Rule2022-23873
Medicare and Medicaid Programs; CY 2023 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Implementing Requirements for Manufacturers of Certain Single-dose Container or Single-use Package Drugs To Provide Refunds With Respect to Discarded Amounts; and COVID-19 Interim Final Rules
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 18, 2022
Effective
January 1, 2023
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This major final rule addresses: changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; Medicare Shared Savings Program requirements; updates to the Quality Payment Program; Medicare coverage of opioid use disorder services furnished by opioid treatment programs; updates to certain Medicare and Medicaid provider enrollment policies, including for skilled nursing facilities; updates to conditions of payment for DMEPOS suppliers; HCPCS Level II coding and payment for wound care management products; electronic prescribing for controlled substances for a covered Part D drug under a prescription drug plan or an MA-PD plan under the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (SUPPORT Act); updates to the Medicare Ground Ambulance Data Collection System; provisions under the Infrastructure Investment and Jobs Act; and finalizes the CY 2022 Methadone Payment Exception for Opioid Treatment Programs IFC. We are also finalizing, as implemented, a few provisions included in the COVID-19 interim final rules with comment period.
Full Text
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[Federal Register Volume 87, Number 222 (Friday, November 18, 2022)]
[Rules and Regulations]
[Pages 69404-70700]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-23873]
[[Page 69403]]
Vol. 87
Friday,
No. 222
November 18, 2022
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405, 410, 411, et al.
Medicare and Medicaid Programs; CY 2023 Payment Policies Under the
Physician Fee Schedule and Other Changes to Part B Payment and Coverage
Policies; Medicare Shared Savings Program Requirements; Implementing
Requirements for Manufacturers of Certain Single-dose Container or
Single-use Package Drugs To Provide Refunds With Respect to Discarded
Amounts; and COVID-19 Interim Final Rules; Final and Interim Final
Rules
Federal Register / Vol. 87 , No. 222 / Friday, November 18, 2022 /
Rules and Regulations
[[Page 69404]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 410, 411, 414, 415, 423, 424, 425, and 455
[CMS-1770-F, CMS-1751-F2, CMS-1744-F2, CMS-5531-IFC]
RINs 0938-AU81, 0938-AU95, 0938-AU31, 0938-AU32
Medicare and Medicaid Programs; CY 2023 Payment Policies Under
the Physician Fee Schedule and Other Changes to Part B Payment and
Coverage Policies; Medicare Shared Savings Program Requirements;
Implementing Requirements for Manufacturers of Certain Single-dose
Container or Single-use Package Drugs To Provide Refunds With Respect
to Discarded Amounts; and COVID-19 Interim Final Rules
AGENCY: Centers for Medicare & Medicaid Services (CMS), Health and
Human Services (HHS).
ACTION: Final rule and interim final rules.
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SUMMARY: This major final rule addresses: changes to the physician fee
schedule (PFS); other changes to Medicare Part B payment policies to
ensure that payment systems are updated to reflect changes in medical
practice, relative value of services, and changes in the statute;
Medicare Shared Savings Program requirements; updates to the Quality
Payment Program; Medicare coverage of opioid use disorder services
furnished by opioid treatment programs; updates to certain Medicare and
Medicaid provider enrollment policies, including for skilled nursing
facilities; updates to conditions of payment for DMEPOS suppliers;
HCPCS Level II coding and payment for wound care management products;
electronic prescribing for controlled substances for a covered Part D
drug under a prescription drug plan or an MA-PD plan under the
Substance Use-Disorder Prevention that Promotes Opioid Recovery and
Treatment (SUPPORT) for Patients and Communities Act (SUPPORT Act);
updates to the Medicare Ground Ambulance Data Collection System;
provisions under the Infrastructure Investment and Jobs Act; and
finalizes the CY 2022 Methadone Payment Exception for Opioid Treatment
Programs IFC. We are also finalizing, as implemented, a few provisions
included in the COVID-19 interim final rules with comment period.
DATES: These regulations are effective on January 1, 2023.
FOR FURTHER INFORMATION CONTACT:
<a href="/cdn-cgi/l/email-protection#99d4fcfdf0faf8ebfcc9f1e0eaf0faf0f8f7dffcfccafaf1fcfdecf5fcd9faf4eab7f1f1eab7fef6ef"><span class="__cf_email__" data-cfemail="b0fdd5d4d9d3d1c2d5e0d8c9c3d9d3d9d1def6d5d5e3d3d8d5d4c5dcd5f0d3ddc39ed8d8c39ed7dfc6">[email protected]</span></a>, for any issues not identified
below. Please indicate the specific issue in the subject line of the
email.
Michael Soracoe, (410) 786-6312, for issues related to practice
expense, work RVUs, conversion factor, and PFS specialty-specific
impacts.
Kris Corwin, (410) 786-8864, for issues related to the comment
solicitation on strategies for updates to practice expense data
collection and methodology.
Sarah Leipnik, (410) 786-3933, and Anne Blackfield, (410) 786-8518,
for issues related to the comment solicitation on strategies for
improving global surgical package valuation.
Larry Chan, (410) 786-6864, for issues related to potentially
misvalued services under the PFS.
Kris Corwin, (410) 786-8864, Patrick Sartini, (410) 786-9252, and
Larry Chan, (410) 786-6864, for issues related to telehealth services
and other services involving communications technology.
Regina Walker-Wren, (410) 786-9160, for issues related to nurse
practitioner and clinical nurse specialist certification by the Nurse
Portfolio Credentialing Center (NPCC).
Lindsey Baldwin, (410) 786-1694, or
<a href="/cdn-cgi/l/email-protection#0e436b6a676d6f7c6b5e66777d676d676f60486b6b5d6d666b6a7b626b4e6d637d2066667d20696178"><span class="__cf_email__" data-cfemail="9ed3fbfaf7fdffecfbcef6e7edf7fdf7fff0d8fbfbcdfdf6fbfaebf2fbdefdf3edb0f6f6edb0f9f1e8">[email protected]</span></a>, for issues related to PFS
payment for behavioral health services.
<a href="/cdn-cgi/l/email-protection#8ac7efeee3e9ebf8efdae2f3f9e3e9e3ebe4ccefefd9e9e2efeeffe6efcae9e7f9a4e2e2f9a4ede5fc"><span class="__cf_email__" data-cfemail="90ddf5f4f9f3f1e2f5c0f8e9e3f9f3f9f1fed6f5f5c3f3f8f5f4e5fcf5d0f3fde3bef8f8e3bef7ffe6">[email protected]</span></a>, for issues related to PFS
payment for evaluation and management services.
Geri Mondowney, (410) 786-1172, Morgan Kitzmiller, (410) 786-1623,
Julie Rauch, (410) 786-8932, and Tamika Brock, (312) 886-7904, for
issues related to malpractice RVUs and geographic practice cost indices
(GPCIs).
<a href="/cdn-cgi/l/email-protection#df92babbb6bcbeadba8fb7a6acb6bcb6beb199baba8cbcb7babbaab3ba9fbcb2acf1b7b7acf1b8b0a9"><span class="__cf_email__" data-cfemail="2a674f4e43494b584f7a4253594349434b446c4f4f7949424f4e5f464f6a49475904424259044d455c">[email protected]</span></a>, for issues related to
non-face-to-face nonphysician services/remote therapeutic monitoring
services (RTM).
Zehra Hussain, (214) 767-4463, or
<a href="/cdn-cgi/l/email-protection#48052d2c212b293a2d1820313b212b2129260e2d2d1b2b202d2c3d242d082b253b6620203b662f273e"><span class="__cf_email__" data-cfemail="f2bf97969b91938097a29a8b819b919b939cb49797a1919a9796879e97b2919f81dc9a9a81dc959d84">[email protected]</span></a>, for issues related to payment
of skin substitutes.
Pamela West, (410) 786-2302, for issues related to revisions to
regulations to allow audiologists to furnish diagnostic tests, as
appropriate without a physician order.
Emily Forrest, (410) 786-8011, Laura Ashbaugh, (410) 786-1113, Anne
Blackfield, (410) 786-8518, and Erick Carrera, (410) 786-8949, for
issues related to PFS payment for dental services.
Heidi Oumarou, (410) 786-7942, for issues related to the rebasing
and revising of the Medicare Economic Index (MEI).
Laura Kennedy, (410) 786-3377, Adam Brooks, (202) 205-0671, and
Rachel Radzyner, (410) 786-8215, for issues related to requiring
manufacturers of certain single-dose container or single-use package
drugs payable under Medicare Part B to provide refunds with respect to
discarded amounts.
Laura Ashbaugh, (410) 786-1113, and Rasheeda Arthur, (410) 786-
3434, for issues related to Clinical Laboratory Fee Schedule.
Lisa Parker, (410) 786-4949, or <a href="/cdn-cgi/l/email-protection#9cdacdd4dfb1cccccfdcfff1efb2f4f4efb2fbf3ea"><span class="__cf_email__" data-cfemail="93d5c2dbd0bec3c3c0d3f0fee0bdfbfbe0bdf4fce5">[email protected]</span></a>, for issues
related to FQHCs.
Michele Franklin, (410) 786-9226, or <a href="/cdn-cgi/l/email-protection#acfee4efeccfc1df82c4c4df82cbc3da"><span class="__cf_email__" data-cfemail="386a707b785b554b1650504b165f574e">[email protected]</span></a>, for issues
related to RHCs.
Daniel Feller, (410) 786-6913, and Elizabeth Truong (410) 786-6005,
for issues related to coverage of colorectal cancer screening.
Heather Hostetler, (410) 786-4515, for issues related to removal of
selected national coverage determinations.
Lindsey Baldwin, (410) 786-1694, for issues related to Medicare
coverage of opioid use disorder treatment services furnished by opioid
treatment programs.
Sabrina Ahmed, (410) 786-7499, or <a href="/cdn-cgi/l/email-protection#1c4f747d6e79784f7d6a75727b6f4c6e737b6e7d715c7f716f3274746f327b736a"><span class="__cf_email__" data-cfemail="07546f667562635466716e6960745775686075666a47646a74296f6f7429606871">[email protected]</span></a>,
for issues related to the Medicare Shared Savings Program (Shared
Savings Program) Quality performance standard and quality reporting
requirements.
Aryanna Abouzari, (415) 744-3668, or
<a href="/cdn-cgi/l/email-protection#590a31382b3c3d0a382f30373e2a092b363e2b3834193a342a7731312a773e362f"><span class="__cf_email__" data-cfemail="41122920332425122037282f263211332e2633202c01222c326f2929326f262e37">[email protected]</span></a>, for issues related to the Shared
Savings Program burden reduction proposal on OHCAs.
Janae James, (410) 786-0801, or Elizabeth November, (410) 786-4518,
or <a href="/cdn-cgi/l/email-protection#6f3c070e1d0a0b3c0e190601081c3f1d00081d0e022f0c021c4107071c41080019"><span class="__cf_email__" data-cfemail="21724940534445724057484f465271534e4653404c61424c520f4949520f464e57">[email protected]</span></a>, for issues related to Shared
Savings Program beneficiary assignment and financial methodology.
Lucy Bertocci, (410) 786-4008, or <a href="/cdn-cgi/l/email-protection#07546f667562635466716e6960745775686075666a47646a74296f6f7429606871"><span class="__cf_email__" data-cfemail="9ccff4fdeef9f8cffdeaf5f2fbefcceef3fbeefdf1dcfff1efb2f4f4efb2fbf3ea">[email protected]</span></a>,
for inquiries related to Shared Savings Program advance investment
payments, participation options and burden reduction policies.
Rachel Radzyner, (410) 786-8215, and Michelle Cruse, (443) 478-
6390, for issues related to vaccine administration services.
Katie Parker, (410) 786-0537, for issues related to medical
necessity and documentation requirements for nonemergency, scheduled,
repetitive ambulance services.
Frank Whelan, (410) 786-1302, for issues related to Medicare
provider
[[Page 69405]]
enrollment regulation updates (including for skilled nursing
facilities), State options for implementing Medicaid provider
enrollment affiliation provisions, and conditions of payment for DMEPOS
suppliers.
Mei Zhang, (410) 786-7837, and Kimberly Go, (410)786-4560, for
issues related to requirement for electronic prescribing for controlled
substances for a covered Part D drug under a prescription drug plan or
an MA-PD plan (section 2003 of the SUPPORT Act).
Amy Gruber, (410) 786-1542, or <a href="/cdn-cgi/l/email-protection#a8e9c5caddc4c9c6cbcdecc9dcc9ebc7c4c4cdcbdcc1c7c6e8cbc5db86c0c0db86cfc7de"><span class="__cf_email__" data-cfemail="8ecfe3ecfbe2efe0edebcaeffaefcde1e2e2ebedfae7e1e0ceede3fda0e6e6fda0e9e1f8">[email protected]</span></a>,
for issues related to the Medicare Ground Ambulance Data Collection
System and Ambulance Fee Schedule (AFS).
Sundus Ashar, <a href="/cdn-cgi/l/email-protection#065573686273752867756e67743746656b75286e6e7528616970"><span class="__cf_email__" data-cfemail="d083a5beb4a5a3feb1a3b8b1a2e190b3bda3feb8b8a3feb7bfa6">[email protected]</span></a>, for issues related to
HCPCS Level II Coding for skin substitutes.
Renee O'Neill, (410) 786-8821, or Kati Moore, (410) 786-5471, for
inquiries related to Merit-based Incentive Payment System (MIPS).
Richard Jensen, (410) 786-6126, for inquiries related to
Alternative Payment Models (APMs).
Lindsey Baldwin, (410) 786-1694 for inquiries related to Opioid
Treatment Programs: CY 2022 Methadone Payment Exception.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
This major final rule revises payment polices under the Medicare
PFS and makes other policy changes, including to the implementation of
certain provisions of the Consolidated Appropriations Act, 2022 (CAA,
2022) (Pub. L. 117-103, March 15, 2022), Protecting Medicare and
American Farmers from Sequester Cuts Act (PMAFSCA) (Pub. L. 117-71,
December 10, 2021), Infrastructure Investment and Jobs Act (Pub. L.
117-58, November 15, 2021), Consolidated Appropriations Act, 2021 (CAA,
2021) (Pub. L. 116-260, December 27, 2020), Bipartisan Budget Act of
2018 (BBA of 2018) (Pub. L. 115-123, February 9, 2018) and the
Substance Use-Disorder Prevention that Promotes Opioid Recovery and
Treatment (SUPPORT) for Patients and Communities Act (the SUPPORT Act)
(Pub. L. 115-271, October 24, 2018), related to Medicare Part B
payment. In addition, this major final rule includes provisions
regarding other Medicare payment policies described in sections III.
and IV.
B. Summary of the Major Provisions
The statute requires us to establish payments under the PFS, based
on national uniform relative value units (RVUs) that account for the
relative resources used in furnishing a service. The statute requires
that RVUs be established for three categories of resources: work,
practice expense (PE), and malpractice (MP) expense. In addition, the
statute requires that each year we establish, by regulation, the
payment amounts for physicians' services paid under the PFS, including
geographic adjustments to reflect the variations in the costs of
furnishing services in different geographic areas.
In this major final rule, we are establishing RVUs for CY 2023 for
the PFS to ensure that our payment systems are updated to reflect
changes in medical practice and the relative value of services, as well
as changes in the statute. This final rule also includes discussions
and provisions regarding several other Medicare Part B payment
policies.
Specifically, this final rule addresses:
<bullet> Determination of PE RVUs (section II.B.)
<bullet> Potentially Misvalued Services Under the PFS (section
II.C.)
<bullet> Payment for Medicare Telehealth Services Under Section
1834(m) of the Act (section II.D.)
<bullet> Valuation of Specific Codes (section II.E.)
<bullet> Evaluation and Management (E/M) Visits (section II.F.)
<bullet> Geographic Practice Cost Indices (GPCI) (section II.G.)
<bullet> Determination of Malpractice Relative Value Units (RVUs)
(section II.H.)
<bullet> Non-Face-to-Face/Remote Therapeutic Monitoring (RTM)
Services (section II.I.)
<bullet> Payment for Skin Substitutes (section II.J.)
<bullet> Provision to Allow Audiologists to Furnish Certain
Diagnostic Tests Without a Physician Order (section II.K.)
<bullet> Provisions on Medicare Parts A and B Payment for Dental
Services (section II.L.)
<bullet> Rebasing and Revising the Medicare Economic Index (MEI)
(section II.M.)
<bullet> Requiring Manufacturers of Certain Single-dose Container
or Single-use Package Drugs to Provide Refunds with Respect to
Discarded Amounts (Sec. Sec. 414.902 and 414.940) (section III.A.)
<bullet> Rural Health Clinics (RHCs) and Federally Qualified Health
Centers (FQHCs) (section III.B.)
<bullet> Clinical Laboratory Fee Schedule: Revised Data Reporting
Period and Phase-in of Payment Reductions, and Policies for Specimen
Collection Fees and Travel Allowance for Clinical Diagnostic Laboratory
Tests (section III.C.)
<bullet> Expansion of Coverage for Colorectal Cancer Screening and
Reducing Barriers (section III.D.)
<bullet> Removal of Selected National Coverage Determinations
(section III.E.)
<bullet> Modifications Related to Medicare Coverage for Opioid Use
Disorder (OUD) Treatment Services Furnished by Opioid Treatment
Programs (OTPs) (section III.F.)
<bullet> Medicare Shared Savings Program (section III.G.)
<bullet> Medicare Part B Payment for Preventive Vaccine
Administration Services (section III.H.)
<bullet> Medical Necessity and Documentation Requirements for
Nonemergency, Scheduled, Repetitive Ambulance Services (section III.I.)
<bullet> Medicare Provider and Supplier Enrollment and Conditions
of DMEPOS Payment (section III.J.)
<bullet> State Options for Implementing Medicaid Provider
Enrollment Affiliation Provision (section III.K.)
<bullet> Requirement for Electronic Prescribing for Controlled
Substances for a Covered Part D Drug under a Prescription Drug Plan or
an MA-PD Plan (section 2003 of the SUPPORT Act) (section III.L.)
<bullet> Medicare Ground Ambulance Data Collection System (GADCS)
(section III.M.)
<bullet> Revisions to HCPCS Level II Coding Procedures for Skin
Substitutes Products (section III.N.)
<bullet> Updates to the Quality Payment Program (section IV.)
<bullet> Opioid Treatment Programs: CY 2022 Methadone Payment
Exception and Origin and Destination Requirements Under the Ambulance
Fee Schedule (section V.A.)
<bullet> Finalizing provisions from the Medicare and Medicaid
Programs; Policy and Regulatory Revisions in Response to the COVID-19
Public Health Emergency (CMS-1744-IFC) (Section V.B.)
<bullet> Finalizing provisions from the Medicare and Medicaid
Programs, Basic Health Program, and Exchanges; Additional Policy and
Regulatory Revisions in Response to the COVID-19 Public Health
Emergency and Delay of Certain Reporting Requirements for the Skilled
Nursing Facility Quality Reporting Program (CMS-5531-IFC) (Section
V.C.)
<bullet> Collection of Information Requirements (section VI.)
<bullet> Regulatory Impact Analysis (section VII.)
