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Proposed Rule2024-14828

Medicare and Medicaid Programs; CY 2025 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Prescription Drug Inflation Rebate Program; and Medicare Overpayments

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Published

July 31, 2024

Issuing agencies

Health and Human Services DepartmentCenters for Medicare & Medicaid Services

Abstract

This major proposed 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; codification of, and proposing policies for, the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act of 2022; updates to the Medicare Diabetes Prevention Program expanded model; payment for dental services inextricably linked to specific covered medical services; updates to drugs and biological products paid under Part B including immunosuppressive drugs and clotting factors; 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 policies for Rural Health Clinics and Federally Qualified Health Centers; electronic prescribing for controlled substances for a covered Part D drug under a prescription drug plan or a Medicare Advantage Prescription Drug (MA-PD) plan under the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act); update to the Ambulance Fee Schedule regulations; codification of the Inflation Reduction Act and Consolidated Appropriations Act, 2023 provisions; updates to Clinical Laboratory Fee Schedule regulations; updates to the diabetes payment structure and PHE flexibilities; expansion of colorectal cancer screening and Hepatitis B vaccine coverage and payment; establishing payment for drugs covered as additional preventive services; Medicare Parts A and B Overpayment Provisions of the Affordable Care Act.

Full Text

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<title>Federal Register, Volume 89 Issue 147 (Wednesday, July 31, 2024)</title>
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[Federal Register Volume 89, Number 147 (Wednesday, July 31, 2024)]
[Proposed Rules]
[Pages 61596-62648]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-14828]

[[Page 61595]]

Vol. 89

Wednesday,

No. 147

July 31, 2024

Part II

Book 2 of 2 Books

Pages 61595-62652

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

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42 CFR Parts 401, 405, et al.

Medicare and Medicaid Programs; CY 2025 Payment Policies Under the
Physician Fee Schedule and Other Changes to Part B Payment and Coverage
Policies; Medicare Shared Savings Program Requirements; Medicare
Prescription Drug Inflation Rebate Program; and Medicare Overpayments;
Proposed Rule

Federal Register / Vol. 89, No. 147 / Wednesday, July 31, 2024 /
Proposed Rules

[[Page 61596]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 401, 405, 410, 411, 414, 423, 424, 425, 427, 428, and
491

[CMS-1807-P]
RIN 0938-AV33

Medicare and Medicaid Programs; CY 2025 Payment Policies Under
the Physician Fee Schedule and Other Changes to Part B Payment and
Coverage Policies; Medicare Shared Savings Program Requirements;
Medicare Prescription Drug Inflation Rebate Program; and Medicare
Overpayments

AGENCY: Centers for Medicare & Medicaid Services (CMS), Health and
Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This major proposed 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; codification of, and proposing policies for, the Medicare
Prescription Drug Inflation Rebate Program under the Inflation
Reduction Act of 2022; updates to the Medicare Diabetes Prevention
Program expanded model; payment for dental services inextricably linked
to specific covered medical services; updates to drugs and biological
products paid under Part B including immunosuppressive drugs and
clotting factors; 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
policies for Rural Health Clinics and Federally Qualified Health
Centers; electronic prescribing for controlled substances for a covered
Part D drug under a prescription drug plan or a Medicare Advantage
Prescription Drug (MA-PD) plan under the Substance Use-Disorder
Prevention that Promotes Opioid Recovery and Treatment for Patients and
Communities Act (SUPPORT Act); update to the Ambulance Fee Schedule
regulations; codification of the Inflation Reduction Act and
Consolidated Appropriations Act, 2023 provisions; updates to Clinical
Laboratory Fee Schedule regulations; updates to the diabetes payment
structure and PHE flexibilities; expansion of colorectal cancer
screening and Hepatitis B vaccine coverage and payment; establishing
payment for drugs covered as additional preventive services; Medicare
Parts A and B Overpayment Provisions of the Affordable Care Act.

DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on September 9,
2024.

ADDRESSES: In commenting, please refer to file code CMS-1807-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-1807-P, P.O. Box 8016, Baltimore, MD
21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-1807-P, Mail Stop C4-26-05, 7500
Security Boulevard, Baltimore, MD 21244-1850.

