payments to 3 percent. A 3 percent change was recommended based on statements made by industry, MedPAC's analysis of new drug pricing, and OIG data. The report also mentioned that discounts on WAC, such as prompt pay discounts, were available soon after the drug went on the market.

In the case of a drug or biological during an initial sales period in which data on the prices for sales for the drug or biological is not sufficiently available from the manufacturer, section 1847A(c)(4) of the Act permits the Secretary to make payments that are based on WAC. In other words, although payments under this section may be based on WAC, unlike section 1847A(b) of the Act (which specifies that certain payments must be made with a 6 percent add-on), section 1847A(c)(4) of the Act does not require that a particular add-on amount or percentage be applied to partial quarter WAC-based pricing. Consistent with section 1847A(c)(4) of the Act, we proposed that effective January 1, 2019, WAC based payments for Part B drugs made under section 1847A(c)(4) of the Act, utilize a 3 percent add-on in place of the 6 percent add-on that is currently being used. We proposed a 3 percent add-on because this percentage is consistent with MedPAC's analysis and recommendations discussed in the paragraph above and cited in its June 2017 Report to the Congress. Although other approaches for modifying the add-on amount, such as a flat fee, or percentages that vary with the cost of a drug, are possible, we proposed a fixed percentage in order to be consistent with other provisions in section 1847A of the Act that specify fixed add-on percentages of 6 percent (section 1847A(b) of the Act) or 3 percent (section 1847A(d)(3)(C) of the Act). A fixed percentage is also administratively simple to implement and administer, predictable, and easy for manufacturers, providers and the public to understand.

We have also reviewed corresponding regulation text at § 414.904(e)(4). To conform the regulation text more closely to the statutory language at section 1847A(c)(4) of the Act, we also proposed to strike the word “applicable” from paragraph (e)(4) of § 414.904. Section 1847A(c)(4) of the Act does not use the term “applicable” to describe the payment methodologies in effect on November 1, 2003.

We also discussed changing the policy articulated in the Medicare Claims Processing Manual that describes the application of the 6 percent add-on to payment determinations made by MACs for new drugs and biologicals. Chapter 17 section 20.1.3 of the Claims Processing Manual (https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c17.pdf) states that WAC-based payment limits for drugs and biologicals that are produced or distributed under a new drug application (or other new application) approved by the Food and Drug Administration, and that are not included in the ASP Medicare Part B Drug Pricing File or Not Otherwise Classified (NOC) Pricing File, are based on 106 percent of WAC. Invoice-based pricing is used if the WAC is not published. In the Hospital Outpatient Prospective Payment System (OPPS) program, the payment allowance limit is 95 percent of the published Average Wholesale Price (AWP). We discussed permitting MACs to use an add-on percentage of up to 3 percent for WAC-based payments for new drugs. MACs have longstanding authority to make payment determinations when we do not publish a payment limit in our national Part B drug pricing files and when a new drug becomes available. This proposal intended to preserve consistency with our proposed national pricing policy and would apply when MACs perform pricing determinations, for example during the period when ASPs have not been reported. The proposed policy would not alter OPPS payment limits; however, the CY 2019 OPPS proposed rule (83 FR 37046) includes a discussion about proposed changes to certain WAC-based drug payments under the OPPS.

We note that the PFS rule proposals do not include WAC-based payments for single source drugs under section 1847A(b) of the Act, that is, where the statute specifies that the payment limit is 106 percent of the lesser of ASP or WAC.

We have stated in previous rulemaking (80 FR 71101) that it is desirable to have fair reimbursement in a healthy marketplace that encourages product development. We have also stated that we seek to promote innovation to provide more options to patients and physicians, and competition to drive prices down (82 FR 53183). These positions have not changed. However, since 2011, concern about the impact of drug pricing and spending on Part B drugs has continued to grow. From 2011 to 2016, Medicare Part B drug spending increased from $17.6 billion to $28.0 billion, representing a compound annual growth rate of 9.8 percent, with per capita spending increasing 54 percent, from $532 to $818 (Based on Spending and Enrollment Data from the CMS Office of Enterprise Data and Analytics). These increases affect the spending by Medicare and beneficiary out-of-pocket costs. In the context of these concerns, we believe that implementation of these proposals would improve Medicare payment rates by better aligning payments with drug acquisition costs, especially for the growing number of drugs with high annual spending and high launch prices where single doses can cost tens or even hundreds of thousands of dollars. The proposals would also decrease beneficiary cost sharing. A 3 percentage point reduction in the total payment allowance will reduce a patient's 20 percent Medicare Part B copayment—for a drug that costs many thousands of dollars per dose, this can result in significant savings to an individual. The proposed approach would help Medicare beneficiaries afford to pay for new drugs by reducing out of pocket expenses and would help counteract the effects of increasing launch prices for newly approved drugs and biologicals. Finally, the proposals are consistent with recent MedPAC recommendations.

The following is a summary of the comments we received on these proposals.

Comment: Many commenters expressed concerns about the proposed add-on reduction and its effect on providers. Many of these commenters focused on the percentage portion of the add-on, stating that the proposed lower add-on would result in payment at ASP + 1.35 percent because of the sequester reduction.

Response: The Budget Control Act of 2011 (Pub. L. 112-25, enacted August 2, 2011) requires mandatory across-the-board reductions in Federal spending, also known as sequestration. The application of sequestration (after the American Taxpayer Relief Act of 2012 (Pub. L. 112-240, enacted January 2, 2013) postponed sequestration for 2 months) requires the reduction of Medicare payments by 2 percent for many Medicare FFS claims with dates-of-service on or after April 1, 2013. The proposed change to the add-on percentage does not include reductions applied to Medicare payments under sequestration, as sequestration is independent of Medicare payment policy. However, we understand the concerns about the reduction to the add-on and the effects of the sequester resulting in a situation where payment amounts could be potentially insufficient to cover acquisition costs for expensive drugs, such as for specialties like rheumatology, which utilize a narrow range of drugs with similar prices, and for providers who may not be able to acquire drugs below the ASP. The policy we proposed would reduce the add-on for WAC-based payment to 3 percent; it would be limited to new drugs and would not apply to the add-on to ASP-based payment amounts. The 3 percent reduction is discussed in further detail in the comment responses below.

Comment: A number of commenters stated that the 6 percent markup is intended to account for specific costs, such as handling, storage and other administrative expenses.

Response: Section 1847A of the Act does not specifically state what the 6 percent add-on represents, and the accompanying Conference Report to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which added section 1847A to the Act, similarly does not discuss the purpose of the 6 percent add-on (see Conference Report on H.R. 1, November 20, 2003). Although section 1847A of the Act does not specifically state what the add-on represents, it is believed by many that the 6 percent add on includes various activities associated with drug acquisition that are not separately paid for, such as handling, and storage, as well as additional costs, such as overhead and mark-ups in drug distribution channels; however, there is no consensus on the intent of the add-on (MedPAC Report to the Congress: Medicare and the Health Care Delivery System June 2016, http://www.medpac.gov/docs/default-source/reports/june-2016-report-to-the-congress-medicare-and-the-health-care-delivery-system.pdf?sfvrsn=0, page 127).

Comment: Commenters expressed concerns that a payment reduction of 3 percent would affect physicians and limit their utilization of new drugs, particularly in practices where margins are small, such as rural practices and small practices. Commenters were concerned that payments for drugs under the proposed reduction would not cover overhead (such as costs to order and store drugs, and rising costs for compliance with standards for the preparation of sterile drugs for administration to a patient), and other costs (such as taxes and markups from intermediaries like wholesalers). Commenters stated that such payment reductions would require physicians to take a loss on new drugs or would prevent physicians from providing new drugs in the office. Several commenters disagreed that the markup incentivizes the use of more expensive drugs, while others agreed that financial incentives to use Part B drugs exist, particularly in the case of expensive drugs. One commenter noted that Part B includes some of the most expensive drugs available in the United States. Several commenters also noted that MedPAC data suggested that WAC-based payments with a 3 percent add-on could sometimes be less than ASP based payments with a 6 percent add-on.

Response: The payment methodology in section 1847A of the Act was authorized by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108-173, enacted on December 8, 2003). Since then, drug prices have increased significantly, sometimes reaching into the tens and even hundreds of thousands of dollars for a single dose of a drug. We agree with commenters that Part B includes payments for very expensive drugs, and at least one GAO study has pointed out that the most new Part B drugs are costly and tend to be biologicals (Medicare Part B: Expenditures for New Drugs Concentrated among a Few Drugs, and Most Were Costly for Beneficiaries. (GAO Publication No. GAO-16-12; https://www.gao.gov/assets/680/673304.pdf)). As stated in the previous comment response, the purpose of the 6 percent add-on is not clear, however, we are interested in striking a balance between concerns about providers' overhead costs and concerns about addressing financial incentives that may lead to excessive drug use.

If the add-on is intended to account for administrative complexity, handling, storage and other overhead costs, these factors are not considered to be exactly proportional to current drug prices (https://aspe.hhs.gov/pdf-report/medicare-part-b-drugs-pricing-and-incentives). The application of the 6 percent add-on results in large dollar value payments for new drugs that are proportional only to the price of the drug. Further, the application of a 6 percent add-on to an undiscounted price like WAC, rather than a market-based price, can result in additional differences between acquisition cost and payment. This difference can become significant, particularly for higher cost drugs where the 6 percent add-on can be hundreds or even thousands of dollars, and can become even more substantial when WAC exceeds ASP or acquisition cost. We are concerned that as drug prices continue to increase, the add-on is continuing to evolve into a financial incentive that is not consistent with the appropriate use of new Part B drugs.

Many new drugs are expensive; single doses may cost thousands of dollars. Six percent add-ons for expensive drugs may be excessive relative to factors such as the cost to acquire a drug, handling and storage, and other overhead costs. We believe that overhead costs for most new drugs and biologicals are generally comparable to the overhead costs for most other injectable Part B drugs. For example, many heavily utilized injectable Part B drugs and biologicals, including new products, appear to be readily available since they are listed in drug wholesalers' catalogues. With certain exceptions, such as biologicals made from autologous cells, prescribing information indicates that many injectable Part B drugs and biologicals are stable under refrigeration or room temperature and do not require highly specialized storage or shipping conditions. We also note that many newer injectable drugs are also produced in ready to use liquid form, thus additional reconstitution and complicated dose preparation steps are not necessary. For many newer injectable products that were added to the ASP drug files in 2018, prescribing information indicates that dose preparation is comparable to many other sterile injectables and consists of drawing up the drug into a syringe using aseptic technique, and sometimes diluting the dose in a small volume bag of intravenous fluid. Some of the newer products are available in ready to use syringes which are administered directly to the patient with no special preparation steps.

We believe that the 3 percent reduction will help encourage the appropriate utilization of new drugs by lessening the financial incentive to overutilize drugs during their initial period of sales. We will discuss the percentage in more detail in the next comment response, but in general we believe that this reduction will not reduce margins for Part B drugs to an extent that would significantly and negatively affect providers, for several reasons. First, the overhead for many new drugs and biologicals is not likely to be significantly higher than the overhead for existing Part B injectable drugs (as discussed in the paragraph above). Second, the add-on is based on an undiscounted list price that is usually higher than market prices, and many new drugs and biologicals are costly. When the add-on is based on an undiscounted list price, this may contribute to potentially excessive add-on payments, particularly for expensive new drugs. As the WAC of a drug increases, so does the dollar value of the add-on, and this increase is not tied to any other factors, such actual market cost, administrative complexity of ordering the drug, or additional overhead costs, for example. The add-on for a costly drug can add significantly to the payment for a drug; a 6 percent add-on for a $5,000 dose of a drug is $300, while the 6 percent add-on for a $10,000 dose is $600. Third, the duration of the reduction to WAC-based payments for new drugs would be brief, applying only during an initial period as stipulated in section 1847A(c)(4) of the Act, where ASP data for drugs or biologicals (including biosimilars) is not sufficiently available to determine an ASP-based payment. Fourth, based on recent additions to the ASP drug pricing files, the change would affect only a small number of drugs each year. Typically, several drugs are added to the ASP Drug Pricing files each quarter, and not all of those drugs are priced based on WAC; some are added to the pricing files after the initial period of sales and are paid based on ASP. For these reasons, we are not persuaded that the reduction of the add-on for new drugs would have significant impact on margins for most physicians or other providers, including small and rural practices.

While some WAC based payments for new drugs could be less than ASP-based payments, the WAC exceeds the ASP for most new drugs entering the market. Our approach using a percentage of the WAC-based amount provides an administratively simple and straightforward solution for new Part B drugs.

We reiterate that our proposal did not include payments for single source drugs under section 1847A(b)(4) of the Act, where payment is made using the lesser of ASP or WAC. (This methodology applies after CMS receives ASP data for the drug.) Section 1847A(b)(1) of the Act requires that a 6 percent add-on be applied regardless of whether WAC or ASP is less; legislation would be required to change the percentage of the add-on that is specified in this provision.

Comment: Several commenters stated that the MedPAC analysis was too limited and did not support a 3 percent add-on. Some suggested that delaying the add-on reduction and conducting more research was a reasonable alternative. Several commenters noted that manufacturers could increase WAC in response to CMS' change in policy.

Response: The MedPAC analysis encompassed drugs with ASP data after 2005 that were in the top 20 highest expenditures in 2014. The analysis indicated that ASP was lower than WAC soon after a drug is marketed; a range of percentages from 0.0 to −2.7 percent was reported. We believe that the 0.0 to −2.7 percent range may underestimate the average difference between WAC and ASP because the MedPAC's group of 8 drugs did not encompass codes where WAC substantially exceeded ASP, such as certain biosimilars. We also note that this analysis of drugs was not the only factor for MedPAC's recommendation of a 3 percent add-on. The report stated that the recommendation for 3 percent change was also based on industry statements regarding prompt-pay discounts, and previous OIG research (http://www.medpac.gov/docs/default-source/reports/jun17_reporttocongress_sec.pdf, pages 43, 44, 52, and 68). For these reasons, we disagree with commenters that the MedPAC analysis was too limited.

Although the number of new drugs that appear on the ASP Drug Pricing Files with a WAC-based payment amount is limited, we stated in the proposed rule (83 FR 36047) that the average difference between WAC and ASP-based payment limits for a group of 3 recently approved drugs and biologicals that appeared on the ASP Drug Pricing Files (including one biosimilar biological product) was 9.0 percent. Excluding the biosimilar biological product results in a difference of 3.5 percent. These findings agree with the MedPAC's analysis and support the use of a 3 percent reduction to WAC-based payments for new drugs. Given the limited application of this policy change, the sources used by the MedPAC (which include industry statements), and our internal review, we do not believe that additional study or delay is necessary.

We are aware that ASP-based payments may exceed payments based on WAC if the percentage for the WAC add-on is smaller than the ASP add-on. The proposal for this policy change was limited to payments under section 1847A(c)(4) of the Act. We do not have authority to change the add-on for WAC based payments made under section 1847A(b)(4) of the Act or payments based on the ASP, and we have not addressed such payments in this rule. We believe that implementation of this relatively minor change without further delay is a positive step toward addressing high drug prices, including list prices. We acknowledge that manufacturers may increase Part B drug prices and that price increases could apply to both list prices like WAC and market-based prices, such as ASP. Section 1847A of the Act does not provide us with authority to addresses most increases for Part B drug prices (we have limited authority to substitute AMP-based prices for ASP, and authority to use alternative prices in response to certain public health emergencies). Price increases from manufacturers and other sources that add to high drug costs will be considered as we continue our work to address concerns about high drug prices.

Comment: Several commenters pointed out that the proposal does not address prices after the initial period of drug marketing, and that the MedPAC's recommendations about reducing the WAC payment add-on percentage were part of several proposals about Part B drug pricing. Several commenters also stated that the proposal to decrease WAC payments is not consistent with the President's goal to decrease list prices for drugs.

Response: This proposal encompassed a change in policy that could be implemented in a relatively short time period and without additional legislation. The proposal is also consistent with the 2019 President's Budget's proposal. Language in the Major Savings and Reforms document states that if discounts are available for new Part B drugs, the use of WAC-based payments results in Medicare paying more than under ASP-based pricing (https://www.whitehouse.gov/wp-content/uploads/2018/02/msar-fy2019.pdf, page 150). The Budget proposal also contained other agenda items that are similar to the MedPAC's 2017 recommendations and would require legislation to implement. Such legislative changes, including authority to limit or to otherwise regulate WAC or other list prices for drugs are outside the scope of this rule; however, other information pertaining to drug pricing will be made public as it is developed. We also note that the use of list prices to determine the payment for Part B drugs is limited and the number of drugs paid using list prices is small. As we continue to work on other approaches to address high drug prices, we plan to monitor Part B drug prices and changes to drug costs that may be related to this policy.

Comment: Many commenters focused on potential negative effects on patients, and expressed concerns that a negative impact on physicians would lead to fewer offices providing new drugs, leading to shifts to higher cost care settings like hospital outpatient departments, and ultimately leading to higher cost sharing payments. A few commenters stated that direct reductions in cost sharing (that is, the amount of money paid by a patient) would be minimal because secondary insurance (like Medigap) or alternative sources of payment are typically available and pay for much of Part B drug cost sharing.

In contrast, several commenters agreed that cost sharing could drop, though the effect would be transient (limited to the early phase of a drug's marketing). However, these commenters generally agree that the CMS proposal was a step in the right direction for addressing the high cost of drugs.

Response: Overall, as discussed in an earlier comment response, we believe that the scope of these changes is modest, will affect few drugs, and will exert a brief effect on Part B drug payment, applying only during the initial quarters when a new drug enters the market. As stated earlier in this section, the overhead for many new drugs and biologicals is not likely to be significantly higher than the overhead for existing Part B injectable drugs, the add-on is based on an undiscounted list price that tends to be higher than market prices, and many new drugs and biologicals are expensive, thus we do not expect a significant effect on providers' margins. Because we do not anticipate a significant or prolonged effect on providers' margins, we also disagree with the position that physicians' offices will be reluctant to administer new drugs and that this reduction to the add-on will negatively affect beneficiaries access to drugs at offices resulting in shifting patients to more expensive settings. As we stated in the proposed rule (83 FR 36047), we believe that the reduction in the WAC-based payment add-on can positively impact individual beneficiaries in situations where they encounter out of pocket cost sharing payments for new and expensive drugs entering the market. We acknowledge that many beneficiaries that receive Part B drugs have supplementary insurance, but for beneficiaries that do not have supplementary insurance, this policy will help reduce out of pocket costs. We would like to reiterate that single doses of new drugs may costs thousands of dollars or more and a 3 percent reduction in the add-on percentage can result in meaningful savings to individual patients. We agree with commenters that a change to the add-on for new drugs is a step in the right direction for addressing the high cost of drugs. Overall, this policy will also provide a modest reduction in spending for drugs by lowering the total payment for new Part B drugs.

After considering the comments submitted in response to our proposal, consistent with section 1847A(c)(4) of the Act, we are finalizing our proposal to reduce the add-on percentage for WAC based payments for new drugs. Effective January 1, 2019, WAC based payments for new Part B drugs made under section 1847A(c)(4) of the Act, will utilize a 3 percent add-on in place of the 6 percent add-on that is currently being used. Our final policy is consistent with the President's Budget and affects an area where we have flexibility to make a change through regulation. The percentage reduction is also consistent with the MedPAC's analysis and recommendations discussed in this section and cited in its June 2017 Report to the Congress. A fixed percentage is also administratively simple to implement and administer, is predictable, and is easy for manufacturers, providers and the public to understand. We believe that the 3 percent reduction to the add-on for WAC-based payments will create greater parity overall between WAC and ASP for new drugs, biologicals and biosimilars and continue to encourage appropriate utilization of drugs. We are not persuaded that this modest and brief reduction in payments will impair access to new drugs or shift patient care to other settings.

This change does not apply to single source drugs or biologicals paid under section 1847A(b)(4) of the Act where payment is made using the lesser of ASP or WAC; section 1847A(b)(1) of the Act requires that a 6 percent add-on be applied regardless of whether WAC or ASP is less.

Comment: We received no specific comments on the proposal to conform the regulation text more closely to the statutory language at section 1847A(c)(4) of the Act. We proposed striking “applicable” from regulation text at § 414.904(e)(4).

Response: We are finalizing this change as proposed and revising regulation text at § 414.904(e)(4) so that the language is more consistent with the statute.

Comment: Several commenters opposed our intent to change the policy articulated in Chapter 17 of the Medicare Claims Processing Manual that describes the application of the 6 percent add-on to payment determinations made by MACs for new drugs and biologicals to reflect our proposal, if finalized. Commenters opposed the Manual changes for the same general reasons that they opposed the proposal to change the WAC-based add-on percentage under section 1847A(c)(4) of the Act. Commenters were also concerned about whether the use of an add-on that could be less than 3 percent would create additional financial stress for providers and whether the manual changes would apply to any WAC-based payment. The commenters also questioned whether CMS has authority to make these changes.

Response: The discussion about changes to Chapter 17 of the Medicare Claims Processing Manual was intended to provide notice of a potential corresponding subregulatory change to align with our regulatory policy if the provision to change the add-on percentage was finalized. Because we finalized the proposal to reduce the WAC-based payment add-on for payments made under the authority in section 1847A(c)(4) of the Act, in the near future we plan to issue Manual instructions that will address contractor pricing for new Part B drugs.

We are clarifying that changes to payments for WAC based drugs discussed in this rule apply only to new drugs and only during the time period while an ASP-based payment limit is not available. This time period begins when a drug is marketed and no ASP data is available for the manufacturer to report to us and ends at the end of the partial quarter pricing period when partial quarter ASP data becomes available to us. We will provide additional guidance or program instructions as appropriate.

The variable percentage that we plan to utilize in the manual, that is, the use of an add-on that is up to 3 percent, addresses the wide range of Part B drug prices. As discussed earlier in this section, the 6 percent add-on payment amount for very expensive drugs can result in very high add-on payments. For example, 6 percent of a $30,000 drug is $1800, while 6 percent of $300,000 is $18,000. We are aware of recently approved Part B drugs that have per dose price points up to several hundred thousand dollars. Our intent is to address the add-on payment that is associated with new drugs before national pricing and potentially other related policies, such as coverage, are developed. Our approach is consistent with provisions in section 1847A(c)(4) of the Act, which does not set a specific percentage for the add-on for drugs where ASP is not available. We also note that section 1847A(c)(5) of the Act provides authority to issue program instructions to implement section 1847A of the Act.

Comment: One commenter expressed concern about the lack of lead time for the changes in drug payment policy.

Response: Notice and comment rulemaking associated with Part B drug payments made under the methodology in section 1847A of the Act typically appears in the annual PFS Rule. Finalized changes to the add-on percentage will not be implemented until January 1, 2019. We believe that using the established process for notice and comment rulemaking is acceptable and provides sufficient notice for the public. As stated earlier in this section, we believe that this change is modest, and its effects on payment for individual drugs will be brief. Further, this change does not require any billing or claims processing changes.

In addition to the comments on the Part B drug add-on percentage for certain drugs discussed previously in this section, we received comments that suggested other alterations to the payment methodology under section 1847A of the Act. These suggestions include replacing a percentage add-on with a flat fee, changes to WAC-based pricing for drugs that are not new, changing payments for drugs that are not paid for under section 1847A of the Act (such as radiopharmaceuticals used in the office), the use of competitive acquisition or value-based payment for Part B drugs, making direct pricing interventions with manufacturers, requiring greater transparency for drug pricing, and educating (or otherwise influencing) providers about Part B drug prescribing. We also received comments pertaining to ASP reporting by manufacturers. Several commenters also questioned the authority for Part B drug payment reductions associated with the sequester. Comments on these issues are also outside the scope of this rule. Therefore, these comments are not addressed in this final rule.

N. Potential Model for Radiation Therapy

Section 3(a) of the Patient Access and Medicare Protection Act (PAMPA) (Pub. L. 114-115, enacted December 28, 2015) revised section 1848 of the Act so that, for the fee schedule established under section 1848(b) of the Act in 2017 and 2018, we must apply the same code definitions and work RVUs under section 1848(c)(2)(C)(ii) of the Act, and the same direct inputs for the PE RVUs for radiation treatment delivery and related imaging services under section 1848(c)(2)(C)(ii) of the Act as those definitions, units, and inputs for such services for the fee schedule established for services furnished in 2016. Section 51009 of the Bipartisan Budget Act of 2018 extended these policies through 2019. Furthermore, section 3(b) of the PAMPA requires the Secretary of Health and Human Services to submit to Congress a report on the development of an episodic APM for payment under the Medicare program under title XVIII of the Act for radiation therapy (RT) services furnished in non-facility settings (“Report to Congress”). In the Report to Congress delivered in November 2017, we discussed the current status of RT services and payment, and reviewed model design considerations for a potential APM for RT services.

For the Report to Congress, the CMS Center for Medicare and Medicaid Innovation (Innovation Center) conducted an environmental scan of current evidence, as well as held a public listening session followed by an opportunity for RT stakeholders to submit written comments about a potential APM. A review of the applicable evidence in the Report to Congress demonstrated that episode payment models can be a tool for improving care and reducing expenditures. We believe that radiation oncology is a promising area of health care for bundled payments, in part, based on the findings in the Report to Congress. The CMS Innovation Center has and will continue to use public information regarding commercial initiatives, as well as stakeholder feedback to help inform the development, implementation, and refinement of design and testing of a potential model that tests payment for RT services under the authority of section 1115A of the Act.

III. Other Provisions of the Proposed Rule

A. Clinical Laboratory Fee Schedule

1. Background

Prior to January 1, 2018, Medicare paid for clinical diagnostic laboratory tests (CDLTs) on the Clinical Laboratory Fee Schedule (CLFS) under sections 1832, 1833(a), (b), and (h), and 1861 of the Social Security Act (the Act). Under the previous methodology, CDLTs were paid based on the lesser of: (1) The amount billed; (2) the local fee schedule amount established by the Medicare Administrative Contractor (MAC); or (3) a national limitation amount (NLA), which is a percentage of the median of all the local fee schedule amounts (or 100 percent of the median for new tests furnished on or after January 1, 2001). In practice, most tests were paid at the NLA. Under the previous system, the CLFS amounts were updated for inflation based on the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U), and reduced by a multi-factor productivity adjustment and other statutory adjustments, but were not otherwise updated or changed.

Section 1834A of the Act, as established by section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA), required significant changes to how Medicare pays for CDLTs under the CLFS. The CLFS final rule, entitled Medicare Clinical Diagnostic Laboratory Tests Payment System (CLFS final rule), published in the Federal Register on June 23, 2016, implemented section 1834A of the Act. Under the CLFS final rule, “reporting entities” must report to CMS during a “data reporting period” “applicable information” collected during a “data collection period” for their component “applicable laboratories.” Applicable information is defined at § 414.502 as, with respect to each CDLT for a data collection period: Each private payor rate for which final payment has been made during the data collection period; the associated volume of tests performed corresponding to each private payor rate; and the specific Healthcare Common Procedure Coding System (HCPCS) code associated with the test. Applicable information does not include information about a test for which payment is made on a capitated basis. An applicable laboratory is defined at § 414.502, in part, as an entity that is a laboratory (as defined under the Clinical Laboratory Improvement Amendments (CLIA) definition at § 493.2) that bills Medicare Part B under its own National Provider Identifier (NPI). In addition, an applicable laboratory is an entity that receives more than 50 percent of its Medicare revenues during a data collection period from the CLFS and/or the Physician Fee Schedule (PFS). We refer to this component of the applicable laboratory definition as the “majority of Medicare revenues threshold.” The definition of applicable laboratory also includes a “low expenditure threshold” component which requires an entity to receive at least $12,500 of its Medicare revenues from the CLFS for its CDLTs that are not advanced diagnostic laboratory tests (ADLTs).

The first data collection period, for which applicable information was collected, occurred from January 1, 2016 through June 30, 2016. The first data reporting period, during which reporting entities reported applicable information to CMS, occurred January 1, 2017 through March 31, 2017. On March 30, 2017, we announced a 60-day enforcement discretion period of the assessment of civil monetary penalties (CMPs) for reporting entities that failed to report applicable information. Additional information about the 60-day enforcement discretion period is available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Downloads/2017-March-Announcement.pdf.

In general, the payment amount for each CDLT on the CLFS furnished beginning January 1, 2018, is based on the applicable information collected during the data collection period and reported to us during the data reporting period, and is equal to the weighted median of the private payor rates for the test. The weighted median is calculated by arraying the distribution of all private payor rates, weighted by the volume for each payor and each laboratory. The payment amounts established under the CLFS are not subject to any other adjustment, such as geographic, budget neutrality, or annual update, as required by section 1834A(b)(4)(B) of the Act. Additionally, section 1834A(b)(3) of the Act, implemented at § 414.507(d), provides a phase-in of payment reductions, limiting the amounts the CLFS rates for each CDLT (that is not a new ADLT or new CDLT) can be reduced as compared to the payment rates for the preceding year. For the first 3 years after implementation (CY 2018 through CY 2020), the reduction cannot be more than 10 percent per year, and for the next 3 years (CY 2021 through CY 2023), the reduction cannot be more than 15 percent per year. For most CDLTs, the data collection period, data reporting period, and payment rate update occur every 3 years. As such, the next data collection period for most CDLTs will be January 1, 2019 through June 30, 2019, and the next data reporting period will be January 1, 2020 through March 31, 2020, with the next update to CLFS occurring on January 1, 2021. Additional information on the private payor rate-based CLFS is detailed in the CLFS final rule (81 FR 41036 through 41101).

2. Recent Stakeholder Feedback

As we discussed in the CY 2019 PFS proposed rule (83 FR 35856), after the initial data collection and data reporting periods, we received feedback on a range of topics related to the private payor rate-based CLFS. Some commenters expressed concern that the CY 2018 CLFS payments rates are based on applicable information from only a relatively small number of laboratories. Some commenters stated that, because most hospital-based laboratories were not applicable laboratories, and therefore, did not report applicable information during the initial data reporting period, the CY 2018 CLFS payment rates do not reflect their information and are inaccurate. Other commenters were concerned that the low expenditure threshold excluded most physician office laboratories and many small independent laboratories from reporting applicable information.

We noted in the proposed rule that, in determining payment rates under the private payor rate-based CLFS, one of our objectives is to obtain as much applicable information as possible from the broadest possible representation of the national laboratory market on which to base CLFS payment amounts, for example, from independent laboratories, hospital outreach laboratories, and physician office laboratories, without imposing undue burden on those entities. As we noted throughout the CLFS final rule, we believe it is important to achieve a balance between collecting sufficient data to calculate a weighted median that appropriately reflects the private market rate for a CDLT, and minimizing the reporting burden for entities. In response to this feedback and in the interest of facilitating our goal, we proposed a change to the Medicare CLFS for CY 2019 in section III.A. of the CY 2019 PFS proposed rule. We stated that we believe this proposal may result in more data being used on which to base CLFS payment rates.

In addition to this proposal, we solicited public comments on other approaches that have been requested by some stakeholders who suggested that such approaches would result in CMS receiving even more applicable information to use in establishing CLFS payment rates. The approaches include revising the definition of applicable laboratory and changing the low expenditure threshold. These topics are discussed in this section.

3. Change to the Majority of Medicare Revenues Threshold in Definition of Applicable Laboratory

In order for a laboratory to meet the majority of Medicare revenues threshold, section 1834A(a)(2) of the Act requires that, “with respect to its revenues under this title, a majority of such revenues are from” the CLFS and the PFS in a data collection period. In the CLFS final rule, we stated that “revenues under this title” are payments received from the Medicare program, which includes fee-for-service payments under Medicare Parts A and B, as well as Medicare Advantage (MA) payments under Medicare Part C, and prescription drug payments under Medicare Part D, and any associated Medicare beneficiary deductible or coinsurance amounts for Medicare services furnished during the data collection period (81 FR 41043). This total Medicare revenues amount (the denominator in the majority of Medicare revenues threshold calculation) is compared to the total of Medicare revenues received from the CLFS and/or PFS (the numerator in the majority of Medicare revenues threshold calculation). If the numerator is greater than 50 percent of the denominator for a data collection period, the entity has met the majority of Medicare revenues threshold criterion. We reflected that requirement in § 414.502 in the third paragraph of the definition of applicable laboratory.

As we explained in the CY 2019 PFS proposed rule, we have considered that our current interpretation of total Medicare revenues may have the effect of excluding laboratories that furnish Medicare services to a significant number of beneficiaries enrolled in MA plans under Medicare Part C from meeting the majority of Medicare revenues threshold criterion, and therefore, from qualifying as applicable laboratories. For instance, if a laboratory has a significant enough Part C component so that it is receiving greater than 50 percent of its total Medicare revenues from MA payments under Part C, it would not meet the majority of Medicare revenues threshold because its revenues derived from the CLFS and/or PFS would not constitute a majority of its total Medicare revenues. We stated that we believe if we were to exclude MA plan revenues from total Medicare revenues, more laboratories of all types may meet the majority of Medicare revenues threshold, and therefore, the definition of applicable laboratory, because it would have the effect of decreasing the amount of total Medicare revenues and increase the likelihood that a laboratory's CLFS and PFS revenues would constitute a majority of its Medicare revenues.

We stated in the proposed rule that we believe section 1834A of the Act permits an interpretation that MA plan payments to laboratories not be included in the total Medicare revenues component of the majority of Medicare revenues threshold calculation. Rather, MA plan payments to laboratories can be considered to only be private payor payments under the CLFS. We emphasized in the CY 2019 PFS proposed rule that this characterization of MA plan payments is limited to only the CLFS for purposes of defining applicable laboratory. Whether MA plan payments to laboratories or other entities are considered Medicare “revenues” or “private payor payments” in other contexts in the Medicare program is not relevant to our proposal, and our characterization of MA plan payments as private payor payments for purposes of the CLFS has no bearing on any aspect of the Medicare program other than the CLFS.

As noted above, we defined total Medicare revenues for purposes of the majority of Medicare revenues threshold calculation to include fee-for-service payments under Medicare Parts A and B, as well as MA payments under Medicare Part C, prescription drug payments under Medicare Part D, and any associated Medicare beneficiary deductible or coinsurance amounts for Medicare services furnished during the data collection period. However, section 1834A(a)(8) of the Act, which defines the term “private payor,” identifies at section 1834A(a)(8)(B) a “Medicare Advantage plan under Part C” as a type of private payor. Under the private payor rate-based CLFS, CLFS payment amounts are based on private payor rates that are reported to CMS. Accordingly, an applicable laboratory that receives MA plan payments is to consider those MA plan payments in identifying its applicable information, which must be reported to CMS. We explained in the proposed rule that we believe it is more logical to not consider MA plan payments under Part C to be both Medicare revenues for determining applicable laboratory status and private payor rates for purposes of reporting applicable information. Congress contemplated that applicable laboratories would furnish MA services, as reflected in the requirement that private payor rates must be reported for MA services. However, under our current definition of applicable laboratory, laboratories that furnish MA services, particularly those that furnish a significant amount, are less likely to meet the majority of Medicare revenues threshold, which means they would be less likely to qualify as applicable laboratories, and as a result, to report private payor rates for MA services.

Therefore, we stated in the proposed rule that after further review and consideration of the new private payor rate-based CLFS, we believe it is appropriate to include MA plan revenues as only private payor payments rather than both Medicare revenues, for the purpose of determining applicable laboratory status, and private payor payments, for the purpose of specifying what is applicable information. Such a change would have the effect of eliminating the laboratory revenue generated from a laboratory's Part C-enrolled patient population as a factor in determining whether a majority of the laboratory's Medicare revenues are comprised of services paid under the CLFS or PFS. We noted that we believe this change would permit a laboratory with a significant Medicare Part C revenue component to be more likely to meet the majority of Medicare revenues threshold and qualify as an applicable laboratory. In other words, MA payments are currently included as total Medicare revenues (the denominator). In order to meet the majority of Medicare revenues threshold, the statute requires a laboratory to receive the majority of its Medicare revenues from the CLFS and or PFS. If MA plan payments were excluded from the total Medicare revenues calculation, the denominator amount would decrease. If the denominator amount decreases, the likelihood increases that a laboratory would qualify as an applicable laboratory. Therefore, we stated that we believe this proposal responds directly to stakeholders' concerns regarding the number of laboratories for which applicable information must be reported because a broader representation of the laboratory industry may qualify as applicable laboratories, which means we would receive more applicable information to use in setting CLFS payment rates.

For these reasons, we proposed that MA plan payments under Part C would not be considered Medicare revenues for purposes of the applicable laboratory definition. We noted in the CY 2019 PFS proposed rule that if finalized, we would revise paragraph (3) of the definition of applicable laboratory at § 414.502 accordingly. We reiterated that not characterizing MA plan payments under Medicare Part C as Medicare revenues would be limited to the definition of applicable laboratory under the CLFS, and would not affect, reflect on, or otherwise have any bearing on any other aspect of the Medicare program.

In an effort to provide stakeholders a better understanding of the potential reporting burden that may result from this proposal, we provided a summary of the distribution of data reporting that occurred for the first data reporting period. We explained that if we were to finalize the proposed change to the majority of Medicare revenues threshold component of the definition of applicable laboratory, additional laboratories of all types serving a significant population of beneficiaries enrolled in Medicare Part C could potentially qualify as applicable laboratories, in which case their data would be reported to us. As discussed in the proposed rule, we received over 4.9 million records from 1,942 applicable laboratories for the initial data reporting period, which we used to set CY 2018 CLFS rates. Additional analysis shows that the average number of records reported for an applicable laboratory was 2,573. The largest number of records reported for an applicable laboratory was 457,585 while the smallest amount was 1 record. A summary of the distribution of reported records from the first data collection period is illustrated in the Table 25.