3. Summary of Costs and Benefits
We have determined that this final rule is economically
significant. For a detailed discussion of the economic
[[Page 69406]]
impacts, see section VII., Regulatory Impact Analysis, of this final
rule.
B. Determination of PE RVUs
1. Overview
Practice expense (PE) is the portion of the resources used in
furnishing a service that reflects the general categories of physician
and practitioner expenses, such as office rent and personnel wages, but
excluding malpractice (MP) expenses, as specified in section
1848(c)(1)(B) of the Act. As required by section 1848(c)(2)(C)(ii) of
the Act, we use a resource-based system for determining PE RVUs for
each physicians' service. We develop PE RVUs by considering the direct
and indirect practice resources involved in furnishing each service.
Direct expense categories include clinical labor, medical supplies, and
medical equipment. Indirect expenses include administrative labor,
office expense, and all other expenses. The sections that follow
provide more detailed information about the methodology for translating
the resources involved in furnishing each service into service specific
PE RVUs. We refer readers to the CY 2010 Physician Fee Schedule (PFS)
final rule with comment period (74 FR 61743 through 61748) for a more
detailed explanation of the PE methodology.
2. Practice Expense Methodology
a. Direct Practice Expense
We determine the direct PE for a specific service by adding the
costs of the direct resources (that is, the clinical staff, medical
supplies, and medical equipment) typically involved with furnishing
that service. The costs of the resources are calculated using the
refined direct PE inputs assigned to each CPT code in our PE database,
which are generally based on our review of recommendations received
from the RUC and those provided in response to public comment periods.
For a detailed explanation of the direct PE methodology, including
examples, we refer readers to the 5-year review of work RVUs under the
PFS and proposed changes to the PE methodology CY 2007 PFS proposed
notice (71 FR 37242) and the CY 2007 PFS final rule with comment period
(71 FR 69629).
b. Indirect Practice Expense per Hour Data
We use survey data on indirect PEs incurred per hour worked, in
developing the indirect portion of the PE RVUs. Prior to CY 2010, we
primarily used the PE/HR by specialty that was obtained from the AMA's
SMS. The AMA administered a new survey in CY 2007 and CY 2008, the
Physician Practice 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 titled ``CY 2023 PFS final rule PE/HR'' on the
CMS website under downloads for the CY 2023 PFS final rule at <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html</a>.
c. Allocation of PE to Services
To establish PE RVUs for specific services, it is necessary to
establish the direct and indirect PE associated with each service.
(1) Direct Costs
The relative relationship between the direct cost portions of the
PE RVUs for any two services is determined by the relative relationship
between the sum of the direct cost resources (that is, the clinical
staff, medical supplies, and medical equipment) typically involved with
furnishing each of the services. The costs of these resources are
calculated from the refined direct PE inputs in our PE database. For
example, if one service has a direct cost sum of $400 from our PE
database and another service has a direct cost sum of $200, the direct
portion of the PE RVUs of the first service would be twice as much as
the direct portion of the PE RVUs for the second service.
(2) Indirect Costs
We allocate the indirect costs at the code level based on the
direct costs specifically associated with a code and the greater of
either the clinical labor costs or the work RVUs. We also incorporate
the survey data described earlier in the PE/HR discussion. The general
approach to developing the
[[Page 69407]]
indirect portion of the PE RVUs is as follows:
<bullet> For a given service, we use the direct portion of the PE
RVUs calculated as previously described and the average percentage that
direct costs represent of total costs (based on survey data) across the
specialties that furnish the service to determine an initial indirect
allocator. That is, the initial indirect allocator is calculated so
that the direct costs equal the average percentage of direct costs of
those specialties furnishing the service. For example, if the direct
portion of the PE RVUs for a given service is 2.00 and direct costs, on
average, represent 25 percent of total costs for the specialties that
furnish the service, the initial indirect allocator would be calculated
so that it equals 75 percent of the total PE RVUs. Thus, in this
example, the initial indirect allocator would equal 6.00, resulting in
a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75
percent of 8.00).
<bullet> Next, we add the greater of the work RVUs or clinical
labor portion of the direct portion of the PE RVUs to this initial
indirect allocator. In our example, if this service had a work RVU of
4.00 and the clinical labor portion of the direct PE RVU was 1.50, we
would add 4.00 (since the 4.00 work RVUs are greater than the 1.50
clinical labor portion) to the initial indirect allocator of 6.00 to
get an indirect allocator of 10.00. In the absence of any further use
of the survey data, the relative relationship between the indirect cost
portions of the PE RVUs for any two services would be determined by the
relative relationship between these indirect cost allocators. For
example, if one service had an indirect cost allocator of 10.00 and
another service had an indirect cost allocator of 5.00, the indirect
portion of the PE RVUs of the first service would be twice as great as
the indirect portion of the PE RVUs for the second service.
<bullet> Then, we incorporate the specialty specific indirect PE/HR
data into the calculation. In our example, if, based on the survey
data, the average indirect cost of the specialties furnishing the first
service with an allocator of 10.00 was half of the average indirect
cost of the specialties furnishing the second service with an indirect
allocator of 5.00, the indirect portion of the PE RVUs of the first
service would be equal to that of the second service.
(3) Facility and Nonfacility Costs
For procedures that can be furnished in a physician's office, as
well as in a facility setting, where Medicare makes a separate payment
to the facility for its costs in furnishing a service, we establish two
PE RVUs: facility and nonfacility. The methodology for calculating PE
RVUs is the same for both the facility and nonfacility RVUs, but is
applied independently to yield two separate PE RVUs. In calculating the
PE RVUs for services furnished in a facility, we do not include
resources that would generally not be provided by physicians when
furnishing the service. For this reason, the facility PE RVUs are
generally lower than the nonfacility PE RVUs.
(4) Services With Technical Components and Professional Components
Diagnostic services are generally comprised of two components: a
professional component (PC); and a technical component (TC). The PC and
TC may be furnished independently or by different providers, or they
may be furnished together as a global service. When services have
separately billable PC and TC components, the payment for the global
service equals the sum of the payment for the TC and PC. To achieve
this, we use a weighted average of the ratio of indirect to direct
costs across all the specialties that furnish the global service, TCs,
and PCs; that is, we apply the same weighted average indirect
percentage factor to allocate indirect expenses to the global service,
PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum
to the global.)
(5) PE RVU Methodology
For a more detailed description of the PE RVU methodology, we
direct readers to the CY 2010 PFS final rule with comment period (74 FR
61745 through 61746). We also direct readers to the file titled
``Calculation of PE RVUs under Methodology for Selected Codes'' which
is available on our website under downloads for the CY 2023 PFS final
rule at <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html</a>. 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 an RVU scale for each
service. To do this, divide the results of Step 4 by the CF. Note that
the actual value of the CF used in this calculation does not influence
the final direct cost PE RVUs as long as the same CF is used in Step 4
and Step 5. Different CFs would result in different direct PE scaling
adjustments, but this has no effect on the final direct cost PE RVUs
since changes in the CFs and changes in the associated direct scaling
adjustments offset one another.
(c) Create the Indirect Cost PE RVUs
Create indirect allocators.
Step 6: Based on the survey data, calculate direct and indirect PE
percentages for each physician specialty.
Step 7: Calculate direct and indirect PE percentages at the service
level by taking a weighted average of the results of Step 6 for the
specialties that furnish the service. Note that for services with TCs
and PCs, the direct and indirect percentages for a given service do not
vary by the PC, TC, and global service.
We generally use an average of the 3 most recent years of available
Medicare claims data to determine the specialty mix assigned to each
code. Codes with low Medicare service volume require special attention
since billing or enrollment irregularities for a given year can result
in significant changes in specialty mix assignment. We finalized a
policy in the CY 2018 PFS final rule (82 FR 52982 through 59283) to use
the most recent year of claims data to determine which codes are low
volume for the coming year (those that have fewer than 100 allowed
services in the Medicare claims data). For codes that fall into this
category, instead of assigning specialty mix based on the specialties
of the practitioners reporting
[[Page 69408]]
the services in the claims data, we use the expected specialty that we
identify on a list developed based on medical review and input from
expert interested parties. We display this list of expected specialty
assignments as part of the annual set of data files we make available
as part of notice and comment rulemaking and consider recommendations
from the RUC and other interested parties on changes to this list on an
annual basis. Services for which the specialty is automatically
assigned based on previously finalized policies under our established
methodology (for example, ``always therapy'' services) are unaffected
by the list of expected specialty assignments. We also finalized in the
CY 2018 PFS final rule (82 FR 52982 through 52983) a policy to apply
these service-level overrides for both PE and MP, rather than one or
the other category.
We did not make any proposals associated with the list of expected
specialty assignments for low volume services, however we received
public comments on this topic from interested parties. The following is
a summary of the comments we received and our responses.
Comment: Several commenters stated that they had performed an
analysis to identify all codes that meet the criteria to receive a
specialty override under this CMS policy and drafted updated
recommendations for CY 2023. Commenters stated that the purpose of
assigning a specialty to these codes was to avoid the major adverse
impact on MP RVUs that result from errors in specialty utilization data
magnified in representation (percentage) by small sample size. These
commenters submitted a list of several dozen low volume HCPCS codes
with recommended expected specialty assignments.
Response: After reviewing the information provided by the
commenters to determine that the submitted specialty assignments were
appropriate for the service in question, we are finalizing the
additions in Table 1 to the list of expected specialty assignments for
low volume services.
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Comment: Commenters recommended an expected specialty assignment of
interventional cardiology for CPT codes 33370, 33894, 33895, 33897, and
33997.
Response: We do not have PE/HR data for the interventional
cardiology specialty as it was not part of the PPIS when it was
conducted in 2007. We use the cardiology specialty for this specialty's
PE/HR data, and therefore, we have crosswalked the CPT codes in
question to the cardiology specialty on the list of expected specialty
assignments for low volume services.
Comment: Commenters also recommended an expected specialty
assignment of hand surgery for CPT code 26705.
Response: During our review of claims data for this code, we found
that the most frequently reported specialty for CPT code 26705 was
orthopedic surgery, reported more than twice as often as the hand
surgery specialty. Therefore, we are finalizing orthopedic surgery and
not hand surgery as the expected specialty assignment for CPT code
26705.
We also note for commenters that each HCPCS code that appears on
the list of expected specialty assignments for low volume services
remains on the list from year to year, even if the volume for the code
in question rises to over 100 services for an individual calendar year.
The HCPCS codes and expected specialty assignment remain on the list,
and will be applied should the volume fall below 100 services in any
calendar year; there is no need to ``reactivate'' individual codes as
some commenters have suggested in past submissions.
After consideration of the public comments, we are finalizing the
updates to the list of expected specialty assignments for low volume
services as detailed above.
Step 8: Calculate the service level allocators for the indirect PEs
based on the percentages calculated in Step 7. The indirect PEs are
allocated based on the three components: the direct PE RVUs; the
clinical labor PE RVUs; and the work RVUs.
For most services the indirect allocator is: indirect PE percentage
* (direct PE RVUs/direct percentage) + work RVUs.
There are two situations where this formula is modified:
<bullet> If the service is a global service (that is, a service
with global, professional, and technical components), then the indirect
PE allocator is: indirect percentage (direct PE RVUs/direct percentage)
+ clinical labor PE RVUs + work RVUs.
<bullet> If the clinical labor PE RVUs exceed the work RVUs (and
the service is not a global service), then the indirect allocator is:
indirect PE percentage (direct PE RVUs/direct percentage) + clinical
labor PE RVUs.
(Note: For global services, the indirect PE allocator is based on
both the work RVUs and the clinical labor PE RVUs. We do this to
recognize that, for the PC service, indirect PEs would be allocated
using the work RVUs, and for the TC service, indirect PEs would be
allocated using the direct PE RVUs and the clinical labor PE RVUs. This
also allows the global component RVUs to equal the sum of the PC and TC
RVUs.)
For presentation purposes, in the examples in the download file
titled ``Calculation of PE RVUs under Methodology for Selected Codes'',
the formulas were divided into two parts for each service.
<bullet> The first part does not vary by service and is the
indirect percentage (direct PE RVUs/direct percentage).
<bullet> The second part is either the work RVU, clinical labor PE
RVU, or both depending on whether the service is a global service and
whether the clinical PE RVUs exceed the work RVUs (as described earlier
in this step).
Apply a scaling adjustment to the indirect allocators.
Step 9: Calculate the current aggregate pool of indirect PE RVUs by
multiplying the result of step 8 by the average indirect PE percentage
from the survey data.
Step 10: Calculate an aggregate pool of indirect PE RVUs for all
PFS services by adding the product of the indirect PE allocators for a
service from Step 8 and the utilization data for that service.
Step 11: Using the results of Step 9 and Step 10, calculate an
indirect PE adjustment so that the aggregate indirect allocation does
not exceed the available aggregate indirect PE RVUs and apply it to
indirect allocators calculated in Step 8.
Calculate the indirect practice cost index.
Step 12: Using the results of Step 11, calculate aggregate pools of
specialty specific adjusted indirect PE allocators for all PFS services
for a specialty by adding the product of the adjusted indirect PE
allocator for each service and the utilization data for that service.
Step 13: Using the specialty specific indirect PE/HR data,
calculate specialty specific aggregate pools of indirect PE for all PFS
services for that specialty by adding the product of the indirect PE/HR
for the specialty, the work time for the service, and the specialty's
utilization for the service across all services furnished by the
specialty.
Step 14: Using the results of Step 12 and Step 13, calculate the
specialty specific indirect PE scaling factors.
Step 15: Using the results of Step 14, calculate an indirect
practice cost index at the specialty level by dividing each specialty
specific indirect scaling factor by the average indirect scaling factor
for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service
level to ensure the capture of all indirect costs. Calculate a weighted
average of the practice cost index values for the specialties that
furnish the service. (Note: For services with TCs and PCs, we calculate
the indirect practice cost index across the global service, PCs, and
TCs. Under this method, the indirect practice cost index for a given
service (for example, echocardiogram) does not vary by the PC, TC, and
global service.)
Step 17: Apply the service level indirect practice cost index
calculated
[[Page 69411]]
in Step 16 to the service level adjusted indirect allocators calculated
in Step 11 to get the indirect PE RVUs.
(d) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs
from Step 17 and apply the final PE budget neutrality (BN) adjustment.
The final PE BN adjustment is calculated by comparing the sum of steps
5 and 17 to the aggregate work RVUs scaled by the ratio of current
aggregate PE and work RVUs. This adjustment ensures that all PE RVUs in
the PFS account for the fact that certain specialties are excluded from
the calculation of PE RVUs but included in maintaining overall PFS BN.
(See ``Specialties excluded from ratesetting calculation'' later in
this final rule.)
Step 19: Apply the phase-in of significant RVU reductions and its
associated adjustment. Section 1848(c)(7) of the Act specifies that for
services that are not new or revised codes, if the total RVUs for a
service for a year would otherwise be decreased by an estimated 20
percent or more as compared to the total RVUs for the previous year,
the applicable adjustments in work, PE, and MP RVUs shall be phased in
over a 2-year period. In implementing the phase-in, we consider a 19
percent reduction as the maximum 1-year reduction for any service not
described by a new or revised code. This approach limits the year one
reduction for the service to the maximum allowed amount (that is, 19
percent), and then phases in the remainder of the reduction. To comply
with section 1848(c)(7) of the Act, we adjust the PE RVUs to ensure
that the total RVUs for all services that are not new or revised codes
decrease by no more than 19 percent, and then apply a relativity
adjustment to ensure that the total pool of aggregate PE RVUs remains
relative to the pool of work and MP RVUs. For a more detailed
description of the methodology for the phase-in of significant RVU
changes, we refer readers to the CY 2016 PFS final rule with comment
period (80 FR 70927 through 70931).
(e) Setup File Information
<bullet> Specialties excluded from ratesetting calculation: For the
purposes of calculating the PE and MP RVUs, we exclude certain
specialties, such as certain NPPs paid at a percentage of the PFS and
low volume specialties, from the calculation. These specialties are
included for the purposes of calculating the BN adjustment. They are
displayed in Table 2.
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<bullet> Crosswalk certain low volume physician specialties:
Crosswalk the utilization of certain specialties with relatively low
PFS utilization to the associated specialties.
<bullet> Physical therapy utilization: Crosswalk the utilization
associated with all physical therapy services to the specialty of
physical therapy.
<bullet> Identify professional and technical services not
identified under the usual TC and 26 modifiers: Flag the services that
are PC and TC services but do not use TC and 26 modifiers (for example,
electrocardiograms). This flag associates the PC and TC with the
associated global code for use in creating the indirect PE RVUs. For
example, the professional service, CPT code 93010 (Electrocardiogram,
routine ECG with at least 12 leads; interpretation and report only), is
associated with the global service, CPT code 93000 (Electrocardiogram,
routine ECG with at least 12 leads; with interpretation and report).
<bullet> Payment modifiers: Payment modifiers are accounted for in
the creation of the file consistent with current payment policy as
implemented in claims processing. For example, services billed with the
assistant at surgery modifier are paid 16 percent of the PFS amount for
that service; therefore, the utilization file is modified to only
account for 16 percent of any service that contains the assistant at
surgery modifier. Similarly, for those services to which volume
adjustments are made to account for the payment modifiers, time
adjustments are applied as well. For time adjustments to surgical
services, the intraoperative portion in the work time file is used;
where it is not present, the intraoperative percentage from the payment
files used by contractors to process Medicare claims is used instead.
Where neither is available, we use the payment adjustment ratio to
adjust the time
[[Page 69413]]
accordingly. Table 3 details the manner in which the modifiers are
applied.
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We also adjust volume and time that correspond to other payment
rules, including special multiple procedure endoscopy rules and
multiple procedure payment reductions (MPPRs). We note that section
1848(c)(2)(B)(v) of the Act exempts certain reduced payments for
multiple imaging procedures and multiple therapy services from the BN
calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These MPPRs
are not included in the development of the RVUs.
Beginning in CY 2022, section 1834(v)(1) of the Act required that
we apply a 15 percent payment reduction for outpatient occupational
therapy services and outpatient physical therapy services that are
provided, in whole or in part, by a physical therapist assistant (PTA)
or occupational therapy assistant (OTA). Section 1834(v)(2)(A) of the
Act required CMS to establish modifiers to identify these services,
which we did in the CY 2019 PFS final rule (83 FR 59654 through 59661),
creating the CQ and CO payment modifiers for services provided in whole
or in part by PTAs and OTAs, respectively. These payment modifiers are
required to be used on claims for services with dates of service
beginning January 1, 2020, as specified in the CY 2020 PFS final rule
(84 FR 62702 through 62708). We applied the 15 percent payment
reduction to therapy services provided by PTAs (using the CQ modifier)
or OTAs (using the CO modifier), as required by statute. Under sections
1834(k) and 1848 of the Act, payment is made for outpatient therapy
services at 80 percent of the lesser of the actual charge or applicable
fee schedule amount (the allowed charge). The remaining 20 percent is
the beneficiary copayment. For therapy services to which the new
discount applies, payment will be made at 85 percent of the 80 percent
of allowed charges. Therefore, the volume discount factor for therapy
services to which the CQ and CO modifiers apply is: (0.20 + (0.80*
0.85), which equals 88 percent.