FOR FURTHER INFORMATION CONTACT:
<a href="/cdn-cgi/l/email-protection#266b43424f45475443764e5f554f454f474860434375454e4342534a4366454b55084e4e5508414950">[email&#160;protected]</a>, for any issues not
identified below. Please indicate the specific issue in the subject
line of the email.
Michael Soracoe, (410) 786-6312, Morgan Kitzmiller, (410) 786-1623,
or <a href="/cdn-cgi/l/email-protection#6d200809040e0c1f083d05141e040e040c032b08083e0e0508091801082d0e001e4305051e430a021b">[email&#160;protected]</a>, for issues related to
practice expense, work RVUs, conversion factor, and PFS specialty-
specific impacts.
Kris Corwin, (410) 786-8864, or
<a href="/cdn-cgi/l/email-protection#125f77767b71736077427a6b617b717b737c54777741717a7776677e7752717f613c7a7a613c757d64">[email&#160;protected]</a>, for issues related to
strategies for updates to practice expense data collection and
methodology.
Hannah Ahn, (814) 769-0143, or
<a href="/cdn-cgi/l/email-protection#6b260e0f02080a190e3b0312180208020a052d0e0e3808030e0f1e070e2b08061845030318450c041d">[email&#160;protected]</a>, for issues related to
potentially misvalued services under the PFS.
Kris Corwin, (410) 786-8864, Patrick Sartini, (410) 786-9252,
Mikayla Murphy, (667) 414-0093, or
<a href="/cdn-cgi/l/email-protection#400d2524292321322510283933292329212e0625251323282524352c2500232d336e2828336e272f36">[email&#160;protected]</a>, for issues related to direct
supervision using two-way audio/video communication technology,
telehealth, and other services involving communications technology.
Tamika Brock, (312) 886-7904, or
<a href="/cdn-cgi/l/email-protection#c489a1a0ada7a5b6a194acbdb7ada7ada5aa82a1a197a7aca1a0b1a8a184a7a9b7eaacacb7eaa3abb2">[email&#160;protected]</a>, for issues related to
teaching physician billing for services involving residents in teaching
settings.
Sarah Leipnik, (410) 786-3933, Mikayla Murphy, (667) 414-0093,
Regina Walker-Wren, (410) 786-9160, or
<a href="/cdn-cgi/l/email-protection#0c416968656f6d7e695c64757f656f656d624a69695f6f6469687960694c6f617f2264647f226b637a">[email&#160;protected]</a>, for issues related to payment
for caregiver training services and addressing health-related social
needs (community health integration, principal illness navigation, and
social determinants of health risk assessment).
Erick Carrera, (410) 786-8949, or
<a href="/cdn-cgi/l/email-protection#1f527a7b767c7e6d7a4f77666c767c767e71597a7a4c7c777a7b6a737a5f7c726c3177776c31787069">[email&#160;protected]</a>, for issues related to office/
outpatient evaluation and management visit inherent complexity add-one.
Sarah Irie, (410) 786-1348, Emily Parris (667) 414-0418, or
<a href="/cdn-cgi/l/email-protection#317c5455585250435461594842585258505f7754546252595455445d5471525c421f5959421f565e47">[email&#160;protected]</a>, for issues related to payment
for advanced primary care management service.
Sarah Leipnik, (410) 786-3933, or
<a href="/cdn-cgi/l/email-protection#8cc1e9e8e5efedfee9dce4f5ffe5efe5ede2cae9e9dfefe4e9e8f9e0e9ccefe1ffa2e4e4ffa2ebe3fa">[email&#160;protected]</a>, for issues related to global
surgery payment accuracy.
Pamela West, (410) 786-2302, for issues related to supervision of
outpatient therapy services in private practices, certification of
therapy plans of care, and KX modifier threshold.
Lindsey Baldwin, (410) 786-1694, Regina Walker-Wren, (410) 786-
9160, Erick Carrera, (410) 786-8949, Mikayla Murphy, (667) 414-0093, or
<a href="/cdn-cgi/l/email-protection#f3be96979a90928196a39b8a809a909a929db59696a0909b9697869f96b3909e80dd9b9b80dd949c85">[email&#160;protected]</a>, for issues related to
advancing access to behavioral health services.
Laura Ashbaugh, (410) 786-1113, and Erick Carrera, (410) 786-8949,
Zehra Hussain, (214) 767-4463, or
<a href="/cdn-cgi/l/email-protection#aee3cbcac7cdcfdccbfec6d7ddc7cdc7cfc0e8cbcbfdcdc6cbcadbc2cbeecdc3dd80c6c6dd80c9c1d8">[email&#160;protected]</a>, for issues related to dental
services inextricably linked to specific covered medical services.
Zehra Hussain, (214) 767-4463, or
<a href="/cdn-cgi/l/email-protection#5d103839343e3c2f380d35242e343e343c331b38380e3e3538392831381d3e302e7335352e733a322b">[email&#160;protected]</a>, for issues related to payment
of skin substitutes.
Laura Kennedy, (410) 786-3377, Adam Brooks, (202) 205-0671, Rachel
Radzyner, (410) 786-8215, Rebecca Ray, (667) 414-0879, and Jae Ryu,
(667) 414-0765 for issues related to Drugs and Biological Products Paid
Under Medicare Part B.
<a href="/cdn-cgi/l/email-protection#a8e5cdccc1cbc9dacdf8c0d1dbc1cbc1c9c6eecdcdfbcbc0cdccddc4cde8cbc5db86c0c0db86cfc7de">[email&#160;protected]</a>, for issues related to
complex drug administration.

[[Page 61597]]