Assuming a similar distribution of data reporting for the next data reporting period, the mid-point of reported records for an applicable laboratory would be approximately 300 (50th percentile for the first data reporting period was 294). However, as illustrated in Table 25, the number of records reported varies greatly, depending on the volume of services performed by a given laboratory. Laboratories with larger test volumes, for instance at the 90th percentile, should expect to report more records as compared to the midpoint used for this analysis. Likewise, laboratories with smaller test volume, for instance at the 10th percentile, should expect to report fewer records as compared to the midpoint.

The following is a summary of the comments we received and our responses to the comments regarding our proposal to modify the definition of applicable laboratory to exclude MA plan payments under Part C as Medicare revenues.

Comment: Many commenters supported CMS' proposal to exclude MA plan payments under Part C from total Medicare revenues and agreed it would help achieve CMS' goal of increasing the number of laboratories reporting applicable information. They stated that by excluding MA plan payments from total Medicare revenues, the denominator of the majority of Medicare revenues threshold, more laboratories of all types with a significant share of revenues from Medicare Part C would be more likely to qualify as an applicable laboratory and report applicable information to CMS. They also agreed that removal of MA plan payments from total Medicare revenues is consistent with the statute, which defines MA plans as a private payor, and therefore will help enable more laboratories to qualify as applicable laboratories. The commenters that supported excluding MA plan payments under Part C from total Medicare revenues urged CMS to finalize the proposal. However, some stakeholders objected to CMS' proposal because it would result in administrative reporting burden for additional laboratories without having a perceptible impact on CLFS rates (because the largest laboratories with the highest test volumes will continue to dominate the weighted median of private payor rates). They stated that increasing the number of laboratories qualifying for applicable laboratory status and imposing additional data reporting burden, with no perceptible impact expected on the CLFS rates, is in direct conflict with the Administration's goal of reducing regulatory burden.

Response: As discussed in the proposed rule, including MA plan payments as total Medicare revenues in the majority of Medicare revenues threshold (as we currently do) dilutes the percentage of total Medicare revenues attributed to CLFS and PFS revenues. As a result, laboratories performing tests for a significant Medicare Part C population are less likely to qualify as an applicable laboratory and, therefore, to report applicable information to us.

For the additional data reporting burden, as discussed in the Regulatory Impact Analysis in section VII. of the proposed rule (83 FR 36048), we estimated that excluding MA plan payments from total Medicare revenues (the denominator) of the majority of Medicare revenues threshold, and keeping the numerator constant (that is, revenues from only the CLFS and or PFS) yielded an increase of 49 percent in the number of laboratories meeting the majority of Medicare revenues threshold.

We also noted in the proposed rule that there would only be an associated impact to the Medicare rates to the extent the additional applicable laboratories are paid at a higher (or lower) private payor rate, as compared to other laboratories that reported previously and to the extent the volume of services performed by these additional applicable laboratories is significant enough to make an impact on the weighted median of private payor rates. Given that the largest laboratories with the highest test volumes dominate the weighted median of private payor rates, and the largest laboratories reported data for the determination of CY 2018 CLFS rates and are expected to report again, we stated that we do not expect the additional reported data resulting from our proposed change to the majority of Medicare revenues threshold to have a predictable, direct impact on CLFS rates. By this we mean that we cannot predict whether the additional applicable laboratories reporting applicable information are paid at a higher (or lower) private payor rate, as compared to other laboratories that reported previously and whether the private payor rate volume of services performed by these additional applicable laboratories is significant enough to make an impact on the weighted median of private payor rates.

However, as we noted in the proposed rule, our proposal to exclude MA plan payments from total Medicare revenues responded directly to stakeholder concerns regarding the number of applicable laboratories reporting applicable information for the initial data reporting period. We believe that enabling more laboratories of all types that furnish testing to a significant Medicare Part C population to qualify as applicable laboratories and report data to CMS directly supports our goal of collecting as much applicable information as possible from the broadest representation of the national laboratory market on which to base CLFS payment amounts. Therefore, we believe receiving additional applicable information from more laboratories of all laboratory types outweighs the additional reporting burden on laboratories.

Comment: One commenter disagreed with CMS' proposal to define MA plan payments as private payor payments and not Medicare revenues for the purpose of determining applicable laboratory status. The commenter stated that MA plans are Medicare plans that rarely negotiate a rate that varies from the Medicare payment rate and that using MA plan payments to develop Medicare rates is simply a circular reference. The commenter also stated that Medicaid managed care plans should not be considered as a private payor because state Medicaid programs may set laboratory test rates at a percentage of the Medicare CLFS, for example, 80 percent of the Medicare CLFS rate. As such, the commenter stated that the use of Medicaid managed care plan data will create a “downward spiral” of CLFS rates.

Response: Sections 1834A(a)(8)(B) and (C) of the Act define a private payor to include a Medicare Advantage plan under Part C, and a Medicaid managed care organization (as defined in section 1903(m) of the Act), respectively. Therefore, the statute would not permit us to exclude a Medicare Advantage plan under Part C or a Medicaid managed care organization from the definition of private payor for the purposes of determining the applicable information reported to us from which to set CLFS rates. We understand the commenter's concern regarding the potential circularity of using Medicaid managed care and MA plan data to set Medicare CLFS rates to the extent that Medicaid managed care and MA plan rates are established based on Medicare rates. However, we note that section 1834A(a) of the Act explicitly directs us to use such data in setting the CLFS rates. For the suggestion that including Medicaid managed care plan data will result in a “downward spiral,” we note that the statute anticipates that rates will decrease under the new private payor rate-based CLFS and provides a phase-in of payment reductions. Section 1834A(b)(3) of the Act, implemented at § 414.507(d), limits the amounts the CLFS rates for each CDLT (that is not a new ADLT or new CDLT) can be reduced as compared to the payment rates for the preceding year. For the first 3 years after implementation (CY 2018 through CY 2020), the reduction cannot be more than 10 percent per year, and for the next 3 years (CY 2021 through CY 2023), the reduction cannot be more than 15 percent per year. We also note that the Medicaid managed care plans may or may not be obligated to continue to use Medicare rates (or a reduction thereof) as a basis for their rates were such a “downward spiral” to occur.

Comment: One commenter urged CMS to conduct a more robust and transparent analysis of this proposal to identify the types of laboratories to which this policy would apply and the relative impact on payment rates. The commenter also requested that CMS release the number of clinical laboratories that previously reported applicable information, based on market segment and geographic locations. The commenter asserted that without such information, it would be premature to implement a proposal that will only increase administrative burden on hospitals and other organizations which will be forced to re-determine their applicable laboratory status.

Response: As discussed previously, our proposal to exclude MA plan payments from the total Medicare revenues for purposes of applying the majority of Medicare revenues threshold would affect laboratories of all types, that is hospital laboratories, large and small independent laboratories, and physician office laboratories that furnish services to a significant Medicare Part C enrollment population. We also explained that since the largest laboratories with the highest test volumes dominate the weighted median of private payor rates, and the largest laboratories reported data for the determination of CY 2018 CLFS rates and are expected to report again, we did not expect the additional reported data resulting from our proposed change to the majority of Medicare revenues threshold to have a predictable, direct impact on CLFS rates. As we noted previously, this means that we cannot predict whether the additional applicable laboratories reporting applicable information are paid at a higher (or lower) private payor rate, as compared to other laboratories that reported previously and whether the private payor rate volume of services performed by these “additional” applicable laboratories is significant enough to make an impact on the weighted median of private payor rates. However, we noted that we believe this proposal responded directly to stakeholder concerns regarding the number of applicable laboratories reporting applicable information for the initial data reporting period (83 FR 36049). We also noted that in the previous data reporting period we received applicable information from 1,942 applicable laboratories from every state, the District of Columbia, and Puerto Rico, and that additional summary information regarding data reporting for the Medicare CLFS from the first data reporting period is available on the CLFS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Downloads/CY2018-CLFS-Payment-System-Summary-Data.pdf.

Given that section 1834A(a)(8)(B) of the Act specifically defines MA plans under Part C as private payors, and an applicable laboratory that receives MA plan payments must consider those MA plan payments in identifying its applicable information for reporting, we believe that it is more logical to consider MA plan payments only as private payor rates for purposes of reporting applicable information, rather than both private payor rates and Medicare revenues. We believe this is consistent with the statute and will help to increase laboratory participation from all types of laboratories. At the same time, we recognize the administrative concerns raised by some commenters regarding the data reporting requirements for laboratories with a significant Medicare Part C revenue component, particularly as some of these laboratories may be small physician offices or independent laboratories, which we have previously discussed as having a significant burden in reporting applicable information. However, as discussed previously in response to comments, we believe that modifying our definition of applicable laboratory so that we may receive applicable information from more laboratories that furnish tests to a significant Medicare Part C population, which are less likely to qualify for applicable laboratory status under the current policy, outweighs the additional reporting burden placed on these laboratories as well as directly supports our goal of collecting as much applicable information as possible from the broadest representation of the national laboratory market on which to base CLFS payment amounts. For these reasons we are finalizing our proposal to modify the definition of applicable laboratory to exclude MA plan revenues from total Medicare revenues (the denominator of the majority of Medicare revenues threshold). We are revising paragraph (3) of the definition of applicable laboratory at § 414.502 accordingly.

Comment: In addition to CMS' proposal to exclude MA plan payments from total Medicare revenues, one commenter recommended that CMS also remove prescription drug payments under Medicare Part D from the description of total Medicare revenues in the applicable laboratory definition. The commenter stated that including Part D payments is illogical because there is no circumstance under which such payments would be related to laboratory testing.

Response: As discussed previously, we are finalizing our proposal to modify the definition of applicable laboratory to exclude MA plan payments from total Medicare revenues, the denominator of the majority of Medicare revenues threshold, so that more types of laboratories may qualify as an applicable laboratory. While the agency did not propose or solicit comments on the possibility of excluding Medicare Part D revenues from total Medicare revenues, we will take the commenter's suggestion into consideration for future refinements to the CLFS. However, we note that if the commenter is correct that there is no circumstance under which such payments would be related to laboratory testing, then whether Part D payments are included or excluded from the denominator would have no effect on the calculation.

4. Solicitation of Public Comments on Other Approaches To Defining Applicable Laboratory

As discussed in the CY 2019 PFS proposed rule (83 FR 35858), and as noted previously, we define applicable laboratory at the NPI level, which means the laboratory's own billing NPI is used to identify a laboratory's revenues for purposes of determining whether it meets the majority of Medicare revenues threshold and the low expenditure threshold components of the applicable laboratory definition. For background purposes, the following summarizes some of the considerations we made in establishing this policy.

In the CLFS proposed rule, entitled Medicare Clinical Diagnostic Laboratory Tests Payment System, published in the October 1, 2015 Federal Register, we proposed to define applicable laboratory at the TIN level so that an applicable laboratory would be an entity that reports tax-related information to the IRS under a TIN with which all of the NPIs in the entity are associated, and was itself a laboratory or had at least one component that was a laboratory, as defined in § 493.2. In the CLFS proposed rule, we discussed that we considered proposing to define applicable laboratory at the NPI level. However, we did not propose that approach because we believed private payor rates for CDLTs are negotiated at the TIN level and not by individual laboratory locations at the NPI level. Numerous stakeholders had indicated that the TIN-level entity is the entity negotiating pricing, and therefore, is the entity in the best position to compile and report applicable information across its multiple NPIs when there are multiple NPIs associated with a TIN-level entity. We stated that we believed defining applicable laboratory by TIN rather than NPI would result in the same applicable information being reported, and would require reporting by fewer entities, and therefore, would be less burdensome to applicable laboratories. In addition, we stated that we did not believe reporting at the TIN level would affect or diminish the quality of the applicable information reported. To the extent the information is accurately reported, we expected reporting at a higher organizational level to produce exactly the same applicable information as reporting at a lower level (80 FR 59391 through 59393).

Commenters who objected to our proposal to define applicable laboratory at the TIN level stated that our definition would exclude hospital laboratories because, in calculating the applicable laboratory's majority of Medicare revenues amount, which looks at the percentage of Medicare revenues from the PFS and CLFS across the entire TIN-level entity, virtually all hospital laboratories would not be considered an applicable laboratory. Many commenters expressed particular concern that our proposed definition would exclude hospital outreach laboratories, stating that hospital outreach laboratories, which do not provide laboratory services to hospital patients, are direct competitors of the broader independent laboratory market, and therefore, excluding them from the definition of applicable laboratory would result in incomplete and inappropriate applicable information, which would skew CLFS payment rates. Commenters maintained that CMS needed to ensure reporting by a broad scope of the laboratory market to meet what they viewed as the intent of the statute that all sectors of the laboratory market be included to establish accurate market-based rates (81 FR 41045).

In issuing the CLFS final rule, we found particularly compelling the comments that urged us to adopt a policy that would better enable hospital outreach laboratories to be applicable laboratories because we agreed hospital outreach laboratories should be included in determining the new CLFS payment rates. We believed it was important to facilitate reporting of private payor rates for hospital outreach laboratories to ensure a broader representation of the national laboratory market to use in setting CLFS payment amounts (81 FR 41045).

We also stated in the CLFS final rule that we believed the intent of the statute was to effectively exclude hospital laboratories as applicable laboratories, based on the statutory language, in particular, regarding the majority of Medicare revenues threshold criterion in section 1834A(a)(2) of the Act. Section 1834A(a)(2) of the Act provides that, to qualify as an applicable laboratory, an entity's revenues from the CLFS and the PFS need to constitute a majority of its total Medicare payments received from the Medicare program for a data collection period. What we found significant was that most hospital laboratories would not meet that majority of Medicare revenues threshold because their revenues under the Inpatient Prospective Payment System (IPPS) and Outpatient Prospective Payment System (OPPS) alone would likely far exceed the revenues they received under the CLFS and PFS. Therefore, we stated that we believe the statute intended to limit reporting primarily to independent laboratories and physician offices (81 FR 41045 through 41047). For a full discussion of the definition of applicable laboratory, see the CLFS final rule (81 FR 41041 through 41051).

a. Stakeholder Continuing Comments and Stakeholder-Suggested Alternative Approaches

As noted above, in response to public comments, we had previously finalized that an applicable laboratory is the NPI-level entity so that a hospital outreach laboratory assigned a unique NPI, separate from the hospital of which it is a part, is able to meet the definition of applicable laboratory and its applicable information can be used for CLFS rate-setting. We stated in the CY 2019 PFS proposed rule that we continue to believe that the NPI is the most effective mechanism for identifying Medicare revenues for purposes of determining applicable laboratory status and identifying private payor rates for purposes of reporting applicable information. Once a hospital outreach laboratory obtains its own unique billing NPI and bills for services using its own unique NPI, Medicare and private payor revenues are directly attributable to the hospital outreach laboratory. By defining applicable laboratory using the NPI, Medicare payments (for purposes of determining applicable laboratory status) and private payor rates and the associated volume of CDLTs can be more easily identified and reported to us. We also noted that we believe that finalizing our proposal to exclude MA plan payments under Medicare Part C from total Medicare revenues in the definition of applicable laboratory may increase the number of entities meeting the majority of Medicare revenues threshold, and therefore, allow them to qualify for applicable laboratory status. We stated that we believe that finalizing the change to the total Medicare revenues component of the applicable laboratory definition and our current policy that requires an entity to bill Medicare Part B under its own NPI, may increase the number of hospital outreach laboratories qualifying as applicable laboratories.

In addition, we noted that we are confident that our current policy supports our collecting sufficient applicable information in the next data reporting period, and that we received sufficient and reliable applicable information with which we set CY 2018 CLFS rates, and that those rates are accurate. We noted that we received applicable information from laboratories in every state, the District of Columbia, and Puerto Rico. This data included private payor rates for almost 248 million laboratory tests conducted by 1,942 applicable laboratories, with over 4 million records of applicable information. As we have noted, the largest laboratories dominate the market, and therefore, most significantly affect the payment weights (81 FR 41049). We stated that given that the largest laboratories reported their applicable information to CMS in the initial data reporting period, along with many smaller laboratories, we believe the data we used to calculate the CY 2018 CLFS rates was sufficient and resulted in accurate weighted medians of private payor rates.

However, we noted that we continue to consider refinements to our policies that could lead to including even more applicable information for the next data reporting period. Therefore, the comments and alternative approaches suggested by commenters, even though some were first raised prior to the CLFS final rule, were presented and offered for comment as part of the proposed rule.

(1) Using Form CMS-1450 UB 04 (and Electronic Equivalent, 837I) 14X Type of Bill (TOB) To Determine Majority of Medicare Revenues and Low Expenditure Thresholds

Although an NPI-based definition of applicable laboratories includes more hospital outreach laboratories than a TIN-based definition, some commenters expressed concern that the NPI-based definition of applicable laboratory may not be sufficient to capture all of the hospital outreach laboratories. These commenters suggested we revise the definition specifically for the purpose of including more hospital outreach laboratories. Under a suggested approach, a laboratory could determine whether it meets the majority of Medicare revenues threshold and low expenditure threshold using only the revenues from services reported on the Form CMS-1450 (approved Office of Management and Budget number 0938-0997) 14x Type of Bill (TOB), which is used only by hospital outreach laboratories. The CMS-1450 14X TOB is the uniform bill (also known as the UB-04) for institutional providers that was approved by the National Uniform Billing Committee (NUBC) at its February 2005 meeting.

The data elements referenced in the UB-04 manual are also used in the electronic claim standard as required by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (Pub. L. 104-191, enacted August 21, 1996) as per of sections 1171 and 1172 of the Act. Consequently, there was additional emphasis placed on aligning the reporting instructions to closely mirror the HIPAA claim standard for institutional providers for both paper and electronic claims. The TOB is a required element on both the UB 04 and electronic equivalent of the 837I transaction of the HIPAA compliant 005010 standard transaction. The NUBC defines the 14X TOB as an outpatient hospital TOB, and it is used by hospitals to bill a payor for outreach laboratory services for non-patients. As discussed in Transmittal 3425, a non-patient is defined as a beneficiary who is neither an inpatient nor an outpatient of a hospital, but who has a specimen that is submitted for analysis to a hospital and the beneficiary is not physically present at the hospital for purposes of the laboratory service. All hospitals (including Critical Access Hospitals) bill non-patient laboratory tests on a TOB 14X. They are paid under the CLFS, and the Part B deductible and coinsurance do not apply. We believe that laboratory services billed on the CMS 1450 14X encompass all of the laboratory testing services.

To address this stakeholder's concern of including hospital outreach laboratories, we solicited public comments in the CY 2019 PFS on revising the definition of applicable laboratory to permit the revenues identified on the Form CMS-1450 14x TOB to be used instead of the revenues associated with the NPI that the laboratory uses in order to determine whether it meets the majority of Medicare revenues threshold (and the low expenditure threshold). Under this approach, the applicable revenues would be based on the bills used for hospital laboratory services provided to non-patients, which are paid under Medicare Part B (that is, the 14x TOB). If we pursued this approach, we explained that we would have to modify the definition of applicable laboratory in § 414.502 by indicating that an applicable laboratory may include an entity that bills Medicare Part B on the Form CMS-1450 14x TOB.

Although using the 14x TOB could alleviate some initial, albeit limited, administrative burden on hospital outreach laboratories to obtain a unique billing NPI, we explained that we would have operational and statutory authority concerns about defining applicable laboratory by the Form CMS-1450 14x TOB, as indicated below.

First, we explained that defining an applicable laboratory using the Form CMS-1450 14x TOB does not identify an entity the same way an NPI does. Whereas an NPI is associated with a provider or supplier to determine specific Medicare revenues, the 14x TOB is merely a billing mechanism that is currently used only for a limited set of services. Under an approach that permits laboratories to meet the majority of Medicare revenues threshold using the 14x TOB, private payor rates (and the volume of tests paid at those rates) would have to be identified that are associated with only the outreach laboratory services of a hospital's laboratory business. However, some private payors, such as MA plans, may not require hospital outreach laboratories to use the 14x TOB for their outreach laboratory services. To the extent a private payor does not require hospital outreach laboratory services to be billed on a 14x TOB (which specifically identifies outreach services), hospitals may need to develop their own mechanism for identifying and reporting only the applicable information associated with its hospital outreach laboratory services. In light of this possible scenario, we requested public comments about the utility of using the 14x TOB in the way we have described and on the level of administrative burden created if we defined applicable laboratory using the Form CMS-1450 14x TOB.

Second, we questioned whether hospitals would have sufficient time after publication of a new final rule that included using the Form CMS-1450 14x TOB, and any related subregulatory guidance, to develop and implement the information systems necessary to collect private payor rate data before the start of the next data collection period, that is, January 1, 2019. Therefore, we solicited public comments as to whether revising the definition of applicable laboratory to use the Form CMS-1450 14x TOB would allow laboratories sufficient time to make the necessary systems changes to identify applicable information before the start of the next data collection period.

Third, we noted that we believe defining applicable laboratory at the NPI level, as we currently do, provides flexibility for hospital outreach laboratories to not obtain a unique billing NPI, which may be burdensome, particularly where a hospital outreach laboratory performs relatively few outreach services under Medicare Part B. For example, under the current definition of applicable laboratory, if a hospital outreach laboratory's CLFS revenues in a data collection period are typically less than the low expenditure threshold, the hospital of which it is a part could choose not to obtain a separate NPI for its outreach laboratory and could thus avoid determining applicable laboratory status for its outreach laboratory component. In contrast, if laboratories were permitted to use the Form CMS-1450 14x TOB, revenues attributed to the hospital outreach laboratory would have to be calculated in every instance where those services exceeded the low expenditure threshold. This would be true even for a hospital outreach laboratory that performs relatively few outreach services under Medicare Part B. Therefore, we also solicited comments concerning this aspect of using the 14x TOB definition.

Fourth, and significantly, we stated that we believe that if we were to utilize such an approach in defining applicable laboratory, all hospital outreach laboratories would meet the majority of Medicare revenues threshold. We noted, at that time, we believed this approach would be inconsistent with the statute. By virtue of the majority of Medicare revenues threshold, the statute defines applicable laboratory in such a way that not all laboratories qualify as applicable laboratories. However, if we were to use the CMS-1450 14x TOB to define an applicable laboratory, all hospital outreach laboratories that use the 14x TOB would meet the majority of Medicare revenues threshold. Accordingly, we requested public comments regarding whether this definition would indeed be inconsistent with the statute, as well as comments that could identify circumstances under this definition whereby a hospital outreach laboratory would not meet the majority of Medicare revenues threshold.

The following is a summary of the comments we received and our responses to the comments regarding the use of the CMS-1450 14x TOB to define an applicable laboratory.

Comment: We received conflicting comments on this potential refinement to the definition of an applicable laboratory. Some commenters supported using the CMS-1450 14x TOB as a mechanism to define an applicable laboratory, and others were opposed to this approach. The commenters who supported this believe that it provides an opportunity for hospital outreach laboratories that have not obtained an NPI separate from the hospital to qualify as an applicable laboratory and report applicable information. These commenters opined that since the 14X TOB is used only to submit claims by hospital outreach laboratories for non-patient claims, this approach would include hospital laboratories without their own NPI who compete in the marketplace with independent clinical laboratories. These commenters also noted that, in their view, this approach would effectuate Congress' intent to determine whether a majority of Medicare revenues attributable to the laboratory part of the hospital—as opposed to the entire hospital—was from the CLFS and/or PFS.

Another commenter stated their view that considerable burden is associated with requiring a hospital outreach laboratory to obtain its own NPI. According to this commenter, a hospital would need to re-credential under a new NPI with each of their payors in order to submit claims and receive payment from each of their payors for their hospital outreach laboratory services. This commenter stated that this process could take more than a year to complete. Accordingly, this commenter concluded that hospital outreach laboratories rarely obtain their own unique NPI (separate from the hospital) and it would not be practical to do so for the single purpose of reporting applicable information to CMS.

Additional commenters in support of refinements to the definition responded to CMS' concern that revenues attributed to the hospital outreach laboratory would have to be calculated in every instance where those services exceeded the low expenditure threshold, even for a hospital outreach laboratory that performs relatively few outreach services under Medicare Part B. In response to this concern, commenters noted that this refinement to the definition would require hospital outreach laboratories to have the same obligations as other laboratories that exceed the low expenditure threshold and that serve non-hospital patients. Furthermore, commenters suggested that if CMS is concerned that refinements to the definition would result in all hospital outreach laboratories meeting the majority of Medicare revenues threshold, that is the case for almost all independent laboratories, as well, where hospital outreach laboratories compete with independent laboratories in the marketplace. Furthermore, they stated it is reasonable that a laboratory whose revenues are derived primarily from the CLFS and/or PFS and that meets the low expenditure threshold be included in data reporting, regardless if it is a hospital outreach laboratory.

In contrast, several commenters strongly opposed the use of Form CMS-1450 14x TOB to define an applicable laboratory because of their views of the additional administrative burden for hospitals relative to the effect on CLFS rates. These commenters stated that even if every hospital outreach laboratory were to report private payor data, it is unlikely that it would result in a significant change to the weighted median of private payor rates due to the massive amount of data that would be reported by the large independent laboratories. They also agreed with the potential operational feasibility concerns we raised in the proposed rule.

Response: We appreciate the comments raised about the administrative aspects of obtaining an NPI for a hospital outreach laboratory for the sole purpose of reporting data to CMS and the associated administrative burden. We agree that one advantage of using the Form CMS-1450 14x TOB to define an applicable laboratory is that it provides an opportunity for more hospital outreach laboratories to report data for calculating CLFS rates. However, we also recognize that this will result in additional administrative burden on the hospital industry, such as changes to collect and report applicable information. We discuss specific operational concerns in more detail in the sections below. However, we generally believe that this advantage outweighs the potential burden for hospital outreach laboratories, the data collected from hospital outreach laboratories will create a dataset that is a more robust representation of the laboratory testing market, and that this outweighs the potential burden to hospital outreach laboratories. Accordingly, we are finalizing the use of the Form CMS-1450 14x TOB to define applicable laboratories for the next data collection period (January 1, 2019, through June 30, 2019) and the next data reporting period (January 1, 2020, and ends March 31, 2020), subject to other regulatory and subregulatory requirements, such as the regulatory low expenditure threshold.

We also considered the comments regarding the limited impact of this additional data to the weighted median of private payor rates. We believe that we will only know the impact of the data on CLFS rates by collecting data from hospital outreach laboratories. We believe inclusion of this information so that the CLFS rates better reflect the market outweighs the potential added burden on one segment of the market. However, if it becomes apparent that data from hospital outreach laboratories do not result in a significant change in the weighted median of private payor rates, we will revisit the use of the CMS-1450 14x TOB through future rulemaking.

Comment: A few commenters stated that CMS should not be concerned that hospitals will need to develop additional mechanisms to identify applicable information if private payors do not require hospital outreach laboratories to use the CMS-1450 14x TOB. They noted that this point is not relevant to reporting private payor rates because once applicable laboratory status is determined, the hospital outreach laboratory “can simply report its private payor data for all of its fee for service work that is not part of a capitated plan.” The commenters stated that the reporting entities for all other laboratory types would have the same burden as hospital outreach laboratories, that is, of identifying and reporting accurate applicable information.

In contrast, several stakeholders raised concerns about the implications this alternative approach would have on identifying applicable information for purposes of reporting that data to us. They stated that the Form CMS-1450 14x TOB will only capture Medicare Part B revenues, while private payor data would not be captured. In other words, the 14x TOB will correctly identify Medicare Part B revenues for purposes of determining applicable laboratory status, but that the hospital would be responsible for correctly identifying and collecting applicable information associated solely with the hospital outreach laboratory. Several commenters stated that billing systems for hospital outreach laboratories are not set up in a manner that allows this type of information to be easily extracted, and therefore, this approach to defining an applicable laboratory would pose a significant operational burden on hospitals.

Response: We note that hospital outreach laboratories who meet the definition of an applicable laboratory would have the same burden of identifying and reporting accurate applicable information as all other laboratory types that meet the definition of an applicable laboratory.

Comment: Some commenters stated that they believe hospitals would have sufficient time to develop and implement the information systems necessary to collect private payor rate data before the start of the next data collection period, and noted that even though the CLFS final rule was published less than 2 weeks prior to the end of the first data collection period, applicable laboratories were able to develop and implement the information systems necessary to collect private payor rate data and report it to CMS. However, several commenters expressed serious concerns about developing the systems to collect applicable information before the next data reporting period. They indicated that finalizing this alternative approach for defining an applicable laboratory would not allow hospital outreach laboratories sufficient time to make the necessary systems changes prior to the start of the next data collection, and as a result, there would be a risk that inaccurate data would be reported.

Response: As discussed previously in this section, the next data collection period is January 1, 2019, through June 30, 2019. A 6-month window follows the data collection period from July 1, 2019, through December 31, 2019 and the next data reporting period begins January 1, 2020, and ends March 31, 2020. While several commenters raised concerns about the operational changes needed for reporting before the next data collection period, we believe that, similar to the retroactive data collection that occurred under the initial private payor rate-based CLFS, hospitals, including the part of the hospital represented by their hospital outreach laboratories, could develop these operational changes in time. For example, hospitals, including the part of the hospital represented by their hospital outreach laboratories, could use the time before and during the next data collection period to develop processes to collect applicable information, the 6-month window between the collection and reporting periods to determine applicable laboratory status and retroactively collect applicable information to report it before the close of the next data reporting period (March 31, 2020).

Comment: Many commenters noted the concern that hospital outreach laboratories would lose the flexibility to not obtain an NPI for low volume hospital outreach laboratories. For instance, they stated all hospitals would be required to go through the exercise of determining applicable laboratory status for their hospital outreach laboratory components. However, a few commenters indicated that hospital outreach laboratories would have the same obligations as every other laboratory to determine whether it is an applicable laboratory. Therefore, in their view, the loss of flexibility for hospital outreach laboratories to not obtain an NPI should not be a concern.

Response: We agree that the use of Form CMS-1450 14x TOB to define an applicable laboratory will require hospitals to assess applicable laboratory status for all outreach laboratory components, similar to the obligations of other laboratory types. For instance, all independent and physician office laboratories billing Medicare Part B under their own NPI must assess whether they qualify as an applicable laboratory, and if so, report applicable information to us. Consequently, independent and physician office laboratories do not have the flexibility of not reporting private payor data that is currently afforded to hospital outpatient laboratories. Use of the 14x TOB to define an applicable laboratory would equalize the obligations across laboratories, regardless of their affiliation with a hospital, to determine whether they qualify for applicable laboratory status. We note that, insofar as commenters expressed concern about low volume hospital outreach laboratories, our policy regarding laboratories receiving less than a minimum in CLFS revenues remains unchanged. Specifically, hospital outreach laboratories that do not receive at least $12,500 in CLFS revenues on the 14X TOB during a data collection period would be exempt from the reporting requirements.

Comment: Several commenters noted that by using the 14x TOB to define an applicable laboratory, all hospital outreach laboratories would meet the majority of Medicare revenues threshold. They, therefore, raised concerns about the legality of this approach. For instance, some commenters stated their view that Congress did not intend for all hospital outreach laboratories to qualify as applicable laboratories. In contrast, some commenters stated their view that Congress clearly intended for the CLFS to reflect a market-based system that includes hospital outreach laboratories and that it is reasonable for a laboratory with revenues derived primarily from the CLFS and/or PFS that also meets the low expenditure threshold to be an applicable laboratory, regardless of whether it is a hospital outreach laboratory or not.

Response: After further review of this issue, we believe that using Form CMS-1450 14x TOB provides a means of distinguishing services furnished by a hospital outreach laboratory from other services furnished and billed by a hospital using the same NPI. The statute specifically directs us to identify applicable “laboratories” and not “providers” or “suppliers.” We believe that hospital outreach laboratories without unique NPIs furnish clinical laboratory tests paid under the CLFS and PFS, albeit to Medicare beneficiaries who are not hospital patients. Accordingly, we believe such laboratories, should not be exempt from reporting the applicable data merely due to their shared use of a billing entity with a hospital.

Using the laboratory's own billing NPI as the basis for defining applicable laboratory, as we currently do, results in all independent laboratories meeting the statutory “majority of Medicare revenues” requirement because most, if not all, of an independent laboratory's Medicare revenues are received from the PFS and or CLFS. Similar to how the use of the NPI results in all independent laboratories meeting the majority of Medicare revenues threshold, using the Form CMS-1450 14x TOB as the basis for defining applicable laboratory would identify all hospital outreach laboratories that meet the statutorily required “majority of Medicare revenues” component of applicable laboratory.

We believe that the use of Form CMS-1450 14x TOB as a mechanism for applying the majority of Medicare revenues threshold identifies hospital outreach laboratories that meet this threshold, consistent with the statutory requirement for applicable laboratory status. We further believe that, absent having an NPI separate from the hospital, these hospital outreach laboratories otherwise would be excluded. We do not believe that the statute excludes laboratories that meet the majority of Medicare revenues threshold from potentially qualifying as an applicable laboratory. Therefore, using the 14x TOB to define applicable laboratory is consistent with the statute.

As stated above, accordingly, we are finalizing the use of the Form CMS-1450 14x TOB to define applicable laboratories, subject to other regulatory and subregulatory requirements, such as the regulatory low expenditure threshold.

Comment: Two commenters stated that it is unclear whether the burden associated with considering every hospital outreach laboratory to meet the majority of Medicare revenues threshold and an applicable laboratory (if the low expenditure threshold is also met) would outweigh the additional applicable information that would be reported. Therefore, they requested that we continue evaluating this approach before implementing any changes.

Response: As we stated previously, we generally believe that the advantage of including private payor data from hospital outreach laboratories in setting CLFS rates outweighs the potential burden for hospital outreach laboratories; data collected from hospital outreach laboratories will create a dataset that is a more robust representation of the laboratory testing market. We also note that the timing of the data collection and reporting periods, and the 6 month window in between provide time for laboratories to implement needed operational changes.

Comment: One commenter suggested that an alternative approach to identifying applicable laboratories would be for the hospital to develop an “adjustment factor” based on its payment-to-charges ratio to estimate laboratory revenues received from the IPPS and OPPS. The same commenter suggested that we remove the requirement that an applicable laboratory is an entity that bills Medicare Part B under its own NPI and that we amend the majority of Medicare revenues threshold so that “Medicare revenues” means payment for claims submitted on a CMS 1500, a CMS 1450 using a 14x TOB, or their electronic equivalents.

Response: We appreciate this suggested approach and we may consider it in future rulemaking.

In conclusion, as stated previously and for the reasons described previously, we are finalizing the use of the Form CMS-1450 14x TOB to define applicable laboratories, subject to other regulatory and subregulatory requirements, such as the regulatory low expenditure threshold.

We note that because of the low expenditure threshold, not all hospital outreach laboratories would meet the definition of an applicable laboratory and therefore not all hospital outreach laboratories would be required to report applicable information to us. In other words, hospital outreach laboratories that do not receive at least $12,500 in CLFS revenues on the 14X TOB during a data collection period would be exempt from the reporting requirements.

We believe that defining applicable laboratory by the NPI may be preferable to using the CMS-1450 14x TOB for some hospitals and so expect that some hospital outreach laboratories may still want to obtain their own billing NPI separate from the hospital. As such, they may do so and may qualify as an applicable laboratory in this manner. If so, they would report applicable information during the next data reporting period beginning January 1, 2020, through March 31, 2020.

We note that we utilize ongoing subregulatory guidance and provider education materials to provide more details regarding how applicable laboratories, both those identified through NPIs and hospital outreach laboratories identified through the combination of NPI and services reported using the 14x TOBs, are to report the applicable data to CMS. We also note that for hospitals which have an applicable laboratory, whether via its own NPI for its outreach laboratory or by identifying its status with the 14X TOB, the applicable laboratory would be required to report applicable information by March 31, 2020, for services reimbursed for the period between January 1, 2019, and June 30, 2019.

In conclusion, as stated previously, we are finalizing the use of the Form CMS-1450 14x TOB to define applicable laboratories. In other words, we are finalizing modification of the definition of applicable laboratory to also include 14X TOB revenues. We will also revise paragraph (2) of the definition of applicable laboratory at § 414.502 accordingly.

(2) Using CLIA Certificate To Define Applicable Laboratories

Some commenters requested that we use the CLIA certificate rather than the NPI to identify a laboratory that would be considered an applicable laboratory. We discussed in the CLFS proposed rule (80 FR 59392) why not all entities that meet the CLIA regulatory definition at § 493.2 would be applicable laboratories, and therefore, we did not propose to use the CLIA certificate as the mechanism for defining applicable laboratory. However, some commenters to the CLFS proposed rule suggested we use the CLIA certificate to identify the organizational entity that would be considered an applicable laboratory so that each entity that had a CLIA certificate would be an applicable laboratory (81 FR 41045). We considered those comments in the CLFS final rule and discussed why we chose not to adopt that approach.

Among other reasons, we explained in the CLFS final rule that we believed a CLIA certificate-based definition of applicable laboratory would be overly inclusive by including all hospital laboratories, as opposed to just hospital outreach laboratories. In addition, the CLIA certificate is used to certify that a laboratory meets applicable health and safety regulations in order to furnish laboratory services. Unlike, for example, the NPI, with which revenues for specific services can easily be identified, the CLIA certificate is not associated with Medicare billing and cannot be used to identify revenues for specific services. We also indicated that we did not know how a hospital would determine whether its laboratories would meet the majority of Medicare revenues threshold (and the low expenditure threshold) using the CLIA certificate as the basis for defining an applicable laboratory. In addition, we stated that, given the difficulties many hospitals would likely have in determining whether their laboratories are applicable laboratories, we also believed hospitals may object to using the CLIA certificate (81 FR 41045).