For anesthesia services, we do not apply adjustments to volume
since we use the average allowed charge when simulating RVUs;
therefore, the RVUs as calculated already reflect the payments as
adjusted by modifiers, and no volume adjustments are necessary.
However, a time adjustment of 33 percent is made only for medical
direction of two to four cases since that is the only situation where a
single practitioner is involved with multiple beneficiaries
concurrently, so that counting each service without regard to the
overlap with other services would overstate the amount of time spent by
the practitioner furnishing these services.
<bullet> Work RVUs: The setup file contains the work RVUs from this
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)[supcaret] life of equipment)))) + maintenance)
Where:
minutes per year = maximum minutes per year if usage were continuous
(that is, usage=1); generally, 150,000 minutes.
usage = variable, see discussion below in this final rule.
price = price of the particular piece of equipment.
life of equipment = useful life of the particular piece of
equipment.
maintenance = factor for maintenance; 0.05.
interest rate = variable, see discussion below in this final rule.
Usage: We currently use an equipment utilization rate assumption of
50 percent for most equipment, with the exception of expensive
diagnostic imaging equipment, for which we use a 90 percent assumption
as required by section 1848(b)(4)(C) of the Act.
Useful Life: In the CY 2005 PFS final rule we stated that we
updated the useful life for equipment items primarily based on the
AHA's ``Estimated Useful Lives of Depreciable Hospital Assets''
guidelines (69 FR 66246). The most recent edition of these guidelines
was published in 2018. This reference material provides an estimated
useful life for hundreds of different
[[Page 69414]]
types of equipment, the vast majority of which fall in the range of 5
to 10 years, and none of which are lower than 2 years in duration. We
believe that the updated editions of this reference material remain the
most accurate source for estimating the useful life of depreciable
medical equipment.
In the CY 2021 PFS final rule, we finalized a proposal to treat
equipment life durations of less than 1 year as having a duration of 1
year for the purpose of our equipment price per minute formula. In the
rare cases where items are replaced every few months, we noted that we
believe it is more accurate to treat these items as disposable supplies
with a fractional supply quantity as opposed to equipment items with
very short equipment life durations. For a more detailed discussion of
the methodology associated with very short equipment life durations, we
refer readers to the CY 2021 PFS final rule (85 FR 84482 through
84483).
<bullet> Maintenance: We finalized the 5 percent factor for annual
maintenance in the CY 1998 PFS final rule with comment period (62 FR
33164). As we previously stated in the CY 2016 PFS final rule with
comment period (80 FR 70897), we do not believe the annual maintenance
factor for all equipment is precisely 5 percent, and we concur that the
current rate likely understates the true cost of maintaining some
equipment. We also noted that we believe it likely overstates the
maintenance costs for other equipment. When we solicited comments
regarding sources of data containing equipment maintenance rates,
commenters were unable to identify an auditable, robust data source
that could be used by CMS on a wide scale. We noted that we did not
believe voluntary submissions regarding the maintenance costs of
individual equipment items would be an appropriate methodology for
determining costs. As a result, in the absence of publicly available
datasets regarding equipment maintenance costs or another systematic
data collection methodology for determining a different maintenance
factor, we did not propose a variable maintenance factor for equipment
cost per minute pricing as we did not believe that we have sufficient
information at present. We noted that we would continue to investigate
potential avenues for determining equipment maintenance costs across a
broad range of equipment items.
<bullet> Interest Rate: In the CY 2013 PFS final rule with comment
period (77 FR 68902), we updated the interest rates used in developing
an equipment cost per minute calculation (see 77 FR 68902 for a
thorough discussion of this issue). The interest rate was based on the
Small Business Administration (SBA) maximum interest rates for
different categories of loan size (equipment cost) and maturity (useful
life). The Interest rates are listed in Table 4.
[GRAPHIC] [TIFF OMITTED] TR18NO22.004
We did not propose and we are not finalizing any changes to the
equipment interest rates for CY 2023.
3. Adjusting RVUs To Match the PE Share of the Medicare Economic Index
(MEI)
For CY 2023, as explained in detail in section II.M. of this final
rule, we proposed to rebase and revise the Medicare Economic Index
(MEI) to reflect more current market conditions faced by physicians in
furnishing physicians' services. The MEI is an index that measures
changes in the market price of the inputs used to furnish physician
services. This index measure is authorized under section 1842(b)(3) of
the Act, and is developed by the CMS Office of the Actuary. We believe
that the MEI is the best measure available of the relative weights of
the three components in payments under the PFS--work, PE and
malpractice. Accordingly, we believe that to assure that the PFS
payments reflect the relative resources in each of these components as
required by section 1848(c)(3) of the Act, the RVUs used in developing
rates should reflect the same weights in each component as the MEI. In
the past, we have proposed (and subsequently, finalized) to accomplish
this by holding the work RVUs constant and adjusting the PE RVUs, the
MP RVUs and the CF to produce the appropriate balance in RVUs among the
PFS components and payment rates for individual services. The most
recent adjustments to the RVUs to reflect changes in the MEI weights
were made for the CY 2014 RVUs, when the MEI was last updated. In the
CY 2014 PFS proposed rule (78 FR 43287 through 43288) and final rule
(78 FR 74236 through 74237), we detailed the steps necessary to
accomplish this result (see steps 3, 10, and 18). The CY 2014 proposed
and final adjustments were consistent with our longstanding practice to
make adjustments to match the RVUs for the PFS components with the MEI
cost share weights for the components, including the adjustments
described in the CY 1999 PFS final rule (63 FR 58829), CY 2004 PFS
final rule (68 FR 63246 and 63247), and CY 2011 PFS final rule (75 FR
73275).
In the past when we have proposed a rebasing and/or revision of the
MEI, as we discuss in section II.M. of this final rule, we typically
have also proposed to modify steps 3 and 10 to adjust the aggregate
pools of PE costs (direct PE in step 3 and indirect PE in step 10) in
proportion to the change in the PE share in the rebased and revised MEI
cost share weights, as previously described in the CY 2014 PFS final
rule (78 FR 74236 and 74237), and to recalibrate the relativity
adjustment that we apply in step 18 as described in the CY 2014 PFS
final rule. Instead, we proposed to delay the adjustments to the PE
pools in steps 3 and 10 and the recalibration of the relativity
adjustment in step 18 until the public had an opportunity to comment on
the proposed rebased and revised MEI, which is being finalized for CY
2023, as discussed in section II.M. of this final rule. Because we
proposed significant methodological and data source changes to the MEI
for CY 2023 and significant time has elapsed since
[[Page 69415]]
the last rebasing and revision of the MEI, we explained that we believe
it is important to allow public comment and finalization of the
proposed MEI changes based on the review of public comment before we
incorporated the updated MEI into PFS ratesetting, and we believe this
is consistent with our efforts to balance payment stability and
predictability with incorporating new data through more routine
updates. We refer readers to the discussion of our comment solicitation
in section II.B. of this final rule, where we review our ongoing
efforts to update data inputs for PE to aid stability, transparency,
efficiency, and data adequacy. Similarly, we delayed the implementation
of the proposed rebased and revised MEI for use in the PE geographic
practice cost index (GPCI) and solicited comment on appropriate timing
for implementation for potential future rulemaking, discussed in detail
in section II.G. and section VI. of this final rule.
In light of the proposed delay in using the proposed update to the
MEI to make the adjustments to the PE pools in steps 3 and 10 and the
relativity adjustment in step 18, we solicited comment on when and how
to best incorporate the proposed rebased and revised MEI discussed in
section II.M. of the proposed rule into PFS ratesetting, and whether it
would be appropriate to consider a transition to full implementation
for potential future rulemaking. In section VI. of this final rule, we
present the impacts of implementing the proposed rebased and revised
MEI in PFS ratesetting through a 4-year transition and through full
immediate implementation, that is, with no transition period. Given the
significance of the impacts that result from a full implementation and
the interaction with other CY 2023 proposals, we did not consider
proposing to fully implement a rebased and revised MEI in PFS
ratesetting for CY 2023. We solicited comment on other implementation
strategies for potential future rulemaking that are not outlined in
section VI. of this final rule.
The following is a summary of the comments we received and our
responses.
Comment: Many commenters supported our proposed delayed
implementation of the rebased and revised MEI in PFS ratesetting until
the public had an opportunity to comment on the proposed changes to the
MEI, as discussed in section II.M. of this final rule.
Response: We thank the commenters for their support.
Comment: Many commenters expressed concerns with the redistributive
impacts discussed in section VI. of the proposed rule, where we
discussed the alternative considered to implement the proposed rebased
and revised MEI in PFS ratesetting through a 4-year transition for CY
2023. Many of the commenters cited other proposals and their confluence
with the proposed rebased and revised MEI as a source of their concerns
regarding the implementation of the MEI in PFS ratesetting. Most
commenters noted that the AMA has said it intends to collect practice
cost data from physician practices in the near future and urged CMS to
pause consideration of other sources for the MEI until the AMA's
efforts have concluded. A few commenters urged CMS to implement the MEI
for PFS ratesetting when appropriate using a 4-year transition to
minimize shifts and maintain stability in PFS payments.
Response: We appreciate commenters' feedback, specifically as it
relates to updating PFS ratesetting, and will consider this information
in future rulemaking. We note that we discuss comments relating to the
proposed rebased and revised MEI in section II.M. of this final rule.
4. Changes to Direct PE Inputs for Specific Services
This section focuses on specific PE inputs. The direct PE inputs
are included in the CY 2023 direct PE input public use files, which are
available on the CMS website under downloads for the CY 2023 PFS final
rule at <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html</a>.
a. Standardization of Clinical Labor Tasks
As we noted in the CY 2015 PFS final rule with comment period (79
FR 67640 through 67641), we continue to make improvements to the direct
PE input database to provide the number of clinical labor minutes
assigned for each task for every code in the database instead of only
including the number of clinical labor minutes for the preservice,
service, and post service periods for each code. In addition to
increasing the transparency of the information used to set PE RVUs,
this level of detail would allow us to compare clinical labor times for
activities associated with services across the PFS, which we believe is
important to maintaining the relativity of the direct PE inputs. This
information would facilitate the identification of the usual numbers of
minutes for clinical labor tasks and the identification of exceptions
to the usual values. It would also allow for greater transparency and
consistency in the assignment of equipment minutes based on clinical
labor times. Finally, we believe that the detailed information can be
useful in maintaining standard times for particular clinical labor
tasks that can be applied consistently to many codes as they are valued
over several years, similar in principle to the use of physician
preservice time packages. We believe that setting and maintaining such
standards would provide greater consistency among codes that share the
same clinical labor tasks and could improve relativity of values among
codes. For example, as medical practice and technologies change over
time, changes in the standards could be updated simultaneously for all
codes with the applicable clinical labor tasks, instead of waiting for
individual codes to be reviewed.
In the CY 2016 PFS final rule with comment period (80 FR 70901), we
solicited comments on the appropriate standard minutes for the clinical
labor tasks associated with services that use digital technology. After
consideration of comments received, we finalized standard times for
clinical labor tasks associated with digital imaging at 2 minutes for
``Availability of prior images confirmed'', 2 minutes for ``Patient
clinical information and questionnaire reviewed by technologist, order
from physician confirmed and exam protocoled by radiologist'', 2
minutes for ``Review examination with interpreting MD'', and 1 minute
for ``Exam documents scanned into PACS'' and ``Exam completed in RIS
system to generate billing process and to populate images into
Radiologist work queue.'' In the CY 2017 PFS final rule (81 FR 80184
through 80186), we finalized a policy to establish a range of
appropriate standard minutes for the clinical labor activity,
``Technologist QCs images in PACS, checking for all images, reformats,
and dose page.'' These standard minutes will be applied to new and
revised codes that make use of this clinical labor activity when they
are reviewed by us for valuation. We finalized a policy to establish 2
minutes as the standard for the simple case, 3 minutes as the standard
for the intermediate case, 4 minutes as the standard for the complex
case, and 5 minutes as the standard for the highly complex case. These
values were based upon a review of the existing minutes assigned for
this clinical labor activity; we determined that 2 minutes is the
duration for most services and a small number of codes
[[Page 69416]]
with more complex forms of digital imaging have higher values. We also
finalized standard times for a series of clinical labor tasks
associated with pathology services in the CY 2016 PFS final rule with
comment period (80 FR 70902). We do not believe these activities would
be dependent on number of blocks or batch size, and we believe that the
finalized standard values accurately reflect the typical time it takes
to perform these clinical labor tasks.
In reviewing the RUC-recommended direct PE inputs for CY 2019, we
noticed that the 3 minutes of clinical labor time traditionally
assigned to the ``Prepare room, equipment and supplies'' (CA013)
clinical labor activity were split into 2 minutes for the ``Prepare
room, equipment and supplies'' activity and 1 minute for the ``Confirm
order, protocol exam'' (CA014) activity. We proposed to maintain the 3
minutes of clinical labor time for the ``Prepare room, equipment and
supplies'' activity and remove the clinical labor time for the
``Confirm order, protocol exam'' activity wherever we observed this
pattern in the RUC-recommended direct PE inputs. Commenters explained
in response that when the new version of the PE worksheet introduced
the activity codes for clinical labor, there was a need to translate
old clinical labor tasks into the new activity codes, and that a prior
clinical labor task was split into two of the new clinical labor
activity codes: CA007 (Review patient clinical extant information and
questionnaire) in the preservice period, and CA014 (Confirm order,
protocol exam) in the service period. Commenters stated that the same
clinical labor from the old PE worksheet was now divided into the CA007
and CA014 activity codes, with a standard of 1 minute for each
activity. We agreed with commenters that we would finalize the RUC-
recommended 2 minutes of clinical labor time for the CA007 activity
code and 1 minute for the CA014 activity code in situations where this
was the case. However, when reviewing the clinical labor for the
reviewed codes affected by this issue, we found that several of the
codes did not include this old clinical labor task, and we also noted
that several of the reviewed codes that contained the CA014 clinical
labor activity code did not contain any clinical labor for the CA007
activity. In these situations, we continue to believe that in these
cases, the 3 total minutes of clinical staff time would be more
accurately described by the CA013 ``Prepare room, equipment and
supplies'' activity code, and we finalized these clinical labor
refinements. For additional details, we direct readers to the
discussion in the CY 2019 PFS final rule (83 FR 59463 and 59464).
Following the publication of the CY 2020 PFS proposed rule, one
commenter expressed concern with the published list of common
refinements to equipment time. The commenter stated that these
refinements were the formulaic result of the applying refinements to
the clinical labor time and did not constitute separate refinements;
the commenter requested that CMS no longer include these refinements in
the table published each year. In the CY 2020 PFS final rule, we agreed
with the commenter that these equipment time refinements did not
reflect errors in the equipment recommendations or policy discrepancies
with the RUC's equipment time recommendations. However, we believed
that it was important to publish the specific equipment times that we
were proposing (or finalizing in the case of the final rule) when they
differed from the recommended values due to the effect that these
changes can have on the direct costs associated with equipment time.
Therefore, we finalized the separation of the equipment time
refinements associated with changes in clinical labor into a separate
table of refinements. For additional details, we direct readers to the
discussion in the CY 2020 PFS final rule (84 FR 62584).
Historically, the RUC has submitted a ``PE worksheet'' that details
the recommended direct PE inputs for our use in developing PE RVUs. The
format of the PE worksheet has varied over time and among the medical
specialties developing the recommendations. These variations have made
it difficult for both the RUC's development and our review of code
values for individual codes. Beginning with its recommendations for CY
2019, the RUC has mandated the use of a new PE worksheet for purposes
of their recommendation development process that standardizes the
clinical labor tasks and assigns them a clinical labor activity code.
We believe the RUC's use of the new PE worksheet in developing and
submitting recommendations will help us to simplify and standardize the
hundreds of different clinical labor tasks currently listed in our
direct PE database. As we did in previous calendar years, to facilitate
rulemaking for CY 2023, we are continuing to display two versions of
the Labor Task Detail public use file: one version with the old listing
of clinical labor tasks, and one with the same tasks crosswalked to the
new listing of clinical labor activity codes. These lists are available
on the CMS website under downloads for the CY 2023 PFS final rule at
<a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html</a>.
b. Updates to Prices for Existing Direct PE Inputs
In the CY 2011 PFS final rule with comment period (75 FR 73205), we
finalized a process to act on public requests to update equipment and
supply price and equipment useful life inputs through annual
rulemaking, beginning with the CY 2012 PFS proposed rule. Beginning in
CY 2019 and continuing through CY 2022, we conducted a market-based
supply and equipment pricing update, using information developed by our
contractor, StrategyGen, which updated pricing recommendations for
approximately 1300 supplies and 750 equipment items currently used as
direct PE inputs. Given the potentially significant changes in payment
that would occur, in the CY 2019 PFS final rule we finalized a policy
to phase in our use of the new direct PE input pricing over a 4-year
period using a 25/75 percent (CY 2019), 50/50 percent (CY 2020), 75/25
percent (CY 2021), and 100/0 percent (CY 2022) split between new and
old pricing. We believed that implementing the proposed updated prices
with a 4-year phase-in would improve payment accuracy, while
maintaining stability and allowing interested parties the opportunity
to address potential concerns about changes in payment for particular
items. This 4-year transition period to update supply and equipment
pricing concluded in CY 2022; for a more detailed discussion, we refer
readers to the CY 2019 PFS final rule with comment period (83 FR 59473
through 59480).
For CY 2023, we proposed to update the price of eight supplies and
two equipment items in response to the public submission of invoices
following the publication of the CY 2022 PFS final rule. The eight
supply and equipment items with proposed updated prices are listed in
the valuation of specific codes section of the preamble under Table 19,
CY 2023 Invoices Received for Existing Direct PE Inputs.
We received the following comments on our proposal to update the
price of eight supplies and two equipment items in response to the
public submission of invoices following the publication of the CY 2022
PFS final rule:
[[Page 69417]]
Comment: Several commenters submitted comments to clarify that the
invoice they included in their submission that was identified as the
Lysing Reagent (SL089) supply was intended for a different supply item,
the Lysing Solution (SL039). The commenters stated that our proposed
reduction of the price for the SL089 supply appeared to be based on the
invoice they had as misidentified as being for the SL089 supply, when
it was intended for the SL039 supply. The commenters asked CMS to
disregard the earlier mistaken submission and submitted additional
invoices with updated pricing for the SL089 supply for consideration to
correct the oversight in their original submission.
Response: We appreciate the clarification from the commenters and
the updated invoices with pricing information for the SL089 supply. We
are finalizing an increase in the price of the Lysing Reagent (SL089)
supply to $5.53 based on the average of the ten submitted invoices from
the commenter. (Note: the separate discussion of the SL039 supply below
is based on a different invoice submitted by a different interested
party unconnected to the SL089 supply. We believe it is appropriate to
consider and revise the price for the SL089 supply based on the
clarification and new invoices submitted by commenters for that supply.
However, given that the invoice for SL039 submitted by these commenters
was not intended to be submitted for the SL039 supply, we did not
consider the invoice for SL039 that was mistakenly submitted by these
commenters.)