Glenn McGuirk, (410) 786-5723, or <a href="/cdn-cgi/l/email-protection#084b444e5b574166797d617a616d7b486b657b2660607b266f677e">[email&#160;protected]</a> for
issues related to Clinical Laboratory Fee Schedule.
Lisa Parker, (410) 786-4949, or <a href="/cdn-cgi/l/email-protection#d197809992fc81818291b2bca2ffb9b9a2ffb6bea7">[email&#160;protected]</a>, for issues
related to FQHC payments.
Heidi Oumarou, (410) 786-7942, for issues related to the FQHC
market basket.
Michele Franklin, (410) 786-9226, or <a href="/cdn-cgi/l/email-protection#1e4c565d5e7d736d3076766d30797168">[email&#160;protected]</a>, for issues
related to RHC payments.
Kianna Banks (410) 786-3498 and Cara Meyer (667) 290-9856, for
issues related to RHCs and FQHCs and Conditions for Certification or
Coverage.
Colleen Barbero (667) 290-8794, for issues related to Medicare
Diabetes Prevention Program.
Ariana Pitcher, (667) 290-8840, or <a href="/cdn-cgi/l/email-protection#6e213a3e31230b0a070d0f1c0b2e0d031d4006061d40090118">[email&#160;protected]</a>, 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#40132821322524132136292e273310322f2732212d00232d336e2828336e272f36">[email&#160;protected]</a>,
for issues related to the Medicare Shared Savings Program (Shared
Savings Program) Quality performance standard and quality reporting
requirements.
Janae James, (410) 786-0801, or <a href="/cdn-cgi/l/email-protection#3c6f545d4e59586f5d4a55525b4f6c4e535b4e5d517c5f514f1254544f125b534a">[email&#160;protected]</a>,
for issues related to Shared Savings Program beneficiary assignment and
benchmarking methodology.
Richard (Chase) Kendall, (410) 786-1000, or
<a href="/cdn-cgi/l/email-protection#31625950435455625047585f564261435e5643505c71525c421f5959421f565e47">[email&#160;protected]</a>, for issues related to reopening ACO
payment determinations, and mitigating the impact of significant,
anomalous, and highly suspect billing activity on Shared Savings
Program financial calculations.
Lucy Bertocci, (410) 786-3776, or <a href="/cdn-cgi/l/email-protection#36655e574453526557405f5851456644595144575b76555b45185e5e4518515940">[email&#160;protected]</a>,
for issues related to Shared Savings Program prepaid shared savings,
advance investment payments, beneficiary notice and eligibility
requirements.
Rachel Radzyner, (410) 786-8215, for issues related to payment for
preventative services, including preventive vaccine administration and
drugs covered as additional preventive services.
Elisabeth Daniel, (667) 290-8793, for issues related to the
Medicare Prescription Drug Inflation Rebate Program.
Genevieve Kehoe, <a href="/cdn-cgi/l/email-protection#4f0e222d3a232e3b203d363c3f2a2c262e233b362c2e3d2a0f2c223c6127273c61282039">[email&#160;protected]</a>, or 1-844-711-
2664 (Option 4) for issues related to the Request for Information:
Building upon the MIPS Value Pathways (MVPs) Framework to Improve
Ambulatory Specialty Care.
Kimberly Long, (410) 786-5702, for issues related to expanding
colorectal cancer screening.
Rachel Katonak, (410) 786-8564, for issues related to expanding
Hepatitis B vaccine coverage.
Mei Zhang, (410) 786-7837, 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).
Katie Parker, (410) 786-0537, for issues related to Parts A and B
overpayment provisions of the Affordable Care Act.
Amy Gruber, (410) 786-1542, for issues related to low titer O+
whole blood transfusion therapy during ground ambulance transport.
Renee O'Neill, (410) 786-8821, or Sophia Sugumar, (410) 786-1648,
for inquiries related to Merit-based Incentive Payment System (MIPS)
track of the Quality Payment Program.
Danielle Drayer, (516) 965-6630, for inquiries related to
Alternative Payment Models (APMs).

SUPPLEMENTARY INFORMATION:
Addenda Available Only Through the Internet on the CMS website: The
PFS Addenda along with other supporting documents and tables referenced
in this proposed rule are available on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html</a>. Click on the link on the left side of the
screen titled, ``PFS Federal Regulations Notices'' for a chronological
list of PFS Federal Register and other related documents. For the CY
2025 PFS proposed rule, refer to item CMS-1807-P. Readers with
questions related to accessing any of the Addenda or other supporting
documents referenced in this proposed rule and posted on the CMS
website identified above should contact
<a href="/cdn-cgi/l/email-protection#efa28a8b868c8e9d8abf87969c868c868e81a98a8abc8c878a8b9a838aaf8c829cc187879cc1888099">[email&#160;protected]</a>.
CPT (Current Procedural Terminology) Copyright Notice: Throughout
this proposed rule, we use CPT codes and descriptions to refer to a
variety of services. We note that CPT codes and descriptions are
copyright 2020 American Medical Association. All Rights Reserved. CPT
is a registered trademark of the American Medical Association (AMA).
Applicable Federal Acquisition Regulations (FAR) and Defense Federal
Acquisition Regulations (DFAR) apply.

I. Executive Summary

A. Purpose

This major annual rule proposes to revise payment policies under
the Medicare PFS and makes other policy changes, including proposals to
implement certain provisions of the Further Continuing Appropriations
and Other Extensions Act of 2024 (Pub. L. 118-22, November 16, 2023),
Consolidated Appropriations Act, 2023 (Pub. L. 117-328, September 29,
2022), Inflation Reduction Act of 2022 (IRA) (Pub. L. 117-169, August
16, 2022), Consolidated Appropriations Act, 2022 (Pub. L. 117-103,
March 15, 2022), 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 for
Patients and Communities Act (SUPPORT Act) (Pub. L. 115-271, October
24, 2018), related to Medicare Part B payment. In addition, this major
proposed rule includes proposals regarding other Medicare payment
policies described in sections III. and IV.
This rulemaking also proposes to codify policies previously
established in guidance for the Medicare Prescription Drug Inflation
Rebate Program at new parts 427 and 428, including clarifications to
certain existing policies, consistent with sections 1847A(i) and 1860D-
14B of the Act. This rulemaking also proposes new policies for the
Medicare Prescription Drug Inflation Rebate Program, including removal
of units of drugs subject to discarded drug refunds from the Part B
rebate amounts, exclusion of units for which a manufacturer provides a
discount under the 340B Program from the Part D inflation rebate amount
starting on January 1, 2026, the process for reconciliation of a Part B
or Part D rebate amount to incorporate certain revised information, and
procedures for imposing civil money penalties on manufacturers that do
not pay Part B or Part D inflation rebate amounts within a specified
period of time.
This rulemaking proposes to update the Rural Health Clinic (RHC)
and Federally Qualified Health Clinic (FQHC) Conditions for
Certification and Conditions for Coverage (CfCs), respectively, by
clarifying the requirements and intent of the program regarding the
provision of services. We also aim to ensure RHCs are provided
flexibility in the services they offer, including specialty and
laboratory services.

[[Page 61598]]

This rulemaking also proposes to further advance Medicare's overall
value-based care strategy of growth, alignment, and equity through the
Medicare Shared Savings Program (Shared Savings Program) and the
Quality Payment Program. The structure of the programs enables us to
develop a set of tools for measuring and encouraging improvements in
care, which may support a shift to clinician payment over time into
Advanced Alternative Payment Models (APMs) and accountable care
arrangements which reduce care fragmentation and unnecessary costs for
patients and the health system.
This rulemaking also proposes changes to Medicare regulations
regarding requirements for reporting and returning Parts A and B
overpayments.