However, in light of stakeholders' suggestions to use the CLIA certificate to include hospital outreach laboratories in the definition of applicable laboratories, we solicited public comments on that approach. Under such an approach, the majority of Medicare revenues threshold and low expenditure threshold components of the definition of applicable laboratory would be determined at the CLIA certificate level instead of the NPI level. We explained that if we pursued such an approach, we would have to modify the definition of applicable laboratory in § 414.502 to indicate that an applicable laboratory is one that holds a CLIA certificate under § 493.2 of the chapter. We noted in the CY 2019 PFS proposed rule that we would have concerns, however, about defining applicable laboratory by the CLIA certificate.

First, we explained that as we discussed in the CLFS final rule, given that information regarding the CLIA certificate is not required on the Form CMS-1450 14x TOB, which is the billing form used by hospitals for their laboratory outreach services, it is not clear how a hospital would identify and distinguish revenues generated by its separately CLIA-certified laboratories for their outreach services. Therefore, we solicited public comments regarding the mechanisms a hospital would need to develop to identify revenues if we used the CLIA certificate for purposes of determining applicable laboratory status, as well as comments about the administrative burden associated with developing such mechanisms.

In addition, we understood there could be a scenario where one CLIA certificate is assigned to a hospital's entire laboratory business, which would include laboratory tests performed for hospital patients as well as non-patients (that is, patients who are not admitted inpatients or registered outpatients of the hospital). For example, hospital laboratories with an outreach laboratory component would be assigned a single CLIA certificate if the hospital outreach laboratory has the same mailing address or location as the hospital laboratory. We noted that in this scenario, the majority of Medicare revenues threshold would be applied to the entire hospital laboratory, not just its outreach laboratory component. If a single CLIA certificate is assigned to the hospital's entire laboratory business, the hospital laboratory would be unlikely to meet the majority of Medicare revenues threshold because its laboratory revenues under the IPPS and OPPS alone would likely far exceed the revenues it receives under the CLFS and PFS. As a result, a hospital outreach laboratory that could otherwise meet the definition of applicable laboratory, as currently defined at the NPI level, would not be an applicable laboratory if we were to require the CLIA certificate to define applicable laboratory. Given that this approach could have the effect of decreasing as opposed to increasing the number of applicable laboratories, we requested public comments on this potential drawback of defining applicable laboratory at the CLIA certificate level. We stated in the comment solicitation that feedback on this topic could help inform us regarding potential refinements to the definition of applicable laboratory, and that depending on the comments we receive, it is possible we would consider approaches described in that section. The following is a summary of the comments we received and our responses to the comments regarding the use of the CLIA certificate to define an applicable laboratory.

Comment: Many commenters did not support using the CLIA certificate to define applicable laboratory because of the administrative complexity associated with this approach. Commenters stated that the CLIA certificate has no relationship to actual laboratory revenues, like the NPI does, and therefore, laboratories would need to develop their own mechanisms to attribute Medicare revenues to the CLIA certificate. Commenters stated that any “workaround” to resolve these issues would be extremely burdensome to develop and implement. These same commenters also noted that when one CLIA certificate is assigned to a hospital's entire laboratory business, which would include laboratory tests performed for hospital patients as well as non-patients, the total Medicare revenues component of the majority of Medicare revenues threshold equation would be “overly inclusive.” Therefore, they agreed with CMS' concern that hospital outreach laboratories would be unlikely to meet the majority of Medicare revenues threshold under those circumstances because revenues from the IPPS and OPPS alone would likely far exceed the revenues those laboratories receive under the CLFS and PFS. For these reasons, they encouraged CMS to reject the use of the CLIA certificate for defining an applicable laboratory.

Response: We agree that defining applicable laboratory by the CLIA certificate would result in substantial administrative burden for the laboratory industry. From an administrative perspective, we believe the using the CLIA certificate unworkable for the purpose of determining applicable laboratory status because the CLIA certificate is not required on the CMS 1450 14x TOB which is the billing form used by hospital outreach laboratories. Therefore, no revenues can be readily identified by the CLIA certificate. Even if the hospital developed its own mechanism to identify revenues by the CLIA certificate, the CLIA certificate could be assigned to the hospital's entire laboratory business, which includes laboratory tests performed for hospital patients, as well as non-patients. For example, we understand hospital-based laboratories with an outreach component would be assigned a single CLIA certificate if the hospital outreach laboratory has the same mailing address or location as the main laboratory. In this scenario, the applicable laboratory criteria would be applied to the CLIA certificate of the entire hospital laboratory not just its outreach laboratory component. When a single CLIA certificate is assigned to the hospital's entire laboratory business, we believe it would result in the hospital laboratory not meeting the majority of Medicare revenues threshold because its laboratory revenues under the IPPS and OPPS alone will far exceed the revenues it receives under the CLFS and PFS. We also understand that a hospital could have multiple outreach laboratories each with its own CLIA certificate. Therefore, we believe those hospitals would also have difficulties separating Medicare revenues and applicable information among their various CLIA certificates as described below.

Comment: One commenter stated that it is unlikely that a single CLIA certificate would be assigned to both its outreach laboratory (non-patients) and its laboratory that that provides testing for its hospital inpatients and hospital outpatients. The commenter stated that it would be more likely that the outreach laboratory would be at a different location than the hospital and therefore, be assigned its own CLIA certificate even though the outreach laboratory is enrolled in the Medicare program under the hospital's NPI. As such, the commenter stated that an outreach laboratory operates as a distinct laboratory entity by virtue of having its own CLIA certificate and billing on the Form CMS-1450 14x TOB. The commenter suggested that the 14x TOB could be used in combination with each individual CLIA certificate to define applicable laboratory.

Response: We understand that the assignment of CLIA certificates for hospital outreach laboratories could vary depending on the location of the outreach laboratory. As discussed previously, Medicare revenues are not attributed to the CLIA certificate and information regarding the CLIA certificate is not required on the Form CMS-1450 14x TOB. As such, we believe the commenter's suggestion would result in defining applicable laboratory by the Form CMS-1450 14x TOB. We note that in cases in which a hospital owns and operates multiple outreach laboratories at different locations, we believe the administrative burden of attributing Medicare revenues to the CLIA certificate would be even more substantial as there could be several CLIA certificates assigned under the same NPI. In such cases, the hospital would need to attribute laboratory revenues among multiple CLIA certificates under the same billing entity. In other words, if the 14x TOB is used by a hospital to bill for laboratory tests furnished by more than one CLIA certificate under the same NPI, the hospital would need to devise a mechanism to attribute Medicare revenues to each individual CLIA certificate.

5. Solicitation of Public Comments on the Low Expenditure Threshold in the Definition of Applicable Laboratory

a. Decreasing the Low Expenditure Threshold

In the CLFS final rule, we established a low expenditure threshold component in the definition of applicable laboratory at § 414.502, which is reflected in paragraph (4). To be an applicable laboratory, at least $12,500 of an entity's Medicare revenues in a data collection period must be CLFS revenues (with the exception that there is no low expenditure threshold for an entity with respect to the ADLTs it furnishes). We established $12,500 as the low expenditure threshold because we believed it achieved a balance between collecting sufficient data to calculate a weighted median that appropriately reflects the private market rate for a test, and minimizing the reporting burden for laboratories that receive a relatively small amount of revenues under the CLFS. We indicated in the CLFS final rule (81 FR 41049) that once we obtained applicable information under the new payment system, we may decide to reevaluate the low expenditure threshold in future years and propose a different threshold amount through notice and comment rulemaking.

We explained in the CY 2019 PFS proposed rule that we recently heard from some laboratory stakeholders that the low expenditure threshold excludes most physician office laboratories and many small independent laboratories from reporting applicable information, and that by excluding so many laboratories, the payment rates under the new private payor rate-based CLFS reflect incomplete data, and therefore, inaccurate CLFS pricing.

As noted previously, we discussed in the CLFS final rule that we believed a $12,500 low expenditure threshold would reduce the reporting burden on small laboratories. In the CLFS final rule (81 FR 41051), we estimated that 95 percent of physician office laboratories and 55 percent of independent laboratories would not be required to report applicable information under our low expenditure criterion. Although we substantially reduced the number of laboratories qualifying as applicable laboratories (that is, approximately 5 percent of physician office laboratories and approximately 45 percent of independent laboratories), we estimated that the percentage of Medicare utilization would remain high. That is, approximately 5 percent of physician office laboratories would account for approximately 92 percent of CLFS spending on physician office laboratories and approximately 45 percent of independent laboratories would account for approximately 99 percent of CLFS spending on independent laboratories (81 FR 41051).

We stated that it is our understanding that physician offices are generally not prepared to identify, collect, and report each unique private payor rate from each private payor for each laboratory test code subject to the data collection and reporting requirements, and the volume associated with each unique private payor rate. As such, we explained that we believe revising the low expenditure threshold so that more physician office laboratories are required to report applicable information would likely impose significant administrative burdens on physician offices. We stated that we also believe that increasing participation from physician office laboratories would have minimal overall impact on payment rates given that the weighted median of private payor rates is dominated by the laboratories with the largest test volume. We noted that our participation simulations from the first data reporting period show that increasing the volume of physician office laboratories reporting applicable information has minimal overall impact on the weighted median of private payor rates. For more information on our participation simulations, please visit the CLFS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Downloads/CY2018-CLFS-Payment-System-Summary-Data.pdf.

We stated in the proposed rule that we continue to believe the current low expenditure threshold strikes an appropriate balance between collecting enough private payor rate data to accurately represent the weighted median of private payor rates while limiting the administrative burden on small laboratories. In addition, as discussed previously in this section, we are finalizing excluding MA plan revenues under Part C from total Medicare revenues in the definition of applicable laboratory, and we noted that we expect more laboratories of all types, including physician office laboratories, may meet the majority of Medicare revenues threshold.

However, we recognized from stakeholders that some physician office laboratories and small independent laboratories that are not applicable laboratories because they do not meet the current low expenditure threshold may still want to report applicable information despite the administrative burden associated with qualifying as an applicable laboratory. Therefore, we sought public comment on revising the low expenditure threshold to increase the level of participation among physician office laboratories and small independent laboratories.

In the proposed rule we explained that one approach could be for us to decrease the low expenditure threshold by 50 percent, from $12,500 to $6,250, in CLFS revenues during a data collection period. Under such an approach, a laboratory would need to receive at least $6,250 in CLFS revenues in a data collection period. We stated that if we were to adopt such an approach, we would need to revise paragraph (4) of the definition of applicable laboratory at § 414.502 to replace $12,500 with $6,250. We solicited public comments on this approach.

We noted that we were particularly interested in comments from the physician community and small independent laboratories as to the administrative burden associated with such a revision to the low expenditure threshold. Specifically, we requested comments on the following issues: (1) Whether physician offices and small independent laboratories currently have adequate staff levels to meet the data collection and data reporting requirements; (2) whether data systems are currently in place to identify, collect, and report each unique private payor rate from each private payor for each CLFS test code and the volume of tests associated with each unique private payor rate; (3) if physician offices and small independent laboratories are generally not prepared to conduct the data collection and data reporting requirements, what is the anticipated timeframe needed for physician office and small independent laboratories to be able to meet the data collection and data reporting requirements; and (4) any other administrative concerns that decreasing the low expenditure threshold may impose on offices and small independent laboratories.

The following is a summary of the comments we received and our responses to the comments regarding the approach of decreasing the low expenditure threshold by 50 percent, from $12,500 to $6,250, in CLFS revenues during a data collection period.

Comment: Many commenters were opposed to reducing the low expenditure threshold because of the administrative burden it would place on physician office laboratories and small independent laboratories. Commenters noted that they experienced difficulties during the initial data collection and data reporting period with determining whether they met the definition of applicable laboratory and therefore if they were required to report applicable information. Some commenters that did report applicable information stated that they experienced significant administrative burden in collecting and compiling information, especially for test codes that involved numerous different sources of payment (such as the beneficiary's primary private payor, the beneficiary's secondary insurance, and coinsurance requirements). Some commenters reported having to remove staff from regular duties to work full time on preparing to report applicable information to CMS. A few commenters noted that physician office laboratories and small independent laboratories do not have the staffing or resources currently available, nor do they anticipate having them available in the future, to identify, collect and report each unique private payor rate for each CLFS test code and the volume of tests associated with each unique private payor rate. As such, commenters encouraged CMS not to decrease the low expenditure threshold component of the definition of applicable laboratory.

Response: We appreciate the comments regarding the administrative burden imposed by the data collection and reporting requirements on physician office laboratories and small independent laboratories and understand that reducing the low expenditure threshold by 50 percent would add more burden on this segment of the laboratory industry. We will consider the commenters' input regarding the low expenditure threshold as we continue to evaluate and refine Medicare CLFS payment policy in the future.

Comment: A few commenters suggested alternative approaches to lowering the low expenditure threshold that involve collecting data for physician office dependent tests and allowing laboratories to voluntarily report applicable information. For example, two commenters suggested that CMS identify laboratory tests predominantly performed by physician office laboratories and collect a statistically representative sample of data from physician office laboratories for the range of tests commonly performed in this setting. Under the commenters' approach, physician office laboratories would be required to report those tests. The commenters stated that this would ensure that the private payor rates for tests mostly performed by physician office laboratories are represented in the weighted median of private payor rates used to determine CLFS rates. Moreover, a few other commenters suggested that CMS permit voluntary reporting so that laboratories that do not meet the current low expenditure threshold may report applicable information if they choose to.

Response: The suggestions to identify physician office laboratory dependent tests and to permit voluntary reporting have already been addressed in previous rulemaking and we chose not to adopt them (81 FR 41048). We noted that statute is clear about the particular information that is to be reported and on which we must base the new CLFS payment rates. Only applicable information of applicable laboratories is to be reported, and section 1834A(a)(3) of the Act indicates that applicable information is private payor rate information. We also explained that the statute imposes parameters on the collection and reporting of private payor rate information, and section 1834A(b) of the Act specifies that the payment amounts for CDLTs are to be based on the median of the private payor rate information. As such, we stated that we believe the statute supports our policy to prohibit information other than statutorily specified private payor rate information of applicable laboratories from being reported and used to set CLFS payment amounts under the revised CLFS. We also noted that we did not agree with the commenters' recommendation to allow voluntary reporting and at § 414.504(g), we finalized that an entity that does not meet the definition of an applicable laboratory may not report applicable information. We continue to believe that our policy to not allow voluntary reporting is the most appropriate interpretation of the statute, and that applicable information may not be reported for an entity that does not meet the definition of an applicable laboratory.

b. Increasing the Low Expenditure Threshold

We also discussed in the CY 2019 PFS proposed rule that we recognize many small laboratories may not want the additional administrative burden of data collection and reporting and, because their test volume is relatively low, their data is unlikely to have a meaningful impact on the weighted median of private payor rates for CDLTs under the CLFS. In response to comments from smaller laboratories that they prefer to not be applicable laboratories because of the burden of collecting and reporting applicable information, we stated that we could increase the low expenditure threshold in the definition of applicable laboratory by 50 percent, from $12,500 to $18,750, in CLFS revenues during a data collection period. Because physician office laboratories would be less likely to meet a higher threshold, such an approach would decrease the number of physician office laboratories and small independent laboratories required to collect and report applicable information. We noted that we expected decreasing the number of physician office laboratories and small independent laboratories reporting applicable information would have minimal impact on determining CLFS rates because the largest laboratories with the highest test volumes dominate the weighted median of private payor rates.

We stated that if we were to adopt such an approach, we would need to revise paragraph (4) of the definition of applicable laboratory at § 414.502 to replace $12,500 with $18,750. We explained in the proposed rule that we were particularly interested in comments from the physician community and small independent laboratories on the administrative burden and relief of increasing the low expenditure threshold and noted that we believe that feedback on the topics discussed in this section would help inform us regarding potential refinements to the low expenditure threshold. We noted that depending on the comments we received, we would consider approaches described in this section.

The following is a summary of the comments we received and our responses to the comments regarding the approach of increasing the low expenditure threshold by 50 percent, from $12,500 to $18,750, in CLFS revenues during a data collection period.

Comment: Several commenters did not support raising the low expenditure threshold because it would further reduce the amount of applicable information reported from small laboratories. However, one commenter encouraged CMS to increase the low expenditure threshold to exclude even more small laboratories from the administrative burden of collecting and reporting applicable information. A few commenters suggested that CMS not make any changes to the low expenditure threshold at this time and encouraged CMS to allow the program to mature and to only make changes after a careful and transparent review of the data with additional opportunities for public comment.

Response: We appreciate the comments from stakeholders on raising the low expenditure threshold and understand that increasing the low expenditure threshold by 50 percent would lead to fewer physician office laboratories and small independent laboratories from reporting applicable information for purposes of calculating CLFS rates. We will consider the commenters input on increasing the low expenditure threshold as we continue to evaluate and refine Medicare CLFS payment policy in the future, but make no changes to this policy at this time.

c. Additional Comments Received

Comment: Many commenters stated that CMS' implementation of the new private payor rate-based CLFS does not reflect the cost or the value of performing clinical laboratory services and that without meaningful changes to how data is collected from laboratories, Medicare beneficiaries will lose access to the vital laboratory services they rely on to monitor their health and prevent and treat many diseases and conditions. The commenters stated that CMS' regulations, which implemented the private payor rate-based CLFS required under PAMA, prohibit most independent laboratories and physician office laboratories, and virtually all hospital laboratories, from providing data to set Medicare rates, and therefore, results in “skewed data” that does not represent true market rates. The commenters stated that Congress directed CMS to implement a market-based payment system in which private market data from all segments of the laboratory industry, including independent laboratories, hospital laboratories, and physician office laboratories, would be collected in order to determine Medicare reimbursement for laboratory tests. To implement a true market based payment system the commenters encouraged CMS to develop payment rates through a statistically valid process to ensure that the private payer data collected accurately represents all sectors of the laboratory market.

Response: In general, section 1834A of the Act requires the payment amount for each CDLT on the CLFS to be based on the applicable information collected from applicable laboratories during a data collection period and reported to CMS during a data reporting period. For most tests on the CLFS, the statute requires the payment amount to be equal to the weighted median of the private payor rates for each test and specifies that the weighted median is calculated by arraying the distribution of all private payor rates, weighted by the volume for each payor and each laboratory. Given that the largest laboratories reported their applicable information to CMS in the initial data reporting period, as well as many smaller laboratories, we believe the data we used to calculate the CY 2018 CLFS rates was sufficient and resulted in accurate weighted medians of private payor rates per test as required by the statute. As discussed previously in this section, we are finalizing our proposal to exclude MA plan payments under Part C from total Medicare revenues for purposes of the applicable laboratory definition. We believe this change will permit laboratories of all types with a significant Medicare Part C revenue component to be more likely to meet the majority of Medicare revenues threshold and qualify as an applicable laboratory. As a result of this change, we believe that applicable information from a broader segment of the laboratory industry will be reported for purposes of calculating the CLFS rates. As stated previously, we are finalizing the use of the Form CMS-1450 14x TOB to define applicable laboratories, subject to other regulatory and subregulatory requirements, such as the regulatory low expenditure threshold.

Comment: One commenter stated that the reductions in Medicare payment rates for laboratory tests result directly from CMS' regulatory decisions to relieve most laboratories of reporting burdens. According to the commenter, excluding so many laboratories from the data reporting requirements results in median prices that are not representative across the clinical laboratory industry. As such, the commenter noted that the market data upon which Medicare reimbursement is based does not reflect the market composition of the clinical laboratory industry. In other words, exempting low-volume and many hospital laboratories from reporting does not allow for Medicare prices to reflect the full range of payment amounts paid to varying entities. The commenter encouraged CMS to collect data from a broader segment of the laboratory industry and suggested that we weight private payor rates by market share (that is, prices typically paid per reporting entity), instead of based on overall volume per test.

Response: As discussed in response to the previous comment, section 1834A of the Act generally requires the payment amount for each CDLT on the CLFS to be based on the applicable information collected from applicable laboratories during a data collection period and reported to CMS during a data reporting period. Because for most tests, the payment amount is equal to the median of the private payor rates weighted by volume, the largest laboratories with the highest test volumes will most significantly affect the payment rates. Because of this, we established and implemented a low expenditure threshold to alleviate administrative burden on small laboratories. We believe that our current method of calculating the weighted median of private payor rates is appropriate and consistent with the statute. Given that the largest laboratories reported their applicable information to us in the initial data reporting period, along with many smaller laboratories, we believe the data we used to calculate the CY 2018 CLFS rates was sufficient and resulted in accurate weighted medians of private payor rates as required by statute. As noted above, we are finalizing changes to the definition of an applicable laboratory, which we believe will lead to an even more robust data collection from which to calculate payment rates for the next CLFS update.

Comment: Many commenters stated that the administrative burden for the first data reporting period was overwhelming and they offered suggestions on how to reduce the reporting burden on applicable laboratories. Many commenters suggested that CMS implement a “data aggregation system” consistent with statutory authority. In addition, a few commenters requested that CMS allow flexibility to exclude manual remittances from the definition of applicable information and therefore from data reporting. One commenter requested an “across the board waiver” from the reporting requirement for all small medical practices.

Response: We addressed the comment requesting exclusion of manual remittances from the definition of applicable information in the CLFS final rule (81 FR 41053 through 41054). We explained that the statute is clear that applicable information, which is used to set CLFS payment amounts, must be reported for applicable laboratories for a data collection period, and it defines applicable information, in part, as the payment rate that was paid by each private payor for the test during a data collection period and the volume of such tests for each such payor for the data collection period. As such, we stated that we believe the statute does not support selective reporting of applicable information for applicable laboratories. If the laboratory meets the definition of applicable laboratory, the applicable information for that laboratory must be reported. In addition, given that the statute requires applicable information to be reported for applicable laboratories, we do not believe granting an “across the board waiver” from the reporting requirements for all small laboratories would be consistent with statute. We believe that the low expenditure threshold would continue to exclude the majority of small laboratories from the applicable laboratory definition and, therefore, from data reporting.

With regard to the commenters suggesting that we implement aggregate reporting, we note that section 1834A(a)(6) of the Act permits the Secretary, beginning with January 1, 2019, to establish rules to aggregate reporting in situations where an applicable laboratory has more than one payment rate for the same payor for the same test or more than one payment rate for different payors for the same test. While the agency did not propose or solicit comments on implementing aggregate data reporting, we will take the commenters' suggestion into consideration for future refinements to the CLFS. However, to help reduce administrative burden for the next data reporting period, we will allow reporting entities the option to condense certain applicable information at the TIN-level, instead of reporting for each applicable laboratory individually at the NPI level. We will provide more information regarding the condensed reporting option through subregulatory guidance during the next data collection period.

Comment: One commenter suggested that CMS adopt a 90-day data collection period instead of the current 6-month data collection period to alleviate some of the burden associated with collecting applicable information.

Response: While we did not propose or solicit comments on changing the data collection period, we will take the commenter's suggestion into consideration for future refinements to the CLFS.

Comment: One commenter raised concerns about the integrity of the data reported during the first data reporting period. The commenter mentioned that the CLFS final rule was released just prior to the end of the first data collection period and as a result, laboratories struggled to collect information and submit the required data accurately. The commenter noted that many laboratories still do not have the systems in place to determine the private payor payment rates for each test and the associated volume paid at each rate, therefore exacerbating the potential for inaccurate reporting in the next data reporting period. The commenter was particularly concerned about how inaccurate data affects newer tests in which the volume of services has remained relatively low as compared to well established laboratory procedures. For instance, because of the low volume of applicable information being reported for Tier 1 and Tier 2 molecular pathology procedures, the commenter stated that any inaccurate data reported has a greater impact on these test codes. The commenter noted that expanding the definition of an applicable laboratory would likely result in additional reporting errors and therefore, did not support any revisions to the definition of an applicable laboratory. Instead, the commenter urged CMS to refine the reporting process and implement measures to safeguard data integrity in future reporting periods. Specifically, the commenter requested that CMS consider implementing a data aggregation system for future data reporting periods, consistent with statutory authority. The commenter noted that a data aggregation system may guarantee more complete reporting and expand the ability of laboratories to report accurate data.

Response: We share the commenter's interest in collecting accurate data. As discussed previously, we are finalizing changes to the definition of applicable laboratory in § 414.502. We did not propose changes to the CLFS data reporting requirements or solicit comments on how to safeguard against inaccurate data. We will consider the issues raised by the commenter for future rulemaking. As noted in response to another comment, for the next data reporting period we will permit the reporting entity to condense applicable information for its applicable laboratories at the TIN level, instead of reporting for each of its applicable laboratories individually, and will issue subregulatory guidance on this topic.

Comment: One commenter stated that in general “our market based system is flawed” because it allows companies to profit on people's health. The commenter stated that the CLFS should be based on recovering costs only and not profit. The commenter noted that such approach will lead to a decrease in cost for laboratory testing and a standardization of fees across the industry.

Response: As previously noted, section 1834A of the Act generally requires the payment amount for each CDLT on the CLFS to be based on the applicable information collected from applicable laboratories during a data collection period and reported to us during a data reporting period. Basing CLFS rates on laboratory costs would not be permissible under the statute.

Comment: One commenter stated that uncertainty regarding the definition of an ADLT has discouraged some laboratories from applying for ADLT status, and suggested that we should implement the regulatory requirements in a manner that “recognizes the uniqueness of the results generated by each precision diagnostic test due to its use of a proprietary algorithm validated in a unique patient cohort.”

Response: We did not propose or solicit any comments regarding changes to the definition of an ADLT, therefore, this comment is not within the scope of this rulemaking.

B. Changes to the Regulations Associated With the Ambulance Fee Schedule

1. Overview of Ambulance Services

a. Ambulance Services

Under the ambulance fee schedule, the Medicare program pays for ambulance transportation services for Medicare beneficiaries under Medicare Part B when other means of transportation are contraindicated by the beneficiary's medical condition and all other coverage requirements are met. Ambulance services are classified into different levels of ground (including water) and air ambulance services based on the medically necessary treatment provided during transport.

These services include the following levels of service:

• For Ground—

++ Basic Life Support (BLS) (emergency and non-emergency).

++ Advanced Life Support, Level 1 (ALS1) (emergency and non-emergency).

++ Advanced Life Support, Level 2 (ALS2).

++ Paramedic ALS Intercept (PI).

++ Specialty Care Transport (SCT).

• For Air—

++ Fixed Wing Air Ambulance (FW).

++ Rotary Wing Air Ambulance (RW).

b. Statutory Coverage of Ambulance Services

Under sections 1834(l) and 1861(s)(7) of the Act, Medicare Part B (Supplemental Medical Insurance) covers and pays for ambulance services, to the extent prescribed in regulations, when the use of other methods of transportation would be contraindicated by the beneficiary's medical condition.

The House Ways and Means Committee and Senate Finance Committee Reports that accompanied the 1965 Social Security Amendments suggest that the Congress intended that—

• The ambulance benefit cover transportation services only if other means of transportation are contraindicated by the beneficiary's medical condition; and
• Only ambulance service to local facilities be covered unless necessary services are not available locally, in which case, transportation to the nearest facility furnishing those services is covered (H.R. Rep. No. 213, 89th Cong., 1st Sess. 37 and Rep. No. 404, 89th Cong., 1st Sess. Pt 1, 43 (1965)).

The reports indicate that transportation may also be provided from one hospital to another, to the beneficiary's home, or to an extended care facility.

c. Medicare Regulations for Ambulance Services

The regulations relating to ambulance services are set forth at 42 CFR part 410, subpart B, and 42 CFR part 414, subpart H. Section 410.10(i) lists ambulance services as one of the covered medical and other health services under Medicare Part B. Therefore, ambulance services are subject to basic conditions and limitations set forth at § 410.12 and to specific conditions and limitations included at §§ 410.40 and 410.41. Subpart H of part 414 describes how payment is made for ambulance services covered by Medicare Part B.

2. Ambulance Extender Provisions

a. Amendment to Section 1834(l)(13) of the Act

Section 146(a) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), (Pub. L. 110-275, enacted July 15, 2008) amended section 1834(l)(13)(A) of the Act to specify that, effective for ground ambulance services furnished on or after July 1, 2008, and before January 1, 2010, the ambulance fee schedule amounts for ground ambulance services shall be increased as follows:

• For covered ground ambulance transports that originate in a rural area or in a rural census tract of a metropolitan statistical area, the fee schedule amounts shall be increased by 3 percent.
• For covered ground ambulance transports that do not originate in a rural area or in a rural census tract of a metropolitan statistical area, the fee schedule amounts shall be increased by 2 percent.

The payment add-ons under section 1834(l)(13)(A) of the Act have been extended several times. Most recently, section 50203(a)(1) of the Bipartisan Budget Act of 2018 (BBA) (Pub. L. 115-123, enacted February 9, 2018) amended section 1834(l)(13)(A) of the Act to extend the payment add-ons through December 31, 2022. Thus, these payment add-ons apply to covered ground ambulance transports furnished before January 1, 2023. We proposed to revise § 414.610(c)(1)(ii) to conform the regulations to this statutory requirement. (For further information regarding the implementation of this provision for claims processing, please see CR 10531. For a discussion of past legislation extending section 1834(l)(13) of the Act, please see the CY 2014 PFS final rule with comment period (78 FR 74438 through 74439), the CY 2015 PFS final rule with comment period (79 FR 67743) and the CY 2016 PFS final rule with comment period (80 FR 71071 through 71072)).

This statutory requirement is self-implementing. A plain reading of the statute requires only a ministerial application of the mandated rate increase, and does not require any substantive exercise of discretion on the part of the Secretary.

We received two comments on this proposal. The following is a summary of those comments along with our response.

Comment: One commenter supported the 5-year extension of the add-on payments and appreciates CMS' implementation of the statutory requirement, and stated these provisions are critical to ensuring the delivery of ambulance services. Another commenter stated that due to the staffing and distances that might be involved in the use of ambulance services in varying areas (for example, urban, rural and super rural), these add-ons payments will assist in appropriate reimbursements for these services.

Response: We appreciate the commenters' support.

After consideration of the comments received, we are finalizing our proposal, without modification, to revise § 414.610(c)(1)(ii) to conform the regulations to this statutory requirement.

b. Amendment to Section 1834(l)(12) of the Act

Section 414(c) of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Pub. L. 108-173, enacted December 8, 2003) (MMA) added section 1834(l)(12) to the Act, which specified that, in the case of ground ambulance services furnished on or after July 1, 2004, and before January 1, 2010, for which transportation originates in a qualified rural area (as described in the statute), the Secretary shall provide for a percent increase in the base rate of the fee schedule for such transports. The statute requires this percent increase to be based on the Secretary's estimate of the average cost per trip for such services (not taking into account mileage) in the lowest quartile of all rural county populations as compared to the average cost per trip for such services (not taking into account mileage) in the highest quartile of rural county populations. Using the methodology specified in the July 1, 2004 interim final rule (69 FR 40288), we determined that this percent increase was equal to 22.6 percent. As required by the MMA, this payment increase was applied to ground ambulance transports that originated in a “qualified rural area,” that is, to transports that originated in a rural area included in those areas comprising the lowest 25th percentile of all rural populations arrayed by population density. For this purpose, rural areas included Goldsmith areas (a type of rural census tract). This rural bonus is sometimes referred to as the “Super Rural Bonus” and the qualified rural areas (also known as “super rural” areas) are identified during the claims adjudicative process via the use of a data field included in the CMS-supplied ZIP code file.

The Super Rural Bonus under section 1834(l)(12) of the Act has been extended several times. Most recently, section 50203(a)(2) of the BBA amended section 1834(l)(12)(A) of the Act to extend this rural bonus through December 31, 2022. Therefore, we are continuing to apply the 22.6 percent rural bonus described in this section (in the same manner as in previous years) to ground ambulance services with dates of service before January 1, 2023 where transportation originates in a qualified rural area. Accordingly, we proposed to revise § 414.610(c)(5)(ii) to conform the regulations to this statutory requirement. (For further information regarding the implementation of this provision for claims processing, please see CR 10531. For a discussion of past legislation extending section 1834(l)(12) of the Act, please see the CY 2014 PFS final rule with comment period (78 FR 74439 through 74440), CY 2015 PFS final rule with comment period (79 FR 67743 through 67744) and the CY 2016 PFS final rule with comment period (80 FR 71072)).

This statutory provision is self-implementing. It requires an extension of this rural bonus (which was previously established by the Secretary) through December 31, 2022, and does not require any substantive exercise of discretion on the part of the Secretary.

We received two comments on this proposal. The following is a summary of those comments along with our response.

Comment: One commenter supported the 5-year extension of this provision and appreciates CMS' implementation of the statutory requirement and noted this provision is critical to ensuring the delivery of ambulance services. Another commenter stated that due to the staffing and distances that might be involved in the use of ambulance services in varying areas (for example, urban, rural and super rural), these add-ons payments will assist in appropriate reimbursements for these services.

Response: We appreciate the commenters' support.

After consideration of the comments received, we are finalizing our proposal, without modification, to revise § 414.610(c)(5)(ii) to conform the regulations to this statutory requirement.

3. Amendment to Section 1834(l)(15) of the Act

Section 637 of the American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240, enacted January 2, 2013) added section 1834(l)(15) of the Act to specify that the fee schedule amount otherwise applicable under the preceding provisions of section 1834(l) of the Act shall be reduced by 10 percent for ambulance services furnished on or after October 1, 2013, consisting of non-emergency BLS services involving transport of an individual with end-stage renal disease for renal dialysis services (as described in section 1881(b)(14)(B) of the Act) furnished other than on an emergency basis by a provider of services or a renal dialysis facility. In the CY 2014 PFS final rule with comment period (78 FR 74440), we revised § 414.610 by adding paragraph (c)(8) to conform the regulations to this statutory requirement.

Section 53108 of the BBA amended section 1834(l)(15) of the Act to increase the reduction from 10 percent to 23 percent effective for ambulance services (as described in section 1834(l)(15) of the Act) furnished on or after October 1, 2018. The 10 percent reduction applies for ambulance services (as described in section 1834(l)(15) of the Act) furnished during the period beginning on October 1, 2013 and ending on September 30, 2018. Accordingly, we proposed to revise § 414.610(c)(8) to conform the regulations to this statutory requirement.

This statutory requirement is self-implementing. A plain reading of the statute requires only a ministerial application of the mandated rate decrease, and does not require any substantive exercise of discretion on the part of the Secretary. Accordingly, for ambulance services described in section 1834(l)(15) of the Act furnished during the period beginning on October 1, 2013 and ending on September 30, 2018, the fee schedule amount otherwise applicable (both base rate and mileage) is reduced by 10 percent, and for ambulance services described in section 1834(l)(15) of the Act furnished on or after October 1, 2018, the fee schedule amount otherwise applicable (both base rate and mileage) is reduced by 23 percent. (For further information regarding application of this mandated rate decrease, please see CR 10549.)

We received two comments on this proposal. The following is a summary of those comments along with our response.

Comment: One commenter supported the reduction of payment for these ambulance services and stated that the payment adjustment for non-emergency, BLS transports for ESRD beneficiaries is at an appropriate level. Another commenter stated that for accountable care organizations, transportation for dialysis services constitutes the largest portion of ambulance spending. According to the commenter, because patients often do not receive medical care during the transportation, they supported the reduction to the ambulance fee schedule for the transportation of patients with ESRD for renal dialysis services.

Response: We appreciate the commenters' support.

After consideration of the comments received, we are finalizing our proposal, without modification, to revise § 414.610(c)(8) to conform the regulations to the statutory requirement described above.

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

1. Payment for Care Management Services

In the CY 2018 PFS final rule, we revised the payment methodology for Chronic Care Management (CCM) services furnished by RHCs and FQHCs, and established requirements and payment for general Behavioral Health Integration (BHI) and psychiatric Collaborative Care Management (CoCM) services furnished in RHCs and FQHCs, beginning on January 1, 2018.

For CCM services furnished by RHCs or FQHCs between January 1, 2016, and December 31, 2017, payment is at the PFS national average payment rate for CPT 99490. For CCM, general BHI, and psychiatric CoCM services furnished by RHCs or FQHCs on or after January 1, 2018, we established 2 new HCPCS codes. The first HCPCS code, G0511, is a General Care Management code for use by RHCs or FQHCs when at least 20 minutes of qualified CCM or general BHI services are furnished to a patient in a calendar month. The second HCPCS code, G0512, is a psychiatric CoCM code for use by RHCs or FQHCs when at least 70 minutes of initial psychiatric CoCM services or 60 minutes of subsequent psychiatric CoCM services are furnished to a patient in a calendar month.

The payment amount for HCPCS code G0511 is set at the average of the 3 national non-facility PFS payment rates for the CCM and general BHI codes and updated annually based on the PFS amounts. The 3 codes are CPT 99490 (20 minutes or more of CCM services), CPT 99487 (60 minutes or more of complex CCM services), and CPT 99484 (20 minutes or more of BHI services).

The payment amount for HCPCS code G0512 is set at the average of the 2 national non-facility PFS payment rates for CoCM codes and updated annually based on the PFS amounts. The 2 codes are CPT 99492 (70 minutes or more of initial psychiatric CoCM services) and CPT 99493 (60 minutes or more of subsequent psychiatric CoCM services).