Comment: Several commenters stated their support for the proposed
pricing changes to the EP014 and EP088 equipment items and the SA117,
SK082, SL024, SL030, SL061, and SL469 supply items. The commenters
urged CMS to finalize them as proposed in the final rule.
Response: We appreciate the support for our proposed pricing from
the commenters.
In the proposed rule, we did not propose to update the price of
another eight supplies and two equipment items which were the subject
of public submission of invoices. Our rationale for not updating these
prices is detailed below:
<bullet> Acetic acid 5% (SH001): We received an invoice submission
that would suggest an increase in price from 3 cents per ml to 9.5
cents per ml for the SH001 supply. However, the invoice stated that
this price was for an ``Alcian Blue 1% in 3% Acetic Acid pH 2.5''
supply and it is not clear that this represents the same supply as the
``Acetic acid 5%'' described by the SH001 supply item. We also do not
believe that the typical price for this supply has increased 200
percent in the 3 years since StrategyGen researched its pricing,
especially given that we increased the price for the SH001 supply from
1.2 cents in CY 2019 to its current price of 3 cents for CY 2022.
<bullet> Cytology, lysing soln (CytoLyt) (SL039): We received an
invoice submission that would suggest an increase in price from 6 cents
per ml to 80 cents per ml for the SL039 supply. We do not believe that
the typical price for this supply has increased 1200% in the 3 years
since StrategyGen researched its pricing, especially given that we
increased the price for the SL039 supply from 3.4 cents in CY 2019 to
its current price of 6 cents for CY 2022.
<bullet> Fixative (for tissue specimen) (SL068): We received an
invoice submission that would suggest an increase in price from 1.3
cents per ml to $4.87 for the SL068 supply. We believe that this was
the result of confusion on the part of the interested party regarding
the unit quantity for the SL068 supply. This item is paid on a per ml
basis and not a per unit basis; there was not enough information on the
submitted invoice to determine the price for the SL068 supply on a per
ml basis.
<bullet> Ethanol, 100% (SL189): We received an invoice submission
that would suggest an increase in price from 0.33 cents per ml to 1.2
cents per ml for the SL189 supply. However, we noted that the invoice
was based on the price for a single gallon of 100% ethanol which is
typically sold in much larger quantities than a single gallon. We found
that 100% ethanol was readily available for sale online in larger unit
sizes and the current price of 0.33 cents per ml (based on the past
StrategyGen market research) appears to be accurate based on online
bulk pricing. We also found that the submitted invoices for the
ethanol, 70% (SL190), ethanol, 95% (SL248), and stain, PAP OG-6 (SL491)
supplies were also based on pricing for a single gallon. Each of these
supply items was also available for purchase in larger unit quantities
which indicated that the current pricing remained typical for these
supplies. Therefore, we did not propose to update the prices for the
SL189, SL190, SL248 or SL491 supply, as we do not believe that the
higher prices paid for smaller quantities of these supplies would be
typical.
<bullet> Biohazard specimen transport bag (SM008): We received an
invoice submission that would suggest an increase in price from 8 cents
to 45 cents for the SM008 supply. However, it is not clear that the
item described on the invoice is the same item as the SM008 supply. The
invoice states only that the price is for ``Supplied Case Red Bags''
which was not enough information to determine if this would be typical
for the SM008 supply. We also do not believe that the typical price for
this supply has increased 460 percent in the 3 years since StrategyGen
researched its pricing, especially given that we increased the price
for the SM008 supply from 3.5 cents in CY 2019 to its current price of
8 cents for CY 2022.
<bullet> International Normalized Ratio (INR) analysis and
reporting system w-software (EQ312): We did not receive an invoice for
this equipment item, only a letter stating that the cost of the EQ312
equipment should be increased from the current price of $19,325 to
$1,600,000. We previously finalized a policy in the CY 2011 PFS final
rule (75 FR 73205) to update supply and equipment prices through an
invoice submission process. We require pricing data indicative of the
typical market price of the supply or equipment item in question to
update the price. It is not sufficient to state a different price
without providing information to support a change in pricing. Since we
did not receive an invoice to support the higher costs asserted in the
letter, we did not propose a new price for the EQ312 equipment item.
Interested parties are encouraged to submit invoices with their public
comments or, if outside the notice and comment rulemaking process, via
email at <a href="/cdn-cgi/l/email-protection#5707120807253e3432081e392722230802273336233217343a24793f3f2479303821"><span class="__cf_email__" data-cfemail="83d3c6dcd3f1eae0e6dccaedf3f6f7dcd6f3e7e2f7e6c3e0eef0adebebf0ade4ecf5">[email protected]</span></a>. We also noted that in order
to be considered a direct PE input, an equipment item must be
individually allocable to a particular patient for a particular
service. Costs associated with the implementation, maintenance, and
upgrade of equipment that is not individually allocable to a particular
patient for a particular service, or other costs associated with
running a practice, would typically be classified as forms of indirect
PE under our methodology.
Prior to the publication of the proposed rule, the same interested
parties that addressed the pricing of the EQ312 equipment item
questioned the assignment of the General Practice specialty crosswalk
for indirect PE for home Prothrombin Time (PT)/INR monitoring services.
These individuals stated that the predominant code used for PT/INR
monitoring (HCPCS code G0249) will be significantly and negatively
impacted by the continuing implementation over a 4-year period of
changes in the clinical labor rates
[[Page 69418]]
finalized in the CY 2022 PFS final rule (86 FR 65024). The individuals
requested that CMS change the crosswalk for home PT/INR monitoring
services to All Physicians or Pathology which would partially offset
the reduction that HCPCS code G0249 is facing due to changes in the
clinical labor rates.
We noted for these interested parties in the CY 2021 PFS final rule
(85 FR 84477 and 84478)that we finalized a crosswalk to the General
Practice specialty for home PT/INR monitoring services (HCPCS codes
G0248, G0249, and G0250). The data submitted by the commenters at the
time indicated that the direct-to-indirect cost percentages to furnish
home PT/INR monitoring are in the range of 31:69, similar to the ratio
associated with the General Practice specialty. We disagreed, as we did
in response to comments in the CY 2021 PFS final rule, that these home
PT/INR monitoring services should be reassigned to a different
specialty that is less reflective of the cost structure for these
services to offset reductions in payment for the services that result
from an unrelated policy proposal (the clinical labor pricing update).
We also noted that we had not received any new information about PT/INR
monitoring services since CY 2021 to indicate that Pathology would be
more accurate choices for use in indirect PE allocation but are open to
receiving new relevant information that CMS could consider in future
rulemaking. As such, we did not propose to change the assigned
specialty for PT/INR services; we direct interested parties to the
previous discussion of this topic in the CY 2021 PFS final rule (85 FR
84477 and 84478) and again in the CY 2022 PFS final rule (86 FR 65000).
Interested parties are encouraged to submit new information to support
the most accurate specialty choice to use in indirect PE allocation for
PT/INR monitoring services distinct from what has previously been
reviewed during the last two rule cycles.
Comment: A commenter submitted additional direct and indirect cost
data associated with pricing the INR analysis and reporting system w-
software (EQ312) equipment. The commenter stated that they arrived at
this amount based upon detailed review of all of the software system
and related expenses involved with furnishing home INR monitoring
services, including up front equipment and software purchases that
comprise direct equipment practice expenses, up front maintenance and
support services that comprise indirect practice expenses, and
recurring support and telecommunications services that also comprise
indirect practice expenses. The commenter submitted invoices detailing
a one-time direct cost of $69,621, a one-time indirect cost of
$84,126.31, and recurring annual costs of $963,638.52 associated with
the EQ312 equipment.
Response: We agree with the commenter that the invoices support an
increase in the purchase price of the equipment from the current
$19,325 to the price of $69,621 listed on the invoices. However, we
disagree that the one-time indirect cost of $84,126.31 or recurring
annual costs of $963,638.52 listed on the invoices would constitute
forms of direct PE which would be included in the equipment's price.
The indirect costs on the submitted invoices are for project management
and service order costs while the recurring annual costs comprise
monthly maintenance and telecommunications expenses. We agree that
these are real costs associated with the software, however they are
classified as forms of indirect PE under our current methodology. The
equipment cost formula that we use already incorporates maintenance and
interest rates costs into the per-minute pricing calculation; if we
were to include these expenses in the equipment cost as a form of
direct PE, we would be making duplicative payment for the same
expenses. We are therefore finalizing an increase in the price of the
EQ312 equipment to $69,621 but not including the indirect and recurring
annual costs in the equipment price as they are classified as forms of
indirect PE.
Comment: The same commenter reiterated their previous request made
in PFS rulemaking for CY 2021 for CMS to change the crosswalk for home
PT/INR monitoring services from the previously finalized General
Practice specialty to the All Physicians or Pathology specialty. The
commenter stated that the code used to report ongoing home PT/INR
monitoring (HCPCS code G0249) will again be significantly and
negatively impacted in CY 2023 as a result of changes in the clinical
labor rates with the corresponding budget neutrality adjustment and the
drop in the conversion factor. The commenter stated that the Pathology
specialty provides a better reflection of the indirect to direct costs
associated with home PT/INR monitoring and also reflects a more
appropriate indirect practice cost index (IPCI) for a service with very
high indirect costs, such as home PT/IN monitoring. The commenter
stated their belief that the indirect cost data captured in their
submitted invoices supports a crosswalk to the Pathology specialty
given the higher indirect costs of furnishing these services, including
the on-going software costs that are not captured in the direct PE
input; and that this specialty crosswalk change would help offset the
cuts in the proposed rate for HCPCS code G0249.
Response: We continue to believe that assignment of the Pathology
specialty for home PT/INR monitoring services as requested by the
commenters would not be appropriate. As we stated in the proposed rule,
we continue to disagree that these home PT/INR monitoring services
should be reassigned to a different specialty that is less reflective
of the cost structure for these services to offset reductions in
payment that result from an unrelated policy proposal (the clinical
labor pricing update). The commenter stated that home PT/INR monitoring
services have high indirect expenses and suggested that this supported
assignment of a specialty with a higher direct-to-indirect expense
ratio than General Practice (which has a 31 to 69 percent ratio), such
as Pathology (which has a 26 to 74 percent ratio). However, this is a
misunderstanding of the direct-to-indirect ratio for each specialty,
which is a ratio based on data from the Physician Practice Expense
Information Survey (PPIS) conducted back in 2007. The direct-to-
indirect ratio is merely a ratio, and not indicative of a specialty
having higher or lower indirect expenses in absolute terms. Higher
indirect expenses for a specialty are not correlated with a higher
percentage of indirects as compared with directs in that ratio; in
fact, the Independent Diagnostic Testing Facility specialty has both
the highest indirect expenses of any specialty, as well as a low direct
to indirect ratio (50 to 50%) precisely because IDTFs also have very
high direct expenses as well. Similarly, the Pathology specialty had
lower indirect expenses on the PPIS than the General Practice
specialty; this contradicts the commenter's contention that the high
indirect costs for home PT/INR monitoring services would justify a
change to the Pathology specialty. We continue to believe that the data
submitted by the commenters in the CY 2021 PFS final rule (85 FR 84477
and 84478) indicated that the direct-to-indirect cost percentages to
furnish home PT/INR monitoring are not reflective of the Pathology
specialty.
We note that the PE methodology, which relies on the allocation of
indirect costs based on the magnitude of direct costs, should
appropriately reflect the typical costs for the specialty the
commenters suggest. However, we are cognizant that approach may not
work
[[Page 69419]]
in all cases, particularly for newer services with costs that are not
well accounted for in our PE methodology, or services with cost
structures that do not necessarily reflect the specialties furnishing
them. Although we have previously assigned the General Practice
specialty to these codes, interested parties have provided additional
information about these services suggesting assignment to a different
specialty for purposes of allocating indirect cost. We believe that, as
we work to identify ways to update the PE methodology and our data
sources to better reflect costs for all services and changes in medical
practice, it is best to apply a consistent approach in setting rates
that does not over-allocate cost, which could result in significant
increases in payments for these services. Considering our concerns, we
will switch the specialty assignment for these services to the All
Physician specialty, consistent with how we have treated other new
services that do not quite fit our PE methodology in recent rulemaking
(see for example the discussion of HCPCS codes G2082 and G2083 in the
CY 2022 PFS final rule (86 FR 65014 and 65015) and again in this rule).
We believe this will allow for improved stability in payments, and
preserve access to this care for beneficiaries, while we work to
identify longer term solutions.
<bullet> Remote musculoskeletal therapy system (EQ402): We received
an invoice submission for a price of $1,000 for the EQ402 equipment
item. Since this equipment already has a price of $1,000 we did not
propose to make any changes in the pricing; we thank the interested
party for their invoice submission confirming the current price.
The following are additional comments that we received associated
with supply and equipment pricing:
Comment: Several commenters requested the creation of a new supply
code to describe an alternate form of a basic injection pack.
Commenters stated that for many services the use of Chloraprep
(chlorhexidine) for intact skin preparation has become more typical
than Betadine (povidone-iodine solution) and that the current basic
injection pack described by supply code SA041 no longer accurately
reflects typical resource use. Commenters requested that CMS create an
alternative pack which instead includes Chloraprep (chlorhexidine) so
that specialties can select the injection pack with the most
appropriate antiseptic. Commenters requested that the new pack should
mirror the SA041 basic injection pack with the addition of the patient
prep swab, 1.5 ml chloraprep (SJ081) supply and removal of the Betadine
povidone soln (SJ041) and sponge tipped applicator (SG009) supplies.
Response: We appreciate the feedback from the commenters on the
changing nature of what supplies are typically included in basic
injection packs, and as a result, we are creating an alternate
injection pack with the new supply code SA135 which will be priced at
$14.12 as detailed in Table 5.
[GRAPHIC] [TIFF OMITTED] TR18NO22.005
After consideration of the public comments, we are finalizing the
creation of the SA135 alternate injection pack. We note that this
supply is not currently included in any CPT or HCPCS codes but has been
added to our direct PE database for future use in services.
Comment: A commenter expressed concern that the prices for the
injectable fluorescein (SH033) and lidocaine (SH049) supplies were too
low. The commenter submitted invoices for both supply items and
requested that they be used to update their respective prices.
Response: After reviewing the invoices, we are updating the price
of the fluorescein injectable (5ml uou) (SH033) supply from $38.02 to
$49.13 based on an average of prices from five submitted invoices. We
did not include the sixth invoice for the SH033 supply (with a listed
price of $64.80) in this average as it described a different type of
injectable fluorescein from the other five invoices (it described 2 mL
of a 25% solution as opposed to 5 mL of a 10% solution on the other
five invoices).
We are not updating the price of the lidocaine 2% w-epidural
injectable (Xylocaine w-epi) (SH049) supply as the two submitted
invoices were not usable for pricing. One of the invoices detailed a
3.5% type of lidocaine while the SH049 supply code specifies that it is
for 2% lidocaine. The other submitted invoice specifically noted that
it was a ``preservative free'' version of lidocaine which was more
expensive than the typical item; we do not agree that this invoice
would be accurate for establishing a new national price for the SH049
supply. We remain interested in additional information regarding
updated pricing information for the SH049 and other supply/equipment
codes; as noted below, interested parties are encouraged to submit
invoices with their public comments or, if outside the notice and
comment rulemaking
[[Page 69420]]
process, via email at <a href="/cdn-cgi/l/email-protection#7c2c39232c0e151f192335120c090823290c181d08193c1f110f5214140f521b130a"><span class="__cf_email__" data-cfemail="b2e2f7ede2c0dbd1d7edfbdcc2c7c6ede7c2d6d3c6d7f2d1dfc19cdadac19cd5ddc4">[email protected]</span></a>.
We did not make any proposals associated with HCPCS codes G0460
(Autologous platelet rich plasma for chronic wounds/ulcers, including
phlebotomy, centrifugation, and all other preparatory procedures,
administration and dressings, per treatment) or G0465 (Autologous
platelet rich plasma (prp) for diabetic chronic wounds/ulcers, using an
FDA-cleared device (includes administration, dressings, phlebotomy,
centrifugation, and all other preparatory procedures, per treatment))
in the CY 2023 PFS proposed rule. In the CY 2021 PFS final rule, we
established contractor pricing for HCPCS code G0460 for CY 2021 (85
FR84497-84498). In the CY 2022 PFS final rule, we finalized a policy to
maintain contractor pricing for HCPCS code G0460 as we did not have
sufficient information to establish national pricing, and we did not
receive public comments on either the proposal or comment solicitation
to support establishing a national payment rate (86 FR 65019-65020). It
remains unclear to us what the typical supply inputs would be for HCPCS
code G0460 and whether they would include the use of the new 3C patch
system.
Comment: Following the publication of the CY 2023 PFS proposed
rule, we received two comments on the pricing of HCPCS codes G0460 and
G0465, and the 3C patch system supply which is topically applied for
the management of exuding cutaneous wounds, such as leg ulcers,
pressure ulcers, and diabetic ulcers and mechanically or surgically-
debrided wounds. One commenter submitted invoices associated with the
pricing of the 3C patch system (SD343) supply for which we established
a price of $625.00 in the CY 2021 PFS final rule (85 FR 84498). The
commenter requested that CMS update its supply database based on
invoices submitted for SD343 to reflect an updated price of $750.00 per
unit. The commenter also requested national pricing for HCPCS codes
G0460 and G0465, expressing concern that insufficient payment
disproportionately impacts vulnerable populations. The commenter
requested a payment rate of $1,408.90 for HCPCS G0465 in the office
setting, stating that this rate would appropriately account for the
purchase of the 3C patch, as well as the other related costs and supply
inputs required for point of care creation and administration.
Another commenter requested the establishment of new codes to allow
for quantity-specific payment when multiple patches are needed to treat
wounds of various surface sizes. Both commenters stated that many
months have passed since CMS updated NCD 270.3 in April 2021 (for
Blood-Derived Products for Chronic, Non-Healing Wounds), however, the
3C patch remains nearly inaccessible in the office and facility
settings because of insufficient payment by MACs. Both commenters
suggested that, to date, just one MAC has assigned a payment rate for
HCPCS code G0465, which the commenters believe is too low to cover the
cost to purchase and administer the patch. One commenter expressed
support for the professional fee to administer the patch in the
facility setting determined by this MAC, First Coast ($135.97), with
the appropriate geographic adjustments, and urged CMS either to apply
this rate nationally or to require MACs to set a carrier price in a
timely and transparent manner. Both commenters stated that health care
providers in the remaining MAC jurisdictions have faced denials even
when they follow the coverage guidelines specified by our NCD 270.3.
One commenter contended that, as of 2019, 27.5 percent of the
traditional Medicare beneficiaries had a diabetes diagnosis. Both
commenters highlighted that, within this population, the prevalence of
diabetes is significantly higher among Medicare FFS beneficiaries who
identify as Native American or Black/African American relative to their
white counterparts, and furthermore, these historically underserved
populations are also more likely to develop foot ulcers and infections
that require amputation. The commenters stated that the 3C Patch has
the potential to help cure these concerning health disparities and
requested that we make the 3C Patch accessible by establishing national
pricing for HCPCS codes G0460 and G0465.