B. Summary of the Major Provisions

Please note, some sections of this proposed rule contain a request
for information (RFI). In accordance with the implementing regulations
of the Paperwork Reduction Act of 1995 (PRA), specifically 5 CFR
1320.3(h)(4), these general solicitations are exempt from the PRA.
Facts or opinions submitted in response to general solicitations of
comments from the public, published in the Federal Register or other
publications, regardless of the form or format thereof, provided that
no person is required to supply specific information pertaining to the
commenter, other than that necessary for self-identification, as a
condition of the agency's full consideration, are not generally
considered information collections and therefore not subject to the
PRA. Respondents are encouraged to provide complete but concise
responses. These RFIs are issued solely for information and planning
purposes; they do not constitute a Request for Proposal (RFP),
applications, proposal abstracts, or quotations. These RFIs do not
commit the U.S. Government to contract for any supplies or services or
make a grant award. Further, CMS is not seeking proposals through these
RFIs and will not accept unsolicited proposals. Responders are advised
that the U.S. Government will not pay for any information or
administrative costs incurred in response to these RFIs; all costs
associated with responding to these RFIs will be solely at the
interested party's expense. Not responding to these RFIs does not
preclude participation in any future procurement, if conducted. It is
the responsibility of the potential responders to monitor these RFI
announcements for additional information pertaining to these requests.
Please note that CMS will not respond to questions about the policy
issues raised in these RFIs. CMS may or may not choose to contact
individual responders. Such communications would only serve to further
clarify written responses. Contractor support personnel may be used to
review RFI responses. Responses to this notice are not offers and
cannot be accepted by the U.S. Government to form a binding contract or
issue a grant. Information obtained as a result of these RFIs may be
used by the U.S. Government for program planning on a non-attribution
basis. Respondents should not include any information that might be
considered proprietary or confidential. These RFIs should not be
construed as a commitment or authorization to incur cost for which
reimbursement would be required or sought. All submissions become U.S.
Government property and will not be returned. CMS may publicly post the
comments received, or a summary thereof.
Section 1848 of the Social Security Act (the Act) requires us to
establish payments under the PFS, based on national uniform relative
value units (RVUs) that account for the relative resources used in
furnishing a service. The statute requires that RVUs be established for
three categories of resources: work, practice expense (PE), and
malpractice (MP) expense. 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 proposed rule, we are proposing to establish RVUs for
CY 2025 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 proposed rule also includes
discussions and provisions regarding several other Medicare Part B
payment policies, Medicare and Medicaid provider and supplier
enrollment policies, and other policies regarding programs administered
by CMS.
Specifically, this proposed rule addresses:

<bullet> Background (section II.A.)
<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> Enhanced Care Management (section II.G.)
<bullet> Supervision of Outpatient Therapy Services in Private
Practices, Certification of Therapy Plans of Care with a Physician or
NPP Order, and KX Modifier Thresholds (section II.H.)
<bullet> Advancing Access to Behavioral Health Services (section II.I.)
<bullet> Proposals on Medicare Parts A and B Payment for Dental
Services Inextricably Linked to Specific Covered Services (section
II.J.)
<bullet> Payment for Skin Substitutes (section II.K.)
<bullet> Drugs and Biological Products Paid Under Medicare Part B
(section III.A.)
<bullet> Rural Health Clinics (RHCs) and Federally Qualified Health
Centers (FQHCs) (section III.B.)
<bullet> Rural Health Clinic (RHC) and Federally Qualified Health
Center (FQHC) Conditions for Certification and Conditions for Coverage
(CfCs) (section III.C.)
<bullet> Clinical Laboratory Fee Schedule: Revised Data Reporting
Period and Phase-in of Payment Reductions (section III.D.)
<bullet> Medicare Diabetes Prevention Program (MDPP) (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 Services (Sec. Sec.
410.10, 410.57, 410.64, 410.152) (section III.H.)
<bullet> Medicare Prescription Drug Inflation Rebate Program (section
III.I.)
<bullet> Request for Information: Building upon the MIPS Value Pathways
(MVPs) Framework to Improve Ambulatory Specialty Care (section III.J.)
<bullet> Expand Colorectal Cancer Screening (section III.K.)
<bullet> Requirements for Electronic Prescribing for Controlled
Substances for a Covered Part D Drug under a Prescription Drug Plan or
an MA-PD Plan (section III.L.)
<bullet> Expand Hepatitis B Vaccine Coverage (section III.M.)
<bullet> Low Titer O+ Whole Blood Transfusion Therapy During Ground
Ambulance Transport (section III.N.)
<bullet> Medicare Parts A and B Overpayment Provisions of the
Affordable Care Act (section III.O.)
<bullet> Updates to the Quality Payment Program (section IV.)

[[Page 61599]]

<bullet> Collection of Information Requirements (section V.)
<bullet> Response to Comments (section VI.)
<bullet> Regulatory Impact Analysis (section VII.)

C. Summary of Costs and Benefits

We have determined that this proposed rule is economically
significant. We estimate the CY 2025 PFS conversion factor to be
32.3562 which reflects a 0.05 percent positive budget neutrality
adjustment required under section 1848(c)(2)(B)(ii)(II) of the Act, the
0.00 percent update adjustment factor specified under section
1848(d)(19) of the Act, and the removal of the temporary 2.93 percent
payment increase for services furnished from March 9, 2024, through
December 31, 2024, as provided in the CAA, 2024. For a detailed
discussion of the economic impacts, see section VII., Regulatory Impact
Analysis, of this proposed rule.