For practitioners billing under the PFS, we proposed for CY 2019 a new CPT code, 994X7, which would correspond to 30 minutes or more of CCM furnished by a physician or other qualified health care professional and is similar to CPT codes 99490 and 99487. For RHCs and FQHCs, we proposed to add CPT code 994X7 as a general care management service and to include it in the calculation of HCPCS code G0511. That is, we proposed that starting on January 1, 2019, RHCs and FQHCs would be paid for HCPCS code G0511 based on the average of the national non-facility PFS payment rates for CPT codes 99490, 99487, 99484, and 994X7. We note that CPT code 994X7 was a placeholder code, and the final code is CPT code 99491.

We proposed to revise § 405.2464 to reflect the current payment methodology that was finalized in the CY 2018 PFS and incorporate the addition of the new CPT code to HCPCS code G0511.

2. Communication Technology-Based and Remote Evaluation Services

RHC and FQHC visits are face-to-face (in-person) encounters between a patient and an RHC or FQHC practitioner during which time one or more RHC or FQHC qualifying services are furnished. RHC and FQHC practitioners are physicians, nurse practitioners, physician assistants, certified nurse midwives, clinical psychologists, and clinical social workers, and under certain conditions, a registered nurse or licensed practical nurse furnishing care to a homebound RHC or FQHC patient. A Transitional Care Management service can also be an RHC or FQHC visit. A Diabetes Self-Management Training (DSMT) service or a Medical Nutrition Therapy (MNT) service furnished by a certified DSMT or MNT provider may also be an FQHC visit.

RHCs are paid an all-inclusive rate (AIR) for medically-necessary, face-to-face visits with an RHC practitioner. The rate is subject to a payment limit, except for those RHCs that have an exception to the payment limit for being “provider-based” (see § 413.65). FQHCs are paid the lesser of their charges or the FQHC Prospective Payment System (PPS) rate for medically-necessary, face-to-face visits with an FQHC practitioner. Only medically-necessary medical, mental health, or qualified preventive health services that require the skill level of an RHC or FQHC practitioner can be RHC or FQHC billable visits.

The RHC and FQHC payment rates reflect the cost of all services and supplies that an RHC or FQHC furnishes to a patient in a single day, and are not adjusted for the complexity of the patient health care needs, the length of the visit, or the number or type of practitioners involved in the patient's care.

Services furnished by auxiliary personnel (such as nurses, medical assistants, or other clinical personnel acting under the supervision of the RHC or FQHC practitioner) are considered incident to the visit and are included in the per-visit payment. This may include services furnished prior to or after the billable visit that occur within a medically appropriate time period, which is usually 30 days or less.

RHCS and FQHCs are also paid for care management services, including chronic care management services, general behavioral health integration services, and psychiatric Collaborative Care Model services. These are typically non-face-to-face services that do not require the skill level of an RHC or FQHC practitioner and are not included in the RHC or FQHC payment methodologies.

For practitioners billing under the PFS, we proposed for CY 2019 separate payment for certain communication technology-based services. This includes what is referred to as “Brief Communication Technology-Based Services” for a “virtual check-in” and separate payment for remote evaluation of recorded video and/or images. The “virtual check-in” visit would be billable when a physician or non-physician practitioner has a brief (5 to 10 minutes), non-face-to-face check in with a patient via communication technology to assess whether the patient's condition necessitates an office visit. This service could be billed only in situations where the medical discussion was for a condition not related to an E/M service provided within the previous 7 days, and does not lead to an E/M service or procedure within the next 24 hours or at the soonest available appointment. We also proposed payment for practitioners billing under the PFS for remote evaluation services. This payment would be for the remote evaluation of patient-transmitted information conducted via pre-recorded “store and forward” video or image technology, including interpretation with verbal follow-up with the patient within 24 business hours, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment. We stated that both of these services would be priced under the PFS at a rate that reflects the resource costs of these non-face-to-face services relative to other PFS services, including face-to-face and in-person visits.

The RHC and FQHC payment models are distinct from the PFS model in that the payment is for a comprehensive set of services and supplies associated with an RHC or FQHC visit. A direct comparison between the payment for a specific service furnished in an RHC or FQHC and the same service furnished in a physician's office is not possible, because the payment for RHCs and FQHCs is a per diem payment that includes the cost for all services and supplies rendered during an encounter, and payment for a service furnished in a physician's office and billed under the PFS is only for that service.

We recognize that there are occasions when it may be beneficial to both the patient and the RHC or FQHC to utilize communication technology-based services to determine the course of action for a health issue. Currently under the RHC and FQHC payment systems, if the communication results in a face-to-face billable visit with an RHC or FQHC practitioner, the cost of the prior communication would be included in the RHC AIR or the FQHC PPS. However, if as a result of the communication it is determined that a visit is not necessary, there would not be a billable visit and there would be no payment.

RHCs and FQHCs furnish services in rural and urban areas that have been determined to be medically underserved areas or health professional shortage areas. They are an integral component of the Nation's health care safety net, and we want to ensure that Medicare patients who are served by RHCs and FQHCs are able to communicate with their RHC or FQHC practitioner in a manner that enhances access to care, consistent with evolving medical care. Particularly in rural areas where transportation is limited and distances may be far, we believe the use of communication technology-based services may help some patients to determine if they need to schedule a visit at the RHC or FQHC. If it is determined that a visit is not necessary, the RHC or FQHC practitioner would be available for other patients who need their care.

When communication technology-based services are furnished in association with an RHC or FQHC billable visit, the costs of these services are included in the RHC AIR or the FQHC PPS and are not separately billable. However, if there is no RHC or FQHC billable visit, these costs are not paid as part of an RHC AIR or FQHC PPS payment. We therefore proposed that, effective January 1, 2019, RHCs and FQHCs receive an additional payment for the costs of communication technology-based services or remote evaluation services that are not already captured in the RHC AIR or the FQHC PPS payment when the requirements for these services are met.

We proposed that RHCs and FQHCs receive payment for communication technology-based or remote evaluation services when at least 5 minutes of communication technology-based or remote evaluation services are furnished by an RHC or FQHC practitioner to a patient who has been seen in the RHC or FQHC within the previous year. These services may only be billed when the medical discussion or remote evaluation is for a condition not related to an RHC or FQHC service provided within the previous 7 days, and does not lead to an RHC or FQHC service within the next 24 hours or at the soonest available appointment, since in those situations the services are already paid as part of the RHC or FQHC per-visit payment.

We proposed to create a new virtual communication G-code for use by RHCs and FQHCs only, with a payment rate set at the average of the PFS national non-facility payment rates for HCPCS code GVCI1 for communication technology-based services, and HCPCS code GRAS1 for remote evaluation services. RHCs and FQHCs would be able to bill the virtual communication G-code either alone or with other payable services. The payment rate for the virtual communication G-code would be updated annually based on the PFS amounts. We note that HCPCS codes GCVI1 and GRAS1 were placeholder codes, and the final HCPCS codes are G2012 and G2010, respectively.

We also proposed to waive the RHC and FQHC face-to-face requirements when these services are furnished to an RHC or FQHC patient. Coinsurance would be applied to FQHC claims, and coinsurance and deductibles would apply to RHC claims for these services. Services that are currently being furnished and paid under the RHC AIR or FQHC PPS payment methodology will not be affected by the ability of the RHC or FQHC to receive payment for additional services that are not included in the RHC AIR or FQHC PPS.

3. Other Options Considered

We considered other options for payment for these services. First, we considered adding communication technology-based and remote evaluation services as an RHC or FQHC stand-alone service. Under this option, payment for RHCs would be at the AIR, and payment for FQHCs would be the lesser of total charges or the PPS rate. We did not propose this payment option because these services do not meet the requirements for an RHC or FQHC billable visit and payment at the RHC AIR or FQHC PPS would result in a payment rate incongruent with efficiencies inherent in the provision of the technology-based services.

The second option we considered was to allow RHCs and FQHCs to bill HCPCS codes G2012 or G2010 separately on an RHC or FQHC claim. We did not propose this payment option because we believe that a combined G-code is less burdensome and will allow expansion of these services without adding additional codes on an RHC or FQHC claim.

4. Comments and Responses

We invited comments on this proposal. In particular, we were interested in comments regarding the appropriateness of payment for communication technology-based and remote evaluation services in the absence of an RHC or FQHC visit, the burden associated with documentation for billing these codes (RHC or FQHC practitioner's time, medical records, etc.), and any potential impact on the per diem nature of RHC and FQHC billing and payment structure as a result of payment for these services.

The following is a summary of the comments we received regarding the addition of CPT code 99491 to the codes used to determine the payment for HCPCS code G0511 in RHCs and FQHCs, and the proposed requirements and payment for a new G-code for virtual communication for payment for communication technology-based and remote evaluation services. The majority of the commenters were very supportive of both proposals, and some requested clarification on issues related to billing, cost reporting, and payment for care management and virtual communication services in RHCs and FQHCs.

Comment: Several commenters requested clarification of how the inclusion of the new chronic care management code, CPT code 99491 (previously referred to as CPT code 994X7), would impact the payment of HCPCS code G0511 (the RHC and FQHC General Care Management code), and requested assurance that adding this code to the codes used to determine the payment for HCPCS code G0511 would not result in a lower payment rate.

Response: In the CY 2018 PFS final rule, we stated that if a new care management code is proposed and subsequently finalized for practitioners billing under the PFS, we would review the new code to determine if it should be included in the calculation of the RHC and FQHC General Care Management Code. The determination of whether a new care management code should be added to the codes used to determine the payment rate is based on the applicability of the service in RHCs and FQHCs, and may result in either an increase or decrease in the payment amount for HCPCS code G0511.

CPT code 99491 is for 30 minutes or more of CCM furnished by a physician or other qualified health care professional. Since this is similar to CPT codes 99490 and 99487, we determined that it should be included in the RHC and FQHC General Care Management code, which is paid using HCPCS code G0511. The CY 2019 payment rate for this code is expected to be $74.26, and the payment rate for CY 2019 payment rate for HCPCS code G0511 is expected to be approximately $67, which will result in a higher payment for HCPCS code G0511 than it would have been if CPT code 99491 was not added to the codes used to determine the rate. The rate is adjusted annually based on the PFS payment rates for these codes.

Comment: A commenter stated that the care management services included in the PFS are already contemplated and included in the RHC AIR and the FQHC PPS payments, which are designed to cover all activities related to a comprehensive primary care visit, even if they do not occur on the same day. The commenter did not support separate payment to RHCs and FQHCs for care management services, and stated that paying separately for these services results in duplicative payment. The commenter also noted that because the care management payment is made through the RHC and FQHC payment systems, it does not trigger a budget-neutrality adjustment and therefore represents additional spending for the Medicare program and its beneficiaries.

Response: Comprehensive, high quality, and coordinated primary care has always been an integral part of RHC and FQHC services in their communities, We respectfully disagree with the suggestion that the type of structured chronic care management and behavioral health integration services that are now separately paid as care management are already included in the RHC AIR or the FQHC PPS payment methodologies. These services have specific requirements which have not typically or routinely been provided by RHCs or FQHCs, and therefore have not been factored into either the RHC AIR or the FQHC PPS rate. RHC and FQHC payments are not subject to the budget neutrality provisions of the PFS, and we believe that the cost-saving potential of these services is likely to offset any additional Medicare spending.

Comment: A commenter encouraged CMS to evaluate the additional costs of providing CCM services for people with limited English proficiency and to adjust payment accordingly in future rulemaking.

Response: We are aware that some RHCs and FQHCs have a higher than average rate of patients with limited English proficiency, which may sometimes require additional time or resources. However, once the minimum requirements for care management are met, the RHC or FQHC can bill for the service, and the rate is based on the average cost of furnishing the services.

Comment: Several commenters noted their support for a new G-code for payment for communication technology‐based and remote evaluation services and requested that CMS investigate its authority to allow FQHCs to serve as distant site providers for telehealth services to Medicare beneficiaries.

Response: Although both telehealth and virtual communication services use technology to communicate, these are separate and distinct services. Telehealth services are considered a substitute for an in-person visit, and are therefore paid at the same rate as it would have been had it been furnished in person. With some exceptions, telehealth services require the use of interactive audio and digital telecommunication systems that permit real-time communication between the practitioner at the distant site and the beneficiary at the originating site. The communication technology-based and remote evaluation services that we proposed are not a substitute for a visit, but are instead brief discussions with the RHC or FQHC practitioner to determine if a visit is necessary. If the discussion between the RHC or FQHC practitioner and the Medicare beneficiary results in a billable visit, then the usual RHC or FQHC billing would occur. The virtual communication G-code would only be separately payable if the discussion between the RHC or FQHC practitioner does not result from or lead to an RHC or FQHC billable visit. The payment rate for communication technology-based services are valued based on the shorter duration of time and the efficiencies associated with the use of communication technology.

Section 1834(m)(4)(C)(ii) of the Act authorizes RHCs and FQHCs to serve as telehealth “originating sites” (that is, where the patient is located) for qualified telehealth services. Section 1834(m)(1) of the Act, which describes distant site telehealth services (where the practitioner is located), does not include RHCs and FQHCs. We do not have the authority to allow RHCs and FQHCs to furnish distant site telehealth services, and RHCs and FQHCs may not bill for distant site telehealth services under the PFS.

Comment: Some commenters supported a separate payment for communication technology-based and remote evaluation services using a virtual communication G-code because these new services were not included in the calculation of the Medicare FQHC PPS rate, but requested that CMS reconsider the payment amount for these services. The commenters suggested that because an FQHC practitioner is required and the face-to-face requirements for these services are waived, the payment should be on par with a traditional FQHC visit.

Response: We disagree with the suggestion that the payment be on par with a regular FQHC visit. If the communication technology-based or remote evaluation service results in a face-to-face visit with an RHC or FQHC practitioner, the cost of the brief communication with the RHC or FQHC practitioner would already be included in the RHC AIR or the FQHC PPS payment. If the communication technology-based or remote evaluation service does not originate from or result in a face-to-face visit with an RHC or FQHC practitioner, the RHC or FQHC may bill using the new virtual communication G-code. The payment rate for these services under the PFS reflects the resource costs of these non-face-to-face services relative to other PFS services, including face-to-face and in-person visits. We did not propose payment for these services as an RHC or FQHC visit or at the same payment rate as an RHC or FQHC visit because these services do not meet the requirements for an RHC or FQHC billable visit, and payment at the RHC AIR or FQHC PPS would result in a payment rate incongruent with efficiencies inherent in the provision of these communication services.

Comment: Commenters recommended not implementing any type of frequency limitation, especially as RHCs and FQHCs learn to utilize these services for their patients. Commenters stated that any frequency limitation would be arbitrary, may have the opposite effect of the provision's intended purpose to encourage innovative ways to provide comprehensive care to Medicare beneficiaries, that the reimbursement rate does not provide a financial incentive for overuse of this service, and that the cost of virtual visits, even if unlimited, would more than offset the cost of even one emergency room visit.

Response: We agree that frequency limitations should not be implemented at this time.

Comment: Some commenters questioned the feasibility of billing for virtual communication services because they noted that the coinsurance requirement will discourage individuals from utilizing virtual communication services to assess whether or not they need to come in for an E/M visit, and will create patient confusion and dissatisfaction if they receive a bill for these services.

Response: We are aware that coinsurance can be a barrier for some beneficiaries, but we do not have the statutory authority to waive the coinsurance requirement. RHCs and FQHCs should inform their patients that coinsurance applies, and provide information on the availability of assistance to qualified patients in meeting their cost sharing obligations, or any other programs to provide financial assistance, if applicable.

Comment: A few commenters expressed concern about how care management is currently reported and how virtual communication services will be reported on the RHC cost report. The commenters stated that although care management services are considered RHC services, they are reported separately on line 80 in the non-reimbursable section of the cost report, and as a result, they are not considered allowable costs on the RHC cost report. The commenters stated that this process is administratively cumbersome, exposes the RHC to an audit risk, and represents a significant barrier for RHCs in offering care management services. The commenters suggested that the costs included on line 80 should only be the direct costs associated with care management services, which would allow RHCs to more easily identify those costs and assure them that they are completing this form correctly. The commenters noted similar concerns for the reporting of virtual communication services, and recommended that CMS allow the costs associated with virtual communication to be reported in the reimbursable section of the RHC cost report.

Response: Reducing administrative burden and encouraging the appropriate use of services is a high priority for CMS, and we appreciate the detailed comments and suggested changes regarding the reporting of care management and virtual communication services on the RHC cost report. Cost reporting information in typically provided in subregulatory guidance, and we will carefully consider these comments.

Comment: A commenter questioned how virtual communication that occurs during non-RHC hours would be billed and calculated on the cost report.

Response: Services such as care management and virtual communication services are not billable visits in RHCs and FQHCs and may occur outside of the RHC's or FQHC's posted hours. As stated previously, information on cost reporting will be provided in subregulatory guidance.

Comment: Some commenters recommended removing the timeframe restrictions for billing virtual communication services, stating that they are vague, arbitrary, administratively burdensome, or that allowing daily check in would improve health and reduce costs. Other commenters suggested modifying the timeframe limitations with a clear cut-off that RHCs and FQHCs can track and calculate, such as within the previous 3 days or subsequent 24 hours, or the previous and subsequent 24 hours. One commenter stated that the timeframe restrictions would require RHCs and FQHCs to review prior patient clinical activity, assess the diagnostic category of any recent activity, and then delay for 24 hours to ascertain whether the service is followed by a clinical visit, rather than billing immediately for the services. This commenter also stated that most computer billing systems are not set up for this type of review, and a supplemental billing process would be costly, and noted that there are no restrictions on face-to-face visits in RHCs or FQHCs.

Response: PFS payments for HCPCS code G2012 (communication technology-based services), and HCPCS code G2010 (remote evaluation services) are based on the descriptor for CPT code 99441 (Telephone evaluation and management service by a physician or other qualified health care professional who may report evaluation and management services provided to an established patient, parent, or guardian not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 5-10 minutes of medical discussion). HCPCS code G0071, the new virtual communication G-code for RHCs and FQHCs, is set at the average of the PFS national non-facility payment rates for HCPCS codes G2012 and G2010, and would be billed by the RHC or FQHC when the minimum requirements for either of these codes are met.

Except for the Initial Preventive Physical Exam and the Annual Wellness Visit, RHC and FQHC visits do not have frequency limitations, and a patient could have more than one RHC or FQHC billable visit in the same week if it is a medically-necessary, face-to-face visit with an RHC or FQHC practitioner. If a service is not medically-necessary, or is not furnished by an RHC or FQHC practitioner, or does not require the skill level of an RHC or FQHC practitioner, it would not be a billable visit. Since the RHC AIR and FQHC PPS payment methodologies are designed to include all services and supplies incident to a visit, the absence of time restrictions could result in duplicate payment to the RHC or FQHC. Since the virtual communication payment is designed to provide payment to the RHC or FQHC when there is no billable visit, the time restrictions are necessary to avoid any duplicate payment.

Communication technology-based and remote evaluation services are initiated by a patient who has been seen in the past year by the RHC or FQHC practitioner, and in many cases, a review of prior patient clinical activity and diagnoses would be necessary as part of the virtual communication with the patient. Since most RHCs and FQHCs are utilizing electronic health records, we expect that RHCs and FQHCs will be able to comply with the time restrictions without any additional burden. It is also our understanding that most RHCs and FQHCs (like other providers and supplies) may not always submit a claim immediately upon furnishing a service. As with any new service, we expect that there would be a period of adjustment, and we will monitor implementation to determine if changes are necessary.

Comment: Commenters questioned if an RHC could bill for virtual communication services if the discussion results in the patient going to an emergency room, an urgent care center, or a specialist not affiliated with the RHC or FQHC, or if it leads to an “incident-to” service at the RHC (such as an injection) that is not a billable visit.

Response: If the discussion with the RHC or FQHC practitioner does not occur within 7 days of an RHC or FQHC visit, and does not result in an RHC or FQHC visit with 24 hours or the soonest available appointment with an RHC or FQHC practitioner, and all other requirements are met, the RHC or FQHC could bill for virtual communication services. This would apply even if the patient is subsequently seen in an emergency room, urgent care center, or by a non-RHC or FQHC practitioner, or has a subsequent non-billable service in the RHC or FQHC such as an injection.

Comment: A commenter questioned if communication technology-based and remote evaluation services could be used by RHC and FQHC practitioners to help beneficiaries determine whether they should visit an RHC or FQHC for DSMT services, and states that this would allow RHC and FQHC practitioners to reach beneficiaries in both rural and urban underserved area and improve the lives of beneficiaries with diabetes. Another commenter questioned if the new virtual communication codes for RHCs and FQHCs would impact payment for DSMT in FQHCs.

Response: We agree that outreach and education to communities on diabetes prevention services are important, especially in rural and urban underserved areas. However, communication technology-based and remote evaluation services would be billable by RHCs and FQHCs only when the discussion requires the skill level of the RHC or FQHC practitioner. If the discussion could be conducted by a nurse, health educator, or other clinical personnel, it would not be billable as a virtual communication service. Payment for DSMT in FQHCs would not be impacted by the new virtual communication codes.

Comment: A commenter agreed that virtual communication services should be limited to established patients (seen by an RHC or FQHC practitioner within the previous year), and recommends that audio-only technology (that is, telephone) should be allowed for virtual check-ins because many RHC or FQHC patients may not have access to technology capabilities beyond audio-only communication.

Response: We note that while other technology can be used, telephone discussions are acceptable for billing the virtual communication G-code.

Comment: A commenter suggested that CMS should consider redefining what constitutes a billable RHC visit and develop a new and expansive definition so that new healthcare services such as care management and virtual communication services can be incorporated in the RHC cost-based model in the same manner as face-to-face billable visits.

Response: We welcome suggestions on modifying program requirements, but redefining RHC and FQHC billable visits is outside the scope of this regulation.

Comment: A commenter stated that the proposed PFS change for CPT code 99213 will result in independent RHCs and provider-based RHCs with more than 50 beds being paid $10 less per visit than practitioners billing under the PFS. The commenter stated that this will cause some RHCs to leave the RHC program, resulting in higher costs to Medicare, and questioned what can be done to raise the RHC capped encounter payment.

Response: RHCs are paid based on their costs, subject to a payment limit set out at section 1833(f) of the Act, except for those RHCs that have an exception to the payment limit, and is adjusted annually based on the Medicare Economic Index. We do not have the authority to make changes in the RHC payment rate.

Comment: A commenter questioned if this proposed change will impact the FQHC payment rate.

Response: The RHC AIR and the FQHC PPS would not be impacted by these changes.

Comment: A commenter questioned if the new virtual communication G-code would be accepted by Medicare Advantage Plans.

Response: HCPCS code G0071 is part of the HCPCS code set and must be accepted by all payers as a HIPAA standard (45 CFR 162.1002). RHCs and FQHCs should consult their associated MA plans for billing information.

Comment: A commenter questioned whether the two new add-on codes proposed for inherent visit complexity would apply to RHCs and FQHCs and be eligible for separate payment in addition to their standard all inclusive rate, and several commenters requested that RHCs and FQHCs be allowed to bill separately for interprofessional internet consultations.

Response: The two new add-on codes proposed for inherent visit complexity are for practitioners billing under the PFS, and do not apply to RHCs and FQHCs. The RHC AIR and the FQHC PPS includes all costs associated with a billable visit, and therefore consultations with other practitioners are not separately billable.

Comment: We received comments on allowing RNs to provide billable visits in RHCs, allowing FQHCs to bill for assessment and care planning for patients with cognitive impairment, reducing the requirements for psychiatric collaborative care management services in RHCs and FQHCs, providing separate payment to RHCs and FQHCs for medications to treat alcohol and substance use disorders, revising payment for pneumococcal vaccines, and reducing the requirements for patient consent for care management services.

Response: These comments are beyond the scope of this rule.

5. Finalized Provisions

As a result of the comments, we are finalizing the following provisions:

• Effective January 1, 2019, the payment rate for HCPCS code G0511 (General Care Management Services) is set at the average of the national non-facility PFS payment rates for CPT codes 99490, 99487, 99484, and 99491.
• Effective January 1, 2019, RHCs and FQHCs are paid for HCPCS code G0071 (Virtual Communication Services), when HCPCS code G0071 is on an RHC or FQHC claim, either alone or with other payable services, and at least 5 minutes of communication technology-based or remote evaluation services are furnished by an RHC or FQHC practitioner to a patient who has had an RHC or FQHC billable visit within the previous year, and the medical discussion or remote evaluation is for a condition not related to an RHC or FQHC service provided within the previous 7 days, and does not lead to an RHC or FQHC visit within the next 24 hours or at the soonest available appointment. We are adding a new paragraph (e) to § 405.2464 to reflect this payment and making additional minor conforming changes to this section.
• HCPCS code G0071 is set at the average of the national non-facility PFS payment rates for HCPCS code G2012 (communication technology-based services) and HCPCS code G2010 (remote evaluation services) and is updated annually based on the PFS national non-facility payment rate for these codes.
• RHC and FQHC face-to-face requirements are waived when these services are furnished to an RHC or FQHC patient. Coinsurance and deductibles apply to RHC claims for G0071 and coinsurance applies to FQHC claims for G0071.

6. Other Regulatory Updates

In addition to the regulatory change described in this section of the rule, we are finalizing the following technical corrections for accuracy:

• Removal of the extra section mark in the definition of “Federally qualified health center (FQHC)” in § 405.2401.
• Replacing the word “his” with “his or her” in the definition of “Secretary” in § 405.2401.
• Reordering the occurrence of RHC and FQHC in § 405.2462(g).

7. Substance Use-Disorder Prevention That Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act

Section 6083 of the SUPPORT for Patients and Communities Act (Pub. L. 115-271, enacted on October 24, 2018) provides additional payments to RHCs and FQHCs for services furnished for the treatment of opioid use disorders by practitioners meeting certain requirements. We anticipate guidance from the Department of Health and Human Services on the implementation of this provision will be forthcoming.

D. Appropriate Use Criteria for Advanced Diagnostic Imaging Services

Section 218(b) of the Protecting Access to Medicare Act (PAMA) (Pub. L. 113-93, enacted April 1, 2014) amended Title XVIII of the Act to add section 1834(q) of the Act directing us to establish a program to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services. The CY 2016 PFS final rule with comment period addressed the initial component of the new Medicare AUC program, specifying applicable AUC. In that rule (80 FR 70886), we established an evidence-based process and transparency requirements for the development of AUC, defined provider-led entities (PLEs) and established the process by which PLEs may become qualified to develop, modify or endorse AUC. The first list of qualified PLEs was posted on the CMS website at the end of June 2016 at which time their AUC libraries became specified applicable AUC for purposes of section 1834(q)(2)(A) of the Act. The CY 2017 PFS final rule addressed the second component of this program, specification of qualified clinical decision support mechanisms (CDSMs). In the CY 2017 PFS final rule (81 FR 80170), we defined CDSM, identified the requirements CDSMs must meet for qualification, including preliminary qualification for mechanisms documenting how and when each requirement is reasonably expected to be met, and established a process by which CDSMs may become qualified. We also defined applicable payment systems under this program, specified the first list of priority clinical areas, and identified exceptions to the requirement that ordering professionals consult specified applicable AUC when ordering applicable imaging services. The first list of qualified CDSMs was posted on the CMS website in July 2017.

The CY 2018 PFS final rule addressed the third component of this program, the consultation and reporting requirements. In the CY 2018 PFS final rule (82 FR 53190), we established the start date of January 1, 2020 for the Medicare AUC program for advanced diagnostic imaging services. It is for services ordered on and after this date that ordering professionals must consult specified applicable AUC using a qualified CDSM when ordering applicable imaging services, and furnishing professionals must report AUC consultation information on the Medicare claim. We further specified that the AUC program will begin on January 1, 2020 with a year-long educational and operations testing period during which time AUC consultation information is expected to be reported on claims, but claims will not be denied for failure to include proper AUC consultation information. We also established a voluntary period from July 2018 through the end of 2019 during which ordering professionals who are ready to participate in the AUC program may consult specified applicable AUC through qualified CDSMs and communicate the results to furnishing professionals, and furnishing professionals who are ready to do so may report AUC consultation information on the claim (https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10481.pdf). Additionally, to incentivize early use of qualified CDSMs to consult AUC, we established in the CY 2018 Updates to the Quality Payment Program; and Quality Payment Program: Extreme and Uncontrollable Circumstances Policy for the Transition Year final rule with comment period and interim final rule (hereinafter “CY 2018 Quality Payment Program final rule”) a high-weight improvement activity for ordering professionals who consult specified AUC using a qualified CDSM for the Merit-based Incentive Payment System (MIPS) performance period that began January 1, 2018 (82 FR 54193).

In the CY 2019 PFS proposed rule, we proposed additions to the definition of applicable setting, clarification around who may perform the required AUC consultation using a qualified CDSM under this program, clarification that reporting is required across claim types and by both the furnishing professional and furnishing facility, changes to the policy for significant hardship exceptions for ordering professionals under this program, mechanisms for claims-based reporting, and a solicitation of feedback regarding the methodology to identify outlier ordering professionals.

1. Background

AUC present information in a manner that links: A specific clinical condition or presentation; one or more services; and an assessment of the appropriateness of the service(s). Evidence-based AUC for imaging can assist clinicians in selecting the imaging study that is most likely to improve health outcomes for patients based on their individual clinical presentation. For purposes of this program, AUC is a set or library of individual appropriate use criteria. Each individual criterion is an evidence-based guideline for a particular clinical scenario based on a patient's presenting symptoms or condition.

AUC need to be integrated as seamlessly as possible into the clinical workflow. CDSMs are the electronic portals through which clinicians access the AUC during the patient workup. They can be standalone applications that require direct entry of patient information, but may be more effective when they are integrated into electronic health records (EHRs). Ideally, practitioners would interact directly with the CDSM through their primary user interface, thus minimizing interruption to the clinical workflow.

2. Statutory Authority

Section 218(b) of the PAMA added a new section 1834(q) of the Act entitled, “Recognizing Appropriate Use Criteria for Certain Imaging Services,” which directs the Secretary to establish a new program to promote the use of AUC. Section 1834(q)(4) of the Act requires ordering professionals to consult with specified applicable AUC through a qualified CDSM for applicable imaging services furnished in an applicable setting and paid for under an applicable payment system; and payment for such service may only be made if the claim for the service includes information about the ordering professional's consultation of specified applicable AUC through a qualified CDSM.

3. Discussion of Statutory Requirements

There are four major components of the AUC program under section 1834(q) of the Act, and each component has its own implementation date: (1) Establishment of AUC by November 15, 2015 (section 1834(q)(2) of the Act); (2) identification of mechanisms for consultation with AUC by April 1, 2016 (section 1834(q)(3) of the Act); (3) AUC consultation by ordering professionals, and reporting on AUC consultation by January 1, 2017 (section 1834(q)(4) of the Act); and (4) annual identification of outlier ordering professionals for services furnished after January 1, 2017 (section 1834(q)(5) of the Act). We did not identify mechanisms for consultation by April 1, 2016. Therefore, we did not require ordering professionals to consult CDSMs or furnishing professionals to report information on the consultation by the January 1, 2017 date.

a. Establishment of AUC

In the CY 2016 PFS final rule with comment period, we addressed the first component of the Medicare AUC program under section 1834(q)(2) of the Act—the requirements and process for establishment and specification of applicable AUC, along with relevant aspects of the definitions under section 1834(q)(1) of the Act. This included defining the term “provider-led entity” and finalizing requirements for the rigorous, evidence-based process by which a PLE would develop AUC, upon which qualification is based, as provided in section 1834(q)(2)(B) of the Act and in the CY 2016 PFS final rule with comment period. Using this process, once a PLE is qualified by us, the AUC that are developed, modified or endorsed by the qualified PLE are considered to be specified applicable AUC under section 1834(q)(2)(A) of the Act. We defined PLE to include national professional medical societies, health systems, hospitals, clinical practices and collaborations of such entities such as the High Value Healthcare Collaborative or the National Comprehensive Cancer Network. Qualified PLEs may collaborate with third parties that they believe add value to their development of AUC, provided such collaboration is transparent. We expect qualified PLEs to have sufficient infrastructure, resources, and the relevant experience to develop and maintain AUC according to the rigorous, transparent, and evidence-based processes detailed in the CY 2016 PFS final rule with comment period.

In the same rule we established a timeline and process under § 414.94(c)(2) for PLEs to apply to become qualified. Consistent with this timeline the first list of qualified PLEs was published at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/PLE.html in June 2016 (OMB Control Number 0938-1288).

b. Mechanism for AUC Consultation

In the CY 2017 PFS final rule, we addressed the second major component of the Medicare AUC program—the specification of qualified CDSMs for use by ordering professionals for consultation with specified applicable AUC under section 1834(q)(3) of the Act, along with relevant aspects of the definitions under section 1834(q)(1) of the Act. This included defining the term CDSM and finalizing functionality requirements of mechanisms, upon which qualification is based, as provided in section 1834(q)(3)(B) of the Act and in the CY 2017 PFS final rule. CDSMs may receive full qualification or preliminary qualification if most, but not all, of the requirements are met at the time of application. The preliminary qualification period began June 30, 2017 and ends when the AUC consulting and reporting requirements become effective on January 1, 2020. The preliminarily qualified CDSMs must meet all requirements by that date. We defined CDSM as an interactive, electronic tool for use by clinicians that communicates AUC information to the user and assists them in making the most appropriate treatment decision for a patient's specific clinical condition. Tools may be modules within or available through certified EHR technology (as defined in section 1848(o)(4) of the Act) or private sector mechanisms independent from certified EHR technology or a mechanism established by the Secretary.

In the CY 2017 PFS final rule, we established a timeline and process in § 414.94(g)(2) for CDSM developers to apply to have their CDSMs qualified. Consistent with this timeline, the first list of qualified CDSMs was published at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/CDSM.html in July 2017 (OMB Control Number 0938-1315).

c. AUC Consultation and Reporting

In the CY 2018 PFS final rule, we addressed the third major component of the Medicare AUC program—consultation with applicable AUC by the ordering professional and reporting of such consultations under section 1834(q)(4) of the Act. We established a January 1, 2020 effective date for the AUC consultation and reporting requirements for this program. We also established a voluntary period during which early adopters can begin reporting limited consultation information on Medicare claims from July 2018 through December 2019. During the voluntary period there is no requirement for ordering professionals to consult AUC or furnishing professionals to report information related to the consultation. On January 1, 2020, the program will begin with an educational and operations testing period and during this time we will continue to pay claims whether or not they correctly include AUC consultation information. Ordering professionals must consult specified applicable AUC through qualified CDSMs for applicable imaging services furnished in an applicable setting, paid for under an applicable payment system and ordered on or after January 1, 2020; and furnishing professionals must report the AUC consultation information on the Medicare claim for these services ordered on or after January 1, 2020.

Consistent with section 1834(q)(4)(B) of the Act, we also established that furnishing professionals must report the following information on Medicare claims for advanced diagnostic imaging services as specified in section 1834(q)(1)(C) of the Act and defined in § 414.94(b), furnished in an applicable setting as defined in section 1834(q)(1)(D) of the Act, paid for under an applicable payment system as defined in section 1834(q)(4)(D) of the Act, and ordered on or after January 1, 2020: (1) The qualified CDSM consulted by the ordering professional; (2) whether the service ordered would or would not adhere to specified applicable AUC, or whether the specified applicable AUC consulted was not applicable to the service ordered; and (3) the NPI of the ordering professional (if different from the furnishing professional). Clarifying revisions to the reporting requirement are discussed later in this preamble.

Section 1834(q)(4)(C) of the Act provides for exceptions to the AUC consultation and reporting requirements in the case of: A service ordered for an individual with an emergency medical condition, a service ordered for an inpatient and for which payment is made under Medicare Part A, and a service ordered by an ordering professional for whom the Secretary determines that consultation with applicable AUC would result in a significant hardship. In the CY 2017 PFS final rule, we adopted a regulation at § 414.94(h)(1)(i) to specify the circumstances under which AUC consultation and reporting requirements are not applicable. These include applicable imaging services ordered: (1) For an individual with an emergency medical condition (as defined in section 1867(e)(1) of the Act); (2) for an inpatient and for which payment is made under Medicare Part A; and (3) by an ordering professional who is granted a significant hardship exception to the Medicare EHR Incentive Program payment adjustment for that year under § 495.102(d)(4), except for those granted under § 495.102(d)(4)(iv)(C). In the CY 2019 PFS proposed rule, we proposed changes to the conditions for significant hardship exceptions, and we summarize and respond to public comments on our proposals later in this preamble. We remind readers that, consistent with section 1834(q)(4)(A) of the Act, ordering professionals must consult AUC for every applicable imaging service furnished in an applicable setting and paid under an applicable payment system unless a statutory exception applies.

Section 1834(q)(4)(D) of the Act specifies the applicable payment systems for which AUC consultation and reporting requirements apply and, in the CY 2017 PFS final rule, consistent with the statute, we defined applicable payment system in our regulation at § 414.94(b) as: (1) The PFS established under section 1848(b) of the Act; (2) the prospective payment system for hospital outpatient department services under section 1833(t) of the Act; and (3) the ambulatory surgical center payment system under section 1833(i) of the Act.