Response: We do not have enough information to establish national
pricing at this time. We will consider the commenters' feedback for
future rulemaking while maintaining contractor pricing for CY 2023,
which will allow for more flexibility for contractors to establish
appropriate pricing using available information. We appreciate the
invoice submission with additional pricing information for the SD343
supply and will update our supply database for supply code SD343 at a
price of $678.57 based on an average of the submitted invoices.
(1) Invoice Submission
We remind readers that we routinely accept public submission of
invoices as part of our process for developing payment rates for new,
revised, and potentially misvalued codes. Often these invoices are
submitted in conjunction with the RUC-recommended values for the codes.
To be included in a given year's proposed rule, we generally need to
receive invoices by the same February 10th deadline we noted for
consideration of RUC recommendations. However, we will consider
invoices submitted as public comments during the comment period
following the publication of the PFS proposed rule, and would consider
any invoices received after February 10th or outside of the public
comment process as part of our established annual process for requests
to update supply and equipment prices. Interested parties are
encouraged to submit invoices with their public comments or, if outside
the notice and comment rulemaking process, via email at
<a href="/cdn-cgi/l/email-protection#5f0f1a000f2d363c3a0016312f2a2b000a2f3b3e2b3a1f3c322c7137372c71383029"><span class="__cf_email__" data-cfemail="08584d57587a616b6d574166787d7c575d786c697c6d486b657b2660607b266f677e">[email protected]</span></a>.
c. Clinical Labor Pricing Update
Section 220(a) of the PAMA provides that the Secretary may collect
or obtain information from any eligible professional or any other
source on the resources directly or indirectly related to furnishing
services for which payment is made under the PFS, and that such
information may be used in the determination of relative values for
services under the PFS. Such information may include the time involved
in furnishing services; the amounts, types and prices of PE inputs;
overhead and accounting information for practices of physicians and
other suppliers, and any other elements that would improve the
valuation of services under the PFS.
Beginning in CY 2019, we updated the supply and equipment prices
used for PE as part of a market-based pricing transition; CY 2022 was
the final year of this 4-year transition. We initiated a market
research contract with StrategyGen to conduct an in-depth and robust
market research study to update the supply and equipment pricing for CY
2019, and we finalized a policy in CY 2019 to phase in the new pricing
over a period of 4 years. However, we did not propose to update the
clinical labor pricing, and the pricing for clinical labor has remained
unchanged during this pricing transition. Clinical labor rates were
last updated for CY 2002 using Bureau of Labor Statistics (BLS) data
and other supplementary sources where BLS data were not available; we
refer readers to the full discussion in the CY 2002 PFS final rule for
additional details (66 FR 55257 through 55262).
Interested parties raised concerns that the long delay since
clinical labor
[[Page 69421]]
pricing was last updated created a significant disparity between CMS'
clinical wage data and the market average for clinical labor. In recent
years, a number of interested parties suggested that certain wage rates
were inadequate because they did not reflect current labor rate
information. Some interested parties also stated that updating the
supply and equipment pricing without updating the clinical labor
pricing could create distortions in the allocation of direct PE. They
argued that since the pool of aggregated direct PE inputs is budget
neutral, if these rates are not routinely updated, clinical labor may
become undervalued over time relative to equipment and supplies,
especially since the supply and equipment prices are in the process of
being updated. There was considerable interest among interested parties
in updating the clinical labor rates, and when we solicited comment on
this topic in past rules, such as in the CY 2019 PFS final rule (83 FR
59480), interested parties supported the idea.
Therefore, we proposed to update the clinical labor pricing for CY
2022, in conjunction with the final year of the supply and equipment
pricing update (86 FR 39118 through 39123). We believed it was
important to update the clinical labor pricing to maintain relativity
with the recent supply and equipment pricing updates. We proposed to
use the methodology outlined in the CY 2002 PFS final rule (66 FR
55257), which draws primarily from BLS wage data, to calculate updated
clinical labor pricing. As we stated in the CY 2002 PFS final rule, the
BLS' reputation for publishing valid estimates that are nationally
representative led to the choice to use the BLS data as the main
source. We believe that the BLS wage data continues to be the most
accurate source to use as a basis for clinical labor pricing and this
data will appropriately reflect changes in clinical labor resource
inputs for purposes of setting PE RVUs under the PFS. We used the most
current BLS survey data (2019) as the main source of wage data for our
CY 2022 clinical labor proposal.
We recognized that the BLS survey of wage data does not cover all
the staff types contained in our direct PE database. Therefore, we
crosswalked or extrapolated the wages for several staff types using
supplementary data sources for verification whenever possible. In
situations where the price wages of clinical labor types were not
referenced in the BLS data, we used the national salary data from the
Salary Expert, an online project of the Economic Research Institute
that surveys national and local salary ranges and averages for
thousands of job titles using mainly government sources. (A detailed
explanation of the methodology used by Salary Expert to estimate
specific job salaries can be found at <a href="http://www.salaryexpert.com">www.salaryexpert.com</a>). We
previously used Salary Expert information as the primary backup source
of wage data during the last update of clinical labor pricing in CY
2002. If we did not have direct BLS wage data available for a clinical
labor type, we used the wage data from Salary Expert as a reference for
pricing, then crosswalked these clinical labor types to a proxy BLS
labor category rate that most closely matched the reference wage data,
similar to the crosswalks used in our PE/HR allocation. For example,
there is no direct BLS wage data for the Mammography Technologist
(L043) clinical labor type; we used the wage data from Salary Expert as
a reference and identified the BLS wage data for Respiratory Therapists
as the best proxy category. We calculated rates for the ``blend''
clinical labor categories by combining the rates for each labor type in
the blend and then dividing by the total number of labor types in the
blend.
As in the CY 2002 clinical labor pricing update, the proposed cost
per minute for each clinical staff type was derived by dividing the
average hourly wage rate by 60 to arrive at the per minute cost. In
cases where an hourly wage rate was not available for a clinical staff
type, the proposed cost per minute for the clinical staff type was
derived by dividing the annual salary (converted to 2021 dollars using
the Medicare Economic Index) by 2080 (the number of hours in a typical
work year) to arrive at the hourly wage rate and then again by 60 to
arrive at the per minute cost. We ultimately finalized the use of
median BLS wage data, as opposed to mean BLS wage data, in response to
comments in the CY 2022 PFS final rule. To account for the employers'
cost of providing fringe benefits, such as sick leave, we finalized the
use of a benefits multiplier of 1.296 based on a BLS release from June
17, 2021 (USDL-21-1094). As an example of this process, for the
Physical Therapy Aide (L023A) clinical labor type, the BLS data
reflected a median hourly wage rate of $12.98, which we multiplied by
the 1.296 benefits modifier and then divided by 60 minutes to arrive at
the finalized per-minute rate of $0.28.
After considering the comments on our CY 2022 proposals, we agreed
with commenters that the use of a multi-year transition would help
smooth out the changes in payment resulting from the clinical labor
pricing update, avoiding potentially disruptive changes in payment for
affected interested parties, and promoting payment stability from year-
to-year. We believed it would be appropriate to use a 4-year
transition, as we have for several other broad-based updates or
methodological changes. While we recognized that using a 4-year
transition to implement the update means that we will continue to rely
in part on outdated data for clinical labor pricing until the change is
fully completed in CY 2025, we agreed with the commenters that these
significant updates to PE valuation should be implemented in the same
way, and for the same reasons, as for other major updates to pricing
such as the recent supply and equipment update. Therefore, we finalized
the implementation of the clinical labor pricing update over 4 years to
transition from current prices to the final updated prices in CY 2025.
We finalized the implementation of this pricing transition over 4
years, such that one quarter of the difference between the current
price and the fully phased-in price is implemented for CY 2022, one
third of the difference between the CY 2022 price and the final price
is implemented for CY 2023, and one half of the difference between the
CY 2023 price and the final price is implemented for CY 2024, with the
new direct PE prices fully implemented for CY 2025. An example of the
transition from the current to the fully-implemented new pricing that
we finalized in the CY 2022 PFS final rule is provided in Table 6.
[[Page 69422]]
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(1) CY 2023 Clinical Labor Pricing Update Proposals
For CY 2023, we received information from one interested party
regarding the pricing of the Histotechnologist (L037B) clinical labor
type. The interested party provided data from the 2019 Wage Survey of
Medical Laboratories which supported an increase in the per-minute rate
from the $0.55 finalized in the CY 2022 PFS final rule to $0.64. This
rate of $0.64 for the L037B clinical labor type is a close match to the
online salary data that we had for the Histotechnologist and matches
the $0.64 rate that we initially proposed for L037B in the CY 2022 PFS
proposed rule. Based on the wage data provided by the commenter, we
proposed this $0.64 rate for the L037B clinical labor type for CY 2023;
we also proposed a slight increase in the pricing for the Lab Tech/
Histotechnologist (L035A) clinical labor type from $0.55 to $0.60 as it
is a blend of the wage rate for the Lab Technician (L033A) and
Histotechnologist clinical labor types. We also proposed the same
increase to $0.60 for the Angio Technician (L041A) clinical labor type,
as we previously established a policy in the CY 2022 PFS final rule
that the pricing for the L041A clinical labor type would match the rate
for the L035A clinical labor type (86 FR 65032). The proposed pricing
increase for these three clinical labor types is included in Table 7;
the CY 2023 pricing for all other clinical labor types would remain
unchanged from the pricing finalized in the CY 2022 PFS final rule.
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Comment: Several commenters noted that there was an error in the
proposed clinical labor pricing table in the CY 2023 PFS proposed rule
(87 FR 45874) where the final rate per minute for the L041A Angio
Technician clinical labor type was incorrectly listed at 0.58 rather
than the correct 0.60 as specified in the preamble text.
Response: We agree that the incorrect rate per minute for the L041A
clinical labor type was reflected in Table 5 of the proposed rule, and
have corrected this error in Table 7 of this final rule. We apologize
for any confusion that may have been caused by this mistake.
As was the case for the market-based supply and equipment pricing
update, the clinical labor rates will remain open for public comment
over the course of the 4-year transition period. We updated the pricing
of a number of clinical labor types in the CY 2022 PFS final rule in
response to information provided by commenters. For the full discussion
of the clinical labor pricing update, we direct readers to the CY 2022
PFS final rule (86 FR 65020 through 65037).
The following is a summary of the comments we received and our
responses.
Comment: Several commenters stated their support for the proposed
pricing updates to the Histotechnologist (L037B) and the Lab Tech/
Histotechnologist (L035A) clinical labor types and urged CMS to
finalize the updated pricing.
Response: We appreciate the support for our proposals from the
commenters.
Comment: Several commenters requested that CMS update the clinical
labor description of the Angio Technician (L041A) clinical labor type
to ``Vascular Interventional Technologist.'' The commenters stated that
this updated title for the L041A clinical labor type would better align
with industry recognition of the advanced certification required to
assist physicians with minimally invasive, image-guided vascular
procedures.
Response: We appreciate the feedback and are finalizing a change in
the descriptive text of the L041A clinical labor type from ``Angio
Technician'' to ``Vascular Interventional Technologist'' as requested
by the commenter.
Comment: Several commenters disagreed with the proposed pricing for
several different technologist clinical labor types. The commenters
stated that basic certification is required for a radiologic
technologist and that there are additional advanced modality
certifications, such as for Computed Tomography (CT), Magnetic
Resonance (MR), and Vascular Intervention (VI), which require
additional educational programs and training for these advanced
modalities/disciplines. The commenters stated that the proposed pricing
for the Vascular Interventional Technologist (L041A), the Mammography
Technologist (L043A), the CT Technologist (L046A), and the MRI
Technologist (L047A) clinical labor types did not reflect the training
and certification required for these occupations. The commenters
submitted wage data from the 2022 Radiologic Technologist Wage and
Salary Survey and requested that the pricing for these four clinical
labor types be updated to reflect the wage data from the submitted
survey.
Response: When we initiated the clinical labor pricing update last
year, we lacked specific wage data for the Vascular Interventional
Technologist (L041A), the Mammography Technologist (L043A), and the CT
Technologist (L046A) clinical labor types; and relied on crosswalks for
their pricing. Based on the information contained in the 2022
Radiologic Technologist Wage and Salary Survey, we now have specific
wage data which will allow us to no longer rely on crosswalks for
pricing for these clinical labor types. Therefore, we are finalizing an
update in the pricing of these three clinical labor types: from 0.60 to
0.84 for the Vascular Interventional Technologist (L041A), from 0.63 to
0.79 for the Mammography Technologist (L043A), and from 0.76 to 0.78
for the CT Technologist (L046A). For the MRI Technologist (L047A), we
were able to make use of direct BLS wage data for the occupation. In
addition, since we continue to believe that the BLS is the most
accurate source of information for wage data, we are not finalizing an
increase in the pricing of the L047A clinical labor type. As a
reminder, CY 2023 is the second year of the four-year transition to the
updated clinical labor pricing, and we will continue to transition the
prices established for these three clinical labor types over the next
two years of the update.
Comment: A commenter thanked CMS for the agency's recent work in
updating clinical labor pricing and stated that nurses and other
nonphysician providers have been drastically undervalued for many years
which could help to alleviate staffing shortages. The commenter stated
that the table of clinical labor types in the proposed rule listed
registered nurses (RNs) as their own category for labor pricing under
the L051A clinical labor code, but then also included RNs in eight
other categories of clinical labor with other practitioners. The
commenter requested having RNs identified uniquely and removing the RN
option from the other clinical labor categories, as the commenter
stated that leaving RNs in other categories would only make the
clinical labor update more confusing and could end up disadvantaging
RNs in the long term which could exacerbate the current staffing
shortage and worsen patient care.
Response: We do not agree that RNs should be removed from the other
eight clinical labor types currently listed in our direct PE database.
There is a long history of using these ``blended'' clinical labor
categories under the PFS, and together these eight clinical labor types
make up the overwhelming majority of all clinical labor (especially the
RN/LPN/MTA blend described by the L037D clinical labor code). In the
absence of alternative pricing information to value these blended
clinical labor types, we continue to believe that the proposed prices
are the most accurate valuations. We also note for the commenter that
the pricing for the RN (L051A) clinical labor type is drawn directly
from BLS wage data and the inclusion of RNs in other ``blended''
clinical labor types has no effect on the pricing of the L051A category
itself.
Comment: A commenter stated that the current RN/LPN (L042A)
clinical labor type assigned to CPT code 36516 did not accurately
reflect the costs associated with this procedure. The
[[Page 69425]]
commenter stated that CPT code 36516 is a complex extracorporeal blood
therapy procedure, conducted over a 5-1/2 to 6-hour period, that
requires extensively trained and experienced nurse operators known as
apheresis nurses. The commenter stated that the current assignment of
the RN/LPN (L042A) clinical labor type for CPT code 36516 seriously
undervalues the critical nurse labor cost component of this nearly six-
hour procedure and requested that CMS establish a new ``Apheresis
Nurse'' clinical labor type with a valuation of approximately $1.14 per
minute. The commenter also stated that there are additional supply
items not currently captured in the direct PE inputs for CPT code 36516
including a 4-liter accessory waste bag, several types of fluids, and
biohazard waste costs.
Response: We remind the commenter that we did not propose the
creation of any new clinical labor types nor did we propose any changes
in the direct PE inputs for CPT code 36516. If the commenter has reason
to believe that the RN/LPN (L042A) clinical labor type is not capturing
the typical labor costs associated with CPT code 36516 or that there
are additional supply costs not being captured in its direct PE inputs,
we encourage them to nominate CPT code 35616 as potentially misvalued
for additional review.
Comment: Several commenters stated that, to promote predictability
and stability in physician payments and mitigate the financial impacts
of significant fluctuations in physician payments that might accompany
the clinical labor pricing update, CMS should consider using a
threshold to limit the level of reductions in payments for specific
services that would occur in a single year. Several commenters noted
that in the CY 2023 Inpatient Prospective Payment System final rule,
CMS implemented a permanent 5 percent cap on the reduction in an MS-
DRG's relative weight in a given fiscal year; the commenters suggested
applying a similar cap of 5 percent, 10 percent, or 15 percent for the
Physician Fee Schedule.
Response: We agree with the commenters on the importance of
avoiding potentially disruptive changes in payment for affected
interested parties and the need to promote payment stability from year-
to-year. This is why we finalized the use of a multi-year transition
for the clinical labor update in last year's CY 2022 PFS final rule to
help smooth out the changes in payment resulting from the updated data
(86 FR 65024). We also note for the commenters that 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. 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). Given the
mechanisms already in place to smooth payment changes and promote
stability, and considering the need to establish appropriate resource-
based valuations, we do not believe the limitation suggested by
commenters is warranted.
Comment: Several commenters stated that CMS should prioritize
stability and predictability over ongoing updates and temporarily
freeze the implementation of further policy updates. These commenters
requested that CMS pause the ongoing clinical labor pricing update to
avoid significant payment redistributions associated with the pricing
update.
Response: We finalized the implementation of the clinical labor
pricing update through the use of a 4-year transition in the CY 2022
PFS final rule (86 FR 65024). As we stated at the time, although we
recognize that payment for some services will be reduced as a result of
the pricing update due to the budget neutrality requirements of the
PFS, we do not believe that this is a reason to refrain from updating
clinical labor pricing to reflect changes in resource costs over time.
The PFS is a resource-based relative value payment system that
necessarily relies on accuracy in the pricing of resource inputs;
continuing to use clinical labor cost data that are nearly two decades
old would maintain distortions in relativity that undervalue many
services which involve a higher proportion of clinical labor. As noted
above, we also finalized the implementation of the pricing update
through a 4-year transition to help address the concerns of the
commenters about stabilizing RVUs and reducing large fluctuations in
year-to-year payments.
After consideration of the comments, we are finalizing the clinical
labor prices as shown in Table 8.
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As was the case for the market-based supply and equipment pricing
update, the clinical labor rates will remain open for public comment
over the remaining course of the 4-year transition period. We welcome
additional feedback on clinical labor pricing from commenters in next
year's rulemaking cycle, especially any data that will continue to
improve the accuracy of our finalized pricing.
d. Technical Corrections to Direct PE Input Database and Supporting
Files
We did not propose any technical corrections to the direct PE input
database or supporting files in the proposed rule. However, commenters
identified the following issues after we issued the CY 2023 PFS
proposed rule:
Comment: Several commenters requested that the SD332 bubble
contrast supply, an ultrasound-specific contrast agent, should be
removed from the direct PE inputs for CPT codes 76978 (Ultrasound,
targeted dynamic microbubble sonographic contrast characterization
(non-cardiac); initial lesion) and 76979 (Ultrasound, targeted dynamic
microbubble sonographic contrast characterization (non-cardiac); each
additional lesion with separate injection). Commenters stated that this
supply item does not need to be included in the direct PE inputs for
these two CPT codes because contrast agents are reported separately
using existing HCPCS Level II supply codes, such as Q9950 (Injection,
sulfur hexafluoride lipid microspheres, per ml).
Response: We appreciate the additional information from the
commenters indicating that the SD332 supply is duplicative for CPT
codes 76978 and 76979 since the supply is separately reported using
HCPCS Level II supply codes. Therefore, we are finalizing the removal
of the SD332 supply from these two CPT codes.