II. Provisions of the Proposed Rule for the PFS

A. Background

In accordance with section 1848 of the Social Security Act (the
Act), CMS has paid for physicians' services under the Medicare
physician fee schedule (PFS) since January 1, 1992. The PFS relies on
national relative values that are established for work, practice
expense (PE), and malpractice (MP), which are adjusted for geographic
cost variations. These values are multiplied by a conversion factor
(CF) to convert the relative value units (RVUs) into payment rates. The
concepts and methodology underlying the PFS were enacted as part of the
Omnibus Budget Reconciliation Act of 1989 (OBRA '89) (Pub. L. 101-239,
December 19, 1989), and the Omnibus Budget Reconciliation Act of 1990
(OBRA '90) (Pub. L. 101-508, November 5, 1990). The final rule
published in the November 25, 1991 Federal Register (56 FR 59502) set
forth the first fee schedule used for Medicare payment for physicians'
services.
We note that throughout this proposed rule, unless otherwise noted,
the term ``practitioner'' is used to describe both physicians and
nonphysician practitioners (NPPs) who are permitted to bill Medicare
under the PFS for the services they furnish to Medicare beneficiaries.

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 American Medical Association (AMA) Relative Value Scale Update
Committee (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 in the CY 2007
PFS proposed rule (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 to
develop the indirect portion of the PE RVUs. Prior to CY 2010, we
primarily used the PE/HR by specialty obtained from the AMA's
Socioeconomic Monitoring System (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 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 or how the PE/HR data are used. 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 are not

[[Page 61600]]

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 2025 PFS proposed rule PE/HR'' on the
CMS website under downloads for the CY 2025 PFS proposed rule at
<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html</a>.
For CY 2025, we have incorporated the available utilization data
for two new specialties, Marriage and Family Therapist (MFT) and Mental
Health Counselor (MHC), which we recognized effective January 1, 2024,
in accordance with section 4121 of the CAA, 2023. We are proposing to
use proxy PE/HR values for these new specialties, as there are no PPIS
data for these specialties, by crosswalking the PE/HR as follows from
specialties that furnish similar services in the Medicare claims data:

<bullet> Marriage and Family Therapist (MFT) from Licensed Clinical
Social Workers; and
<bullet> Mental Health Counselor (MHC) from Licensed Clinical Social
Workers

These updates are reflected in the ``CY 2025 PFS proposed rule PE/
HR'' file available on the CMS website under the supporting data files
for the CY 2025 PFS proposed rule at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html">https://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 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 healthcare 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 2025 PFS
proposed rule at https://www.cms.gov/

[[Page 61601]]

Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-
Federal-Regulation-Notices.html. This file contains a table that
illustrates the calculation of PE RVUs as described in this proposed
rule for individual codes.
(a) Setup File
First, we create a setup file for the PE methodology. The setup
file contains the direct cost inputs, the utilization for each
procedure code at the specialty and facility/nonfacility place of
service level, and the specialty specific PE/HR data calculated from
the surveys.
(b) Calculate the Direct Cost PE RVUs
Sum the costs of each direct input.
Step 1: Sum the direct costs of the inputs for each service.
Step 2: Calculate the aggregate pool of direct PE costs for the
current year. We set the aggregate pool of PE costs equal to the
product of the ratio of the current aggregate PE RVUs to current
aggregate work RVUs and the projected aggregate work RVUs.
Step 3: Calculate the aggregate pool of direct PE costs for use in
ratesetting. This is the product of the aggregate direct costs for all
services from Step 1 and the utilization data for that service.
Step 4: Using the results of Step 2 and Step 3, use the CF to
calculate a direct PE scaling adjustment to ensure that the aggregate
pool of direct PE costs calculated in Step 3 does not vary from the
aggregate pool of direct PE costs for the current year. Apply the
scaling adjustment to the direct costs for each service (as calculated
in Step 1).
Step 5: Convert the results of Step 4 to 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 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 three 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 a specialty mix based on the
specialties of the practitioners reporting 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 annually. 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.
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.

[[Page 61602]]

Step 15: Using the results of Step 14, calculate an indirect
practice cost index at the specialty level by dividing each specialty
specific indirect scaling factor by the average indirect scaling factor
for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service
level to ensure the capture of all indirect costs. Calculate a weighted
average of the practice cost index values for the specialties that
furnish the service. (Note: For services with TCs and PCs, we calculate
the indirect practice cost index across the global service, PCs, and
TCs. Under this method, the indirect practice cost index for a given
service (for example, echocardiogram) does not vary by the PC, TC, and
global service.)
Step 17: Apply the service level indirect practice cost index
calculated in Step 16 to the service level adjusted indirect allocators
calculated in Step 11 to get the indirect PE RVUs.
(d) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs
from Step 17 and apply the final PE budget neutrality (BN) adjustment.
The final PE BN adjustment is calculated by comparing the sum of steps
5 and 17 to the 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 proposed 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: To
calculate the PE and MP RVUs, we exclude certain specialties, such as
NPPs paid at a percentage of the PFS and low volume specialties, from
the calculation. These specialties are included to calculate the BN
adjustment. They are displayed in Table 1.
BILLING CODE P

[[Page 61603]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.000

BILLING CODE C
<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
creating the file consistent with the current payment policy as
implemented in claims processing. For example, services billed with the
assistant at surgery modifier are paid 16 percent of the PFS amount for
that service; therefore, the utilization file is modified to only
account for 16 percent of any service that contains the assistant at
surgery modifier. Similarly, for those services to which volume
adjustments are made to account for the payment modifiers, time
adjustments are applied as well. For time adjustments to surgical
services, the intraoperative portion in the work time file is used;
where it is not present, the intraoperative percentage from the payment
files used by contractors to process Medicare claims is used instead.
Where neither is available, we use the payment adjustment ratio to
adjust the time accordingly. Table 2 details the

[[Page 61604]]

manner in which the modifiers are applied.
[GRAPHIC] [TIFF OMITTED] TP31JY24.001

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.
We note that for CY 2025, we are proposing mandatory use of the 54
and 55 modifiers when practitioners furnishing global surgery
procedures share in patient care and intend only to furnish
preoperative/intraoperative or postoperative portions of the total
global procedure. If finalized, this proposal will likely increase the
number of claims subject to the adjustment described in the discussion
above. We discuss this proposal in section II.G. of this proposed rule.
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
proposed 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 proposed 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 proposed
rule.