Section 1834(q)(1)(D) of the Act specifies the applicable settings in which AUC consultation and reporting requirements apply: A physician's office, a hospital outpatient department (including an emergency department), an ambulatory surgical center, and any other “provider-led outpatient setting determined appropriate by the Secretary.” In the CY 2017 PFS final rule, we added this definition to our regulation at § 414.94(b). Proposed additional applicable settings are discussed later in this preamble.

d. Identification of Outliers

The fourth component of the Medicare AUC program is specified in section 1834(q)(5) of the Act, Identification of Outlier Ordering Professionals. The identification of outlier ordering professionals under this paragraph facilitates a prior authorization requirement that applies for outlier professionals beginning January 1, 2020, as specified under section 1834(q)(6) of the Act. Because we established a start date of January 1, 2020 for AUC consultation and reporting requirements, we will not have identified any outlier ordering professionals by that date. As such, implementation of the prior authorization component is delayed. However, we did finalize in the CY 2017 PFS final rule the first list of priority clinical areas to guide identification of outlier ordering professionals as follows:

• Coronary artery disease (suspected or diagnosed).
• Suspected pulmonary embolism.
• Headache (traumatic and non-traumatic).
• Hip pain.
• Low back pain.
• Shoulder pain (to include suspected rotator cuff injury).
• Cancer of the lung (primary or metastatic, suspected or diagnosed).
• Cervical or neck pain.

We did not include proposals to expand or modify the list of priority clinical areas in this final rule.

4. Proposals for Continuing Implementation

In the CY 2019 PFS proposed rule, we proposed to amend § 414.94 of our regulations, “Appropriate Use Criteria for Certain Imaging Services,” to reflect the following policies.

a. Expanding Applicable Settings

Section 1834(q)(1)(D) of the Act specifies that the AUC consultation and reporting requirements apply only in an applicable setting, which means a physician's office, a hospital outpatient department (including an emergency department), an ambulatory surgical center, and any other provider-led outpatient setting determined appropriate by the Secretary. In the CY 2017 PFS final rule, we codified this definition in § 414.94(b). We proposed to revise the definition of applicable setting to add an independent diagnostic testing facility (IDTF).

We believe the addition of IDTFs to the definition of applicable setting will ensure that the AUC program is in place across outpatient settings in which outpatient advanced diagnostic imaging services are furnished. IDTFs furnish services for a large number of Medicare beneficiaries; nearly $1 billion in claims for 2.4 million beneficiaries in 2010 (OEI-05-09-00560). An IDTF is independent of a hospital or physician's office and diagnostic tests furnished by an IDTF are performed by licensed, certified non-physician personnel under appropriate physician supervision (§ 410.33). Like other applicable settings, IDTFs must meet the requirements specified in § 410.33 of our regulations to be enrolled to furnish and bill for advanced diagnostic imaging and other IDTF services. Services that may be provided by an IDTF include, but are not limited to, magnetic resonance imaging (MRI), ultrasound, x-rays, and sleep studies. An IDTF may be a fixed location, a mobile entity, or an individual non-physician practitioner, and diagnostic procedures performed by an IDTF are paid under the PFS. IDTF services must be furnished under the appropriate level of physician supervision as specified in § 410.33(b); and all procedures furnished by the IDTF must be ordered in writing by the patient's treating physician or non-physician practitioner. As such, we believe the IDTF setting is a provider-led outpatient setting appropriate for addition to the list of applicable settings under section 1834(q)(1)(D), and we proposed to add IDTF to our definition of applicable setting under § 414.94(b) of the regulations.

We note that under the PFS, payment for many diagnostic tests including the advanced diagnostic imaging services to which the AUC program applies can be made either “globally” when the entire service is furnished and billed by the same entity; or payment can be made separately for the technical component (TC) of the service and the professional component (PC) when those portions of the service are furnished and billed by different entities. In general, the TC for an advanced diagnostic imaging service is the portion of the test during which the patient is present and the image is captured. The PC is the portion of the test that involves a physician's interpretation and report on the captured image. For example, when a CT scan is ordered by a patient's treating physician, the entire test (TC and PC) could be furnished by a radiologist in their office and billed as a “global” service. Alternatively, the TC could be furnished and billed by an IDTF, and the PC could be furnished and billed by a radiologist in private practice. By adding IDTFs as an applicable setting, we believe we would appropriately and consistently apply the AUC program across the range of outpatient settings where applicable imaging services are furnished.

We proposed to revise the definition of applicable setting under § 414.94(b) to include an IDTF. We invited comments on this proposal and on the possible inclusion of any other applicable setting. We reminded commenters that application of the AUC program is not only limited to applicable settings, but also to services for which payment is made under applicable payment systems (the PFS, the OPPS, and the ASC payment system).

The following is a summary of the comments we received on revising the definition of applicable setting under § 414.94(b) to include an IDTF and on the possible inclusion of any other applicable setting.

Comment: The majority of commenters supported adding IDTF to the definition of applicable setting. These commenters agreed that this addition would apply the AUC program appropriately and consistently across outpatient settings where applicable advanced diagnostic imaging services are furnished and reported. In contrast, a few commenters were concerned with expanding the definition of applicable setting until CMS and other impacted stakeholders have a better understanding of the program and 3 to 5 years of experience with it. These commenters suggested that any expanded definition will add complexity and make implementation even more difficult by the 2020 required start date as the addition of another applicable setting would require broader reporting of AUC consultation information. To this end, these commenters requested modification to the proposal to allow some flexibility on the timeline to add IDTFs as an applicable setting. Finally, a few commenters requested that the definition of applicable setting be further expanded to include any office-based service, including for example, situations in which physicians have an MRI in their own office.

Response: We appreciate these perspectives by the commenters. We continue to believe that the IDTF setting is a provider-led outpatient setting appropriate for addition to the list of applicable settings under section 1834(q)(1)(D) of the Act, and are finalizing this definition as proposed. We disagree that the definition will add complexity as we seek consistency in applying our regulations across outpatient settings in which outpatient advanced diagnostic imaging services are furnished, and would be concerned with applying these requirements in different settings along different timelines. Because we did not propose adding other settings to this definition we will not expand it further in this final rule, but will continue to monitor claims for advanced diagnostic imaging services across the Medicare program. We remind readers that the physician's office (including one where advanced imaging equipment is located), hospital outpatient department (including an emergency department), and an ambulatory surgical center are already included in the definition of applicable setting.

After considering the comments, we are finalizing the proposal revising the definition of applicable setting under § 414.94(b) to include an IDTF.

b. Consultations by Ordering Professionals

Section 1834(q)(1)(E) of the Act defines the term “ordering professional” as a physician (as defined in section 1861(r)) or a practitioner described in section 1842(b)(18)(C) who orders an applicable imaging service. The AUC consultation requirement applies to these ordering professionals. We proposed that the consultation with AUC through a qualified CDSM may be performed by auxiliary personnel under the direction of the ordering professional and incident to the ordering professional's services, when the consultation is not performed personally by the ordering professional whose NPI will be listed on the order for an advanced imaging service.

In response to the CY 2018 PFS proposed rule, we received several public comments requesting clarification regarding who is required to perform the consultation of AUC through a qualified CDSM. Commenters not only sought clarification, but also provided recommendations for requirements around this topic. Some commenters recommended that CMS strictly interpret the statutory language and only allow the clinician placing the order to perform the consultation and others recommended that CMS allow others to perform the AUC consultation on behalf of the clinician.

Section 1834(q)(4)(A)(i) of the Act requires an ordering professional to consult with a qualified CDSM, and this was codified in our regulations at § 414.94(j). The statute does not explicitly provide for consultations under the AUC program to be fulfilled by other professionals, individuals or organizations on behalf of the ordering professional; however, we continue to seek ways to minimize the burden of this new Medicare program and understand that many practices currently use clinical staff, working under the direction of the ordering professional, to interact with the CDSM for AUC consultation and subsequent ordering of advanced diagnostic imaging. Therefore, we proposed to modify paragraph § 414.94(j) to specify that additional individuals may perform the required AUC consultation.

When the AUC consultation is not performed personally by the ordering professional, we proposed the consultation may be performed by auxiliary personnel incident to the ordering physician or non-physician practitioner's professional service. We believed this approach was appropriate under this program and still accomplishes the goal of promoting the use of AUC. This proposed policy would allow the ordering professional to exercise their discretion to delegate the performance of this consultation. It is important to note that the ordering professional is ultimately responsible for the consultation as their NPI is reported by the furnishing professional on the claim for the applicable imaging service; and that it is the ordering professional who could be identified as an outlier ordering professional and become subject to prior authorization based on their ordering pattern.

We proposed to revise the AUC consultation requirement specified at § 414.94(j) to specify that the AUC consultation may be performed by auxiliary personnel under the direction of the ordering professional and incident to the ordering professional's services.

The following is a summary of the comments we received on this proposal. Overall commenters either agreed or disagreed with the proposal to expand who can perform the consultation with a qualified CDSM, and the commenters that agreed with the concept of the proposal either requested clarification around the term auxiliary personnel or recommended that we use more specific language to describe eligible personnel.

Comment: Some commenters were completely against the concept of this proposal and did not support allowing anyone beyond the ordering professional to perform the AUC consultation stating that allowing anyone other than the ordering professional to perform the consultation would undermine the intent of the AUC program and increase administrative burden. A few of those commenters suggested that expanding the scope of individuals who can perform the consultation would actually increase burden and confusion for ordering professionals. Others opposed the proposal on the basis that the educational goals of the program would be undermined or auxiliary personnel would manipulate the information to achieve adherent responses. These commenters wanted ordering professionals to be directly exposed to AUC. Some of the commenters that agreed with the proposal specifically stated that the intent of the AUC program would not be diminished by expanding AUC consultation beyond the ordering professional. However, the vast majority of commenters agreed that expanding beyond the ordering professional allows flexibility and the opportunity for the AUC consultation requirement to be less burdensome on the ordering professional.

Response: We agree that the AUC program should be a learning program for ordering professionals. However, to balance the burden put upon ordering professionals and their offices to comply with this program as well as focus on the educational component of this program, we maintain that expanding AUC consultations to individuals beyond the ordering professional is an important step. We envision that the ordering professionals will, even when they do not personally perform the AUC consultation, remain closely involved and will engage with the individual to whom they delegate the task of performing the consultation. For many ordering professionals, this delegation may save time when they routinely order tests that are consistently considered to adhere to AUC. In those cases, the back-and-forth between the ordering professional and the individual who conducts the consultation may be minimal. We anticipate that, when an AUC consultation is performed by someone other than the ordering professional and the result is that the imaging service does not adhere to the consulted AUC, that information will be provided back to the ordering professional to allow them to consider whether a different test (or no test) should be ordered, or if the original order is still appropriate for the patient. Additionally, ordering professionals may still choose to personally perform the consultation. This may be ideal for ordering professionals with CDSMs that allow for seamless interaction, such as the case of a CDSM integrated within an EHR.

Regardless of who performs the AUC consultation, the ordering professional is ultimately responsible for the order and may become subject to prior authorization if they demonstrate a pattern of non-adherent orders. Therefore, the ordering professional not only has a vested interest in terms of providing the right test for their patient, but also to monitor the frequency with which they order tests that do not adhere to AUC.

Comment: While the majority of commenters agreed with expanding who, beyond the ordering professional, can personally perform the consultation with a qualified CDSM, they expressed either confusion with the term “auxiliary personnel” or recommended additional regulatory language to more specifically identify the scope of individuals who could perform the AUC consultation. Other commenters questioned the applicability of “incident to” provisions since consulting AUC through a CDSM is not a billable service.

Some commenters suggested additional language that would identify specific licensed professionals, lay out training requirements, allow for medical assistants or credentialed clinical staff, cite state scope of practice laws, or require that the individual be present in the office of the ordering professional. These commenters stated that the AUC consultation should not be an administrative task that can be performed by any staff member, such as a receptionist or data entry clerk. The underlying concern of commenters that wanted to explicitly allow only clinical personnel to consult AUC was that the individual performing an AUC consultation would need to understand the patient's medical information, the advanced imaging service being recommended and the clinical information that is returned by the CDSM. Commenters stated that this understanding on the part of the individual who performs the AUC consultation was particularly important when a CDSM indicates that the order is not adherent to AUC.

Some commenters specifically addressed our proposal that the individual who consults AUC must be under the direction of the ordering professional. At least one commenter noted the need for direct supervision while another said the individual should be physically located in the office of the ordering professional as opposed to off-site. Other commenters suggested that we use language that allows for maximum flexibility.

One commenter gave an example that drew parallels between CDSMs and Computerized Provider Order Entry (CPOE) systems, and suggested the same requirements should apply to individuals consulting CDSMs. The commenter stated that for CPOE entries to count toward meeting Medicaid Meaningful Use thresholds, the entry must be made by a licensed healthcare professional or credentialed medical assistant. Similarly, the commenter suggested the consultation should be performed consistent with state scope of practice laws since the use of CPOE is limited to those individuals referenced above, as it is within their state scope of practice to enter orders into medical records.

Response: We agree with comments suggesting that the language we proposed could potentially cause confusion, and we understand the disagreement among commenters regarding precisely who, beyond the ordering professional, should be eligible to perform the AUC consultation. We further agree that the concept of services incident to a physician's professional services may not be directly relevant to the action of consulting AUC using a CDSM. We proposed using “incident to” as a description of the relationship between the ordering professional and the auxiliary personnel consulting the AUC.

We also agree that there are similarities between CPOE systems and CDSMs, and that individuals using these systems should have some level of knowledge of the clinical information they are inputting and, importantly, the information they receive back from the system. However, we also agree with the view of most commenters that ordering professionals should have flexibility to delegate the AUC consultation task. We also agree that the learning and educational aspects of AUC are more likely to be realized when there is real communication between the ordering professional and the person performing the consultation. While we proposed the consultation could be performed incident to the ordering professional's service, we agree with commenters that the “incident to” concept is difficult to apply to a service that is not billable and does not require the patient to be present. We further agree with comments recommending that there be good communication and a close relationship between the ordering professional and individual consulting the AUC. In the case of consulting AUC, we believe it is important that the individual who uses the CDSM is working under the ordering professional, and that the individual is available to the ordering professional to discuss the results of the consultation and any responsive adjustments to planned orders.

Comment: A few commenters suggested allowing the furnishing professional to occasionally consult AUC using a CDSM. Another commenter questioned whether auxiliary personnel would be permitted to change the order based on the AUC consultation and an additional commenter questioned whether physical therapists could write orders.

Response: While a furnishing professional may consult AUC as they wish for other purposes, such a consultation would not suffice for purposes of the AUC consultation required under this program. The AUC consultation must be performed by the ordering professional or an individual to whom the ordering professional has delegated it; and the ordering professional may only delegate the required AUC consultation to an individual as specified in our final policy. The furnishing professional may perform their own AUC consultation to verify information; however, that would not replace the consultation that is required to be performed by the ordering professional or their appropriately designated surrogate. The AUC program does not change the scope of professionals permitted under law to write or change orders for advanced diagnostic imaging services.

Comment: Some commenters questioned whether there was statutory authority to allow anyone other than the ordering professional to personally perform the AUC consultation with a CDSM.

Response: We do not believe it is inconsistent with the statute to allow an individual other than the ordering professional to perform the AUC consultation with a qualified CDSM. Moreover, regardless of who performs the act of consulting with a qualified CDSM, it is important to understand that the ordering professional remains ultimately responsible for the AUC consultation and communication of the consultation information to the furnishing professional.

Comment: A commenter who disagreed with our proposal to permit certain individuals other than the ordering professional to perform the AUC consultation suggested that the proposal is counter to the intent of the existing regulation at § 414.94(k) finalized in the CY 2018 PFS final rule. The commenter suggested that educating ordering professionals regarding the optimal use of advanced imaging services can only be accomplished when ordering professionals are directly exposed to AUC.

Response: We believe the intent of the statutory provisions requiring the AUC program is to increase appropriate ordering of advanced imaging services through a learning system, and that can still be achieved even if we allow delegation of the consultation when the individual performing it has the proper training and is working under the appropriate direction of the ordering professional.

Comment: One commenter requested a specific set of standards or training requirements for such auxiliary personnel to ensure that diagnostic imaging services comply with AUC requirements.

Response: At this time, we are not in a position to establish training requirements or standards tailored to the AUC program for individuals that may be delegated the AUC consultation.

Based on the public comments received, we do not believe it would be appropriate to move forward with the proposal to specify the scope of individuals who can perform the AUC consultation as auxiliary personnel. We are modifying our proposal in response to comments, and conforming the regulation at § 414.94(j)(2), to clarify that, in the event of a significant hardship, the requirement to consult AUC does not apply and specify that, when not personally performed by the ordering professional, the consultation with a qualified CDSM may be performed by clinical staff under the direction of the ordering professional. We have used the term clinical staff elsewhere in the Medicare program to identify the individuals that may perform care management services including chronic care management (CCM), behavioral health integration (BHI) and transitional care management (TCM) services. These services involve some non-face-to-face services along with clinical activities around the care plan and communication and coordination with the patient's other healthcare professionals. For care management, the clinical staff requirement ensures that the individual performing the service must have the level of clinical knowledge necessary to effectively coordinate and communicate with the treating clinician. Similarly, in the case of the AUC program, the individual performing the AUC consultation must have sufficient clinical knowledge to interact with the CDSM and communicate with the ordering professional. After considering public comments on our proposal, we have concluded that allowing clinical staff to perform the AUC consultation under the direction of the ordering professional is a better fit with the AUC program than our proposal, and is responsive to public comments asserting that the concept of “incident to” is not relevant in the context of the AUC program. We believe the policy we are finalizing, to allow the AUC consultation to be performed by clinical staff under the direction of the ordering professional, further reflects a balance between those commenters who wanted only the ordering professional to perform the consultation and those who suggested we should allow the consultation to be delegated. Clinical staff will have a level of knowledge that allows for effective communication of advanced diagnostic imaging orders, interaction with AUC, and engagement with the ordering professional, while they remain under the direction of the ordering professional.

c. Reporting AUC Consultation Information

Section 1834(q)(4)(B) of the Act requires that payment for an applicable imaging service furnished in an applicable setting and paid for under an applicable payment system may only be made if the claim for the service includes certain information about the AUC consultation. As such, the statute requires that AUC consultation information be included on any claim for an outpatient advanced diagnostic imaging service, including those billed and paid under any applicable payment system (the PFS, OPPS or ASC payment system). When we initially codified the AUC consultation reporting requirement in § 414.94(k) through rulemaking in the CY 2018 PFS final rule, we specified only that “furnishing professionals” must report AUC consultation information on claims for applicable imaging services. This led some stakeholders to believe that AUC consultation information would be required only on practitioner claims. To better reflect the statutory requirements of section 1834(q)(4)(B) of the Act, we proposed to revise our regulations to clarify that AUC consultation information must be reported on all claims for an applicable imaging service furnished in an applicable setting and paid for under an applicable payment system. The revised regulation would more clearly express the scope of advanced diagnostic imaging services that are subject to the AUC program, that is, those furnished in an applicable setting and paid under an applicable payment system.

The language codified in § 414.94(k) uses the term furnishing professional to describe who must report the information on the Medicare claims. We recognize that section 1834(q)(1)(F) of the Act specifies that a “furnishing professional” is a physician (as defined in section 1861(r)) or a practitioner described in section 1842(b)(18)(C) who furnishes an applicable imaging service. However, because section 1834(q)(4)(B) of the Act, as described above, clearly includes all claims paid under applicable payment systems without exclusion, we believe that the claims from both furnishing professionals and facilities must include AUC consultation information. In other words, we would expect this information to be included on the practitioner's claim for the PC of the applicable advanced diagnostic imaging service and on the provider's or supplier's claim for the facility portion or TC of the imaging service.

As such, we proposed to revise § 414.94(k) to clearly reflect the scope of claims for which AUC consultation information must be reported, and to clarify that the requirement to report AUC consultation information is not limited to the furnishing professional. The following is a summary of the comments we received.

Comment: Some commenters stated that they appreciate the clarification that the requirement to report AUC consultation information is not limited to the furnishing professional. These commenters thanked CMS for addressing the increasingly common instances in which the TC and PC of an advanced diagnostic imaging service are performed at separate locations. Additionally, these commenters acknowledged that the clarification recognizes situations when payment can be made globally, to include both the TC and PC furnished and billed by the same entity, and situations of Method II billing by critical access hospitals. In contrast, other commenters opposed the reporting of AUC consultation information on all claims, specifically the facility claims, for an applicable imaging service furnished in an applicable setting and paid under an applicable payment system. These commenters noted that requiring the reporting of AUC consultation information does not appropriately target the ordering professionals for whom the AUC program is intended, and creates a duplicative effort when CMS receives AUC consultation information from both facilities and furnishing professionals for different parts of the same exam. A few other commenters expressed concern that requiring two sources of AUC consultation information that relates to the same test for the same patient could result in situations where one source was inaccurate or provides conflicting information.

Response: The statutory requirement under section 1834(q)(4)(B) of the Act specifies that payment for an applicable imaging service furnished in an applicable setting and paid for under an applicable payment system may only be made if the claim for the service includes certain information about the AUC consultation. We recognize that this requirement to report AUC consultation information is not placed on the ordering professional, but rather on those submitting claims for the advanced diagnostic imaging service that the ordering professional orders. We also recognize that the TC or facility portion of an applicable imaging service is frequently furnished and billed by a different entity than the PC portion of the service. We do not currently do any matching or comparison of separate claims for the PC and TC or facility portion of an advanced diagnostic imaging service. Rather, we process these separate claims individually, and have no immediate plans to begin doing otherwise for purposes of the AUC program. We hope to learn more about the implementation of this program, including issues such as these commenters have raised, during the educational and operations testing period.

After considering the comments, we are finalizing without modification the proposal to revise § 414.94(k) to clearly reflect the scope of claims for which AUC consultation information must be reported, and to make this requirement consistent with section 1834(q)(4)(B) of the Act.

d. Claims-Based Reporting

In the CY 2018 PFS proposed rule (82 FR 34094) we discussed using a combination of G-codes and modifiers to report the AUC consultation information on the Medicare claim. We received numerous public comments objecting to this potential solution. In the 2018 PFS final rule, we agreed with many of the commenters that additional approaches to reporting AUC consultation information on Medicare claims should be considered, and we learned from many commenters that reporting a unique consultation identifier (UCI) would be a less burdensome and preferred approach. The UCI would include all the information required under section 1834(q)(4)(B) of the Act including an indication of AUC adherence, non-adherence and not applicable responses. Commenters noted that capturing a truly distinguishing UCI on the claim will allow for direct mapping from a single AUC consultation to embedded information within a CDSM. We indicated that we would work with stakeholders to further explore the concept of using a UCI to satisfy the requirements of section 1834(q)(4)(B) of the Act, which will be used for Medicare claims processing and, ultimately, for the identification of outlier ordering professionals, and consider developing a taxonomy for a UCI.

We had the opportunity to engage with some stakeholders over the last 6 months and we understand that some commenters from the previous rule continue to be in favor of a UCI, while some may have changed their position upon further consideration.

We provide the following information to summarize alternatives we considered. We had originally considered assigning a G-code for every qualified CDSM with a code descriptor containing the name of the qualified CDSM. The challenge to this approach arises when there is more than one advanced imaging service on a single claim. We could attribute a single G-code to all of the applicable imaging services for the patient's clinical condition on the claim, which might be appropriate if each AUC consultation for each service was through the same CDSM. If a different CDSM was used for each service (for example, when services on a single claim were ordered by more than one ordering professional and each ordering professional used a different CDSM) then multiple G-codes could be needed on the claim. Each G-code would appear on the claim individually as its own line item. As a potential solution, we considered the use of modifiers, which are appealing because they would appear on the same line as the CPT code that identifies the specific billed service. Therefore, information entered onto a claim would arrive into the claims processing system paired with the relevant AUC consultation information.

When reporting the required AUC consultation information based on the response from a CDSM: (1) The imaging service would adhere to the applicable AUC; (2) the imaging service would not adhere to such criteria; or (3) such criteria were not applicable to the imaging service ordered, three modifiers could be developed. These modifiers, when placed on the same line with the CPT code for the advanced imaging service would allow this information to be easily accessed in the Medicare claims data and matched with the imaging service.

Stakeholders have made various suggestions for a taxonomy that could be used to develop a UCI to report the required information. Stakeholders have also considered where to place the UCI on the claim. We understand the majority of solutions suggested by stakeholders involving a UCI are claim-level solutions and would not allow us to attribute the CDSM used or the AUC adherence status (adherent or not adherent, or not applicable) to a specific imaging service. As such, the approach of using a UCI would not identify whether an AUC consultation was performed for each applicable imaging service reported on a claim form, or be useful for purposes of identifying outlier ordering professionals in accordance with section 1834(q)(5) of the Act.

We have received ideas from stakeholders that are both for and against the two approaches we have identified; and we appreciate the stakeholders that have provided additional information or engaged us in this discussion. Internally, we have explored the possibility of using, and feasibility of developing, a UCI; and concluded that, although we initiated this approach during the CY 2018 PFS final rule, it is not feasible to create a uniform UCI taxonomy, determine a location of the UCI on the claims forms, obtain the support and permission by national bodies to use claim fields for this purpose, and solve the underlying issue that the UCI seems limited to claim-level reporting. Using coding structures that are already in place (such as G-codes and modifiers) would allow us to establish reporting requirements prior to the start of the program (January 1, 2020).

Since we did not finalize a proposal in the CY 2018 PFS final rule, we proposed in this rule to use established coding methods, to include G-codes and modifiers, to report the required AUC information on Medicare claims. This would allow the program to be implemented by January 1, 2020. We will consider future opportunities to use a UCI and look forward to continued engagement with and feedback from stakeholders.

The following is a summary of comments we received on this proposal.

Comment: The majority of commenters agreed with our proposed approach of using G-codes and modifiers to append AUC information on claims. Of those commenters, most stated that the approach is not without flaws, including increased workflow challenges and complexity, time needed for staff to learn and incorporate these changes into billing practices, and the limited information modifiers may convey for outlier identification purposes. We summarize and respond to comments on these issues below. However, they acknowledged that there is a lack of better alternatives. Other commenters disagreed with the proposal, and recommended CMS not require claims-based reporting until a UCI can be reported on claims. In addition to those recommending a delay in reporting, others suggested that CMS not require claims-based reporting at all and instead allow information to be transmitted directly from qualified CDSMs to CMS.

Response: We agree with commenters that G-codes and modifiers may not be the ideal solution. However, it is important that we make strides to implement this program and prepare stakeholders for the method of reporting in the immediate years of the program. We will continue to discuss with stakeholders the potential of using a UCI in the future. There are hurdles to overcome with respect to the use of a UCI that are discussed in the comment summaries and responses below. Some of these include understanding how UCI information would be used in the development of the eventual outlier ordering professional methodology, and where it would be appended to the claim. In addition, there is disagreement among stakeholders regarding whether the UCI would contain a taxonomy and embed meaningful information. Additionally, as we have consulted with stakeholders responsible for updating the claims forms, which would be necessary to establish a field to report a UCI on claims, we understand that it would be a matter of years before the forms could be updated. As such, the prospect of developing and using a UCI is not a realistic immediate solution.

Comment: There were disagreements and concerns among commenters that support the use of G-codes to identify which qualified CDSM was consulted. Some were concerned that CMS could not develop G-codes quickly enough to keep pace with newly qualified CDSMs and that the total number of G-codes would be unwieldy. Others supported the use of a single generic G-code to describe that a qualified CDSM was consulted but would not identify a particular CDSM. Another commenter pointed out that a G-code would not be necessary on claims when a CDSM was not consulted, rather, only a modifier (placed on the same line as the CPT code for the imaging service) would be used in these circumstances.

Commenters pointed out that claims for both the furnishing facility and furnishing professional are capable of reporting G-codes and modifiers, but identified an issue related to resorting of information on claims as they are processed through the system. In other words, the codes billed on separate claim lines can come through the system and end up in a different order than how they originally appeared when the claim was submitted. This means CMS cannot presume to pair an imaging service reported on a specific claim line with a specific G-code when more than one imaging service appears on the claim. A commenter suggested that furnishing professionals could split their claims so only one imaging service and one G-code would appear on each claim. Commenters pointed out that while this is possible on the furnishing professional claim, it is not possible on the furnishing facility claim due to other rules involving facility billing and same-day procedures.

Response: We are optimistic that we can issue G-codes in a timely manner upon qualifying new CDSMs. There are a number of CDSMs already qualified and G-codes could be issued for those prior to the start of the educational and operations testing period set to begin in 2020. We could secure additional G-codes with general descriptors to describe “newly qualified CDSM A,” “newly qualified CDSM B,” etc. to be ready for assignment to a specific CDSM upon qualification. That would allow some time for the descriptor to be changed to reflect the name of the CDSM, but also enable immediate use of the appropriate G-code for reporting purposes. This information will be contained in standard coding information issued by the agency as well as on the AUC website that lists all qualified CDSMs.

Regarding the use of one generic G-code to describe that a qualified CDSM was consulted, we are not confident that this would satisfy the statutory requirement under section 1834(q)(4)(B) of the Act to report which qualified CDSM was consulted. However, we may find that generic codes are needed as a temporary measure as we move forward with implementation.

If a CDSM is not consulted, for example due to the ordering professional attesting to a significant hardship, then we agree that a distinct G-code for that purpose is not necessary. Rather the modifier describing that hardship could be placed on the same claim line as the CPT code for the imaging service.

We agree with commenters that the issue of claims processing system resorting of claims information is problematic. When multiple imaging services are reported on a single claim, it will not be possible to pair the G-code describing which CDSM was consulted with the imaging service for which it was consulted. While we could require the furnishing professional to split the claim, we are not committing to that solution at this point but will explore that option as we move forward with implementation. Another possible solution, though still imperfect, could be to list the G-code on a line and place the modifiers describing AUC adherence on the line with the CPT code describing the imaging service. This model could work when the same ordering professional has ordered all of the furnished imaging services on the claim, and if we presume that an ordering professional will consistently use only one qualified CDSM. We appreciate commenters raising these issues and we will continue to explore options to address them.

Comment: One commenter suggested that, instead of G-codes, CPT codes should be developed to identify the qualified CDSM consulted.

Response: Initially we do not believe it will be possible for AMA-CPT to issue CPT codes identifying qualified CDSMs in time for the program to begin. We do, however, understand that there may be benefits to making these codes Level 1 HCPCS codes that are issued by AMA-CPT as opposed to HCPCS Level 3 codes (G-codes). We will look into the benefits and potential problems of using CPT codes to describe which qualified CDSM was consulted. An initial concern we have, in addition to timing to accommodate the start of the AUC program, is whether CPT code descriptors could be changed quickly enough to accommodate newly qualified CDSMs and whether CPT codes would be set aside for future use.

Comment: Many commenters observed that, under this AUC program, qualified CDSMs must generate and provide a certification or documentation at the time of order that documents which qualified CDSM was consulted, the name and NPI of the ordering professional that consulted the CDSM, and whether the service ordered would or would not adhere to specified applicable AUC or whether the specified applicable AUC consulted was not applicable to the service ordered. As a result, these commenters assumed that the CDSM would also communicate the relevant G-codes and modifiers, and requested that CMS clarify that qualified CDSMs are required to explicitly communicate their assigned G-code and the adherence modifier to the ordering professional. The commenters stated that absent this clarification, some CDSMs may simply convey their name and an indication (other than the relevant modifier) as to whether the ordered service “adhered,” or “didn't adhere,” or the AUC “didn't apply” to the imaging test. The commenters were concerned that if CDSMs provide AUC consultation results in this way, it would create additional burden for ordering professionals to manually assign coding information to be transmitted for billing purposes.

A few of these commenters stated that they requested this clarification because they noted: (1) Each qualified CDSM will know its G-code and can readily convert their adherence rating system into modifiers, (2) the required data could be transmitted between EHR and CDSM vendors and communicated between professionals in a standardized manner, and (3) accuracy of consultation reporting would improve.

Response: Commenters accurately described what information must be included in the certification or documentation generated by a qualified CDSM at the time of order, and this is specified in our regulation at § 414.94(g)(1)(vi). As we move forward in finalizing our approach for claims-based reporting where CDSMs will be represented through G-codes, and AUC adherence represented through modifiers, we agree with commenters that CDSMs should include the G-codes and modifiers in their certification or documentation. We would like to see CDSMs begin to do this as the specific G-codes and modifiers become available. And as the commenters noted, this would seem to be a simple thing for CDSMs to do. If we do not see CDSMs making such adjustments to their certification or documentation, we will consider imposing a requirement in regulation.

Comment: Commenters had varying views of using a UCI to report consultation information on claims. Some commenters were interested in moving forward with the UCI requirement when the claims forms are adjusted to accommodate this new information. Others disagreed on whether or not a taxonomy with embedded meaning was necessary. Some of these commenters supported a UCI issued by the qualified CDSM that was unique to that CDSM. A G-code would also appear on the claim that would identify which qualified CDSM was consulted and then the UCI would be used to pair the information with the data in the CDSM specific to that consultation. Others supported a UCI with a taxonomy with embedded meaning so one could look at the UCI and know, without accessing additional information, which CDSM was consulted and the outcome of that consultation. We also heard from commenters that the UCI could be lengthy and therefore prone to transcription errors when entering information on the order or the claim form.

Response: We will continue to consult with stakeholders about the future possibility of using the UCI.

Comment: Numerous commenters were concerned about the requirements for claims-based reporting of AUC consultation information when the claims are not yet able to accommodate new types of information. Most of these commenters expressed concern about the placement of the UCI and other commenters pointed out that the furnishing facility claim does not contain a designated location for the ordering professional's NPI.

Response: We agree with these concerns and will work with the appropriate stakeholders to identify a possible future location for a UCI to be appended to claims. We are not committing to using the UCI at this time but will be open to exploring the possibility of developing a UCI that could be appended to claims in the future. We will also work to better understand and identify a potentially appropriate place on the furnishing facility claim to include the ordering professional's NPI, and to understand whether changes to that claim form may be needed. In the short term we will consider other implementation options so that fields on the claims are not used improperly.

Comment: Several commenters sought clarification on how, absent a UCI, AUC claims-based information as reported by the furnishing professional and facility would be reconciled with the AUC consultation performed by the ordering professional as there is interest in establishing best practices for retaining this information. These commenters requested clarification on who bears responsibility if such data are not available during an audit, considering that the ordering professional interacts with the CDSM and provides the information that the furnishing provider submits on the claim.

Response: It is the responsibility of the ordering professional to consult AUC and to provide that consultation information to the furnishing professional; and it is the responsibility of the furnishing professional and facility to accurately report that information on claims for applicable imaging services. We will take into account the specific roles of ordering and furnishing professionals and facilities as the program develops and we begin to engage in program monitoring activities.

Comment: Many commenters noted the practice of “exam substitution” permitted by Sections 80.6.2-80.6.4 of Chapter 15 of the Medicare Benefit Policy Manual when the furnishing professional determines a different diagnostic imaging service should be ordered in certain circumstances and the ordering practitioner is not available to provide a new order. To this end, commenters recommended additional proposals to modify the reporting method using G-codes and modifiers by creating additional modifiers for those orders that (1) are initiated in one location and furnished at a different point of service, (2) furnished after a second consultation has occurred, or (3) are the result of interpretation-only services.

Response: We thank these commenters for their suggestions on additional modifiers and will consider these recommendations during implementation.

Based on the public comments we are finalizing the proposal to use G-codes and modifiers to report consultation information on claims. We appreciate that commenters pointed out concerns and technical issues regarding this approach and we will work to address them during implementation.

e. Significant Hardship Exception

We proposed to revise § 414.94(i)(3) of our regulations to adjust the significant hardship exception requirements under the AUC program. We proposed criteria specific to the AUC program and independent of other programs. An ordering professional experiencing any of the following when ordering an advanced diagnostic imaging service would not be required to consult AUC using a qualified CDSM, and the claim for the applicable imaging service would not be required to include AUC consultation information. The proposed criteria include:

• Insufficient internet access;
• EHR or CDSM vendor issues; or
• Extreme and uncontrollable circumstances.

Insufficient internet access is specific to the location where an advanced diagnostic imaging service is ordered by the ordering professional. EHR or CDSM vendor issues may include situations where ordering professionals experience temporary technical problems, installation or upgrades that temporarily impede access to the CDSM, vendors cease operations, or we de-qualify a CDSM. We expect these situations to generally be irregular and unusual. Extreme and uncontrollable circumstances include disasters, natural or man-made, that have a significant negative impact on healthcare operations, area infrastructure or communication systems. These could include areas where events occur that have been designated a federal Emergency Management Agency (FEMA) major disaster or a public health emergency declared by the Secretary. Based on 2016 data from the Medicare EHR Incentive Program and the 2019 payment year MIPS eligibility and special status file, we estimate that 6,699 eligible clinicians could submit such a request due to extreme and uncontrollable circumstances or as a result of a decertification of an EHR, which represents less than 1 percent of available ordering professionals.

In the CY 2017 PFS final rule, for purposes of the AUC program significant hardship exceptions, we provided that those who received significant hardship exceptions in the following categories from § 495.102(d)(4) would also qualify for significant hardship exceptions for the AUC program:

• Insufficient internet Connectivity (as specified in § 495.102(d)(4)(i)).
• Practicing for less than 2 years (as specified in § 495.102(d)(4)(ii)).
• Extreme and Uncontrollable Circumstances (as specified in § 495.102(d)(4)(iii)).
• Lack of Control over the Availability of CEHRT (as specified in § 495.102(d)(4)(iv)(A)).
• Lack of Face-to-Face Patient Interaction (as specified in § 495.102(d)(4)(iv)(B)).