In the CY 2020 PFS final rule (84 FR 63102 through 63104), we
created two new HCPCS G codes, G2082 and G2083, effective January 1,
2020, on an interim final basis for the provision of self-administered
esketamine. In the CY 2021 PFS final rule, we finalized a proposal to
refine the values for HCPCS codes G2082 and G2083 using a building
block methodology that summed the values associated with several codes
(85 FR 84641 through 84642). Following the publication of the CY 2021
PFS final rule, interested parties expressed concerns that the
finalized PE RVU had decreased for HCPCS codes G2082 and G2083 as
compared to the proposed valuation and as compared to the previous CY
2020 interim final valuation. Interested parties questioned whether
there had been an error in the PE allocation since CMS had finalized
increases in the direct PE inputs for the services.
We reviewed the indirect PE allocation for HCPCS codes G2082 and
G2083 in response to the interested party inquiry and discovered a
technical change that was applied in error. Specifically, we
inadvertently assigned a different physician specialty than we intended
(``All Physicians'') to HCPCS codes G2082 and G2083 for indirect PE
allocation in our ratesetting process during valuation of these codes
in the CY 2020 PFS final rule, and continued that assignment into the
CY 2021 PFS proposed rule. This specialty assignment caused the PE
value for these services to be higher than anticipated for CY 2020. We
intended to revise the assigned physician specialty for these codes to
``General Practice'' in the CY 2021 PFS final rule; however, we
neglected to discuss this change in the course of PFS rulemaking for CY
2021. Since we initially applied this technical change in the CY 2021
PFS final rule without providing an explanation, we issued a correction
notice (86 FR 14690) to remove this change from the CY 2021 PFS final
rule, and to instead maintain the All Physicians specialty assignment
through CY 2021. We apologize for any confusion this may have caused.
For CY 2022, we finalized our proposal to maintain the currently
assigned physician specialty for indirect PE allocation for HCPCS codes
G2082 and G2083 to maintain payment consistency with the rates
published in the CY 2020 PFS final rule and the CY 2021 PFS proposed
rule. Although we had previously intended to assign the General
Practice specialty to these codes, interested parties have provided
additional information about these services suggesting that maintaining
the All Physicians specialty assignment for these codes will help
maintain payment stability and preserve access to this care for
beneficiaries. We solicited public comments to help us discern which
specialty would be the most appropriate to use for indirect PE
allocation for HCPCS codes G2082 and G2083. We note that the PE
methodology, which relies on the allocation of indirect costs based on
the magnitude of direct costs, should appropriately reflect the typical
costs for the specialty the commenters suggest. For example, we do not
believe
[[Page 69428]]
it would be appropriate to assign the Psychiatry specialty for these
services given that HCPCS codes G2082 and G2083 include the high direct
costs associated with esketamine supplies. The Psychiatry specialty is
an outlier compared to most other specialties, allocating indirect
costs at a 15:1 ratio based on direct costs because psychiatry services
typically have very low direct costs. Assignment of most other
specialties would result in allocation of direct costs at roughly a 3:1
ratio. We requested that commenters explain in their comments how the
indirect PE allocation would affect the payment for these services.
Specifically, to ensure appropriate payment for HCPCS codes G2082 and
G2083, we wanted to get a better understanding of the indirect costs
associated with these services, relative to other services furnished by
the suggested specialty.
As we noted in the CY 2021 PFS final rule (85 FR 84498 through
84499) and CY 2022 PFS final rule (86 FR 65042), the RAND Corporation
was studying potential improvements to our PE allocation methodology
and the data that underlie it. We were interested in exploring ways
that the PE methodology can be updated, which could include
improvements to the indirect PE methodology to address newer services
similar to those described by G2082 and G2083 which have a direct to
indirect ratio that does not match their most commonly billed
specialties. In CY 2022, we agreed with the commenters who supported
the proposal to maintain the currently assigned physician specialty
(All Physicians) for indirect PE allocation for these codes. After
consideration of the public comments, we finalized our proposal to
maintain the All Physicians specialty for indirect PE allocation for
HCPCS codes G2082 and G2083 for CY 2022.
For CY 2023, we did not make any proposals regarding the assigned
physician specialty for indirect PE allocation for HCPCS codes G2082
and G2083; however, we received public comments on this topic from
interested parties. The following is a summary of the comments we
received and our responses.
Comment: One commenter urged CMS to adopt a clear and recurring
process to update, on an annual basis, supply costs for codes G2082 and
G2083 with the most recently available wholesale acquisition cost (WAC)
data and to include the ``Psychiatry'' specialty type in the allocation
of the indirect PE for G2082 and G083. The commenter believed these
recommended actions directly support the following two priority CMS
initiatives: the CMS Behavioral Health Strategy and an approach to
improve the PE methodology within the PFS. The commenter stated that
the technical correction for CY 2021 to assign these HCPCS codes to the
``All Physician'' specialty preserved Medicare beneficiary access and
was an improvement over the original CMS intent to assign them to the
``General Practice'' specialty but ``demonstrated the sensitive and
intricate dependency of Medicare beneficiary access on reimbursement.''
The commenter urged CMS to provide additional insight behind its
specialty designation of ``All Physicians'' for HCPCS codes G2082 and
G2083, and argued that CMS deviated from its normal practice of using
the specialty mix contained in the claims data for these codes. The
commenter stated that, while CMS has cited concerns in applying the
actual specialty mix, CMS has not provided sufficient information or
data to suggest that the rates produced when the ``Psychiatry''
specialty is included produces an inaccurate payment. The commenter
also requested that CMS consider the implementation of policies that
allow for the construction of specialty blends in unique cases, such as
HCPCS codes G2082 and G2083, in which the agency has concerns about
applying a service's actual specialty mix. The commenter stated that,
based on utilization data published with the CY 2023 PFS proposed rule,
over 70 percent of practitioners administering esketamine are
psychiatrists. Considering that it is primarily psychiatrists
administering esketamine and CMS recognizes the imperative to improve
the indirect PE and PFS rate setting methodology for behavioral health
services, the commenter recommended a transition of specialty
designation for HCPCS codes G2082 and G2083 to its actual specialty mix
through a three-year phased-in approach. The commenter recognized CMS'
concerns about assigning the Psychiatry specialty for HCPCS codes G2082
and G2083 given the higher supply costs for these services, but
recommended that CMS adopt a specialty blend of three-fourths
``Psychiatry'' specialty type and one-fourth ``All Physician''
specialty type. The commenter believed that this specialty blend would
result in appropriate reimbursement and acknowledge the role of
psychiatrists while also addressing our concerns.
The commenter also stated that in CY 2021, CMS updated the price
for the esketamine supply item for these codes using wholesale
acquisition cost (WAC) data from the most recent available quarter, but
did not again update the price using the latest WAC data in the CY 2022
PFS final rule, or propose to update the price in the CY 2023 PFS
proposed rule. The commenter stated that, based on WAC data on
submitted invoices for the most recently available quarter, the supply
input that describes 56 mg (supply code SH109) for HCPCS code G2082
should be priced at $683.67, and the supply input describing 84 mg of
esketamine (supply code SH110) for HCPCS code G2083 should be priced at
$1025.50. The commenter urged CMS to align with its prior action and
stated intention to address input price updates in future rulemaking by
updating the supply pricing for SH109 and SH110 using WAC data
annually, and to make clear the additional data or processes interested
parties should follow to support annual updates for the esketamine
supply items for these codes.
Response: We continue to believe that the All Physicians specialty
most accurately captures the indirect PE allocation associated with
HCPCS codes G2082 and G2083. We do not assign a blended combination of
specialties for any other services and the commenters did not provide
new data to support a change in specialty assignment aside from noting
that many practitioners who report HCPCS codes G2082 and G2083 are in
the Psychiatry specialty. We continue to believe that it would not be
accurate to assign the Psychiatry specialty for HCPCS codes G2082 and
G2083 due to its outlier status among specialties, whereby Psychiatry
allocates indirect costs at a 15:1 ratio based on direct costs as
compared to most other specialties having approximately a 3:1 ratio. We
do not believe that Psychiatry would be an accurate specialty
designation for HCPCS codes G2082 and G2083 given the high direct costs
associated with esketamine (which would translate into
disproportionately high indirect PE allocation at the 15:1 ratio). We
also disagree that these services should be reassigned to a different
specialty to offset reductions in payment that result from an unrelated
policy proposal (the clinical labor pricing update).
However, to account for the cost of the provision of the self-
administered esketamine as a direct PE input, we agree with the
commenters that we should update supply costs to reflect the wholesale
acquisition cost (WAC) data from the most recent available quarter. For
HCPCS code G2082, we are finalizing an updated price of $683.67 for the
supply input that describes 56 mg (supply code SH109) and for HCPCS
code G2083, we are finalizing an
[[Page 69429]]
updated price of $1025.50 for the supply input describing 84 mg of
esketamine (supply code SH110) based on the submitted invoices.
After consideration of the public comments, we continue to believe
that the All Physician specialty is the most accurate specialty
assignment for HCPCS codes G2082 and G2083, and we are not finalizing
any changes to the specialty assignment. However, as noted above we are
finalizing an increase in the price of the SH109 supply to $683.67 and
an increase in the price of the SH110 supply to $1025.50 to reflect the
updated market-based prices associated with esketamine. We also
received comments on other policies relating to these services that
were not addressed in the CY 2023 PFS proposed rule, and which we are
not addressing in this final rule. We appreciate the feedback from the
commenters and will take it into consideration for possible future
rulemaking.
5. Soliciting Public Comment on Strategies for Updates To Practice
Expense Data Collection and Methodology
The PE inputs used in setting PFS rates, including both the
development of PE RVUs and, historically, the relative shares among
work, PE, and malpractice RVUs across the PFS, are central in
developing accurate rates and maintaining appropriate relativity among
PFS services and overall payment among the professionals and suppliers
paid under the PFS. Consequently, the underlying PE data inputs are a
consistent point of interest among interested parties. However, unlike
other payment systems with cost reporting systems, PFS data inputs are
primarily based on exogenous proprietary data that become available as
the data are collected. Specifically, we rely on historical survey data
(almost all of which is over a decade old), some publicly available
data collected for other purposes (for example, Bureau of Labor
Statistics (BLS) wage data), recommendations from the American Medical
Association and other provider groups, and annual Medicare claims data.
a. History of Updates to PE Inputs
Each year we continue to improve accuracy, predictability, and
sustainability of updates to the PE valuation methodology to reduce the
risks of possible misvaluation and other unintended outcomes. We have
continued to develop policies geared toward providing more consistent
updates to the direct PE inputs used in PFS ratesetting, including
supply/equipment pricing and clinical labor rates. These efforts to
develop these policies should contribute to improved standardization
and transparency for all PE inputs used to update the PFS. As we
continue our work to improve the information we use in our PE
methodology, we issued a general comment solicitation to better
understand how we might improve the collection of PE data inputs and
refine the PE methodology.
In recent years, we have refined specific PE data inputs using a
combination of market research and publicly available data (for
example, market research on medical supply and equipment items and BLS
data to update clinical labor wages) to update the direct PE data
inputs used in the PFS ratesetting process. Last year, we implemented a
final transition year for supply and equipment pricing updates and
started the first year of a 4-year phase-in update to the clinical
labor rates. However, the indirect PE data inputs remain tied to legacy
information that is well over a decade old. To build on much needed
progress, we now believe indirect PE would also benefit from a refresh
that implements similar standard and routine updates. We believe that a
data refresh, and use of data sources that receive routine refreshes,
would reduce the likelihood of unpredictable shifts in payment,
especially when such shifts could be driven by the age of data
available rather than comprehensive information about changes in actual
costs.
b. Data Collection, Analysis and Findings
In light of feedback from interested parties, CMS has prioritized
stability and predictability over ongoing updates, and has taken a
measured approach to updating PE data inputs. We have worked with
interested parties and CMS contractors over a period of years to study
the landscape and identify possible strategies to reshape the PE
portion of physician payments. The fundamental issues are clear, but
thought leaders and subject matter experts have advocated for more than
one tenable approach to updating our PE methodology. Thus, we must
balance the various interests of the public, and any path forward
should allow for ongoing and routine cycles of PE updates.
Of the various PE data inputs, we believe that indirect PE data
inputs, which reflected costs such as office rent, IT costs, and other
non-clinical expenses, present the opportunity to build consistency,
transparency, and predictability into our methodology to update PE data
inputs. The primary source for indirect PE information is the Physician
Practice Information Survey (PPIS), fielded by the AMA. The survey was
most recently conducted in 2007 and 2008 (reflecting 2006 data). The
survey respondents were self-employed physicians and selected
nonphysician practitioners.
In general, interested parties have expressed the following
concerns regarding CMS's approach to indirect PE allocation:
<bullet> CMS seems to rely on increasingly out-of-date data
sources, and there is a dearth of mechanisms to update empirical
inputs.
<bullet> The approach exacerbates payment differentials that
possibly create inappropriate variation of reimbursement across
ambulatory places of service (for example, significantly higher
payments for the same service provided in a hospital outpatient
department versus a physician office).
<bullet> CMS's method of indirect PE allocation may not accurately
reflected variation in PE across different types of services, different
practice characteristics, or evolving business models. Beyond these
issues, we have also explored other concerns with our indirect PE
allocation method in depth in previous rulemaking. For example, refer
to our previous comment solicitation and discussion of resource costs
for services involving the use of innovative technologies in our CY
2022 PFS proposed rule (86 FR 39125). PE data inputs, and the
methodological and evidence-based principles that shape use of such
information in the context of reimbursement, are discussed in depth in
a RAND Corporation (``RAND'') report prepared for CMS, entitled
Practice Expense Methodology and Data Collection Research and Analysis,
available at <a href="https://www.rand.org/pubs/research_reports/RR2166.html">https://www.rand.org/pubs/research_reports/RR2166.html</a>.\1\
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\1\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara
O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al.
``Practice Expense Methodology and Data Collection Research and
Analysis.'' RAND Corporation, April 11, 2018. <a href="https://www.rand.org/pubs/research_reports/RR2166.html">https://www.rand.org/pubs/research_reports/RR2166.html</a>.
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Various interested parties have taken issue with the use of certain
costs in our current PE allocation methodology that they do not believe
are associated with increased indirect PE. Some interested parties
argue that the costs of disposable supplies, especially expensive
supplies, and equipment are not relevant to allocating indirect PE; or
that similarly, work in the facility setting (for example, work RVUs
for surgical procedures) is not relevant to allocating indirect PE,
[[Page 69430]]
though they agree that work in the office setting may be relevant to
allocating indirect PE.\2\ However, we do not believe that there is
sufficient, if any, data or peer-reviewed evidence available to
definitively show that shifting indirect PE allocations based on the
setting of care, or based on specialty, would result in improved
allocations of PE that reflect true costs. Further, varying indirect PE
allocations based on setting of care or based on specialty might create
unintended consequences such as reduced access to care for
beneficiaries, or reduced competition and autonomy of small group
practices or individual clinicians whose revenue is based in part on
services furnished under contract in the facility setting.
---------------------------------------------------------------------------
\2\ Kazungu, Jacob S., Edwine W. Barasa, Melvin Obadha, and Jane
Chuma. ``What Characteristics of Provider Payment Mechanisms
Influence Health Care Providers' Behaviour? A Literature Review.''
The International Journal of Health Planning and Management 33, no.
4 (October 2018): e892-905. <a href="https://doi.org/10.1002/hpm.2565">https://doi.org/10.1002/hpm.2565</a>.
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We believe it is necessary to establish a roadmap toward more
routine PE updates, especially because potentially improper or outdated
allocation of PE across services may affect access to certain services,
which could exacerbate disparities in care and outcomes. Establishing
payments that better reflect current practice costs would mitigate
possible unintended consequences, such as labor market distortions due
to indirect cost allocations that do not reflect the current evolution
of health care practice.\3\ Interested parties have reiterated their
desire for CMS to move away from the current PE allocation approach and
continued to raise concerns with CMS's methodology and the underlying
PE data inputs. In response to these and other concerns, we continue to
review the methodology we use to establish the PE RVUs and to identify
refinements. As part of this effort, we have contracted with RAND to
develop and assess potential improvements in the current methodology
used to allocate indirect practice costs in determining PE RVUs for a
service, model alternative methodologies for determining PE RVUs, and
identify and assess alternative data sources that CMS could use to
regularly update indirect practice cost estimates.\4\
---------------------------------------------------------------------------
\3\ Laugesen, Miriam J. ``Regarding `Committee Representation
and Medicare Reimbursements: An Examination of the Resource-Based
Relative Value Scale.' '' Health Services Research 53, no. 6
(December 2018): 4123-31. <a href="https://doi.org/10.1111/1475-6773.13084">https://doi.org/10.1111/1475-6773.13084</a>.
\4\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara
O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al.
``Practice Expense Methodology and Data Collection Research and
Analysis.'' RAND Corporation, April 11, 2018. <a href="https://www.rand.org/pubs/research_reports/RR2166.html">https://www.rand.org/pubs/research_reports/RR2166.html</a>.
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In this final rule, we are signaling our intent to move to a
standardized and routine approach to valuation of indirect PE and we
solicited feedback from interested parties on what this may entail,
given our discussion above. We would propose the new approach to
valuation of indirect PE in future rulemaking.
We solicited comment on the following topics related to
identification of the appropriate instrument, methods, and timing for
updating specialty-specific PE data:
<bullet> Potential approaches to design, revision, and fielding of
a PE survey that foster transparency (for example, transparency in
terms of the methods of survey design, the content of the survey
instrument, and access to raw results for informing PFS ratesetting);
and
<bullet> Mechanisms to ensure that data collection and response
sampling adequately represent physicians and non-physician
practitioners across various practice ownership types, specialties,
geographies, and affiliations.
We also solicited comment on any alternatives to the above that
would result in more predictable results, increased efficiencies, or
reduced burdens. For example:
<bullet> Use of statistical clustering or other methods that would
facilitate a shift away from specialty-specific inputs to inputs that
relate to homogenous groups of specialties without a large change in
valuation relative to the current PE allocations.
<bullet> Avenues by which indirect PE can be moved for facility to
non-facility payments, based on data reflecting site of service cost
differences.
<bullet> Methods to adjust PE to avoid the unintended effects of
undervaluing cognitive services due to low indirect PE.
<bullet> A standardized mechanism and publicly available means to
track and submit structured data and supporting documentation that
informs pricing of supplies or equipment.
<bullet> Sound methodological approaches to offset circularity
distortions, where variable costs are higher than necessary costs for
practices with higher revenue.
We also solicited comment on the cadence, frequency, and phase-in
of adjustments for each major area of prices associated with direct PE
inputs (Clinical Labor, Supplies/Equipment). We requested that
commenters address the following:
<bullet> Whether CMS should stagger updates year-to-year for each
update, or establish ``milestone'' years at regular intervals during
which all direct PE inputs would be updated in the same year.
<bullet> The optimal method of phasing in the aggregate effect of
adjustments, such that the impacts of updates gradually ramp up to a
full 100 percent over the course of a few years (for example, 25
percent of the aggregate adjustment in Year 1, then 50 percent of the
aggregate adjustment in Year 2, etc.).