Usage: We currently use an equipment utilization rate assumption of
50 percent for most equipment, with the exception of expensive
diagnostic

[[Page 61605]]

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 types of equipment, the vast
majority of which fall in the range of 5 to 10 years, and none of which
are lower than two 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 data sources containing equipment maintenance rates,
commenters could not identify an auditable, robust data source that CMS
could use 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 3.
[GRAPHIC] [TIFF OMITTED] TP31JY24.002

We are not proposing any changes to the equipment interest rates
for CY 2025.
3. Adjusting RVUs To Match the PE Share of the Medicare Economic Index
(MEI)
In the past, we have stated that we believe that the MEI is the
best measure available of the relative weights of the three components
in payments under the PFS--work, practice expense (PE), and malpractice
(MP). Accordingly, we believe that to ensure that the PFS payments
reflect the relative resources in each of these PFS 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 cost
share weights in the Medicare Economic Index (MEI). In the past, we
have proposed (and subsequently finalized) to accomplish this by
holding the work RVUs constant and adjusting the PE RVUs, MP RVUs, and
CF to produce the appropriate balance in RVUs among the three PFS
components and payment rates for individual services, that is, that the
total RVUs on the PFS are proportioned to approximately 51 percent work
RVUs, 45 percent PE RVUs, and 4 percent MP RVUs. As the MEI cost shares
are updated, we would typically propose 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, and to recalibrate the
relativity adjustment that we apply in step 18 as described in the CY
2023 PFS final rule (87 FR 69414 and 69415) and CY 2014 PFS final rule
(78 FR 74236 and 74237). The most recent recalibration was done for the
CY 2014 RVUs.
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 CY 2023 PFS final rule (87 FR 69688 through 69711), we
finalized to rebase and revise the MEI to reflect more current market
conditions faced by physicians in furnishing physicians' services
(referred to as the ``2017-based MEI''). We also finalized a delay of
the adjustments to the PE pools in steps 3

[[Page 61606]]

and 10 and the recalibration of the relativity adjustment in step 18
until the public had an opportunity to comment on the rebased and
revised MEI (87 FR 69414 through 69416). Because we finalized
significant methodological and data source changes to the MEI in the CY
2023 PFS final rule and significant time has elapsed since the last
rebasing and revision of the MEI in CY 2014, we believed that delaying
the implementation of the finalized CY 2023 rebased and revised MEI was
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 the CY 2023 PFS final rule (87 FR 69429 through 69432), where we
reviewed our ongoing efforts to update data inputs for PE to aid
stability, transparency, efficiency, and data adequacy. We also
solicited comment in the CY 2023 PFS proposed rule on when and how to
best incorporate the CY 2023 rebased and revised MEI into PFS
ratesetting, and whether it would be appropriate to consider a
transition to full implementation for potential future rulemaking. We
presented the impacts of implementing the rebased and revised MEI in
PFS ratesetting through a 4-year transition and through full immediate
implementation, that is, with no transition period in the CY 2023 PFS
proposed rule. We also solicited comment on other implementation
strategies for potential future rulemaking in the CY 2023 PFS proposed
rule. In the CY 2023 PFS final rule, we discussed that many commenters
supported our proposed delayed implementation, and many commenters
expressed concerns with the redistributive impacts of the
implementation of the rebased and revised MEI in PFS ratesetting. Many
commenters also noted the AMA's intent to collect practice cost data
from physician practices, which could be used to derive cost share
weights for the MEI and RVU shares.
In light of the AMA's current data collection efforts and because
the methodological and data source changes to the MEI finalized in the
CY 2023 PFS final rule would have significant impacts on PFS payments,
similar to our discussion of this topic in the CY 2024 PFS rulemaking
cycle (88 FR 78829 through 78831), we continue to believe that delaying
the implementation of the finalized 2017-based MEI cost share weights
for the RVUs is consistent with our efforts to balance payment
stability and predictability with incorporating new data through more
routine updates. For these reasons, we did not propose to incorporate
the 2017-based MEI in PFS ratesetting for CY 2024. As we noted in the
CY 2024 PFS final rule, many commenters on the CY 2024 PFS proposed
rule supported our continued delayed implementation of the 2017-based
MEI in PFS ratesetting (88 FR 78830). Most of these commenters urged us
to pause consideration of other sources for the MEI until the AMA's
efforts to collect practice cost data from physician practices have
concluded, although a few commenters recommended that we implement the
MEI for PFS ratesetting as soon as possible. We agree with the
commenters that it would be prudent, and avoid potential duplication of
effort, to wait to consider other data sources for the MEI while the
AMA's data collection activities are ongoing. As we discussed in the CY
2024 PFS final rule, we continue to monitor the data available related
to physician services' input expenses, but we are not proposing to
update the data underlying the MEI cost weights at this time. Given our
previously described policy goal to balance PFS payment stability and
predictability with incorporating new data through more routine updates
to the MEI, we are not proposing to incorporate the 2017-based MEI in
PFS ratesetting for CY 2025. We invite comments on this approach as
well as any information on the timing of the AMA's practice cost data
collection efforts and other sources of data we could consider for
updating the MEI.
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 2025 direct PE input public use files, which are
available on the CMS website under downloads for the CY 2025 PFS
proposed rule at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html">https://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 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 the relativity of values among codes. For
example, as medical practice and technologies change over time,
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