In the CY 2018 PFS proposed rule, we proposed to amend the AUC significant hardship exception regulation to specify that ordering professionals who are granted reweighting of the Advancing Care Information (ACI) performance category to zero percent of the final score for the year under MIPS per § 414.1380(c)(2) due to circumstances that include the criteria listed in § 495.102(d)(4)(i), (d)(4)(iii), and (d)(4)(iv)(A) and (B) (as outlined in the bulleted list above) would be excepted from the AUC consultation requirement during the same year that the re-weighting applies for purposes of the MIPS payment adjustment. This proposal removed § 495.102(d)(4)(ii), practicing for less than 2 years, as a criterion since these clinicians are not MIPS eligible clinicians and thus would never meet the criteria for reweighting of their MIPS ACI performance category for the year.

In response to public comments, we did not finalize the proposed changes to the significant hardship exceptions in the CY 2018 PFS final rule and instead decided further evaluation was needed before moving forward with any modifications. Our original intention was to design the AUC significant hardship exception process in alignment with the process for the Medicare EHR Incentive Program for eligible professionals, and then for the MIPS ACI (now Promoting Interoperability) performance category. Under section 1848(a)(7)(A) of the Act, the downward payment adjustment for eligible professionals under the Medicare EHR Incentive Program will end in 2018, and we are unable to continue making reference to a regulation relating to a program that is no longer in effect. As we have continued to evaluate both policy options and operational considerations for the AUC significant hardship exception, we have concluded that the most appropriate approach, which we consider to be more straightforward and less burdensome than the current approach, involves establishing significant hardship criteria and a process that is independent from other Medicare programs. We also note as we have in the past that the AUC program is a real-time program with a need for real-time significant hardship exceptions. This is in contrast to the way significant hardship exceptions are handled under MIPS where the hardship might impact some or all of a performance period, or might impact reporting, both of which occur well before the MIPS payment adjustment is applied in a subsequent year. We recognize that when a significant hardship arises, an application process to qualify for an exception becomes a time consuming hurdle for health care providers to navigate, and we believe that it is important to minimize the burden involved in seeking significant hardship exceptions. As such, we proposed that ordering professionals would self-attest if they are experiencing a significant hardship at the time of placing an advanced diagnostic imaging order and such attestation would be supported with documentation of significant hardship. Ordering professionals attesting to a significant hardship would communicate that information to the furnishing professional with the order and it would be reflected on the furnishing professional's and furnishing facility's claim by appending a HCPCS modifier. The modifier would indicate that the ordering professional has self-attested to experiencing a significant hardship and communicated this to the furnishing professional with the order. Claims for advanced diagnostic imaging services that include a significant hardship exception modifier would not be required to include AUC consultation information.

In addition to the proposals above, we invited the public to comment on any additional circumstances that would cause the act of consulting AUC to be particularly difficult or challenging for the ordering professional, and for which it may be appropriate for an ordering professional to be granted a significant hardship exception under the AUC program. Although we understand the desire by some for significant hardship categories unrelated to difficulty in consulting AUC through a CDSM, we remind readers that circumstances that are not specific to AUC consultation, such as the ordering professional being in clinical practice for a short period of time or having limited numbers of Medicare patients, would not impede clinicians from consulting AUC through a CDSM as required to meet the requirements of this program.

The following is a summary of the comments we received on the modifications to the significant hardship exceptions and additional circumstances for consideration as needing significant hardship exceptions.

Comment: Some commenters requested that clinicians in the Quality Payment Program be excepted from or considered automatically in compliance with the AUC program requirements. Some of these commenters specified that an exception should apply to all primary care practitioners, others suggested an exception should apply to all clinicians in the Quality Payment Program, and several commenters requested that hospitals and health systems be exempt from reporting AUC consultation information. One commenter requested that facility and institutional providers be exempt. Acknowledging that the statutory language in section 218(b) of the PAMA does not include such an exception, some of these commenters clarified that CMS should seek legislative authority to add such an exception.

Response: As added by section 218(b) of the PAMA, section 1834(q)(4)(B) of the Act specifies that AUC consultation information must be included on all claims for applicable imaging services when furnished in an applicable setting and paid under an applicable payment system, which includes the physician fee schedule, prospective payment system for hospital outpatient department services and the ambulatory surgical center payment system. Section 1834(q)(4)(C) of the Act also set forth specific exceptions, including for a service ordered for an individual with an emergency medical condition, a service ordered for an inpatient for which payment is made under Medicare Part A, or for a service ordered by an ordering professional for whom AUC consultation would result in a significant hardship. In the case of significant hardship, section 1834(q)(4)(C)(iii) of the Act provides for such exceptions in situations when the Secretary determines, on a case-by-case basis, that an ordering professional is exempt because “consultation with applicable appropriate use criteria would result in a significant hardship, such as in the case of a professional who practices in a rural area without sufficient internet access.” Given these statutory provisions, blanket exceptions, considered significant hardships or otherwise, for clinicians in the Quality Payment Program, for facility or institutional providers, or for hospitals and health systems, would not be consistent with the statutory requirements. While we understand that stakeholders may view the AUC program as duplicative of the Quality Payment Program, we also note that there are specific and distinct differences between the programs. The AUC program was established to promote appropriate use of advanced diagnostic imaging and improve ordering patterns for these services through the consultation of AUC with real time reporting requirements and payment implications. While some components of the Quality Payment Program can involve using AUC and clinical decision support, their use is not mandatory, and the Quality Payment Program provides numerous options for participation across all MIPS performance categories. In contrast, consultation with AUC using a CDSM is required for each order for an applicable imaging service furnished in an applicable setting and paid under an applicable payment system under the AUC program. If amendments are made to the AUC statutory provisions, we will adjust our regulations throughout § 414.94 accordingly. However, at this time, we do not have the authority to include exceptions to the AUC program beyond the scope of those specified in section 1834(q)(4)(C) of the Act.

Comment: Some commenters requested an additional significant hardship category based on a low-volume threshold for practices with low patient volumes, low number of covered services or a low number of Medicare charges. Some commenters supported this request by noting the increased cost and burden a small practice would be required to undertake to meet the requirements of the AUC program.

Response: As noted above, we believe that significant hardships are reflective of situations that would impede clinicians from consulting AUC through a CDSM. As the program is structured and given the availability of qualified CDSMs that are free of charge, we do not agree that ordering professionals in practices with low patient volumes, low number of covered services or a low number of Medicare charges would be impeded from consulting AUC. While we do understand that participation in the AUC program may result in increased cost and burden, which could arguably be disproportionate for these types of low volume practices, we do not have the authority to include exceptions to the AUC program beyond the scope of those specified in section 1834(q)(4)(C) of the Act.

Comment: Several commenters provided recommendations for other categories of significant hardship exceptions. One commenter requested an exception for professionals when the PLE they rely upon becomes unavailable, and another commenter requested a significant hardship exception when there is a lack of AUC for the service(s) requiring consultation or AUC are outdated. Another commenter suggested that new physicians be excepted from the AUC program and another identified imaging services ordered as the result of a clinical research protocol as a potential significant hardship.

Response: We disagree with adding these scenarios to the significant hardship exceptions under this program. For unavailable PLEs and AUC, we established specific requirements for both qualified PLEs and CDSMs that address the two situations included above. First, qualified CDSMs are required to make available, at a minimum, specified applicable AUC that reasonably address common and important clinical scenarios within all priority clinical areas and be able to incorporate specified applicable AUC from more than one qualified PLE. Should a qualified PLE cease to exist or otherwise become unavailable, then the qualified CDSM through which the AUC for that qualified PLE is consulted would no longer meet the requirements to be a qualified CDSM (assuming it does not incorporate AUC from another qualified PLE), and as such, would be de-qualified as a CDSM under this program. As noted above, de-qualification of a CDSM would be an allowable circumstance for an ordering professional to attest to a significant hardship due to EHR or CDSM vendor issues. Second, when an ordering professional consults a qualified CDSM and there are no AUC applicable to the service ordered, that information would be reported on the claim as such. In these situations, the qualified CDSM is required under § 414.94(g)(1)(vi) to generate and provide a certification or documentation at the time of order that documents whether the specified applicable AUC consulted was not applicable to the service ordered. The ordering professional is then required to provide that information to the furnishing professional and facility so that it can be reported as specified under § 414.94(k). The absence of applicable AUC does not constitute an exception from the requirement to consult AUC using the qualified CDSM in an effort to find specified applicable AUC for the order. Third, qualified PLEs are required to review their AUC regularly and update them at least annually when appropriate; and qualified CDSMs are required to make any updated AUC content available within 12 months of the qualified PLE's update(s). Finally, we do not believe that being a new physician or conducting clinical research would cause the act of consulting AUC to be particularly difficult or challenging for the ordering professional.

Comment: Several commenters revisited previously expressed concerns about the emergency services exception. The commenters requested clarification around what constitutes an emergency medical condition. One commenter suggested that CMS revise the regulatory language to allow exceptions when an emergency medical condition is suspected for cases in which clinicians, in their best judgment, believe a patient may be experiencing a medical emergency at the time of order. This commenter noted that this approach was the intent of section 218(b) of the PAMA as explained by a member of Congress who was involved in drafting the statutory language, and that the reference to section 1867(e) of the Act instead of section 1867(a) of the Act was an inadvertent drafting error. One commenter requested that CMS delay requiring AUC consultations in the emergency department until the ambiguity over what services are considered emergency services is resolved.

Response: Section 1834(q)(4)(C)(i) of the Act provides for an exception to the AUC consultation and reporting requirements in the case of a service ordered for an individual with an emergency medical condition as defined in section 1867(e)(1) of the Act, not section 1867(a) of the Act as the commenter suggests. The regulation reflects the current statutory language and we will not amend our regulation in response to these comments. As stated in our response to comments in the CY 2017 PFS final rule with comment, we agree that exceptions granted for an individual with an emergency medical condition include instances where an emergency medical condition is suspected, but not yet confirmed. This may include, for example, instances of severe pain or severe allergic reactions. In these instances, the exception is applicable even if it is determined later that the patient did not in fact have an emergency medical condition.

Comment: Many commenters generally supported the proposed significant hardship categories and self-attestation approach, with one commenter specifically encouraging oversight of AUC and the use of significant hardship exceptions. However, many other commenters challenged the proposed approach to annotating the significant hardship self-attestation on every Medicare claim. Specifically, they requested that a blanket exception or single attestation be applied over a period of time to avoid increased burden of communicating and reporting a significant hardship attestation on every advanced diagnostic imaging order, and suggested using a significant hardship exception modifier on the subsequent claim(s) after the single attestation. One commenter noted that the approach as proposed by CMS is more burdensome than requiring the use of an applications process.

Response: Because the AUC program requires real time reporting on Medicare claims, we believe the best way to ensure clinicians have the ability and flexibility to use the significant hardships allowable under this program is to establish a mechanism for real time application of significant hardship attestations. To accomplish this, inclusion of the relevant significant hardship modifier on each Medicare claim offers the most straightforward approach, enabling ordering professionals to use a significant hardship exception as needed and without more complicated, time consuming steps that could result in a delay in the transmission, acceptance and processing of the imaging order for the ordering and furnishing professionals, as well as a delay in care for the patient. We note that applying a blanket exception for a specific period of time for ordering professionals based on a single significant hardship attestation would introduce a level of complexity and burden to the process that was not identified by requestors. Following such a single attestation, furnishing professionals (as well as CMS) would need to keep track of which ordering professionals had attested to a significant hardship as well as the period of time applicable to each attestation every time an order is received and a claim is prepared, submitted and processed. We disagree with commenters that inclusion of significant hardship information on each imaging order and subsequent claim imposes extensive burden, or that other approaches would be less burdensome and achieve the same goal of allowing for a real time significant hardship exception process under the real time AUC program.

Comment: Many commenters posed specific requests for clarification around the proposed significant hardship exception categories. One commenter requested further clarity and a broader application of insufficient internet access and extreme and uncontrollable circumstances to include, respectively, situations out of the control of the ordering professional like slow internet and no physical access to the CDSM, lost CDSM usernames and passwords and other situations preventing an ordering professional from consulting at the time of the patient encounter. Other commenters requested clarification around how orders would be made during downtime and how and when to document the significant hardship and by whom. A few commenters did not understand how de-certification of an EHR would qualify as a significant hardship since there are no certification requirements related to the AUC program. Others requested further information on how hardship information must be reported on the claim, specific information on coding a significant hardship, how to handle emergency situations and what to report when orders are changed.

Response: We appreciate the comments submitted requesting further clarification around exactly how significant hardship exceptions will be operationalized. We note that many of the questions posed are specific to claims reporting details. We expect to provide further details and clarification in the claims processing instructions that we expect to release following the final rule.

We describe insufficient internet access as specific to the location where an advanced diagnostic imaging service is ordered by the ordering professional. To further clarify, we note that in addition to ordering imaging services in an area without sufficient internet access, a significant hardship may apply when ordering professionals would face insurmountable barriers to obtaining infrastructure to have internet access (that is, lack of broadband). We do not believe that occasions of slow internet constitute a significant hardship.

We describe EHR or CDSM vendor issues as situations where ordering professionals experience temporary technical problems, installation or upgrades that temporarily impede access to the CDSM, vendors cease operations, or we de-qualify a CDSM and note that we expect these situations to be irregular and unusual. De-certification of an EHR would qualify as a significant hardship when the ordering professionals' qualified CDSM is integrated into their EHR, and the ordering professional's access to the CDSM is temporarily impeded due to installation issues associated with switching to a new vendor. We do not agree that losing CDSM usernames and passwords constitutes a significant hardship under the AUC program. Self-attestation for this significant hardship should be used as needed when the situations described above occur. We have not established limitations around using the EHR or CDSM vendor issues or the other significant hardship exceptions, but may monitor the use of these exceptions to ensure misuse or overuse does not become a problem.

We describe extreme and uncontrollable circumstances to include disasters, natural or man-made, that have a significant negative impact on healthcare operations, area infrastructure or communication systems. We also explain these may include areas where events occur that have been designated by FEMA as a major disaster or a public health emergency declared by the Secretary. To further clarify, these circumstances are events that are entirely outside the control of the ordering professional that prevent the ordering professional from consulting AUC through a qualified CDSM. We believe the hardship criteria under this program are similar to other programs such as MIPS and Promoting Interoperability, particularly the flexibility that is given to clinicians to identify extreme and uncontrollable circumstances.

Comment: Several commenters submitted a variety of additional comments and questions about the proposed significant hardship exceptions. One commenter questioned why the AUC hardships are not completely aligned with Quality Payment Program hardships. One stated that interpretation-only services do not need to include documentation of AUC consultation because professionals with no face-to-face encounters are excepted. One commenter questioned why an ordering professional with a significant hardship exception would need to communicate AUC consultation information, and suggested that they should only need to communicate the exception information to the furnishing professional and facility. A few commenters recommended that furnishing professionals should be held harmless when ordering professionals self-attest to experiencing a significant hardship.

Response: As explained above, the AUC program requires real time reporting of information on the Medicare claims for payment purposes. The Quality Payment Program is not a real time program but instead uses data from prior performance years to determine status and potential payment adjustments in future years. This distinct and significant difference, along with statutory differences between the programs, necessitates a separate significant hardship exception approach and process for the AUC program. As discussed throughout this section, we have made efforts to align significant hardship exception concepts with the Quality Payment Program as closely as possible; however, we are unable to achieve full alignment due to the innate programmatic differences. For ordering professionals without face-to-face patient interactions, we did not include this circumstance in our proposals and do not provide for such an exception in this final rule. The degree of patient interaction does not create in itself a significant hardship to consultation with applicable AUC. For communicating consultation information on the imaging order when a significant hardship is experienced, the commenter is correct. No AUC consultation information is to be communicated when an ordering professional self-attests to experiencing a significant hardship and communicates that on the order. This confusion likely arose from language that we inadvertently included in the preamble and have corrected for the final rule. Section 1834(q)(4)(B) of the Act requires certain information to be included on the claim for applicable imaging services under this program. As long as the furnishing professional and facilities correctly include the required information or append the appropriate hardship modifier, the claims will not be denied for failing to include AUC consultation information, and the furnishing professionals and facilities are not held responsible for the self-attestation made by the ordering professional. As noted above, we may monitor the use of these exceptions to ensure misuse or overuse does not become a problem, with the understanding that they reflect the ordering professional's self-attestation, not a representation made by the furnishing professional or facility. It is not appropriate for furnishing professionals or facilities to append significant hardship modifiers at their discretion; and we note that support for the use of such a modifier should be included by the ordering professional in the patient's medical record.

After considering the public comments, we are finalizing the significant hardship categories of insufficient internet access, EHR or CDSM vendor issues, and extreme and uncontrollable circumstances and updating this language in § 414.94(i)(3) of our regulations. We are also finalizing our proposal to allow ordering professionals experiencing a significant hardship to self-attest and include that information on the order for the advanced diagnostic imaging service, which the furnishing professional or facility would then communicate on the Medicare claim for the service by appending a HCPCS modifier identifying the ordering professional's self-attested significant hardship category.

f. Identification of Outliers

As previously mentioned, the fourth component of the AUC program specified in section 1834(q)(5) of the Act, is the identification of outlier ordering professionals. In our efforts to start a dialogue with stakeholders, we invited the public to submit their ideas on a possible methodology for the identification of outlier ordering professionals who would eventually be subject to a prior authorization process when ordering advanced diagnostic imaging services. Specifically, we solicited comments on the data elements and thresholds that we should consider when identifying outliers. We also intend to perform and use analysis to assist us in developing the outlier methodology for the AUC program. Our existing prior authorization programs generally do not specifically focus on outliers. We are interested in hearing ideas from the public on how outliers could be determined for the AUC program. Because we would be concerned about data integrity and reliability, we do not intend to include data from the educational and operations testing period in CY 2020 in the analysis used to develop our outlier methodology. Since we intend to evaluate claims data to inform our methodology we expect to address outlier identification and prior authorization more fully in CY 2022 or 2023 rulemaking. We appreciate the feedback received from public commenters and as noted above, we expect to solicit additional public comment to inform our methodology through rulemaking before finalizing our approach.

5. Summary

We appreciate the commenters that continue to provide their perspective and feedback on this program. Based on those comments we will finalize the following:

We will finalize as proposed to add IDTFs to the definition of applicable settings under § 414.94(b) of this program. We will also finalize as proposed that furnishing professionals and all furnishing entities are required to report AUC consultation information on the claim as specified under § 414.94(k). In addition we will finalize as proposed the significant hardship exception criteria and process under § 414.94(i)(3) to be specific to the AUC program and independent of other Medicare programs.

We will not finalize as proposed the proposal to allow the AUC consultation, when not personally performed by the ordering professional, to be performed by auxiliary personnel incident to the ordering professional's services. Rather we are finalizing under § 414.94(j)(2) that when delegated by the ordering professional, clinical staff under the direction of the ordering professional may perform the AUC consultation with a qualified CDSM.

Additionally, we will move forward with plans to use G-codes and modifiers to report AUC consultation information on the Medicare claims.

We will continue to post information on our website for this program, accessible at www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/index.html.

E. Medicaid Promoting Interoperability Program Requirements for Eligible Professionals (EPs)

1. Background

Sections 1903(a)(3)(F) and 1903(t) of the Act provide the statutory basis for the incentive payments made to Medicaid EPs and eligible hospitals for the adoption, implementation, upgrade, and meaningful use of CEHRT. We have implemented these statutory provisions in prior rulemakings to establish the Medicaid Promoting Interoperability Program.

Under sections 1848(o)(2)(A)(iii) and 1903(t)(6)(C)(i)(II) of the Act, and the definition of “meaningful EHR user” in regulations at § 495.4, one of the requirements of being a meaningful EHR user is to successfully report the clinical quality measures selected by CMS to CMS or a state, as applicable, in the form and manner specified by CMS or the state, as applicable. Section 1848(o)(2)(B)(iii) of the Act requires that in selecting electronic clinical quality measures (eCQMs) for EPs to report under the Promoting Interoperability Program, and in establishing the form and manner of reporting, the Secretary shall seek to avoid redundant or duplicative reporting otherwise required. We have taken steps to align various quality reporting and payment programs that include the submission of eCQMs.

In the “Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2018 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Electronic Health Record (EHR) Incentive Program Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Provider-Based Status of Indian Health Service and Tribal Facilities and Organizations; Costs Reporting and Provider Requirements; Agreement Termination Notices” final rule (82 FR 37990, 38487) (hereafter referred to as the “FY 2018 IPPS/LTCH PPS final rule”), we established that, for 2017, Medicaid EPs would be required to report on any six eCQMs that are relevant to the EP's scope of practice. In proposing and finalizing that change, we indicated that it is our intention to align eCQM requirements for Medicaid EPs with the requirements of Medicare quality improvement programs, to the extent practicable.

2. eCQM Reporting Requirements for EPs Under the Medicaid Promoting Interoperability Program for 2019

CMS annually reviews and revises the list of eCQMs for each MIPS performance year to reflect updated clinical standards and guidelines. In section III.I.3.h.(2)(b)(i) of this final rule, we amend the list of available eCQMs for the CY 2019 performance period. To keep eCQM specifications current and minimize complexity, we proposed to align the eCQMs available for Medicaid EPs in 2019 with those available for MIPS eligible clinicians for the CY 2019 performance period (83 FR 35871). Specifically, we proposed that the eCQMs available for Medicaid EPs in 2019 would consist of the list of quality measures available under the eCQM collection type on the final list of quality measures established under MIPS for the CY 2019 performance period.

We explained that we believed that this proposal would be responsive to stakeholder feedback supporting quality measure alignment between MIPS and the Medicaid Promoting Interoperability Program for EPs, and that it would encourage EP participation in the Medicaid Promoting Interoperability Program by allowing those that are also MIPS eligible clinicians the ability to report the same eCQMs as they report for MIPS in 2019. In addition, we explained that we believed that aligning the eCQMs available in each program would ensure the most uniform application of up-to-date clinical standards and guidelines possible.

We explained that we anticipated that this proposal would reduce burden for Medicaid EPs by aligning the requirements for multiple reporting programs, and that the system changes required for EPs to implement this change would not be significant, particularly in light of our belief that many EPs will report eCQMs to meet the quality performance category of MIPS and therefore should be prepared to report on the available eCQMs for 2019. We explained that we expected that this proposal would have only a minimal impact on states, by requiring minor adjustments to state systems for 2019 to maintain current eCQM lists and specifications.

We also requested comments on whether in future years of the Medicaid Promoting Interoperability Program beyond 2019, we should include all e-specified measures from the core set of quality measures for Medicaid and the Children's Health Insurance Program (CHIP) (the Child Core Set) and the core set of health care quality measures for adults enrolled in Medicaid (Adult Core Set) (hereinafter together referred to as “Core Sets”) as additional options for Medicaid EPs.

Sections 1139A and 1139B of the Act require the Secretary to identify and publish core sets of health care quality measures for child Medicaid and CHIP beneficiaries and adult Medicaid beneficiaries. These measure sets are required by statute to be updated annually and are voluntarily reported by states to CMS. These core sets comprise measures that specifically focus on populations served by the Medicaid and CHIP programs and are of particular importance to their care. Several of these Core Set measures are included in the MIPS eCQM list, but some are not. We explained that we believe that including, as eCQM reporting options for Medicaid EPs, the e-specified measures from the Core Sets that are not also on the MIPS eCQM list would increase EP utilization of these measures and provide states with better data to report. At this time, the only measure within the Core Sets that would not be available as an option for Medicaid EPs in 2019 (because it is not on the MIPS eCQM list for Performance Year 2019) is NQF-1360, “Audiological Diagnosis No Later Than 3 Months of Age.” However, as these Core Sets are updated annually, in future years there may be other eCQMs that would not be on the MIPS eCQM list, and that could be included.

For 2019, we proposed that Medicaid EPs would report on any six eCQMs that are relevant to their scope of practice, regardless of whether they report via attestation or electronically. After we removed the NQS domain requirements for Medicaid EPs' 2017 eCQM submissions in the FY 2018 IPPS/LTCH PPS final rule, we have found that allowing EPs to report on any six quality measures that are relevant to their practice has increased EPs' flexibility to report pertinent data. In addition, this policy of allowing Medicaid EPs to report on any six measures relevant to their scope of practice would generally align with the MIPS data submission requirement for eligible clinicians using the eCQM collection type for the quality performance category, which is established at § 414.1335(a)(1). MIPS eligible clinicians who elect to submit eCQMs must generally submit data on at least six quality measures, including at least one outcome measure (or, if an applicable outcome measure is not available, one other high priority measure). We refer readers to § 414.1335(a) for the data submission criteria that apply to individual MIPS eligible clinicians and groups that elect to submit data with other collection types.

We proposed that for 2019 the Medicaid Promoting Interoperability Program would adopt the MIPS requirement that EPs report on at least one outcome measure (or, if an outcome measure is not available or relevant, one other high priority measure).

We also requested comments on how high priority measures should be identified for Medicaid EPs. We proposed (83 FR 35872) to use all three of the following methods to identify which of the available measures are high priority measures, but invited comments on other possibilities.

1. We proposed to use the same set of high priority measures for EPs participating in the Medicaid Promoting Interoperability Program that the MIPS program has identified for eligible clinicians. As discussed in section III.I.3.h.(2)(b)(i) of this final rule, we proposed to amend § 414.1305 to revise the definition of high priority measure for purposes of MIPS to mean an outcome (including intermediate-outcome and patient-reported outcome), appropriate use, patient safety, efficiency, patient experience, care coordination, or opioid-related quality measure, beginning with the 2021 MIPS payment year.

2. For 2019, we also proposed to identify as high priority measures the available eCQMs that are included in the previous year's Core Sets and that are also included on the MIPS list of eCQMs. We explained that because the Core Sets are released at the beginning of each year, it would not be possible to update the list of high-priority eCQMs with those added to the current year's Core Sets. We also explained that CMS has already identified the measures included in the Core Sets as ones that specifically focus on populations served by the Medicaid and CHIP programs and are particularly important to their care. The eCQMs that would be available for Medicaid EPs to report in 2019, that are both part of the Core Sets and on the MIPS list of eCQMs, and that would be considered high priority measures under our proposal are: CMS2, “Preventive Care and Screening: Screening for Depression and Follow-Up Plan”; CMS4, “Initiation and Engagement of Alcohol and Other Drug Dependence Treatment”; CMS122, “Diabetes: Hemoglobin A1c (HbA1c) Poor Control (>9%)”; CMS125, “Breast Cancer Screening”; CMS128, “Anti-depressant Medication Management”; CMS136, “Follow-Up Care for Children Prescribed ADHD Medication (ADD)”; CMS153, “Chlamydia Screening for Women”; CMS155, “Weight Assessment and Counseling for Nutrition and Physical Activity for Children and Adolescents”; and CMS165, “Controlling High Blood Pressure.”

3. We also proposed to give each state the flexibility to identify which of the available eCQMs selected by CMS are high priority measures for Medicaid EPs in that state, with review and approval from CMS, through their State Medicaid HIT Plans (SMHP), similar to the flexibility granted states to modify the definition of Meaningful Use at § 495.332(f). We explained that we believe this proposal would give states the ability to identify as high priority those measures that align with their state health goals or other programs within the state. We proposed to amend § 495.332(f) to provide for this state flexibility to identify high priority measures.

We proposed that any eCQMs identified via any of these mechanisms be considered to be high priority measures for EPs participating in the Medicaid Promoting Interoperability Program for 2019.

We also proposed that the eCQM reporting period for EPs in the Medicaid Promoting Interoperability Program would be a full CY in 2019 for EPs who have demonstrated meaningful use in a prior year, in order to align with the corresponding performance period in MIPS for the quality performance category. We explained that we continue to align Medicaid Promoting Interoperability Program requirements with requirements for other CMS quality programs, such as MIPS, to the extent practicable, to reduce the burden of reporting different data for separate programs. In addition, we explained that we have found that clinical quality data from an entire year reporting period is significantly more useful than partial year data for quality measurement and improvement because it gives states a fuller picture of a health care provider's care and patient outcomes. We proposed that the eCQM reporting period for Medicaid EPs demonstrating meaningful use for the first time, which was established in the final rule entitled “Medicare and Medicaid Programs; Electronic Health Record Incentive Program-Stage 3 and Modifications to Meaningful Use in 2015 Through 2017” (80 FR 62762) (hereafter referred to as “Stage 3 final rule”), would remain any continuous 90-day period (80 FR 62892).

We explained that we will adjust future years' requirements for reporting eCQMs in the Medicaid Promoting Interoperability Program through rulemaking, and will continue to align the quality reporting requirements, as logical and feasible, to minimize EP burden.

Comment: Many commenters stated that they support the alignment of the eCQMs available for Medicaid EPs in 2019 with those available for MIPS eligible clinicians for the CY 2019 performance period. These commenters stated that alignment between the two programs helps reduce health care provider reporting burden. In addition, several commenters noted that the MIPS eCQM list is geared toward adults and that including measures from the Child Core Set in future years, after 2019, would add measures that are more applicable to certain specialties that serve Medicaid and CHIP beneficiaries, such as pediatricians and pediatric dentists.

Response: We appreciate these comments, and we continue to look for opportunities to align programs, make measures more relevant to Medicaid EPs, and reduce reporting burden when possible.

Comment: Several commenters supported the proposal to include any e-specified measures from the Adult Core Set and Child Core Set that are not also on the MIPS eCQM list, in order to align with other CMS programs, as well as to provide a wider variety of measures that are specifically applicable to Medicaid EPs.

Response: We agree that the measures included in the Adult Core Set and the Child Core Set are targeted toward Medicaid patients and Medicaid health care providers. These Core Sets are tools states can use to monitor and improve the quality of health care provided to Medicaid and CHIP enrollees. Although under statute, state reporting on these measure sets is voluntary, we aim to increase the number of states reporting on a uniform set of measures and to support states in using these measures to drive quality improvement for the beneficiaries they serve.

Comment: One commenter stated that the e-specified Adult Core Set and Child Core Set measures that are not also on the MIPS eCQM list should not be included in future years of the Medicaid Promoting Interoperability Program beyond 2019 because the Medicaid Promoting Interoperability Program is approaching the final years of participation and Medicaid EPs are already aware of the requirements they need to meet to be a meaningful EHR user. In addition, the same commenter stated that adding additional measures from the Core Sets would create a large burden on all states to update their attestation systems for the one or two remaining participation years.

Response: We appreciate this comment, but point out that the burden to states would be no greater than including any additional measures that may be added to the MIPS eCQM set in future years, if CMS continues to align the MIPS and Medicaid Promoting Interoperability Program eCQM requirements. We also point out that many of the positive comments regarding this proposal came from states that appreciated the proposal to align with other CMS reporting requirements. Those commenters did not indicate that such a requirement would impose a significant burden on states.

After careful consideration of the comments, we are finalizing without change our proposal to amend the list of available eCQMs for the CY 2019 performance period. To keep eCQM specifications current and minimize complexity, we are aligning the eCQMs available for Medicaid EPs in 2019 with those available for MIPS eligible clinicians for the CY 2019 performance period. Specifically, the eCQMs available for Medicaid EPs in 2019 will consist of the list of quality measures available under the eCQM collection type on the final list of quality measures established under MIPS for the CY 2019 performance period.

We did not propose to include the e-specified measures within the Adult Core Set and Child Core Set that are not also on the MIPS eCQM list for eCQM reporting in the Medicaid Promoting Interoperability Program in 2019, due to timing and logistical feasibility. However, we intend to reevaluate whether to add these measures when proposing eCQM reporting requirements for the Medicaid Promoting Interoperability Program for 2020 and beyond.

Comment: Many commenters stated their support for aligning the Medicaid Promoting Interoperability Program with the MIPS requirement that eligible clinicians who elect to submit eCQMs must generally submit data on at least six quality measures, including at least one outcome measure (or, if an applicable outcome measure is not available, one other high priority measure).

Response: We thank these commenters and we will continue to look for opportunities to align the programs and reduce reporting burden when possible.

Comment: One commenter stated that there are relatively few pediatric-appropriate measures in the Medicaid Promoting Interoperability Program and MIPS, and therefore recommended that CMS provide specific clarification that pediatric providers would not be held responsible for adult measures that are not necessarily applicable to pediatrics.

Response: We acknowledge that not all Medicaid EPs may find six measures applicable to their scope of practice. Therefore, we note that our policy continues to allow Medicaid EPs to report eCQMs with zero in the denominator, which indicates that they have no data on that eCQM in their EHR from the reporting period. If fewer than six measures are relevant to a Medicaid EP's scope of practice, he or she may submit “zero denominator” eCQMs that his or her CEHRT is able to calculate to meet the requirement to report six measures. If an EP's CEHRT contains no data on a specific eCQM, when states are auditing EP's submissions, it may create a rebuttable presumption that that measure falls outside of the EP's scope of practice. However, unless they cannot otherwise report on six measures, we encourage EPs to report on eCQMs that contain data, which are more likely to be within their scope of practice, instead of reporting eCQMs with a zero denominator.

Comment: One commenter stated that some specialists may have difficulty finding an outcome or high priority measure applicable to their scope of practice. The commenter also noted that this difficulty is alleviated under MIPS with the group reporting option, which is not available under the Medicaid Promoting Interoperability Program.

Response: In light of this concern, we now explain that if no outcome or high priority measures apply to a Medicaid EP's scope of practice and there is no data for any of the outcome or high priority measures reportable by his or her CEHRT, he or she may report on six non-outcome and non-high priority measures that are applicable to his or her scope of practice.

Comment: One commenter inquired as to a state's responsibility for auditing the eCQMs a Medicaid EP submits, how a state would ensure that the reported eCQMs are within the EP's scope of practice, and how a state would know whether there was an unselected relevant outcome or high priority measure.

Response: Under § 495.368, states are required to combat fraud and abuse and ensure that incentive payments are made properly per the requirements of the program, including the eCQM reporting requirements. In regard to this particular requirement, we believe that Medicaid EPs are in the best position to determine which measures are applicable to their scope of practice, not the state. Therefore, when verifying EPs' submissions, either at prepayment or during a post-payment audit, states should give Medicaid EPs the widest reasonable latitude to determine which eCQMs are relevant to their scope of practice. For instance, an EP should be able to meet the eCQM reporting requirements by submitting non-zero data for six relevant eCQMs, including one outcome or high-priority measure, regardless of whether there may be an unselected eCQM more relevant to his or her practice. That is, as we noted above, we do not think EPs should be reporting on eCQMs with a zero denominator unless that is the only way the EP can report on six measures. We encourage states to provide technical assistance to Medicaid EPs and to design their attestation systems in such a way that will assist EPs to meet this program requirement, and that will help avoid recouping incentive payments.

After careful consideration of the comments, we are finalizing our proposal that for 2019, Medicaid EPs will report on any six eCQMs that are relevant to the EP's scope of practice, regardless of whether they report via attestation or electronically. We are also finalizing the proposal that for 2019 the Medicaid Promoting Interoperability Program will adopt the MIPS requirement that EPs report on at least one outcome measure (or, if an applicable outcome measure is not available or relevant, one other high priority measure). Additionally, in response to comments summarized above, we now explain that if no outcome or high priority measure is relevant to a Medicaid EP's scope of practice, he or she may report on any six eCQMs that are relevant.

Comment: Some commenters approved of our proposal to allow states to indicate which eCQMs are high priority measures for that state's Medicaid agency.

Response: We thank these commenters for their comments.

Comment: A few commenters opposed offering states the flexibility to identify high priority eCQMs because it can cause additional cost to states for technology updates, and additional burden for vendors to customize and make software updates in a short timeframe. They also commented that having differences among states can cause burden on Medicaid EPs.

Response: We do not believe that this flexibility and variation between states will cause any additional burden for states, vendors or Medicaid EPs. Allowing states to identify their own high priority measures is entirely optional. If a state chooses not to identify additional high priority measures, the state would need to take no additional action. Furthermore, we expect that providing this option for states will reduce Medicaid EP burden, as it will give EPs a wider range of options to meet the requirement that they report on at least one outcome measure, or on at least one high priority measure if an outcome measure is not available or relevant. Additionally, as we explain above, if no outcome or priority measure is relevant to a Medicaid EP's scope of practice, he or she may instead report on any six measures that are relevant.

Finally, this proposal should not increase burden on CEHRT vendors. States may select high priority measures only from the list of eCQMs that are already available for Medicaid EPs to meet the requirements of the program. Medicaid EPs are not required to select any of their state-specific high priority measures. Therefore, the CEHRT need not vary between states, but must be able to calculate and report on at least one outcome measure (or, if an applicable outcome measure is not available or relevant, one other high priority measure) relevant to the provider's scope of practice, whether or not that is a state-specific high priority measure.

We received no comments on the first and second methods of identifying high priority measures for the Medicaid Promoting Interoperability Program. After careful consideration of the comments on our proposed approach to how high priority measures would be identified, we are finalizing it without modification.

Comment: Several commenters stated their support for aligning the eCQM reporting period for EPs in the Medicaid Promoting Interoperability Program with the corresponding performance period in MIPS, because they agreed this proposal would reduce EP burden. In addition, commenters noted that consistency with previous years will reduce confusion among EPs.

Response: We appreciate these comments and will continue to align when possible.

Comment: Several commenters urged CMS to adopt a 90-day eCQM reporting period within CY 2019 for all Medicaid EPs. A couple commenters indicated that the transition between 2014 Edition and 2015 Edition CEHRT during the year may create difficulty for Medicaid EPs to report a full year of data.