<bullet> How often CMS should repeat the cycle to ensure that
direct PE inputs are based on the most up-to-date information,
considering the burden of data collection on both respondents and
researchers fielding instruments or maintaining datasets that generate
data.
We received public comments on data collection, analysis and
findings. The following is a summary of the comments we received and
our responses.
Comment: Most commenters that responded to this RFI recommended
that CMS delay any change to update the indirect PE survey inputs. Many
commenters urged CMS to wait for AMA data collection efforts prior to
implementing changes. In responding to our RFI, the AMA RUC underscored
that CMS wrote in this year's proposed rule that the AMA PPIS continues
to be the best available source of data necessary for the purpose of
calculating indirect PE. AMA also points to the fact that CMS has
relied on AMA physician cost data for 50 years in updating the MEI and
30 years updating the RBRVS. Additionally, the RUC urged that CMS
continue to work with the AMA and various specialty societies involved
in the previous data collection effort, and wait for an updated set of
data to become available for use. The AMA indicated that it has
continued work on updates and would likely be ready by early CY 2024
with refreshed data. One commenter submitted a jointly-signed letter
that did not support the AMA RUC approaches, and described a different
means of data collection and analysis for updating the PE methodology.
In addition to emphasizing some of the same themes noted in findings
from RAND's review of the PE landscape, the letter recommended that CMS
form an expert advisory group, multidisciplinary in composition, and
backed with a dedicated research and development team of CMS staff, to
support CMS' strategic plans to update PFS ratesetting. In this letter,
the commenter also posited that indirect allocations would eventually
be unnecessary, as the methodology could be evolved toward an entirely
different means to capture actual costs of services. Overall, we
received few direct responses to many
[[Page 69431]]
of the specific prompts included in our request for information.
Response: We reiterate that we continue to believe that the current
AMA PPIS data does represent the best available source of information
at this time. However, as we continue to engage with a broad range of
perspectives from interested parties who frequently ask for CMS policy
to better reflect rapidly changing health care costs, we acknowledge,
in consideration of these perspectives and our work to analyze these
issues, that these concerns may be addressed by consistent and
transparent data refreshes.
We remain interested in possible alternatives to use of a sole
source of data. We believe that transparency and repeatability should
be key principles for examining future work to update indirect PE
inputs. We have clear agreement among interested parties that the
economic and medical landscapes have changed, and rapidly. Our intent
remains to seek data that capture such changes on a more frequent
basis, and allow for others to explore and study how best to assess and
account for changes with more rapid feedback loops. Conversely, we
understand that the competitive marketplace may create a dynamic
whereby some market participants receive revenue for the licensing and
sharing of proprietary information itself. We believe it remains
important to avoid interference with this type of business arrangement
between vendors and their customers, yet, we also believe that there is
a strong public interest to support open, transparent, and low-cost
means to conduct research on these topics. For example, we are not
aware of any independent, third-party, peer-reviewed research focused
on the characteristics of the health care labor market in light of
advancements in automation (for example, empirical analysis of how
software implementation may have a causal link to changes in the health
care labor market). Simply put, there are no available studies that
adequately answer the question, with sufficient predictive power and
adequate empirical data, of how much clinical labor is saved, or
replaced, by use of automation, in the context of furnishing
practitioner services. Further, many, if not all examinations of
automation and its effects on labor take a far broader focus than
health care workforce only, and mainly use anecdotal information, with
conclusions or hypotheses that focus on job gains/losses. We note that
many commenters highlighted themes this year focusing on labor
shortages, rather than labor surplusage. The comments that noted
refreshed survey data alone would address the need for more precise,
and up-to-date, allocations of indirect expenses seem discordant with
other comments we received about updating our PE methodology to account
for current advancements in automation, and associated software costs.
Therefore, there are a number of competing concerns that CMS must take
into account when considering updated data sources, which also should
support and enable ongoing refinements to our PE methodology.
For these reasons, it is possible that CMS would look to using
verifiable, more objective data sets in the future to supplement or
augment survey data alone. Such action would be similar to how certain
specialty data are used in current indirect PE calculations, and
sourced from specialty societies themselves, as required by statute, in
some cases as PPIS data were not available. Alternatively, we may
explore the use of data already in the public domain. We believe that
fast-moving changes to the distribution of costs and use of evolving
technology, and more generally the innovations in how vendors support
practices, reshape indirect expenses in ways that would require
flexible but standardized methods to account for these on a more
frequent basis in our ratesetting methodology.
We reiterate our needs described in our initial discussion for this
RFI. We note that this interest to develop a roadmap for updates to our
PE methodology is underpinned by a need to have better understanding of
repeatability and reproducibility of results, as we move toward more
consistent and frequent data collection. Some commenters expressed
concerns over bias and validity. We believe some of those concerns may
be alleviated by having means to refresh data and make transparent with
more accuracy and precision how the information affects valuations for
services payable under the PFS.
Further, we note that it is possible that with the current timing
for AMA's planned updates, we would be unable to refresh data for
several years. This would result in CMS using data nearly 20 years old
to form indirect PE inputs used to set rates for services on the PFS.
As these survey data are static inputs, and leverage only the responses
gathered at the time of collection, which are applied using a
methodology without any dynamic variables, this is quite distinct from
each of the MEI and various other inputs in PE methodology.
We believe both the somewhat stale and static aspects of the PPIS,
along with expected timing for updates is significantly at tension with
the feedback we receive on a regular basis. Consistently, a broad range
of perspectives across various interested parties frequently ask for
CMS to better reflect costs in what has been a rapidly changing health
care payment landscape. The medical community and others continue to
point to shortcomings in our ratesetting methodology, which may be
improved by consistent and transparent data refreshes.
Additionally, we acknowledge that some hold disparate points of
view about the above process of updating our PE methodology. We note
that part of the public comment process aims to encourage thinking and
build consensus, or identifies a lack of consensus. We appreciate the
dialogue, multiple perspectives, and encourage that the broader
national community of health policy thought leaders, health economists,
and health systems researchers, all continue to have such conversations
with one another and with CMS. A diversity of perspectives is important
to foster a more robust set of options for the best available path
forward.
We again thank commenters for submitting feedback on our RFI. We
reiterate that our RFI does not contain any specific proposals for CY
2023. We will consider possible proposals in future rulemaking.
c. Changes to Health Care Delivery and Practice Ownership Structures,
and Business Relationships Among Clinicians and Health Care
Organizations
Market consolidation, and shifts in workforce alignment, as well as
an evolution in the type of business entities predominant in health
care markets, all suggest significant transformation in the composition
and proportions of practice expenses required to furnish care. These
evolving conditions collectively highlight the need for a comprehensive
update to PE data inputs, and possibly the PE methodology as a
whole.\5\ Ideally, more comprehensive PE data inputs and a different PE
calculation methodology would better account for indirect/overhead
costs, current trends in the delivery of health care, the use of
machine learning technology, and EHRs, and the cost differentials in
[[Page 69432]]
independent versus facility-based practices.
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\5\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara
O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al.
``Practice Expense Methodology and Data Collection Research and
Analysis.'' RAND Corporation, April 11, 2018. <a href="https://www.rand.org/pubs/research_reports/RR2166.html">https://www.rand.org/pubs/research_reports/RR2166.html</a>.
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We solicited comment on current and evolving trends in health care
business arrangements, use of technology, or similar topics that might
affect or factor into indirect PE calculations. We are interested in
learning whether any PE data inputs may be obsolete, unnecessary, or
misrepresentative of the actual costs involved in operating a medical
practice.
We received public comments on current and evolving trends in
health care business arrangements, use of technology, or similar topics
that might affect or factor into indirect PE calculations. The
following is a summary of the comments we received and our responses.
Comment: A few commenters responding to our prompt to explore
avenues by which indirect PE can be moved for facility to non-facility
payments, based on data reflecting site of service cost differences,
suggested that indirect PE inputs should not be part of payment for the
facility rate of payment.
Commenters explained that because the facility bears the indirect
costs for provision of services at the facility, and the physician or
practitioner would receive indirect PE allocations for any in-office
services, the indirect PE portion of the facility fee for a physician
service is unwarranted.
Response: We note that the face value of a change that would reduce
the indirect PE portions of our current facility fees for physicians'
services to zero may have merit. We have open questions about this
feedback, which we will explore further in our ongoing research. We
believe, and related feedback from interested parties suggests, there
are two considerable shifts in today's healthcare business models.
First, many physicians and NPP's have become employed staff, versus
independent practitioners. Second, the landscape includes far more
variation in the ways that organizations interact and contract for
clinical staff and auxiliary personnel, and structure their
compensation. We would aim to better understand whether potentially
reducing to zero any indirect PE portion that is part of the facility
fee for physician services may or may not reduce competition, or have
the unintended effect of favoring certain forms of arrangements over
others.
Further, before proposing any policy, we would need to understand
whether the policy could address related open questions. Our work with
RAND to explore the relationship between different types of indirect
costs and direct cost inputs remains one of few empirical efforts to
examine the issue in-depth. In this year, and in previous years, when
we have requested similar information from the public, we continue to
receive anecdotal, if any evidence, when feedback from commenters aims
to take issue with findings in the RAND studies.
d. Unintended Consequences and Missing Information
We solicited comment on additional information that we may have not
considered or discussed above about updating and maintaining PE data
inputs, as well as any unintended impacts (or positive outcomes) that
could result from changes to the overall strategy. We are especially
interested in public comment on any concerns about beneficiaries'
access to care, possible consolidation of group practices, or burden on
small group or solo practitioners. We are also interested in public
comments on any collateral program integrity or quality issues that
could arise from potential updates. We requested that any respondents
who provide feedback ensure that the response includes discussion of
any possible health equity impacts.
We received public comments on unintended consequences and missing
information. The following is a summary of the comments we received and
our responses.
Comment: A few commenters expressed concern that topics of AI, a
related evolution of software and technology used to support provision
of services, and ties to health equity are not well-suited for the
process of updates to our annual rulemaking cycle. Commenters expressed
concerns that the public comment process alone is not sufficient to
provide information, and requested a separate RFI. We received a
similar response from many interested parties that question how CMS has
in the past, and will in the future, address definition of topics and
terms that shape our PE inputs.
Response: We encourage interested parties to continue to provide
feedback and suggestions to CMS that in general, give an evidentiary
basis to shape optimal PE data collection and methodological
adjustments over time. Submissions should discuss the feasibility and
burden associated with implementation of any suggested adjustments, and
should highlight opportunities to optimize the cadence, frequency, and
phase-in of resulting adjustments. In the interim, we will continue to
consider ways that we may engage in dialogue with interested parties to
better understand how to address possible long-term policies and
methods for PFS ratesetting.
6. Soliciting Public Comment on Strategies for Improving Global
Surgical Package Valuation
In preparation for future rulemaking, we solicited public comment
on strategies to improve the accuracy of payment for the global
surgical packages (herein referred to as ``global packages') under the
PFS. Currently, there are over 4,000 physicians' services paid as
global packages under the PFS. Global packages generally include the
surgical procedure and any services typically provided during the pre-
and postoperative periods (including evaluation and management (E/M)
services and hospital discharge services). There are three types of
global packages:
<bullet> The 0-day global package, which includes the procedure and
the preoperative and postoperative physicians' services on the day of
the procedure.
<bullet> The 10-day global package, which includes services on the
day of, and 10 days after, the procedure.
<bullet> The 90-day global package, which includes services
furnished one day prior to the procedure, and on the day of, and 90
days immediately following the day of the procedure.
More detail about how global packages are billed and what
activities are included may be found in Chapter 12, Section 40, of the
Medicare Claims Processing Manual (Pub. 100-04).
We have applied the concept of global payment for some procedures
since the inception of the PFS on January 1, 1992 (54 FR 59502).
However, in the past decade we have engaged with interested parties
regarding numerous concerns about the accuracy and validity of the
valuation of global packages, with particular attention paid to the E/M
visits included in the services. We have made previous requests for
public feedback on global packages, including solicitations for
information or data that could be used to help support more accurate
valuations. We now wish to expand on our conversations with the public,
considering the current status of a multi-year data collection and
analysis project, as well as ongoing changes we have made to payments
for other types of patient care that may impact the global packages.
a. History of Global Valuation Discussion
In the CY 2013 PFS proposed rule (77 FR 44737 through 44738), we
discussed two reports released by the HHS Office of the Inspector
General in 2005 and
[[Page 69433]]
2012 with findings that practitioners were performing fewer E/M
postoperative visits than had been included in the valuation for these
global packages, suggesting that Medicare was paying for care that was
not being delivered. In response to the concerns raised by the OIG
reports, we solicited public feedback on methods of obtaining accurate
and current data on E/M services furnished as part of a global package.
We summarized public comment in the CY 2013 PFS final rule (77 FR 68911
through 68913).
In the CY 2015 PFS proposed rule (79 FR 40341), we delved into
barriers to accurate valuation of global packages, especially as
compared to other forms of bundled payments made under the inpatient or
outpatient prospective payment systems. In addition to the ongoing
concerns about whether E/M visits presumed to be furnished in
connection with global packages were actually being performed by the
physician receiving the global package payment, we noted issues such
as:
<bullet> E/M services in the global period that occur post-
discharge are valued with PE values associated with follow-up visits in
the physician's office. Many of these follow-up visits may occur in a
hospital outpatient department where the physician may not incur many
PE costs.
<bullet> The direct PE inputs often differ slightly between an E/M
service furnished in a global period and a stand-alone E/M service. For
example, follow-up visits for certain surgeries may include specialized
clinical labor such as an RN rather than a general nurse blend.
<bullet> The types of physicians furnishing a specific service
dictate the direct and indirect percentages, as well as the indirect
practice cost index, in the PE methodology. Most surgical specialties
have a lower direct percentage mix, resulting in higher indirect costs
that extend to the E/M visits in the global periods.
<bullet> Because the E/M visits embedded in the global package are
not reported separately and do not appear in claims data, it is
difficult to quantify the number and level of E/M services furnished in
connection with global packages under the fee-for-service system.
<bullet> In some cases we have limited billing of the 10- and 90-
day global packages in conjunction with some of the payment policies
intended to encourage coordination of care through payments for non-
face-to-face services, such as transitional care management and chronic
care management, because of presumed overlap between these services.
To address these concerns, we solicited comment and finalized a
policy in the CY 2015 PFS final rule (79 FR 67586) intended to, over a
period of several years, transition all services with 10-day and 90-day
global periods to 0-day global periods. As stated in the CY 2015 PFS
final rule, we believed it would be more accurate to value the surgical
procedure-day services separately from postop E/M visits, and would
avoid potentially duplicative or unwarranted payments. For our full
discussion and rationale, refer to 79 FR 67586 through 67591.
Implementation of this policy, however, was halted by the Medicare
Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 110-14).
Section 523(a) of the MACRA amended section 1848(c)(8) of the Act to
prohibit the Secretary from implementing the transition policy
finalized in the CY 2015 PFS final rule. The amendments to section
1848(c)(8) of the Act also require CMS to collect additional data on
how best to value global packages and to reassess every 4 years the
continued need for this data collection. Section 1848(c)(8) of the Act
directs CMS to use the information collected to improve the accuracy of
valuation of these services under the PFS starting in CY 2019. (Refer
to the CY 2016 PFS final rule at 80 FR 70915 for additional discussion
of these requirements.)
In response to the statutory requirements as added by section
523(a) of the MACRA, we engaged in multiple discussions with interested
parties about methods of data collection and analysis, including
through public comment solicitation in the CY 2016 PFS proposed rule
(80 FR 41707) and CY 2017 PFS proposed rule (81 FR 46191), a national
listening session, and a town hall meeting. (Materials for the January
20, 2016 listening session are available at <a href="https://www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/2016-01-20-MCRA-Presentation.pdf">https://www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/2016-01-20-MCRA-Presentation.pdf</a>. The transcript of the town hall meeting held August
25, 2016 is available at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/CY2017-PFS-FR-Townhall.pdf">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/CY2017-PFS-FR-Townhall.pdf</a>.) In the CY 2017 PFS final rule (81 FR 80209 through
80213), we finalized a claims-based process to collect data from
practitioners on both the number and level of postoperative visits
furnished as part of the 10- and 90-day global packages. We also
contracted with RAND to support this data collection and analysis.
b. Data Collection, Analysis, and Findings
In 2019, RAND issued two reports based on its analysis of the data
collected through the data collection process we established. The
reports examined, using claims-based and survey-based data, the number
of postoperative visits furnished during the 10- and 90-day global
periods for certain high-volume procedures and the level of visits
furnished for certain procedures. (Complete details about the data
collected are discussed in the CY 2017 PFS final rule starting at 81 FR
80212, the CY 2020 PFS final rule at 84 FR 62857, and in the reports
themselves, available at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection</a>-.)
Notably, RAND's analysis found that, according to claims-based data,
the reported number of E/M visits matched the expected number (included
for purposes of PFS valuation) for only 4 percent of reviewed 10-day
global packages and 38 percent of reviewed 90-day global packages.
Based on these analyses, RAND released a third report that analyzed the
current valuation of global packages based on the difference between
the number of postoperative E/M visits observed via the claims-based
data collection process and the expected number of such E/M visits. The
report modeled how valuation for global packages would change by
adjusting the work RVUs, physician time, and direct PE inputs to
reflect the observed number of E/M visits. The report provided
hypothetical valuations for the global packages based on these
adjustments. These three RAND reports were made available to the public
and are available at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection</a>.
The RAND reports were shared with the public, and we received
public comment about these reports in the CY 2020 PFS final rule (84 FR
62866). Public commenters raised concerns about the findings in the
reports, including questions as to whether the E/M visit data were
collected from a true representative sample of practitioners, and
various other challenges to the validity of the RAND methodology. Other
members of the public, however, were supportive of our overall efforts
to collect and analyze the data, and supplied additional data similarly
suggesting that the 10- and 90-day global packages are overvalued. In
2021, RAND responded to the CY 2020 public comments that were critical
of
[[Page 69434]]
the methodologies used in the three earlier reports in a separate
report entitled, ``Responses to Comments on RAND Global Services
Reports,'' which is available at <a href="https://www.rand.org/content/dam/rand/pubs/research_reports/RR4300/RR4314-1/RAND_RR4314-1.pdf/">https://www.rand.org/content/dam/rand/pubs/research_reports/RR4300/RR4314-1/RAND_RR4314-1.pdf/</a>.
While some interested parties have challenged the methodology or
conclusions of the RAND reports, we have not yet received data
suggesting that postoperative E/M visits are being performed more
frequently than indicated by the data collected and analyzed in the
RAND reports. We continue to be concerned that our current valuations
of the global packages reflect certain E/M visits that are not
typically furnished in the global period, and thus, are not occurring.