[[Page 61607]]

case, 4 minutes as the standard for the complex case, and 5 minutes as
the standard for the highly complex case. These values were based upon
a review of the existing minutes assigned for this clinical labor
activity; we determined that 2 minutes is the duration for most
services and a small number of codes with more complex forms of digital
imaging have higher values. We also finalized standard times for 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 believe that the three 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. We direct readers to the
discussion in the CY 2019 PFS final rule (83 FR 59463 through 59464)
for additional details.
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 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 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 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. We direct readers to the discussion in the CY 2020 PFS
final rule (84 FR 62584) for additional details.
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 the RUC's development and our review of code values
for individual codes. Beginning with its recommendations for CY 2019,
the RUC mandated the use of a new PE worksheet for its 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
helps us simplify and standardize the hundreds of clinical labor tasks
currently listed in our direct PE database. As in previous calendar
years, to facilitate rulemaking for CY 2025, 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 2025 PFS proposed rule at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html">https://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 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 2025, we are proposing to update the price of 17 supplies
and one equipment item in response to the public submission of invoices
following the publication of the CY 2024 PFS final rule. The 18 supply
and equipment items with proposed updated prices are listed in the
valuation of specific codes section of the preamble under Table 16, CY
2025 Invoices Received for Existing Direct PE Inputs.
An interested party submitted 30 invoices to update pricing for the
human amniotic membrane allograft

[[Page 61608]]

mounted on a non-absorbable self-retaining ring (SD248) supply. We
previously updated the price of this supply in the CY 2024 final rule
(88 FR 78901) based on averaging together the price of the Prokera
Slim, Prokera Classic, and Prokera Plus devices. The interested party
submitted new invoices for all three of these devices which averaged to
a new price of $1149.00 which we are proposing for the SD248 supply. We
are soliciting additional comments from interested parties regarding
the price of the SD248 supply as well as any information as far as
whether one of these three devices (the Prokera Slim, Prokera Classic,
and Prokera Plus) would be more typical than the other two for use as a
supply in CPT code 65778.
In the case of the indocyanine green (25ml uou) (SL083) supply, we
noticed that there was a clear bimodal distribution of prices on the
eight submitted invoices, clustered around $91.00 and $141.67,
respectively, with no pricing in between $100 and $140. We are
proposing the updated total average price of $125.11 based on the eight
submitted invoices for the SL083 supply, however, we are soliciting
comments on why there was such divergence in the pricing on the
submitted invoices, as well as whether these may represent pricing for
two different supplies.
Regarding the Reaction buffer 10X (Ventana 950-300) (SL478) supply,
we are proposing to update the price from $0.037 to $0.045, which is
less than the $0.075 contained on the invoice submitted by interested
parties. We were able to find this product readily available for
purchase online at a quantity of 10 liters for $453 or a price of
$0.045. We do not believe that it would be typical for providers to pay
a higher price based on smaller unit quantities; therefore, we are
proposing to update the price of the SL478 supply but only to $0.045,
which is the price to purchase this supply online, as stated above.
Interested parties also alerted CMS to a technical correction for
pricing the Atomizer tips (disposable) (SL464) supply. We previously
finalized a price of $2.66 for the SL464 supply, which was included in
the table of Invoices Received for Existing Direct PE Inputs in the CY
2018 final rule (82 FR 53162). However, due to a technical error, the
updated pricing for the SL464 supply was never implemented. We are
proposing to make this correction for CY 2025; the corrected price of
$2.66 for the SL464 supply is included in Table 16.
We are not proposing to update the price of another ten supplies,
which were the subject of public submission of invoices. Our reasons
for not proposing updates to these prices are detailed below, and we
are seeking additional information from interested parties for
assistance in pricing these supplies:
<bullet> Liposorber supplies: Tubing set (SC083), Plasma LDL
adsorption column (SD186), and Plasma separator (SD188): We received
invoices for these three Liposorber supplies from an interested party.
However, it was unclear from the invoice submissions what the unit
quantity size is for each product. We require additional information
regarding the unit size of each supply included on these invoices to
establish updated pricing, and therefore, we are not proposing updates
to the prices for these supplies. We are seeking additional comments
regarding the pricing of these supplies and whether the pricing has
increased so dramatically, as it seems unlikely that prices have
tripled in the five years since we most recently updated the pricing
for these supplies.
<bullet> Congo Red kits (SA110): We received three invoices from
interested parties requesting an increase in the price of the SA110
supply from $6.80 to $18.78. However, we were able to find Congo Red
staining kits readily available online at a price of 100 for $410 or
$4.10 per kit. The unit size of these kits was also unclear, which made
price comparisons with the submitted invoices difficult. Based on the
three invoices and the online price of 100 for $410 or $4.10 per kit,
we do not believe there is enough pricing data to support an increase
in the price of the SA110 supply from $6.80 to $18.78, and we are not
proposing an increase in the price of this supply.
<bullet> Gauze, non-sterile 4in x 4in (SG051): We received one
invoice from interested parties requesting an increase in the price of
the SG051 supply from $0.03 to $0.04. However, the submitted invoice
price appeared to be for surgical gauze, not non-sterile gauze. We were
able to find the 4x4 non-sterile gauze readily available online at less
than the invoice price. Based on this information, we do not believe
there is enough pricing data to support an increase in the price of the
SG051 supply from $0.03 to $0.04, and we are not proposing an increase
in the price of this supply.
<bullet> Permanent marking pen (SL477): We received one invoice
from interested parties requesting an increase in the price of the
SL477 supply from $2.81 to $4.62. However, we found black marking pens,
such as Sharpies, widely available at unit prices around $2.00 when
purchased in larger quantities. Based on this information, we do not
believe there is enough pricing data to support an increase in the
price of the SL477 supply from $2.81 to $4.62, and we are not proposing
an increase in the price of this supply.
<bullet> Hematoxylin II (Ventana 790-2208) (SL483): We received
four invoices from interested parties requesting an increase in the
price of the SL483 supply from $0.780 to $2.722. However, we were able
to find hematoxylin II stains readily available online at cheaper
prices, such as $52.00 for 500 ml ($0.104 per ml). Based on this
information, we do not believe there is enough pricing data to support
an increase in the price of the SL483 supply from $0.780 to $2.722, and
we are not proposing an increase in the price of this supply.
<bullet> Bluing reagent (Ventana 760-2037) (SL484): We received
three invoices from interested parties requesting an increase in the
price of the SL484 supply from $4.247 to $6.130. While researching the
pricing of the SL484 supply, we were unable to determine the unit
quantity size on invoices, which made it difficult to evaluate if the
requested price accurately reflected market pricing. As best we could
tell, the requested price increase to $6.130 was more expensive than
comparable online bluing reagents available for purchase. Based on this
information, we do not believe there is enough pricing data to support
an increase in the price of the SL484 supply from $4.247 to $6.130, and
we are not proposing an increase in the price of this supply.
<bullet> EZ Prep (10X) (Ventana 950-102) (SL481) and 250 Test Prep
Kit # 78 (Ventana 786-3034) (SL486): In each of these cases, we
received invoices from interested parties requesting substantial
increases in the price of the associated supplies, from $0.034 to
$0.509 for the SL481 supply and from $0.309 to $2.134 for the SL486
supply. We do not believe that it is reasonable to expect that the
typical market prices for these supplies have increased by 1400 percent
and 600 percent, respectively, in the 5 years since we most recently
updated the pricing for these supplies. The limited pricing information
we could find online for each product also failed to support these
drastic increases in pricing. Based on this information, we do not
believe there is enough pricing data to support the requested increases
for the SL481 and SL486 supplies, and we are not proposing increases to
the prices for these supplies.
(1) Invoice Submission
We remind readers that we routinely accept public submissions of
invoices as part of our process for developing payment rates for new,
revised, and