Response: We acknowledge that many Medicaid EPs might be upgrading or implementing new CEHRT in 2019. However, Medicaid EPs frequently upgrade or implement new CEHRT, regardless of the reporting year. Regardless of what CEHRT the EP used during the eCQM reporting period, the data that Medicaid EPs are required to report for eCQMs is a snapshot based on the data within the CEHRT, taken at the time of attestation, for the reporting period. Medicaid EPs are only responsible for reporting exactly the data that their CEHRT produces. As certified, 2015 Edition CEHRT should accurately calculate and report the eCQM data for the full reporting period, in accordance with the relevant certification requirements at 45 CFR 170.315(c), even if that 2015 Edition CEHRT was not implemented for the entire reporting period. Vendors should ensure that their CEHRT is performing in accordance with relevant 2015 Edition Certification requirements as defined by the Office of the National Coordinator for Health IT. The reporting process for EPs should be no different regardless of the length of the reporting period.

After careful consideration of the comments, we are finalizing without change our proposal that the eCQM reporting period for EPs in the Medicaid Promoting Interoperability Program will be a full CY in 2019 for EPs who have demonstrated meaningful use in a prior year, in order to align with the corresponding performance period in MIPS for the quality performance category. The eCQM reporting period for Medicaid EPs demonstrating meaningful use for the first time, which was established in the Stage 3 final rule, will remain any continuous 90-day period (80 FR 62892).

3. Proposed Revisions to the EHR Reporting Period and eCQM Reporting Period in 2021 for EPs Participating in the Medicaid Promoting Interoperability Program

In the July 28, 2010 final rule titled “Medicare and Medicaid Programs; Electronic Health Record Incentive Program” at 75 FR 44319, we established that, in accordance with section 1903(t)(4)(A)(iii) of the Act, in no case may any Medicaid EP receive an incentive after 2021 (see § 495.310(a)(2)(v)). Therefore, December 31, 2021 is the last date that states could make Medicaid Promoting Interoperability Program payments to Medicaid EPs (other than pursuant to a successful appeal related to 2021 or a prior year).

For states to make payments by that deadline, there must be sufficient time after EHR and eCQM reporting periods end for Medicaid EPs to attest to states, for states to conduct their prepayment processes, and for states to issue payments. Therefore, we proposed to amend § 495.4 to provide that the EHR reporting period in 2021 for all EPs in the Medicaid Promoting Interoperability Program would be a minimum of any continuous 90-day period within CY 2021, provided that the end date for this period falls before October 31, 2021, to help ensure that the state can issue all Medicaid Promoting Interoperability Program payments on or before December 31, 2021. Similarly, we proposed to change the eCQM reporting period in 2021 for EPs in the Medicaid Promoting Interoperability Program to a minimum of any continuous 90-day period within CY 2021, provided that the end date for this period falls before October 31, 2021, to help ensure that the state can issue all Medicaid Promoting Interoperability Program payments on or before December 31, 2021.

We explained that we understand that the October 31, 2021 date might not provide some states with sufficient time to process payments by December 31, 2021. We also explained that we believe that states are best positioned to determine the last possible date in CY 2021 by which the EHR or eCQM reporting periods for Medicaid EPs must end, and the deadline for receiving EP attestations, so that the state is able to issue all payments by December 31, 2021. Therefore, we proposed to allow states the flexibility to set alternative, earlier final deadlines for EHR or eCQM reporting periods for Medicaid EPs in CY 2021, with prior approval from us, through their State Medicaid HIT Plans (SMHP). If a state establishes an alternative, earlier date within CY 2021 by which all EHR or eCQM reporting periods in CY 2021 must end, Medicaid EPs in that state would continue to have a reporting period of a minimum of any continuous 90-day period within CY 2021. The end date for the reporting period would have to occur before the day of attestation, which must occur prior to the final deadline for attestations established by their state. We proposed to amend § 495.332(f) to provide for this state flexibility to identify an alternative date by which all EHR reporting periods or eCQM reporting periods for Medicaid EPs in CY 2021 must end.

We believe there is no reason why a state would need to set a date by which EHR reporting periods and eCQM reporting periods must end for Medicaid EPs that is earlier than the day before that state's attestation deadline for EPs. Doing so would restrict Medicaid EPs' ability to select EHR and eCQM reporting periods. Therefore, we proposed that any alternative deadline for CY 2021 EHR and eCQM reporting periods set by a state may not be any earlier than the day prior to the attestation deadline for Medicaid EPs attesting to that state.

The following is a summary of the comments we received regarding these proposals.

Comment: Multiple commenters stated their support for the proposal that the EHR reporting period in 2021 for all EPs in the Medicaid Promoting Interoperability Program would be a minimum of any continuous 90-day period within CY 2021, provided that the end date for this period falls before October 31, 2021. They agreed that this would help ensure that states can issue all Medicaid Promoting Interoperability Program payments on or before December 31, 2021. They also stated their support of the 90-day period for eCQM reporting, and for state flexibility to set earlier final deadlines for EHR or eCQM reporting periods for Medicaid EPs in CY 2021.

Response: We appreciate these comments and thank the commenters for their input.

Comment: A commenter pointed out that the earlier in the year a state sets the reporting period and attestation deadline, the more burden is put on Medicaid EPs to attest after a 90 day EHR and eCQM reporting period in 2021. They requested that we balance the burden between states and Medicaid EPs by setting a regulatory date before which a state could not set an attestation deadline.

Response: The commenters raise important questions about whether burden should be reduced on state staff and systems to the disadvantage of Medicaid EPs. Therefore, while we are finalizing the proposed policies without change, we are considering whether to propose in future rulemaking that no state may set a reporting period deadline for CY 2021 that is earlier than June 30, 2021 or an attestation deadline that is earlier than July 1, 2021. In the meanwhile, we welcome input from states and other interested parties on whether any state would need more than 6 months to process Medicaid EPs' attestations, perform the required prepayment validations, and disburse incentive payments.

Comment: One commenter requested that CMS provide outreach and educational materials to providers about the 2021 deadline, as they anticipate confusion.

Response: We will work with State Medicaid Agencies and provider communities to ensure that outreach and education are provided about the final attestation deadline and the end of the program.

Comment: Some commenters requested that CMS consider making the eCQM reporting period any 90 days within CY 2020 as well. They note that a full year reporting period may create significant backlogs of 2020 and 2021 attestations in 2021 that may create difficulty for states to issue payments by the statutory deadline.

Response: We understand that this is a concern. We will continue to monitor this issue as we develop proposed rules for the Medicaid Promoting Interoperability Program in 2020.

After careful consideration of the comments, we are finalizing our proposal to amend § 495.4 to provide that the EHR reporting period in 2021 for all EPs in the Medicaid Promoting Interoperability Program will be a minimum of any continuous 90-day period within CY 2021, provided that the end date for this period falls before October 31, 2021, to help ensure that states can issue all Medicaid Promoting Interoperability Program payments on or before December 31, 2021. We are also finalizing our proposal to change the eCQM reporting period in 2021 for EPs in the Medicaid Promoting Interoperability Program to a minimum of any continuous 90-day period within CY 2021, provided that the end date for this period falls before October 31, 2021, to help ensure that states can issue all Medicaid Promoting Interoperability Program payments on or before December 31, 2021.

In addition, we are finalizing our proposal to allow states the flexibility to set alternative, earlier final deadlines for EHR or eCQM reporting periods for Medicaid EPs in CY 2021, with prior approval from us, through their State Medicaid HIT Plan (SMHP). Any alternative deadline for CY 2021 EHR and eCQM reporting periods set by a state may not be any earlier than the day prior to the attestation deadline for Medicaid EPs attesting to that state.

Although we did not address reporting periods in 2021 for eligible hospitals in the proposed rule, we acknowledge that there will be a similar issue if there are still hospitals eligible to receive Medicaid Promoting Interoperability Program payments in 2021, including Medicaid-only eligible hospitals as well as “dually-eligible” eligible hospitals and critical access hospitals (CAHs) (those that are eligible for an incentive payment under Medicare for meaningful use of CEHRT and/or subject to the Medicare payment reduction for failing to demonstrate meaningful use of CEHRT, and are also eligible to earn a Medicaid incentive payment for meaningful use of CEHRT). However, based on attestation data and information from states' SMHPs regarding the number of years states disburse Medicaid Promoting Interoperability Program payments to hospitals, we believe that there will be no hospitals eligible to receive Medicaid Promoting Interoperability Program payments in 2021 due to the requirement that, after 2016, eligible hospitals cannot receive a Medicaid Promoting Interoperability Program payment unless they have received such a payment in the prior fiscal year. At this time, we believe that there are no hospitals that will be able to receive incentive payments in 2020 or 2021. We invited comments and suggestions on whether this belief is accurate, and if not, how we could address the issue in a manner that limits the burden on hospitals and states. The following is a summary of the comments we received on this issue.

Comment: One commenter stated that CMS's belief is accurate, and that they do not anticipate any hospitals to participate in program years 2020 or 2021. However, the commenter requested that CMS take into consideration the audit and appeals process, which may result in payments made during those years.

Response: We acknowledge that Medicaid Promoting Interoperability Program incentive payments might still be made to hospitals after hospitals' participation years, or even after December 31, 2021, in the limited circumstance of a successful hospital appeal related to participation in the Medicaid Promoting Interoperability Program in a prior year.

We did not propose any specific policy regarding eligible hospital reporting periods for 2021 in this rule and thus are not finalizing any policy in this area now, but we expect to solicit additional comment on the issue in a future proposed rule that is more specifically related to hospital payment.

4. Revisions to Stage 3 Meaningful Use Measures for Medicaid EPs

a. Change to Objective 6 (Coordination of Care Through Patient Engagement)

In the Stage 3 final rule, we adopted a phased approach under Stage 3 for EP Objective 6 (Coordination of care through patient engagement), Measure 1 (View, Download, or Transmit) and Measure 2 (Secure Electronic Messaging). This phased approach established a 5 percent threshold for both measures 1 and 2 of this objective for an EHR reporting period in 2017. (80 FR 62848 through 62849) In the same rule, we established that the threshold for Measure 1 would rise to 10 percent, beginning with the EHR reporting period in 2018, and that the threshold for Measure 2 would rise to 25 percent, beginning with the EHR reporting period in 2018. We stated that we would continue to monitor performance on these measures to determine if any further adjustment was needed. In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38493), we established a policy allowing EPs, eligible hospitals, and CAHs to use either 2014 Edition or 2015 Edition CEHRT, or a combination of 2014 Edition and 2015 Edition CEHRT, for an EHR reporting period in CY 2018, and depending on which Edition(s) they use, to attest to the Modified Stage 2 objectives and measures or the Stage 3 objectives and measures. In doing so, we also delayed the rise of the Objective 6 Measure 1 and Measure 2 thresholds until 2019.

We explained that based on feedback we have received, we understand that these two measures are the largest barrier to successfully demonstrating meaningful use, especially in rural areas and at safety net clinics. Stakeholders have reported a variety of causes that have resulted in lower patient participation than was anticipated when the Stage 3 final rule was issued. The data that we have collected via states for Medicaid EPs and at CMS from Medicare EPs for previous program years support this feedback. The primary issue is that the view, download, transmit measure requires a positive action by patients, which cannot be controlled by an EP. Medicaid populations that are at the greatest risk have lower levels of internet access, internet literacy and health literacy than the general population. Although the Secure Electronic Messaging measure does not require patient action, only that the EP send a secure message, we have received feedback that this functionality is not highly utilized by patients. Although we encourage Medicaid EPs to continue to reach out to patients via secure messaging to engage them in their health care between office visits, it is not productive for EPs to send messages to patients who are unlikely to see them or take action. Retaining the current threshold of 5 percent for both measures would continue to incentivize Medicaid EPs to engage patients in their own care without raising the requirements to unattainable thresholds for EPs who serve vulnerable Medicaid patients. Therefore, we proposed to amend § 495.24(d)(6)(i) such that the thresholds for Measure 1 (View, Download, or Transmit) and Measure 2 (Secure Electronic Messaging) of Meaningful Use Stage 3 EP Objective 6 (Coordination of care through patient engagement) would remain 5 percent for 2019 and subsequent years.

The following is a summary of the comments we received on this proposal.

Comment: The majority of commenters stated that they support CMS's proposal for the Objective 6 threshold to remain at 5 percent for the remainder of the Medicaid Promoting Interoperability Program, and that raising the thresholds would place undue burden on EPs.

Response: We thank the many commenters who stated their support.

Comment: One commenter stated that certain populations, specifically older adults, may struggle to engage with technology, which created challenges for health care providers and recommended giving special consideration to health care providers who struggle to meet this objective.

Response: We understand that some Medicaid EPs struggle to meet the objective due to factors outside of their control. However, this comment further supports our decision to keep the Objective 6 threshold at 5 percent rather than increasing it, as would happen without this rule change.

Comment: Several commenters noted that the Medicaid Promoting Interoperability Program and the Medicare Promoting Interoperability category of MIPS are still not fully aligned, and that this creates reporting burdens for providers. These commenters requested further alignment, between these two Objective 6 measures, which were proposed for removal under MIPS, as well as more broadly between the two programs.

Response: We agree that alignment of MIPS and the Medicaid Promoting Interoperability Program, to the degree practicable, is advantageous. The greater the discrepancy between the program requirements, the greater the reporting burden on health care providers who participate in both programs. We are finalizing our proposed changes to the Objective 6 measures without change, because we anticipate that doing so will reduce Medicaid EP burden. However, especially in light of these comments, we will also consider proposing further changes to the Medicaid Promoting Interoperability Program in future rulemaking, to improve alignment with the objectives and measures under the MIPS program. In the meanwhile, we welcome input from the public on this topic, and on additional ways that CMS can improve alignment between the two programs.

In addition, we note that the change from the Modified Stage 2 objectives and measures will make this objective easier for Medicaid EPs to meet. There are three measures under “Objective 6: Coordination of Care through Patient Engagement.” To be a meaningful EHR user, an EP must attest to all three measures, but only meet the thresholds for two of those three. Under Modified Stage 2, both Measure 1 (View, Download, or Transmit) and Measure 2 (Secure Electronic Messaging) were required (but not under the same objective) and Measure 3 was not an option. Both Measure 2 and Measure 3 do not rely on any patient action, but only require Medicaid EPs' action.

After reviewing the comments, we are finalizing without change the proposal to amend § 495.24(d)(6)(i) so that the thresholds for Measure 1 (View, Download, or Transmit) and Measure 2 (Secure Electronic Messaging) of Meaningful Use Stage 3 EP Objective 6 (Coordination of care through patient engagement) will remain 5 percent for 2019 and subsequent years.

b. Change to the Syndromic Surveillance Reporting Measure

In the proposed rule, we explained that in the Stage 3 final rule, we established that the syndromic surveillance reporting measure for EPs was limited to those who practice in urgent care settings (80 FR 62866 through 62870). Since then, we have received feedback from states and public health agencies that while many are unable to accept non-emergency or non-urgent care ambulatory syndromic surveillance data electronically, some public health agencies can and do want to receive data from health care providers in non-urgent care settings. We also explained that we believe that public health agencies that set the requirements for data submission to public health registries are in a better position to judge which health care providers can contribute useful data.

Therefore, we proposed to amend § 495.24(d)(8)(i)(B)(2), EP Objective 8 (Public health and clinical data registry reporting), Measure 2 (Syndromic surveillance reporting measure), to amend the language restricting the use of syndromic surveillance reporting for meaningful use only to EPs practicing in an urgent care setting. We proposed to include any EP defined by the state or local public health agency as a provider who can submit syndromic surveillance data. This change would not alter the exclusion for this measure at § 495.24(d)(8)(i)(C)(2)(i), for EPs who are not in a category of health care providers from which ambulatory syndromic surveillance data is collected by their jurisdiction's syndromic surveillance system, as defined by the state or local public health agency. Furthermore, we did not propose to create any requirements for syndromic surveillance registries to include all EPs. Additionally, we noted that under the specifications for the 2015 Edition of CEHRT for syndromic surveillance, it is possible that an EP could own CEHRT and submit syndromic surveillance in a format that is not accepted by the local jurisdiction. In this case, the EP may take an exclusion for syndromic surveillance.

The following is a summary of the comments we received on this proposal.

Comment: Several commenters stated their support of our proposal to include any EP defined by the state or local public health agency as a provider who can submit syndromic surveillance data.

Response: We thank the commenters for their support.

After careful consideration of the comments, we are finalizing without change our proposal to amend § 495.24(d)(8)(i)(B)(2), EP Objective 8 (Public health and clinical data registry reporting), Measure 2 (Syndromic surveillance reporting measure), to amend the language restricting the use of syndromic surveillance reporting for meaningful use only to EPs practicing in an urgent care setting. The new objective will also include any other setting from which ambulatory syndromic surveillance data are collected by the state or local public health agency. This change does not alter the exclusion for this measure at § 495.24(d)(8)(i)(C)(2)(i), for EPs who are not in a category of health care providers from which ambulatory syndromic surveillance data is collected by their jurisdiction's syndromic surveillance system, as defined by the state or local public health agency. Furthermore, this does not create any requirements for syndromic surveillance registries to include all EPs. Additionally, under the specifications for the 2015 Edition of CEHRT for syndromic surveillance, it is possible that an EP could own CEHRT and submit syndromic surveillance in a format that is not accepted by the local jurisdiction. In this case, the EP may take an exclusion for syndromic surveillance.

F. Medicare Shared Savings Program

As required under section 1899 of the Act, we established the Medicare Shared Savings Program (Shared Savings Program) to facilitate coordination and cooperation among health care providers to improve the quality of care for Medicare fee-for-service (FFS) beneficiaries and reduce the rate of growth in expenditures under Medicare Parts A and B. Eligible groups of providers and suppliers, including physicians, hospitals, and other health care providers, may participate in the Shared Savings Program by forming or participating in an Accountable Care Organization (ACO). The final rule establishing the Shared Savings Program appeared in the November 2, 2011 Federal Register (Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations; Final Rule (76 FR 67802) (hereinafter referred to as the “November 2011 final rule”)). A subsequent major update to the program rules appeared in the June 9, 2015 Federal Register (Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations; Final Rule (80 FR 32692) (hereinafter referred to as the “June 2015 final rule”)). The final rule entitled, “Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations—Revised Benchmark Rebasing Methodology, Facilitating Transition to Performance-Based Risk, and Administrative Finality of Financial Calculations,” which addressed changes related to the program's financial benchmark methodology, appeared in the June 10, 2016 Federal Register (81 FR 37950) (hereinafter referred to as the “June 2016 final rule”)).

In August 2018, we issued the “Medicare Program: Medicare Shared Savings Program; Accountable Care Organizations—Pathways to Success” proposed rule (hereinafter referred to as the “August 2018 proposed rule”) which addressed a number of proposed policy changes including redesign of the participation options available under the program to encourage ACOs to transition to two-sided models; new tools to support coordination of care across settings and strengthen beneficiary engagement; revisions to ensure rigorous benchmarking; and policies promoting use of interoperable electronic health record technology among ACO providers/suppliers (83 FR 41786). In section V. of this final rule, we are finalizing the following proposals from the August 2018 proposed rule:

• A voluntary 6-month extension for existing ACOs whose participation agreements expire on December 31, 2018 and the methodology for determining financial and quality performance for this 6-month performance year from January 1, 2019, through June 30, 2019;
• Policies implementing the Bipartisan Budget Act of 2018 provisions on voluntary alignment;
• Modifications to the definition of primary care services used in assigning beneficiaries to ACOs to reflect recent code changes;
• Extension of policies providing relief for ACOs and their clinicians impacted by extreme and uncontrollable circumstances during 2017 to performance year 2018 and subsequent years; and
• Policies to promote interoperability among ACO providers/suppliers, including establishing a new program eligibility requirement regarding CEHRT use and retiring the CEHRT quality measure (ACO-11).

We expect to address the remaining proposals in the August 2018 proposed rule in a forthcoming final rule.

We have also made use of the annual calendar year (CY) PFS rules to address quality reporting for the Shared Savings Program and certain other issues. In the CY 2018 PFS final rule (82 FR 53209 through 53226), we finalized revisions to several different policies under the Shared Savings Program, including the assignment methodology, quality measure validation audit process, use of the skilled nursing facility (SNF) 3-day waiver, and handling of demonstration payments for purposes financial reconciliation and establishing historical benchmarks. In addition, in the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 77255 through 77260, and 82 FR 53688 through 53706, respectively), we finalized policies related to the Alternative Payment Model (APM) scoring standard under the Merit-Based Incentive Payment System (MIPS), which reduces the reporting burden for MIPS eligible clinicians who participate in MIPS APMs, such as the Shared Savings Program, by: (1) Using the CAHPS for ACOs survey and the ACO reported CMS Web Interface quality data for purposes of assessing quality performance in the Shared Savings Program and to score the MIPS quality performance category for these eligible clinicians; (2) automatically awarding MIPS eligible clinicians participating in Shared Savings Program ACOs a minimum of one-half of the total points in the MIPS improvement activities performance category; (3) requiring ACO participants to report Advancing Care Information (ACI) data at the group practice level or solo practitioner level; and (4) not assessing MIPS eligible clinicians on the MIPS cost performance category because, through their participation in the ACO, they are already being assessed on cost and utilization under the Shared Savings Program.

As a general summary, in the CY 2019 PFS proposed rule, we proposed the following changes to the quality performance measures that will be used to assess quality performance under the Shared Savings Program for performance year 2019 and subsequent years:

• Changes to Patient Experience of Care Survey measures.
• Changes to CMS Web Interface and Claims-Based measures.

In addition, in the August 2018 proposed rule, we proposed another change to the Shared Savings Program quality measure set, which we are finalizing in section V.B.2.f. of this final rule. We proposed to remove the ACO-11—Use of Certified EHR Technology measure (83 FR 41908 through 41911). We refer readers to section V.B.2.f. of this final rule for a description of that proposal and a discussion of related public comments.

1. Quality Measurement

a. Background

Section 1899(b)(3)(C) of the Act states that the Secretary shall establish quality performance standards to assess the quality of care furnished by ACOs and seek to improve the quality of care furnished by ACOs over time by specifying higher standards, new measures, or both. In the November 2011 final rule, we established a quality measure set spanning four domains: Patient experience of care, care coordination/patient safety, preventive health, and at-risk population (76 FR 67872 through 67891). Since the Shared Savings Program was established, we have updated the measures that comprise the quality performance measure set for the Shared Savings Program through the annual rulemaking in the CY 2015, 2016, and 2017 PFS final rules (79 FR 67907 through 67920, 80 FR 71263 through 71268, and 81 FR 80484 through 80489, respectively).

As we stated in the November 2011 final rule establishing the Shared Savings Program (76 FR 67872), our principal goal in selecting quality measures for ACOs has been to identify measures of success in the delivery of high-quality health care at the individual and population levels, with a focus on outcomes. For performance year 2018, 31 quality measures will be used to determine ACO quality performance (81 FR 80488 and 80489). The information used to determine ACO performance on these quality measures will be submitted by the ACO through the CMS Web Interface, submitted by ACO participant TINs to MIPS for the Promoting Interoperability (PI) performance category (formerly Advancing Care Information), calculated by CMS from administrative claims data, and collected via a patient experience of care survey referred to as the Consumer Assessment of Healthcare Provider and Systems (CAHPS) for ACOs Survey. The CAHPS for ACOs survey is based on the Clinician and Group Consumer Assessment of Healthcare Providers and Systems (CG-CAHPS) Survey and includes additional, program specific questions that are not part of the CG-CAHPS. The CG-CAHPS survey is maintained, and periodically updated, by the Agency for Healthcare Research and Quality (AHRQ) in HHS.

The quality measures collected through the CMS Web Interface in 2015 and 2016 were used to determine whether eligible professionals participating in an ACO would avoid the PQRS and automatic Physician Value-Based Payment Modifier (Value Modifier) downward payment adjustments for 2017 and 2018 and to determine if ACO participants were eligible for upward, neutral or downward adjustments based on quality measure performance under the Value Modifier. Beginning with the 2017 performance period, which impacts payments in 2019, PQRS and the Value Modifier were replaced by the MIPS. Eligible clinicians who are participating in an ACO and who are subject to MIPS (MIPS eligible clinicians) will be scored under the APM scoring standard under MIPS (81 FR 77260). These MIPS eligible clinicians include any eligible clinicians who are participating in an ACO in a track of the Shared Savings Program that is not an Advanced APM, as well as those participating in an ACO in a track that is an Advanced APM, but who do not become Qualifying APM Participants (QPs) as specified in § 414.1425, and are not otherwise excluded from MIPS. Beginning with the 2017 reporting period, measures collected through the CMS Web Interface will be used to determine the MIPS quality performance category score for MIPS eligible clinicians participating in a Shared Savings Program ACO. Starting with the 2018 performance period, the quality performance category under the MIPS APM Scoring Standard for MIPS eligible clinicians participating in a Shared Savings Program ACO will include measures collected through the CMS Web Interface and the CAHPS for ACOs survey measures.

The CAHPS for ACOs Survey includes the core questions contained in the CG-CAHPS, plus additional questions to measure access to and use of specialist care, experience with care coordination, patient involvement in decision-making, experiences with a health care team, health promotion and patient education, patient functional status, and general health. The 2018 CAHPS for ACOs Survey 3.0 incorporates updates made by AHRQ to the CG-CAHPS survey based on feedback from survey users and stakeholders, as well as analyses of multiple data sets. For a summary of the history of changes to the CAHPS for ACOs survey, please refer to the CY 2019 PFS proposed rule (83 FR 35875). Additional information on the CG-CAHPS survey update is available on the AHRQ website at https://www.ahrq.gov/sites/default/files/wysiwyg/cahps/surveys-guidance/cg/about/proposed-changes-cahps-c&g-survey2015.pdf.

In addition to incorporating changes based on the AHRQ survey update, CMS removed all items included in the Summary Survey Measures (SSMs), Helping You to Take Medications as Directed and Between Visit Communication from the 2018 survey. These optional SSMs were not part of the scored measures. The update resulted in a reduction in the number of survey questions from 80 to 58. The CAHPS for ACOs SSMs that contribute to the ACO performance score for performance year 2018, as finalized in the CY 2017 PFS final rule (81 FR 80488) are as follows: Getting Timely Care, Appointments & Information; How Well Your Providers Communicate; Patients' Rating of Provider; Access to Specialists; Health Promotion and Education; Shared Decision Making; Health Status & Functional Status; and Stewardship of Patient Resources. In addition, the core survey includes SSMs on Care Coordination and Courteous & Helpful Office Staff. However, because these measures are not included in the Shared Savings Program quality measure set for 2018, scores for these measures will be provided to ACOs for informational purposes only and will not be used in determining the ACOs' quality scores.

b. Proposals for Changes to the CAHPS Measure Set

To enhance the Patient/Caregiver Experience domain and align with MIPS (82 FR 54163), we proposed to begin scoring the 2 SSMs that are currently collected with the administration of the CAHPS for ACOs survey and shared with the ACOs for informational purposes only. Under this proposal, we would add the following CAHPS for ACOs SSMs that are already collected and provided to ACOs for informational purposes to the quality measure set for the Shared Savings Program as ACO-45, CAHPS: Courteous and Helpful Office Staff, and ACO-46: CAHPS: Care Coordination. These measures would be scored and included in the ACO quality determination starting in 2019. Both of these SSMs are currently designated by AHRQ as CG CAHPS core measures.

The Courteous and Helpful Office Staff SSM, which we proposed to add as ACO-45, asks about the helpfulness, courtesy and respectfulness of office staff. This SSM has been a CG-CAHPS core measure in the previous two versions of the CG-CAHPS survey, but was previously provided for informational purposes only and not included in the ACO quality score determination. We also proposed to add the SSM, CAHPS: Care Coordination to the CAHPS for ACOs measures used in ACO quality score determination as ACO-46. The Care Coordination SSM asks questions about provider access to beneficiary information and provider follow-up. This SSM was designated a core measure in the most recent version of the CG-CAHPS survey.

Including these measures in the quality measure set that is used to assess the quality performance of ACOs under the Shared Savings Program would place greater emphasis on outcome measures and the voice of the patient and provide ACOs with an additional incentive to act upon opportunities for improved care coordination and communication, and would align with the MIPS measure set finalized in the CY 2018 Quality Payment Program final rule (82 FR 54163). Care Coordination and patient and caregiver engagement are goals of the Shared Savings Program. The Care Coordination SSM emphasizes the care coordination goal, while the Courteous and Helpful Office Staff SSM supports patient engagement as it addresses a topic that has been identified as important to beneficiaries in testing. For performance year 2016, the mean performance rates across all ACOs for these two measures, which were not included in the ACO quality score determination, were 87.18 for the Care Coordination SSM and 92.12 for Courteous and Helpful Office Staff SSM.

Consistent with § 425.502(a)(4), regarding the scoring of newly introduced quality measures, we proposed that these additional SSMs would be pay-for-reporting for all ACOs for 2 years (performance years 2019 and 2020). The measures would then phase into pay-for-performance in the program, according to the schedule in Table 26 beginning in performance year 2021. We solicited comment on this proposed change to the quality measure set.

The following is a summary of the comments we received on this proposed change to the CAHPS measures included in the Shared Savings Program quality measure set.

Comment: The majority of commenters supported our proposal. Several commenters noted that ACOs have had experience with these measures for some time now and that patient experience measures help to keep providers accountable for patient-centered care. A few commenters indicated support for the proposal but noted reservations, including the potentially limited ability of ACOs that include independent physician groups and hospitals as ACO participants to impact performance on ACO-45, a concern that the subjectivity of the CAHPS for ACOs measures (especially ACO-45) may put too much emphasis on aspects of care that have little effect on quality outcomes, and a recommendation to consider expanding ACO-45 (Courteous and Helpful Office Staff) to include medical assistants and nurses. Some commenters recommended delaying implementation of the proposal. A commenter suggested that we work with the Core Quality Measures Collaborative (CQMC) to re-evaluate the ACO quality measures, before implementing this proposed change. Another commenter recommended that we streamline the Shared Savings Program quality measure set. In addition, one commenter noted its support in principle for adding a quality measure to assess patients' experience with office staff, but indicated that adding a measure with a high average performance rate seems unnecessary for improving care.

Response: We believe that adding ACO-45 CAHPS: Courteous and Helpful Office Staff puts greater emphasis on the voice of the patient and provides ACOs with an additional incentive to act upon opportunities for improved communication. With regard to the comment that ACOs that include independent physician groups and hospitals as ACO participants may not be able to influence the outcomes of ACO-45 CAHPS: Courteous and Helpful Office Staff, we note that this SSM has been provided for informational purposes as part of the CAHPS for ACO survey for several years. Therefore, we believe ACOs have had sufficient experience with the SSM and have had the opportunity to monitor the survey results and make improvements, as needed. Scoring this measure would also provide ACOs with a stronger incentive to improve performance on this measure that has been identified as important by the beneficiaries they serve. We would also re-emphasize that measures newly added to the scored measures set will be pay-for-reporting for the first 2 years after inclusion, giving ACOs additional time to work toward improvement. With regard to the concern that the proposed new CAHPS measures do not impact quality outcomes, we disagree. We consider the patient's experience of care to be a quality outcome. We also note that the Courteous and Helpful Office Staff measure focuses on an issue that has been identified as important to beneficiaries in testing and that the Care Coordination SSM addresses a primary objective of the Shared Savings Program. With regard to commenters' suggestions that we delay implementation of the proposal to score these measures, including the suggestion that we work with the CQMC to re-evaluate the ACO quality measures first, we disagree with delaying the scoring of these important SSMs. These measures assess performance in areas that the beneficiaries served by ACOs have identified as valuable and that are central to the fundamental purpose of the Shared Savings Program to promote care coordination and improve quality of care. Again, we note that the newly-scored measures would be pay-for-reporting for the first 2 years after their addition, giving ACOs additional time to become familiar with them before the performance rates are considered in scoring. In response to the commenter's suggestion that we streamline the Shared Savings Program quality measure set, we do not have plans at this time to reduce the number of CAHPS measures for which ACOs are held accountable. The two CAHPs measures we proposed to add to the quality measure set for scoring purposes are already being collected and reported to ACOs for informational purposes; thus, the addition of these measures should not result in significant additional burden on ACOs. Moreover, we note that overall, we are reducing the total number of quality measures in the ACO quality measure set, as detailed below and summarized in Table 26 of this final rule.

With regard to the comment supporting the intent of our proposal to start scoring performance on the Courteous and Helpful Office Staff measure, but stating that it is unnecessary to add a measure with a high average performance rate, we believe that this is an important area for continued measurement as beneficiaries have expressed its importance to them in testing, as noted previously. In addition, we believe it is important to continue monitoring this measure because it is an important factor in patient experience of care. By scoring this measure, we acknowledge its continued importance as a patient experience measure. With regard to the comment that we consider expanding ACO-45 to include medical assistants and nurses, we will take this comment under consideration for further analysis as part of any potential future measure refinement.

After considering the comments, we are finalizing our proposal to begin scoring ACO-45 and ACO-46 as part of the CAHPS for ACO survey beginning with quality reporting for performance years during 2019. Consistent with our existing policy regarding the scoring of newly introduced quality measures, these additional SSMs will be pay-for-reporting for all ACOs for 2 years (performance years during 2019 and performance year 2020). The measures would then phase into pay-for-performance beginning in performance year 2021 (§ 425.502(a)(4)). The phase-in schedule for the 2019 ACO quality measures set that we are finalizing in this rule is presented in Table 26.

Additionally, we solicited comment on potentially converting the Health and Functional Status SSM (ACO-7) to pay-for-performance in the future. The Health and Functional Status SSM is currently pay-for-reporting for all years. We have not scored this measure because the scores on the Health and Functional Status SSM may reflect the underlying health of beneficiaries seen by ACO providers/suppliers as opposed to the quality of the care provided by the ACO. We also sought stakeholder feedback on possible options for enhancing the collection of health and functional status data, including potentially changing our data collection procedures to collect data from the same ACO's assigned beneficiaries over time. We noted that such a change could allow for measurement of functional status changes that occurred while beneficiaries were receiving care from ACO providers/suppliers. We also solicited other recommendations regarding the potential inclusion of a functional status measure in the assessment of ACO quality performance in the future.

The following is a summary of the comments we received regarding potentially converting the Health and Functional Status SSM (ACO-7) to pay-for-performance in the future.

Comment: The majority of commenters opposed including ACO-7—Health and Functional Status as a pay-for-performance measure in future years, noting that the measure is largely outside of the physician's control. Some commenters were supportive of including a Health and Functional Status measure as pay-for-performance, but expressed concerns with inclusion of the measure as it is currently structured. For example, one commenter stated that the current structure of the SSM captures patient health and functional status at a single point in time but not as a change in status over time. A number of commenters emphasized this point, noting that a lack of baseline data for this measure for the ACO-assigned beneficiary population means the results cannot be attributed to ACOs. One commenter acknowledged the potential for collecting longitudinal data, but questioned the effectiveness of this approach given that ACOs may not have the same beneficiaries assigned over multiple years. Another commenter expressed concern regarding the lack of benchmark information against which ACOs might measure their performance to date. A commenter encouraged CMS to conduct analyses using existing CAHPS data to identify models that allow for a fair comparison across ACOs. Another commenter suggested an approach to scoring health and functional status using another survey instrument (such as Patient Reported Outcomes Measurement Information System), or collecting baseline data for an ACO and implementing adjustments to account for differences in patient mix across ACOs.

Response: We appreciate the comments. We agree that additional analytic work would be needed in order to assess the potential implications of adding a scored health and functional status measure to the ACO quality measure set in the future. As we plan for future updates and changes to the Shared Savings Program measure set, we will consider this feedback from commenters further before making any proposal to begin scoring ACO-7—Health and Functional Status or to include a different scored heath and functional status measure.

Comment: We also received a few general comments on the applicability of the CAHPS for ACOs SSM to institutional providers, including a comment that raised concerns about low response rates and low reliability of the results.

Response: We made no proposals to adjust the application of the CAHPS for ACOs survey for any specific provider types under the Shared Savings Program. The CAHPS for ACO survey is focused on beneficiaries' experience of care received from clinicians in ambulatory care settings. Consequently, we note that CMS currently excludes beneficiaries from CAHPS sampling if 100 percent of their primary care service visits were performed in an institutional setting (as determined using HCPCS codes). However, after reviewing our current CAHPS sampling process, starting with the CAHPS sample for performance year 2018, we will also begin excluding beneficiaries if their last primary care service visit (as determined using HCPCS codes) during the sampling timeframe was performed in an institutional setting. We believe this change will help to ensure that beneficiaries who are residing in institutional settings are appropriately excluded from CAHPS sampling. Patient experience is a key component of quality measurement under the Shared Savings Program, and at this time we do not have plans to provide exemptions from patient experience measures for specific ACOs. We will monitor this issue, and may in the future consider whether additional changes to measures of patient experience would be appropriate moving forward, based on the goals and priorities of the Shared Savings Program.

c. Proposed Changes to the CMS Web Interface and Claims-Based Quality Measure Sets

In developing the proposals we made in the CY 2019 PFS proposed rule, we considered the agency's efforts to streamline quality measures, reduce regulatory burden and promote innovation as part of the agency's Meaningful Measures initiative (see CMS Press Release, CMS Administrator Verma Announces New Meaningful Measures Initiative and Addresses Regulatory Reform; Promotes Innovation at LAN Summit, October 30, 2017, available at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releases-items/2017-10-30.html). As noted in the proposed rule, under the Meaningful Measures initiative, we have committed to assessing only those core issues that are most vital to providing high-quality care and improving patient outcomes, with the aim of focusing on outcome-based measures, reducing unnecessary burden on providers, and putting patients first. In considering the quality reporting requirements under the Shared Savings Program, we also considered the quality reporting requirements under other initiatives, such as the MIPS and Million Hearts Initiative, and consulted with the measures community to ensure that the specifications for the measures used under the Shared Savings Program are up-to-date with current clinical guidelines, focus on outcomes over process, reflect agency and program priorities, and reduce reporting burden.