We also believe that RAND has adequately responded to critiques of its
methodologies and findings. However, as part of our ongoing assessment
of our data collection process, we continue to welcome any comments
from the public on ideas for other sources of data that would help us
to assess global package valuation (including the typical number and
level of E/M services), as well as our data collection methodology and
the RAND report findings. We received some public comments in our
request for comments on possible additional data sources and on our
data collection methodology. These comments are summarized as follows:
Comment: Some commenters supported the findings and methodology of
the RAND reports. Several commenters stated that the RAND's findings
regarding E/M visit performance aligned with their own anecdotal
observations and experiences. However, other commenters expressed
skepticism of the RAND report findings and methodology, and many urged
us to continue to rely on RUC valuations of global packages (including
the number of embedded E/M visits included in the RUC surveys.) Several
commenters observed that getting truly accurate information from claims
data may be difficult; one commenter pointed out that since work done
by NPPs or clinical staff is often not reported separately, it is
difficult to get a complete picture of postoperative work. As in
previous public discussions, commenters urged CMS to continue to
examine claims data and electronic health records, or obtain
postoperative E/M information through direct surveys of practitioners.
Several commenters noted that we have spent many years performing data
collection in response to the MACRA requirements, and one commenter
requested that we cease our data collection efforts to avoid any
additional burden on practitioner. Many commenters urged us to continue
to work in collaboration with practitioners and other impacted parties
to identify sources of postoperative E/M data and to maintain
transparency about any additional collection efforts.
Response: We found that the comments we received, particularly
those critical of the RAND reports and methodology, echo the feedback
we received several years ago when we shared the RAND reports for
public comment. Please see the discussion of the RAND reports and
findings in the CY 2020 PFS final rule (84 FR 62866) and RAND's
responses to the CY 2020 public comments in the RAND report entitled,
``Responses to Comments on RAND Global Services Reports,'' which is
available at <a href="https://www.rand.org/content/dam/rand/pubs/research_reports/RR4300/RR4314-1/RAND_RR4314-1.pdf/">https://www.rand.org/content/dam/rand/pubs/research_reports/RR4300/RR4314-1/RAND_RR4314-1.pdf/</a>. We note that we
did not receive new data that might either affirm or contradict RAND's
overall findings regarding E/M performance. We agree with commenters'
observations that we have spent many years collecting and analyzing
data regarding E/M performance in response to the MACRA requirements
and other public concerns about the valuation of globals. While we will
continue to evaluate potential sources of data regarding E/M
performance, we agree with commenters who suggest that the overall lack
of transparency within global packages can make identifying the nature
of postoperative care provision difficult and continues to call into
question the accuracy of globals that have been valued through standard
valuation processes.
c. Changes to Health Care Delivery and Payment for E/M Services
Since the inception of the PFS 30 years ago, there have been
significant changes in health care, including improvements in medical
and information technology, new models of health care delivery and
coordination between multiple clinicians furnishing care to a single
patient, and an expanding beneficiary population. (For information on
Medicare service utilization, beneficiary demographics, provider
characteristics, and payment models, please visit the resources at
<a href="http://data.cms.gov">data.cms.gov</a>.) We asked to hear from the public on whether the
postoperative health care landscape has changed in ways that impact the
relevance of the global packages.
We believe that changes to health care delivery may impact proper
valuation of global services. We solicited comment on whether changes
to health care delivery, including changes in coordination of care and
use of medical technology over the past 3 decades, as well as during
the recent PHE, have impacted: the number and level of postoperative E/
M visits needed to provide effective follow-up care to patients; the
timing of when postoperative care is being provided; and who is
providing the follow-up care. We have formed hypotheses that some
beneficiaries are not receiving the number of postoperative visits that
were contemplated when valuing the global surgical packages or are not
receiving any follow-up E/M visits at all during global periods either
because the physician who performed the surgical procedure has
determined they are unnecessary (perhaps due to improvements in medical
technology or evolution in standards of care) or as the result of more
comprehensive discharge planning. It has also been suggested by some
interested parties that physicians are, in fact, performing the number
of postoperative visits that were contemplated when valuing the global
surgical packages, but the visits may, for various reasons, be
scheduled outside the global period. Others have suggested that
physicians are, without formally transferring follow-up care to another
clinician, instructing patients to follow up with another physician or
NPP (such as the patient's primary care physician or other
practitioner), and that the other clinician then furnishes and bills
for E/M services furnished for postoperative care (whether the care is
performed during or after the global period). We appreciate comments on
these ideas, and on other factors not mentioned here that could affect
the ways that postoperative E/M care is provided.
We also solicited comment on whether, or how, recent changes in the
coding and valuation of separately billable E/M services may have
impacted global packages. One change is the expansion of payment for
non-face-to-face care management services. Historically, an advantage
of global packages was that they compensated physicians for non-face-
to-face work related to the patient's transition from the hospital to
the community, or management of other health care needs following a
procedure or serious illness. Over the years, we have implemented
payment for many care management services to better reflect non-face-
to-face time spent by physicians and clinical staff on behalf of
patients with complex health care needs, including transitional care
management services in CY 2013 (77 FR 68978); chronic care
[[Page 69435]]
management in CY 2015 (78 FR 74414) and CY 2019 (83 FR 58577); complex
chronic care management in CY 2017 (81 FR 80244); and principal care
management in CY 2020 (84 FR 62962). We solicit comment on whether
global packages, and especially those with 10- and 90-day global
periods, continue to serve a purpose when physicians could otherwise
bill separately not only for the postoperative E/M visits they furnish,
but also for aspects of postoperative care management they furnish for
some patients. We also would like to hear generally what, if any,
components of preoperative or postoperative care are currently only
compensated as part of payment for global packages.
We have also heard from some interested parties who believe that
recent changes to the coding and valuation of standalone office and
outpatient E/M visits finalized in the CY 2021 PFS final rule have
skewed the relativity between these visits and the E/M visits included
in the current global package valuations (which were not modified in
response to the coding and valuation changes). In the CY 2020 PFS final
rule (84 FR 62851 through 84 FR 62854), we finalized new--and generally
increased, RVUs for the CPT-revised office and outpatient E/M code set.
Some commenters encouraged us to increase the value of the E/M visits
included in the global surgical packages commensurate with the
increased RVUs for the standalone E/M visits. However, we declined to
do so, noting that at the time that it was unclear whether it would be
appropriate to treat the E/M visits reflected in global packages as
discrete components of the package (in other words, to use a building-
block approach to calculating the value of the service, versus valuing
the services using the more holistic magnitude estimation, or possibly
another approach.) Furthermore, we cited the uncertainty as to whether
the E/M services included in valuing the global packages are typically
furnished as part of global surgery services, reasoning that if the
number and level of E/M services for global packages is not
appropriate, adopting increases in the value of E/M services in global
surgery codes would exacerbate rather than ameliorate any potential
relativity issues. (Refer to the CY 2020 PFS final rule at 84 FR 62856
through 62860 for a complete summary of comments and our responses on
the topic of increasing the value of E/M visits included in the global
packages.) We welcomed additional comments on the perceived
misalignment between the E/M visits included in global packages and
separately billable E/M services, including thoughts on how this
current tension reflects on global payment valuation and the
appropriate methodology for determining appropriate values for global
packages.
We received some public comments on whether changes to health care
delivery and payment for E/M services may impact the performance of E/M
visits or overall relevance of E/M visits. The following is a summary
of the comments we received and our responses.
Comment: Several commenters noted that while patients in general
seem in greater need of critical care, there is also (from various
commenters' perspective) either increasing opportunity or mounting
pressure on practitioners to discharge patients from hospitals and
arrange at-home care after surgeries. Many commenters stated that
postoperative care provided by the proceduralists should still be
considered a best practice. However, a few commenters agreed with some
of our hypotheses--namely that for clinical reasons patients may not
need to return for in-person postoperative care within the global
period, or that scheduling conflicts may make timely return difficult.
A few commenters also agreed that patients may, for reasons of
convenience, receive some postoperative care from community
practitioners rather than returning to the hospital where the surgical
procedure was performed. Some commenters also suggested that there may
be clinical reasons why it is better for a patient to receive
postoperative care from a practitioner or NPP other than the
proceduralist, such as in circumstances when the patient needs long-
term or specialized postoperative care outside the expertise of the
proceduralist. Overall, commenters expressed ambivalence about the
impact the PHE and use of telehealth has had on postoperative care. A
few commenters noted that some aspects of postoperative care--including
sharing of test results or consultations--can be done via telehealth,
while others described types of postoperative care that can only be
done in-person. Commenters also expressed doubt about the impact of
expanded payments for non-face-to-face services, noting that payments
for care management or other non-face-to-face services do not include
all post-surgical conditions and do not address in-person care.
Regarding our questions about the overall relevance of global
packages, some commenters stated that paying for postoperative care as
standalone visits would ensure that Medicare was only paying for the
care that was being delivered. A few commenters suggested that
postoperative care should be not only paid for separately, but paid at
a higher rate. Other commenters stated that global packages continue to
be necessary because they reduce administrative burden on practitioners
and ensure payment of care provided by NPPs and clinical staff.
Response: While we did not receive a great deal of feedback on our
specific request for information as to whether global packages are
still relevant, we believe the information we received demonstrates
that there may be variations in patients' individual postoperative care
needs. While we agree with commenters that in-person visits with the
proceduralist is the standard of care on which global packages were
based, we will continue to examine whether this specific model of
postoperative care is still necessary or relevant for all procedures.
Comment: Many commenters provided input on the valuation of the E/M
visits embedded in global packages as compared to standalone E/M
visits. Although commenters did not provide feedback on whether the
misalignment reflects on the relevance of surgical packages, many
commenters suggested that we should increase the value of global
packages to reflect the increase in standalone E/M visits (both the
office/outpatient increases finalized in CY 2020 at 84 FR 62851 through
84 FR 62854, and increases to certain hospital inpatient E/M visits
proposed in CY 2023 at 87 FR 45993.) Some commenters suggested that the
data collection requirement in the MACRA amendments to the statute does
not preclude CMS from applying such increases to all global packages.
Other commenters, however, agreed with our decision not to increase the
global packages pending our inquiry into the performance of
postoperative E/M visits.
Response: We direct commenters to the CY 2020 PFS final rule (84 FR
62851 through 84 FR 62854), where we discussed similar concerns. We
continue to disagree with commenters' interpretation of the MACRA
amendments. We note that section 1848(c)(8) of the Act, as amended by
section 523(a) of the MACRA (Pub. L. 110-14), directs CMS to use the
information collected to improve the accuracy of valuation of these
services specifically requires that we use the data we obtain through
data collection to revalue the global packages. Our data currently
suggests that at least some global packages are inaccurately, revalued,
and until we identify data that demonstrates otherwise, we do not
believe it would be appropriate to apply
[[Page 69436]]
an across-the-board adjustment to the packages that is not supported by
data. Additionally, we are also working to reconcile public
recommendations that we revalue global packages on a holistic or case-
by-case basis (discussed in greater detail in section II.B.6.d. of this
final rule) with recommendations that we apply across-the-board
increases to all global packages.
d. Strategies To Address Global Package Valuation
Consistent with the discussion above, we continue to believe that:
(1) there is strong evidence suggesting that the current RVUs for
global packages are inaccurate; (2) many interested parties agree that
the current values for global packages should be reconsidered, whether
they believe the values are too low or too high; and (3) it is
necessary to take action to improve the valuation of the services
currently valued and paid under the PFS as global surgical packages.
We would like to re-engage with the public about whether the global
packages are indeed misvalued, and if so, what would be an appropriate
approach to valuation. We have previously sought assistance from the
public on possible methods of revaluation, such as in the CY 2015 PFS
final rule (79 FR 67586).
As noted in the ``Data Collection, Analysis, and Findings'' section
above (section II.B.6.b.), RAND has provided a comprehensive roadmap
for a possible revaluation strategy. (See specifically the RAND report,
``Using Claims-Based Estimates of Postoperative Visits to Revalue
Procedures with 10- and 90-Day Global Periods,'' available at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection</a>-. We solicited
additional input on the RAND methodology, including advantages and
drawbacks of applying the RAND methodology to revaluation (in addition
to previous feedback that was provided by the public in the CY 2020 PFS
final rule at 84 FR 62867). We also requested input on specific
alternatives, including: (1) requesting the RUC to make recommendations
on new values; or (2) another method proposed by the public.
We solicited feedback from the public on possible strategies for a
revaluation process for global services. We believe that the available
information provided in the RAND reports (discussed in section
II.B.6.b. of this final rule and available at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection</a>-) indicates that there is a mismatch between
the value of the global package and work being performed. In
particular, it appears that for some services, the number of
postoperative visits typically furnished by the billing physician is
much lower than what was reflected in the global package value, and
thus we believe it may be necessary to revalue those services. (As
noted in section II.B.6.b. of this final rule, RAND's analysis found
that the reported number of E/M visits matched the expected E/M visits
for only 4 percent of reviewed 10-day global packages and 38 percent of
reviewed 90-day global packages. We referred specifically to the RAND
report, ``Claims-Based Reporting of Postoperative Visits for Procedures
with 10- or 90-Day; Global Periods--Updated Results Using Calendar Year
2019 Data'' available at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection</a>-).
Because there are a large number and volume of services paid as global
packages, we must consider the resources needed to revalue even a
subset of the global packages, as well as the impacts across the PFS
and healthcare delivery system in general if we were to change the
values of a significant number of services at one time. We considered
various approaches we could pursue, such as: (1) revaluing all 10- and
90-day global packages at one time (perhaps with staggered
implementation dates); (2) revaluing only the 10-day global packages
(because these appear to have the lowest rate of postoperative visit
performance, per RAND's analysis of claims data); (3) revaluing 10-day
global packages and some 90-day global packages (such as those with
demonstrated low postoperative visit performance rates as identified in
RAND's analysis of these services); or (4) relying on the Potentially
Misvalued Code process to identify and revalue misvalued global
packages over the course of many years. (We noted that regardless of
whether we review particular global packages as part of a specific
revaluation strategy, the public may always nominate any global
packages to be reviewed through the Potentially Misvalued Code process;
refer to the description of the Potentially Misvalued Code process in
section II.C. of this final rule.) We solicited comment on any of the
strategies identified in this paragraph, as well as any additional
ideas members of the public may have that would address the concerns
described above about valuation of global packages. We also solicited
comment on ancillary considerations including timing considerations for
implementation of any future strategy (such as whether to have
staggered effective dates for new valuations and what criteria to use
if assigning staggered effective dates.)
We also solicited comment on additional considerations affecting
valuation of global services that may not have been thoroughly explored
in previous public comment opportunities. For instance, we are aware
that some interested parties are concerned that not enough attention
has been paid to the value of preservice work bundled into the global
payment, which could affect accurate valuation of 10- and 90-day global
packages, as well as the value of the service if it is transitioned to
a 0-day global. We solicited additional information about this concern,
as well as any other concerns about valuation not otherwise mentioned
here.
We received public comments on strategies to address global package
valuation. The following is a summary of the comments we received and
our responses.
Comment: Some commenters agreed that global surgical packages are
misvalued and encouraged CMS to revalue the packages in order to reduce
the impacts of improper valuation on the relative value scale. A few
commenters agreed that packages were misvalued, but suggested we
continue to work with impacted parties to find a method for
revaluation. Other commenters stated that they do not believe that
global packages were misvalued or, if they are misvalued, they should
be revalued on a holistic and case-by-case basis using the RUC process
or the Potentially Misvalued Code process. A few commenters suggested
that CMS and the RUC collaborate on a specific method to revalue global
packages. Commenters also noted that revaluing through the RUC process
could take a number of years and may present resource challenges.
We received diverse comments on approaches for revaluing the codes,
including revaluing all 10- and 90-day packages, revaluing some 10- and
90-day packages, or focusing just on the 10-day packages. Commenters
who recommended focusing on the 10-day packages suggested that this
would address services with lower demonstrated postoperative E/M visit
rates, and would provide us with insight about revaluation that could
then be applied to the 90-day packages as needed. Other commenters made
suggestions including phasing out global packages by not valuing new
CPT codes as globals, or changing the length
[[Page 69437]]
of global periods. While one commenter was in favor of revaluing all
packages at one time, many commenters suggested revaluing over a number
of years to avoid too much disruption to the relative value scale. One
commenter suggested we wait until after the conclusion of the PHE to
revalue any packages.
Response: We believe that the spectrum of comments demonstrates
that there is not, at this time, clear public consensus on this issue
or the preferred strategy for valuing globals. We will consider the
specific strategies proposed by the commenters and the concerns
regarding impact on the relative value scale and the resources that
would be required to revalue these codes.
e. Other Payment Structure Changes, Unintended Consequences, and
Missing Information
We solicited public comment on any other aspects of the global
payment structure (aside from the valuation of services) that
commenters believe are noteworthy. Much of the discussion over the
years has focused on whether global surgical packages are properly
valued and whether they are needed at all. We encourage commenters to
point out ways in which global surgical packages may continue to have a
positive impact on health care delivery (such as their potential to
support innovation). We also solicited suggestions on other ways that
global surgical package payments could be modified (aside from changing
their valuation) that could help improve accurate valuation or help
address other concerns about the payments (such as the lack of
transparency about what care is being provided as part of the package).
We also requested comment on additional information that we may not
have considered or discussed above about proper valuation of the global
packages, as well as any unintended impacts (or positive outcomes) that
could result from changes to how we value global services. We are
especially interested in public comment on any concerns about
beneficiaries' access to care, continuity of care, cost sharing, or
program integrity.
We received limited public comments on other payment structure
changes, unintended consequences, and missing information. The
following is a summary of the comments we received and our responses.
Comment: A few commenters opined on the consequences of unbundling
global payments. A few of these commenters raised concerns that
unbundling the packages would reduce payments to physicians or NPPs. A
few expressed concerns that beneficiaries might not want to pay the
coinsurance for standalone E/M visits (should global packages be
unbundled) and might decline postoperative care.
Response: We agree that the payments to practitioners might change
in circumstances where globals are revalued, although we do not believe
there is yet enough information to determine the financial impact
should proceduralists bill separately for postoperative care for some
procedures. We will continue to consider the potential impact of
coinsurance for globals and postoperative care for beneficiaries.
After consideration of the comments, we wish to thank the
commenters for their input. As outlined in the proposed rule, this
discussion has spanned over a decade, with participation from specialty
societies, advocacy groups, program integrity agencies, and Congress.
We had hoped through this comment solicitation to nudge discussion into
new or under-explored lanes of inquiry that would help us better
understand how global packages fit into the current health care
landscape. We appreciate the engagement we did receive with our
requests for information regarding current health care practices.
Additionally, numerous interested parties, those who have been engaged
with the discussion for many years, as well as some new voices,
provided comment that reinforced or reiterated concerns that have
emerged in prior discussions.
In this year's comment solicitation, we received a spectrum of
perspectives on: whether the globals are misvalued; if misvalued,
whether they are undervalued or overvalued; whether we should continue
to value them through our current processes or develop a new
methodology that better addresses the unique challenges posed by
bundled payments; and whether globals should be revalued individually,
in batches, or in their entirety. Looking at the totality of the
comments and keeping in mind discussion from prior years, we have
identified a few common themes on which many seem to agree. The matter
of global valuation is complex. Global packages comprise a large number
of codes, and their valuation has a significant impact on the PFS
relative value scale. Accurately valuing the work and other inputs of
the globals is critically important to ensure not only that the
practitioners providing those services are paid accurately for the work
performed, but that there is no inequitable impact on practitioners
paid outside of 10- and 90-day global packages. The diversity of
procedures paid under global packages may mean that blanket approaches
to valuat
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