Since the Shared Savings Program was first established in 2012, we have updated the quality measure set to reduce reporting burden and focus on more meaningful, outcome-based measures. The most recent updates to the Shared Savings Program quality measure set were made in the CY 2017 PFS final rule (81 FR 80484 through 80489) to adopt the ACO measure recommendations made by the Core Quality Measures Collaborative, a multi-stakeholder group with the goal of aligning quality measures for reporting across public and private initiatives to reduce provider reporting burden. Currently, more than half of the 31 Shared Savings Program quality measures are outcome-based, including:

• Patient-reported outcome measures collected through the CAHPS for ACOs Survey that strengthen patient and caregiver experience.
• Outcome measures supporting effective communication and care coordination, such as unplanned admission and readmission measures.
• Intermediate outcome measures that address the effective treatment of chronic disease, such as hemoglobin A1c control for patients with diabetes.

In the CY 2019 PFS proposed rule, we proposed to reduce the total number of measures in the Shared Savings Program quality measure set. The proposals were intended to reduce the burden on ACOs and their participating providers and suppliers by lowering the number of measures they are required to report through the CMS Web Interface and on which they are assessed using claims data. Reducing the number of measures on which ACOs are assessed would reduce the number of performance metrics that they are required to track and eliminate redundancies between measures that target similar populations. The proposed reduction in the number of measures would enable ACOs to better utilize their resources toward improving patient care. The proposed reduction in the number of measures would further reduce burden by aligning with the proposed changes to the CMS Web Interface measures that are reported under MIPS as discussed in Tables A, C, and D of Appendix 1: Proposed MIPS Quality Measures of the proposed rule. We recognize that ACOs and their participating providers and suppliers dedicate resources to performing well on our quality metrics, and we believe that reducing the number of metrics and aligning them across programs would allow them to more effectively target those resources toward improving patient care. We proposed to reduce the number of measures by minimizing measure overlap and eliminating several process measures. The proposal to remove process measures also aligns with our proposal to reduce the number of process measures within the MIPS measure set as discussed in section III.H.b.iii of this final rule and would support the CMS goal of moving toward outcome-based measurement.

We proposed to retire the following claims-based quality measures, which have a high degree of overlap with other measures that would remain in the measure set:

• ACO-35—Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM).
• ACO-36—All-Cause Unplanned Admissions for Patients with Diabetes.
• ACO-37—All-Cause Unplanned Admission for Patients with Heart Failure.

Within the claims-based quality measures, a high degree of overlap exists between measures with respect to the population being measured (the denominator), because a single admission may be counted in multiple measures. For example, ACO-35 addresses unplanned readmissions from a SNF, and the vast majority of these SNF readmissions are also captured in the numerator of ACO-8 Risk-Standardized All Condition Readmission. Similarly, ACO-36 and ACO-37 address unplanned admissions for patients with diabetes and heart failure and most of these admissions are captured in the numerator of ACO-38 Risk-Standardized Acute Admission Rates for Patients with Multiple Chronic Conditions (please note that the measure name has been updated to align with changes made by the measure steward). Therefore, to reduce redundancies within the Shared Savings Program measure set, we proposed to remove ACO-35, ACO-36, and ACO-37 from the measure set. However, because these measures are claims-based measures and therefore do not impose any reporting burden on ACOs, we intend to continue to provide information to ACOs on their performance on these measures for use in their quality improvement activities through a new quarterly claims-based quality outcome report that ACOs began receiving in August 2018.

We also proposed to retire claims-based measure ACO-44—Use of Imaging Studies for Low Back Pain, as this measure is restricted to individuals 18-50 years of age, which results in low denominator rates under the Shared Savings Program, meaning that the measure is not a meaningful reflection of the beneficiaries cared for by Shared Savings Program ACOs. Although this measure was originally added to the Shared Savings Program quality measure set in order to align with the Core Quality Measures Collaborative, we proposed to remove this measure as a result of low denominators for many ACOs. We also indicated that removing this measure would align ACO quality measurement with the MIPS requirements as this measure was removed for purposes of reporting under the MIPS program in the CY 2018 Quality Payment Program final rule (82 FR 54159). However, in recognition of the value in providing feedback to providers on potential overuse of diagnostic procedures, we noted that we intended to continue to provide ACOs feedback on performance on this measure as part of the new quarterly claims based quality report.

We welcomed public comment on our proposal to retire these 4 claims-based measures from the quality measure set.

The following is a summary of the comments we received on our proposal to retire ACO-35—Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM), ACO-36—All-Cause Unplanned Admissions for Patients with Diabetes, and ACO-37—All-Cause Unplanned Admission for Patients with Heart Failure from the quality measure set.

Comment: The majority of commenters supported our proposal to remove these measures stating that they appreciated our efforts to modernize the quality measurement requirements and reduce measure overlap. However, a commenter who supported our proposal cautioned, “that there may be a tipping point at which the choice of measures becomes too narrowed. . . .” Another commenter expressed concern that diabetes is not included as one of the multiple chronic conditions for purposes of ACO-38—All-Cause Unplanned Admissions for Patients with Multiple Chronic Conditions (MCC). The commenter noted that the retirement of ACO-36—All-Cause Unplanned Admissions for Patients with Diabetes, without an adequate alternative to measure performance in this area could cause a potential decline in provider performance and care quality. This commenter emphasized that reducing admission rates of diabetic patients should be a shared goal and priority of CMS and ACOs. Another commenter asked if we considered adding diabetes as a qualifying condition for ACO-38.

Response: We acknowledge the concerns raised by commenters with respect to the proposed removal of ACO-36 All-Cause Unplanned Admissions for Patients with Diabetes. However, we disagree with the commenter who stated that without a comparable diabetes measure to replace ACO-36 there would be a decline in provider performance and care quality. An analysis of ACO data from the 2015 performance year found that, as a result of the other comorbidities included for purposes of ACO-38, 48 percent of assigned ACO beneficiaries included in the diabetes measure were also included in the MCC measure. Measure overlap was even higher when considering the number of unplanned admissions shared by the two measures. Almost three-fourths (73 percent) of the unplanned admissions for assigned ACO beneficiaries under ACO-36 were also unplanned admissions for purposes of ACO-38, and thus were counted in both measures. In addition, we note that the Shared Savings Program measure set still includes a diabetes measure that monitors Hemoglobin A1c control (ACO-27: Diabetes Hemoglobin A1c (HbA1c) Poor Control (>9%)) which is reported via the CMS Web Interface. Consequently, we believe that removing ACO-36 will not negatively impact patients with diabetes as the majority of readmissions for these patients are captured by ACO-38. In addition, we note that we plan to continue providing metrics on ACO-36 and ACO-37 in the quarterly claims-based measure reports for informational purposes only, which will allow ACOs to continue to monitor their results for these metrics. We are not considering revisions to add diabetes as a qualifying condition for ACO-38 at this time, but we will consider any changes to the ACO-38 cohort during the annual measure update. In response to the comment that there may be a point at which the measure set becomes too narrow, we understand the concern and will continue to carefully consider the balance between burden reduction and meaningful measurement in order to retain a sufficiently robust measure set against which ACO performance can be measured.

After considering the comments, we are finalizing our proposal to remove ACO-35—Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM), ACO-36—All-Cause Unplanned Admissions for Patients with Diabetes, and ACO-37—All-Cause Unplanned Admission for Patients with Heart Failure from the Shared Savings Program quality measure set effective for quality reporting for performance years during 2019.

The following is a summary of the comments we received on our proposal to retire ACO-44—Use of Imaging Studies for Low Back Pain from the quality measure set.

Comment: A majority of commenters supported our proposal stating that they agreed the measure should be removed due to low denominators in the Medicare population and because the measure was retired from MIPS. MedPAC opposed the removal of this measure stating, “According to our analysis, imaging for patients with nonspecific low back pain affects between 3.1 to 8.9 percent of Medicare beneficiaries.” MedPAC encouraged CMS to consider respecifying the measure to include beneficiaries over the age of 50 and retaining the measure in the ACO quality measure set.

Response: We appreciate the recommendation to respecify the ACO imaging for low-back pain measure to include beneficiaries over age 50 and recognize the value of including over-utilization of care measures in the ACO quality measure set. However, we note that CMS is not the measure steward for this measure. We have raised the issue with the measure steward and will continue to coordinate with the measure owner. Additionally, we note that we proposed to remove this measure to align ACO quality measurement with the MIPS reporting requirements as this measure was removed from the quality measure set under the MIPS program in the CY 2018 Quality Payment Program final rule (82 FR 54159).

After considering the comments, we are finalizing our proposal to remove ACO-44 from the Shared Savings Program quality measure set effective for quality reporting for performance years during 2019.

Although we proposed to retire ACO-35 Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM) from the set of quality measures that are scored for the Shared Savings Program, we recognize the value of measuring the quality of care furnished to Medicare beneficiaries in SNFs. Therefore, we solicited comment on the possibility of adding the Skilled Nursing Facility Quality Reporting Program (SNFQRP) measure “Potentially Preventable 30-Day Post-Discharge Readmission Measure for Skilled Nursing Facilities” to the Shared Savings Program quality measure set through future rulemaking. This measure differs from ACO-35—SNFRM, which we are removing from the quality measure set as discussed above, as the SNFQRP measure looks only at unplanned, potentially preventable readmissions for Medicare FFS beneficiaries within 30 days of discharge to a lower level of care from a SNF, while ACO-35 assesses hospital readmissions from a SNF, that occur within 30 days following discharge from a hospital for beneficiaries admitted to a SNF after hospital discharge. As a result, the SNFQRP measure would have less overlap with ACO-8 (Risk-Standardized All Cause Readmission measure) because the readmission windows for the two measures are different. Specifically, the readmission window for the SNFQRP measure is 30 days following discharge from a SNF, while the readmission window for ACO-8 is 30 days following discharge from a hospital.

The following is a summary of the comments we received on the possibility of adding the SNFQRP measure “Potentially Preventable 30-Day Post-Discharge Readmission Measure for Skilled Nursing Facilities” to the Shared Savings Program quality measure set through future rulemaking.

Comment: A few commenters supported the potential inclusion of the SNFQRP measure to the Shared Savings Program quality measure set through future rulemaking stating that the SNFQRP measure would potentially add more value to the Shared Savings Program measure set than ACO-35 as it is more targeted. Additionally, a few commenters suggested that we should test the measure in the ACO population and consider risk-adjusting the measure for sociodemographic factors prior to proposing the measure for inclusion into the Shared Savings Program quality measure set. However, the majority of commenters were opposed to potentially adding this measure to the Shared Savings Program quality measure set. One commenter stated that the SNFQRP measure assumes that the ACO has input into the care processes at the SNF and has the ability to direct patients to higher quality facilities, which is not always the case. Another commenter stated that as the measure is already used in the SNFQRP, they would not support inclusion in the Shared Savings Program quality measure set because they support avoiding the use of duplicative measures across CMS programs. Some of the commenters further stated that they believed this measure would still overlap with ACO-8 Risk-Standardized All Condition Readmission measure.

Response: As we plan for future updates and changes to the Shared Savings Program quality measure set, we will consider this feedback prior to making any proposals regarding the SNFQRP measure.

Further, as we stated in the CY 2019 PFS proposed rule (83 FR 35877), we seek to align with changes made to the CMS Web Interface measures under the Quality Payment Program. In the 2017 PFS final rule, we stated that we do not believe it is beneficial to propose CMS Web interface measures for ACO quality reporting separately (81 FR 80499). Therefore, in order to avoid confusion and duplicative rulemaking, we adopted a policy that any future changes to the CMS Web interface measures would be proposed and finalized through rulemaking for the Quality Payment Program, and that such changes would be applicable to ACO quality reporting under the Shared Savings Program. In accordance with the policy adopted in the CY 2017 PFS final rule (81 FR 80501), we did not make any specific proposals related to changes in CMS Web Interface measures reported under the Shared Savings Program. Rather, we referred readers to Tables A, C, and D of Appendix 1: Proposed MIPS Quality Measures in the proposed rule for a complete discussion of the proposed changes to the CMS Web Interface measures. Based on the changes being finalized in Tables A, C and D of Appendix 1: Finalized MIPS Quality Measures of this final rule, ACOs will no longer be responsible for reporting the following measures for purposes of the Shared Savings Program starting with reporting for performance years during 2019:

• ACO-12 (NQF #0097) Medication Reconciliation Post-Discharge.
• ACO-15 (NQF #0043) Pneumonia Vaccination Status for Older Adults.
• ACO-16 (NQF #0421) Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow Up.
• ACO-41 (NQF #0055) Diabetes: Eye Exam.
• ACO-30 (NQF #0068) Ischemic Vascular Disease (IVD): Use of Aspirin or another Antithrombotic.

We note that ACO-41 is one measure within a two-component diabetes composite that is currently scored as one measure. The removal of ACO-41 means that ACO-27 Diabetes Hemoglobin A1c (HbA1c) Poor Control (>9%)) will now be assessed as an individual measure. As discussed in section III.I.2.B.i of this final rule, lists of the measures being finalized for purposes of MIPS are in Tables A, C and D of Appendix 1: Finalized MIPS Quality Measures.

Additionally, we proposed to add the following measure to the CMS Web Interface for purposes of the Quality Payment Program:

• ACO-47 (NQF #0101) Falls: Screening, Risk-Assessment, and Plan of Care to Prevent Future Falls.

Based on the policies being finalized for purposes of MIPS in Table A of Appendix 1: Finalized MIPS Quality Measures, Shared Savings Program ACOs will not be responsible for reporting this measure starting with quality reporting for performance years during 2019.

Table 26 shows the Shared Savings Program quality measure set for performance years during 2019 and subsequent performance years.

In this section of this final rule, we are finalizing proposals to eliminate 9 measures and to add 2 measures to the Shared Savings Program quality measure set. Separately, in August 2018 proposed rule, we also proposed to remove ACO-11—Percent of Primary Care Physicians Who Successfully Meet Meaningful Use Requirements (83 FR 41910 and 41911). We are finalizing the removal of ACO-11 in section V.B.2.f. of this final rule and refer readers to that section for a summary of that proposal and a discussion of public comments related to it. The net result of the final policies included in this final rule is a set of 23 measures on which ACOs' quality performance will be assessed for performance years during 2019 and subsequent performance years. The 4 domains will include the following numbers of quality measures (See Table 27):

• Patient/Caregiver Experience of Care—10 measures.
• Care Coordination/Patient Safety—4 measures.
• Preventive Health—6 measures.
• At Risk Populations—3 measures.

Table 27 provides a summary of the number of measures by domain and the total points and domain weights that will be used for scoring purposes under the changes to the quality measure set finalized in this rule.

G. Physician Self-Referral Law

1. Background

Section 1877 of the Act, also known as the physician self-referral law: (1) Prohibits a physician from making referrals for certain designated health services (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership or compensation), unless an exception applies; and (2) prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third party payer) for those referred services. The statute establishes a number of specific exceptions, and grants the Secretary the authority to create regulatory exceptions for financial relationships that pose no risk of program or patient abuse. Additionally, the statute mandates refunding any amount collected under a bill for an item or service furnished under a prohibited referral. Finally, the statute imposes reporting requirements and provides for sanctions, including civil monetary penalty provisions.

Section 50404 of the Bipartisan Budget Act of 2018 (Pub. L. 115-123, enacted February 9, 2018) added provisions to section 1877(h)(1) of the Act pertaining to the writing and signature requirements in certain compensation arrangement exceptions to the statute's referral and billing prohibitions. Although we believe that the newly enacted provisions in section 1877(h)(1) of the Act are principally intended merely to codify in statute existing CMS policy and regulations with respect to compliance with the writing and signature requirements, we proposed revisions to our regulations to address any actual or perceived difference between the statutory and regulatory language, to codify in regulation our longstanding policy regarding satisfaction of the writing requirement found in many of the exceptions to the physician self-referral law, and to make the Bipartisan Budget Act of 2018 policies applicable to compensation arrangement exceptions issued using the Secretary's authority in section 1877(b)(4) of the Act.

In the CY 2016 PFS final rule with comment period (80 FR 70885), we revised § 411.357(a)(7), (b)(6), and (d)(1)(vii) to permit a lease arrangement or personal service arrangement to continue indefinitely beyond the stated expiration of the written documentation describing the arrangement under certain circumstances. Section 50404 of the Bipartisan Budget Act of 2018 added substantively identical holdover provisions to section 1877(e) of the Act. Because the new statutory holdover provisions effectively mirror the existing regulatory provisions, we do not believe it is necessary to revise § 411.357(a)(7), (b)(6), and (d)(1)(vii) as a result of these statutory revisions. Therefore, we made no proposals to these provisions.

2. Special Rules on Compensation Arrangements (Section 1877(h)(1)(D) & (E) of the Act)

Many of the exceptions for compensation arrangements in § 411.357 require that the arrangements are set out in writing and signed by the parties. (See § 411.357(a)(1), (b)(1), (d)(1)(i), (e)(1)(i), (e)(4)(i), (l)(1), (p)(2), (q) (incorporating the requirement contained in § 1001.952(f)(4)), (r)(2)(ii), (t)(1)(ii) or (t)(2)(iii) (both incorporating the requirements contained in § 411.357(e)(1)(i)), (v)(7), (w)(7), (x)(1)(i), and (y)(1).) As described above, section 50404 of the Bipartisan Budget Act of 2018 amended section 1877 of the Act with respect to the writing and signature requirements in the statutory compensation arrangement exceptions. As detailed in this section, we proposed a new special rule on compensation arrangements at § 411.354(e) and proposed to amend existing § 411.353(g) to codify the statutory provisions in our regulations.

a. Writing Requirement (§ 411.354(e))

In the CY 2016 PFS final rule with comment period, we stated CMS' longstanding policy that the writing requirement in various compensation arrangement exceptions in § 411.357 can be satisfied by “a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties” (80 FR 71315). Our guidance on the writing requirement appeared in the preamble of the CY 2016 PFS final rule with comment period but was not codified in regulations. Section 50404 of the Bipartisan Budget Act of 2018 added subparagraph D, “Written Requirement Clarified,” to section 1877(h)(1) of the Act. Section 1877(h)(1)(D) of the Act provides that, in the case of any requirement in section 1877 of the Act for a compensation arrangement to be in writing, such requirement shall be satisfied by such means as determined by the Secretary, including by a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties involved.

In light of the recently added statutory provision at section 1877(h)(1)(D) of the Act, we proposed to add a special rule on compensation arrangements at § 411.354(e). Proposed § 411.354(e) provides that, in the case of any requirement in 42 CFR part 411, subpart J, for a compensation arrangement to be in writing, the writing requirement may be satisfied by a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties. The proposed special rule at § 411.354(e) codifies our existing policy on the writing requirement, as previously articulated in the CY 2016 PFS final rule with comment period. (See 80 FR 71314 et seq.)

b. Special Rule for Certain Arrangements Involving Temporary Noncompliance With Signature Requirements (§ 411.353(g))

Many of the exceptions for compensation arrangements in § 411.357 require that the arrangement (that is, the written documentation evidencing the arrangement) is signed by the parties to the arrangement. Under our existing special rule for certain arrangements involving temporary noncompliance with signature requirements at § 411.353(g)(1), an entity that has a compensation arrangement with a physician that satisfies all the requirements of an applicable exception in § 411.355, § 411.356 or § 411.357 except the signature requirement may submit a claim and receive payment for a designated health service referred by the physician, provided that: (1) The parties obtain the required signature(s) within 90 consecutive calendar days immediately following the date on which the compensation arrangement became noncompliant (without regard to whether any referrals occur or compensation is paid during such 90-day period); and (2) the compensation arrangement otherwise complies with all criteria of the applicable exception. Existing § 411.353(g)(1) specifies the paragraphs where the applicable signature requirements are found and existing § 411.353(g)(2) limits an entity's use of the special rule at § 411.353(g)(1) to only once every 3 years with respect to the same referring physician.

Section 50404 of the Bipartisan Budget Act of 2018 added subparagraph E, “Signature Requirement,” to section 1877(h)(1) of the Act. Section 1877(h)(1)(E) of the Act provides that, in the case of any requirement in section 1877 of the Act for a compensation arrangement to be in writing and signed by the parties, the signature requirement is satisfied if: (1) Not later than 90 consecutive calendar days immediately following the date on which the compensation arrangement became noncompliant, the parties obtain the required signatures; and (2) the compensation arrangement otherwise complies with all criteria of the applicable exception. Notably, under the newly added section 1877(h)(1)(E) of the Act, an applicable signature requirement is not limited to specific exceptions and entities are not limited in their use of the rule to only once every 3 years with respect to the same referring physician. In addition, section 1877(h)(1)(E) of the Act does not include a reference to the occurrence of referrals or the payment of compensation during the 90-day period when the signature requirement is not met.

To conform the regulations with the recently added statutory provision at section 1877(h)(1)(E) of the Act, we proposed to amend existing § 411.353(g) by: (1) Revising the reference at § 411.353(g)(1) to specific exceptions and signature requirements; (2) deleting the reference at § 411.353(g)(1) to the occurrence of referrals or the payment of compensation during the 90-day period when the signature requirement is not met; and (3) deleting the limitation at § 411.353(g)(2). In the alternative, we proposed to delete § 411.353(g) in its entirety and codify in proposed § 411.354(e) the special rule for signature requirements in section 1877(h)(1)(E) of the Act. We solicited comments regarding the best approach for codifying in regulation this provision of the Bipartisan Budget Act of 2018.

The following is a summary of the comments we received regarding the best approach for codifying in regulation sections 1877(h)(1)(D) & (E) of the Act.

Comment: We received a few comments in support of our proposal to codify our existing policy on the writing requirement in a special rule on compensation arrangements at § 411.354(e). No commenters opposed the proposal or suggested revisions or additions to the proposed regulatory text in § 411.354(e).

Response: We are finalizing proposed § 411.354(e) without modification. We remind readers that § 411.354(e) codifies our longstanding policy on the writing requirement in various compensation exceptions, as explained in detail in the CY 2016 PFS final rule with comment period. (See 80 FR 71314 et seq.)

Comment: We received a few comments expressing general support for the special rule on temporary noncompliance with signature requirements. Commenters appreciated the flexibility that the special rule affords. We received no comments in opposition to our proposal. Commenters approved of our efforts to align our regulations pertaining to temporary noncompliance with signature requirements with the statutory provision at section 1877(h)(1)(E) of the Act. Most commenters did not note if it would be better to codify section 1877(h)(1)(E) of the Act at § 411.353(g) or to delete § 411.353(g) in its entirety and codify section 1877(h)(1)(E) of the Act in the special rules on compensation arrangements at § 411.354(e). A couple of commenters acknowledged that both proposals provide clarification but expressed a preference that we delete § 411.353(g) in its entirety and codify section 1877(h)(1)(E) of the Act in proposed § 411.354(e), asserting that such a change would provide a “clear reflection of the statute.”

Response: We believe it would be less disruptive to provider and supplier compliance efforts to amend § 411.353(g), a regulation that has been in place for over 10 years. Therefore, we are finalizing our proposal to revise the special rule for temporary noncompliance with signature requirements at § 411.353(g), thus aligning § 411.353(g) with the newly added section 1877(h)(1)(E) of the Act.

Comment: We received a few comments seeking physician self-referral law regulatory changes that were not proposed.

Response: These comments are beyond the scope of this rulemaking and are not addressed in this final rule.

Finally, we note that the effective date of section 50404 of the Bipartisan Budget Act was February 9, 2018. Thus, beginning February 9, 2018, parties who meet the requirements of section 1877(h)(1)(E) of the Act, including parties who otherwise would have been barred from relying on the special rule for certain arrangements involving temporary noncompliance with signature requirements at § 411.353(g)(1) because of the 3-year limitation at § 411.353(g)(2), may avail themselves of the new statutory provision at section 1877(h)(1)(E) of the Act.

After reviewing the comments, we are finalizing the special rule on compensation arrangements at § 411.354(e) as proposed, and we are finalizing the modifications to § 411.353(g) as proposed.

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

1. General

Section 1877 of the Act prohibits a physician from referring a Medicare beneficiary for certain designated health services (DHS) to an entity with which the physician (or a member of the physician's immediate family) has a financial relationship, unless an exception applies. Section 1877 of the Act also prohibits the DHS entity from submitting claims to Medicare or billing the beneficiary or any other entity for Medicare DHS that are furnished as a result of a prohibited referral.

Section 1877(h)(6) of the Act and § 411.351 of our regulations specify that the following services are DHS:

• Clinical laboratory services.
• Physical therapy services.
• Occupational therapy services.
• Outpatient speech-language pathology services.
• Radiology services.
• Radiation therapy services and supplies.
• Durable medical equipment and supplies.
• Parenteral and enteral nutrients, equipment, and supplies.
• Prosthetics, orthotics, and prosthetic devices and supplies.
• Home health services.
• Outpatient prescription drugs.
• Inpatient and outpatient hospital services.

2. Annual Update to the Code List

a. Background

In § 411.351, we specify that the entire scope of four DHS categories is defined in a list of CPT/HCPCS codes (the Code List), which is updated annually to account for changes in the most recent CPT and HCPCS Level II publications. The DHS categories defined and updated in this manner are:

• Clinical laboratory services.
• Physical therapy, occupational therapy, and outpatient speech-language pathology services.
• Radiology and certain other imaging services.
• Radiation therapy services and supplies.

The Code List also identifies those items and services that may qualify for either of the following two exceptions to the physician self-referral prohibition:

• EPO and other dialysis-related drugs furnished in or by an ESRD facility (§ 411.355(g)).
• Preventive screening tests, immunizations, or vaccines (§ 411.355(h)).

The definition of DHS at § 411.351 excludes services for which payment is made by Medicare as part of a composite rate (unless the services are specifically identified as DHS and are themselves payable through a composite rate, such as home health and inpatient and outpatient hospital services). Effective January 1, 2011, EPO and dialysis-related drugs furnished in or by an ESRD facility (except drugs for which there are no injectable equivalents or other forms of administration), have been reimbursed under a composite rate known as the ESRD prospective payment system (ESRD PPS) (75 FR 49030). Accordingly, EPO and any dialysis-related drugs that are paid for under ESRD PPS are not DHS and are not listed among the drugs that could qualify for the exception at § 411.355(g) for EPO and other dialysis-related drugs furnished by an ESRD facility.

ESRD-related oral-only drugs, which are drugs or biologicals with no injectable equivalents or other forms of administration other than an oral form, were scheduled to be paid under ESRD PPS beginning January 1, 2014 (75 FR 49044). However, there have been several delays of the implementation of payment of these drugs under ESRD PPS. On December 19, 2014, section 204 of the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE) (Pub. L. 113-295) was enacted and delayed the inclusion of these oral-only drugs under the ESRD PPS until 2025. Until that time, such drugs furnished in or by an ESRD facility are not paid as part of a composite rate and thus, are DHS.

The Code List was last updated in Tables 44 and 45 of the CY 2018 PFS final rule (82 FR 53339).

b. Response to Comments

We received no comments relating to the Code List that became effective January 1, 2018.

c. Revisions Effective for CY 2019

The updated, comprehensive Code List effective January 1, 2019, is available on our website at http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/List_of_Codes.html.

Additions and deletions to the Code List conform it to the most recent publications of CPT and HCPCS Level II and to changes in Medicare coverage policy and payment status.

Tables 28 and 29 identify the additions and deletions, respectively, to the comprehensive Code List that become effective January 1, 2019. Tables 28 and 29 also identify the additions and deletions to the list of codes used to identify the items and services that may qualify for the exception in § 411.355(g) (regarding dialysis-related outpatient prescription drugs furnished in or by an ESRD facility) and in § 411.355(h) (regarding preventive screening tests, immunizations, and vaccines).

I. CY 2019 Updates to the Quality Payment Program

1. Executive Summary

a. Overview

This final rule will make payment and policy changes to the Quality Payment Program starting January 1, 2019, except as noted for specific provisions elsewhere in this final rule. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted April 16, 2015) amended title XVIII of the Act to repeal the Medicare sustainable growth rate (SGR) formula, to reauthorize the Children's Health Insurance Program, and to strengthen Medicare access by improving physician and other clinician payments and making other improvements. The MACRA advances a forward-looking, coordinated framework for clinicians to successfully participate in the Quality Payment Program, which rewards value in one of two ways:

• The Merit-based Incentive Payment System (MIPS).
• Advanced Alternative Payment Models (Advanced APMs).

As we move into the third year of the Quality Payment Program, we have taken all stakeholder input into consideration, including recommendations made by the Medicare Payment Advisory Commission (MedPAC), an independent congressional agency established by the Balanced Budget Act of 1997 (Pub. L. 105-33, enacted on August 5, 1997) to advise the U.S. Congress on issues affecting the Medicare program, such as payment policies under Medicare, the factors affecting expenditures for the efficient provision of services, and the relationship of payment policies to access and quality of care for Medicare beneficiaries. We will continue to implement the Quality Payment Program as required, smoothing the transition where possible and offering targeted educational resources for program participants. A few examples of how we are working to address stakeholder input are evident in our work around burden reduction and reshaping our focus of interoperability. We have heard the concern about process-based measures, and we are continuing to move towards the development and use of more outcome measures by way of removing process measures that are topped out and funding new quality measure development, as required by section 102 of MACRA. We have also developed new episode-based cost measures, with stakeholder feedback, for inclusion in the cost performance category beginning in 2019, with additional measure development occurring for potential inclusion in future years.

Additionally, we have also received feedback from stakeholders regarding the added value of the Quality Payment Program. To that point, CMS has begun a series of strategic planning sessions to (1) assess the current value of the program for clinicians and beneficiaries alike and (2) implement the program in a way that is understandable to beneficiaries, as they are the core of the Medicare program.

As a priority for the Quality Payment Program Year 3, we are committed to continue using the framework established by the Patients over Paperwork initiative to assist in reducing clinician burden, implementing the Meaningful Measures Initiative, promoting interoperability, continuing our support of small and rural practices, empowering patients, and promoting price transparency.

Reducing Clinician Burden

We are committed to reducing clinician burden by simplifying and streamlining the program for participating clinicians. Examples include:

• Implementing the Meaningful Measures Initiative, which is a framework that applies a series of cross-cutting criteria to identify and utilize the most meaningful measures with the least amount of burden and greatest impact on patient outcomes;
• Promoting advances in interoperability; and
• Establishing an automatic extreme and uncontrollable circumstances policy for MIPS eligible clinicians.

Improving Patient Outcomes and Reducing Burden Through Meaningful Measures

Regulatory reform and reducing regulatory burden are high priorities for CMS. To reduce the regulatory burden on the healthcare industry, lower health care costs, and enhance patient care, we launched the Meaningful Measures Initiative in October 2017. This initiative is one component of our agency-wide Patients Over Paperwork Initiative, which is aimed at evaluating and streamlining regulations with a goal to reduce unnecessary cost and burden, increase efficiencies, and improve beneficiary experience. The Meaningful Measures Initiative is aimed at identifying the highest priority areas for quality measurement and quality improvement to assess the core quality of care issues that are most vital to advancing our work to improve patient outcomes. The Meaningful Measures Initiative represents a new approach to quality measures that fosters operational efficiencies, and reduces cost associated with collection and reporting burden, while producing quality measurement that is more focused on meaningful outcomes.

The Meaningful Measures Framework has the following principles for identifying measures that:

• Address high-impact measure areas that safeguard public health;
• Patient-centered and meaningful to patients;
• Outcome-based where possible;
• Fulfill each program's statutory requirements;
• Minimize the level of burden for health care providers (for example, through a preference for EHR-based measures where possible, such as electronic clinical quality measures);
• Significant opportunity for improvement;
• Address measure needs for population based payment through alternative payment models; and
• Align across programs and/or with other payers.

To achieve these objectives, we have identified 19 Meaningful Measures areas and mapped them to six overarching quality priorities as shown in Table 30.

By including Meaningful Measures in our programs, we believe that we can also address the following cross-cutting measure criteria:

• Eliminating disparities;
• Tracking measurable outcomes and impact;
• Safeguarding public health;
• Achieving cost savings;
• Improving access for rural communities; and
• Reducing burden.

We believe that the Meaningful Measures Initiative will improve outcomes for patients, their families, and health care providers while reducing burden and costs for clinicians and providers and promoting operational efficiencies.

In the quality performance category under MIPS, clinicians have the flexibility to select and report the measures that matter most to their practice and patients. However, we have received feedback that some clinicians find the performance requirements confusing, and the program makes it difficult for them to choose measures that are meaningful to their practices and have more direct benefit to beneficiaries. For the 2019 MIPS performance period, we are finalizing the following updates: (1) Adding 8 new MIPS quality measures that include 4 patient reported outcome measures, 6 high priority measures, and 2 measures on important clinical topics in the Meaningful Measures framework; and (2) removing 26 quality measures.

In addition to having the right measures, we want to ensure that the collection of information is valuable to clinicians and worth the cost and resources of collecting the information.

Promoting Interoperability Performance Category

As required by MACRA, the Quality Payment Program includes a MIPS performance category that focuses on meaningful use of certified EHR technology, referred to in the CY 2017 and CY 2018 Quality Payment Program final rules as the “advancing care information” performance category. As part of our approach to promoting and prioritizing interoperability of healthcare data, in Quality Payment Program Year 2, we changed the name of the performance category to the Promoting Interoperability performance category.

We have prioritized interoperability, which we define as health information technology, that enables the secure exchange of electronic health information with, and use of electronic health information from, other health information technology without special effort on the part of the user; allows for complete access, exchange, and use of all electronically accessible health information for authorized use under applicable law; and does not constitute information blocking as defined by the 21st Century Cures Act (Pub. L. 114-255, enacted December 13, 2016). We are committed to working with the Office of the National Coordinator for Health IT (ONC) on implementation of the interoperability provisions of the 21st Century Cures Act to have seamless but secure exchange of health information for clinicians and patients, ultimately enabling Medicare beneficiaries to get their claims information electronically. In addition, we are prioritizing quality measures and improvement activities that support interoperability.

To further CMS' commitment to implementing interoperability, at the 2018 Healthcare Information and Management Systems Society (HIMSS) conference, CMS Administrator Seema Verma announced the launching of the MyHealthEData initiative. This initiative aims to empower patients by ensuring that they control their healthcare data and can decide how their data is going to be used, all while keeping that information safe and secure. The overall government-wide initiative is led by the White House Office of American Innovation with participation from HHS—including its CMS, ONC, and the National Institutes of Health (NIH)—as well as the U.S. Department of Veterans Affairs (VA). MyHealthEData aims to break down the barriers that prevent patients from having electronic access and true control of their own health records from the device or application of their choice. This effort will approach the issue of healthcare data from the patient's perspective.

For the Promoting Interoperability performance category, we require MIPS eligible clinicians to use 2015 Edition certified EHR technology beginning with the 2019 MIPS performance period to make it easier for:

• Patients to access their data.
• Patient information to be shared between doctors and other health care providers.

Continuing To Support Small and Rural Practices

We understand that the Quality Payment Program is a big change for clinicians, especially for those in small and rural practices. We intend to continue to offer tailored flexibilities to help these clinicians to participate in the program. For example, in this rule we are finalizing our proposal to retain a small practice bonus under MIPS by moving it to the quality performance category. We will also continue to support small and rural practices by offering free and customized resources available within local communities, including direct, one-on-one support from the Small, Underserved, and Rural Support Initiative along with our other no-cost technical assistance.

Further, we note that we are finalizing our proposal to amend our regulatory text to allow small practices to continue using the Medicare Part B claims collection type. We are also finalizing our proposal to revise the regulatory text to allow a small practice to submit quality data for covered professional services through the Medicare Part B claims submission type for the quality performance category, as discussed further in section III.I.3.h. of this final rule. Finally, in the CY 2018 Quality Payment Program final rule, we finalized a policy to allow small practices to continue to choose to participate in MIPS as a virtual group (82 FR 53598).

Empowering Patients Through the Patients Over Paperwork Initiative

Our Patients Over Paperwork initiative establishes an internal process to evaluate and streamline regulations with a goal to reduce unnecessary burden, to increase efficiencies, and to improve the beneficiary experience. This administration is dedicated to putting patients first, empowering consumers of healthcare to have the information they need to be engaged and active decision-makers in their care. As a result of this consumer empowerment, clinicians will gain competitive advantage by delivering coordinated, high-value quality care.

The policies for the Quality Payment Program in this final rule promote competition and empower patients. We are consistently listening, and we are committed to using data-driven insights, increasingly aligned and meaningful quality measures, and technology that empowers patients and clinicians to make decisions about their healthcare.

In conjunction with development of the Patients Over Paperwork initiative, we are making progress toward developing a patient-centered portfolio of measures for the Quality Payment Program, including 7 new outcome measures included on the 2017 CMS Measures Under Consideration List, 5 of which are directly applicable to the prioritized specialties of general medicine/crosscutting and orthopedic surgery. Finally, on September 21, 2018, CMS awarded seven organizations new cooperative agreements to partner with the agency in developing, improving, updating, or expanding quality measures for Medicare's Quality Payment Program. Awardees will work to establish more appropriate measures for clinical specialties underrepresented in the current measure set with the goal of improving patient care, and focus on outcome measures, including patient-reported and functional-status measures, to better reflect what matters most to patients.