[[Page 61609]]

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#8cdcc9d3dcfee5efe9d3c5e2fcf9f8d3d9fce8edf8e9ccefe1ffa2e4e4ffa2ebe3fa">[email&#160;protected]</a>.
In recent years, we have noticed a growing number of invoice
submissions for use in updating supply and equipment pricing. Although
we continue to believe in the importance of using the most recent and
accurate invoice data to reflect current market pricing, we do have
some concerns that the increased use of these submissions may distort
relativity across the fee schedule. Relying on voluntary invoice
submissions to update pricing for a small subset of the total number of
supply and equipment items in our database, while leaving the
overwhelming majority of prices untouched, could be distorting pricing
in favor of the most recent submissions. We believe that it may be more
efficient, and more accurate, to update supply and equipment pricing in
a more comprehensive fashion similar to the pricing update that took
place from CY 2019 to CY 2022. For example, future updates to supply
and equipment pricing could take place in tandem with updates to
clinical labor pricing after the current clinical labor update
concludes in CY 2025. We welcome public comments on this general topic
of more comprehensive updates to supply and equipment pricing, and we
may consider comments we receive to inform future rulemaking.
(2) Supply Pack Pricing Update
Interested parties previously notified CMS that they identified
numerous discrepancies between the aggregated cost of some supply packs
and the individual item components contained within. The interested
parties indicated that CMS should rectify these mathematical errors as
soon as possible to ensure that the sum correctly matches the totals
from the individual items, and they recommended that we resolve these
pricing discrepancies in the supply packs during CY 2024 rulemaking.
The AMA RUC convened a workgroup on this subject and submitted
recommendations to update pricing for a series of supply packs along
with the RUC's comment letter for the CY 2024 rule cycle.
We appreciated the additional information and RUC workgroup
recommendations regarding discrepancies in the aggregated cost of some
supply packs. However, due to the projected significant cost revisions
in the pricing of supply packs and because we did not propose to
address supply pack pricing in the CY 2024 proposed rule, we stated
that this issue would be better addressed in future rulemaking. For
example, the cleaning and disinfecting endoscope pack (SA042) is
included as a supply input in more than 300 HCPCS codes, which could
have a sizable impact on the overall valuation of these services, and
which was not incorporated into the proposed RVUs published for the CY
2024 proposed rule. We stated that interested parties would be better
served if we comprehensively addressed this topic during future
rulemaking in which commenters could provide feedback in response to
proposed pricing updates (88 FR 78833 through 78834).
For CY 2025, we are proposing to implement the supply pack pricing
update and associated revisions as recommended by the RUC's workgroup.
We are proposing to update the pricing of the ``pack, cleaning and
disinfecting, endoscope'' (SA042) supply from $19.43 to $31.29, to
update the pricing of the ``pack, drapes, cystoscopy'' (SA045) supply
from $17.33 to $14.99, to update the pricing of the ``pack, ocular
photodynamic therapy'' (SA049) supply from $16.35 to $26.35, to update
the pricing of the ``pack, urology cystoscopy visit'' (SA058) supply
from $113.70 to $37.63, and to update the pricing of the ``pack,
ophthalmology visit (w-dilation)'' (SA082) supply from $3.91 to $2.33.
As recommended by the RUC workgroup, we are also proposing to delete
the ``pack, drapes, laparotomy (chest-abdomen)'' (SA046) supply
entirely. The proposed updated prices for these supply packs are listed
in the valuation of specific codes section of the preamble under Table
16, CY 2025 Invoices Received for Existing Direct PE Inputs.
In accordance with the RUC workgroup's recommendations, we are also
proposing to create eight new supply codes, including components
contained within previously existing supply packs. Aside from the SB056
supply, which is a replacement in several HCPCS codes for the deleted
SA046 supply pack, all of these new supplies are not included as
standalone direct PE inputs in any current HCPCS codes, as they are,
again, components contained within previously existing supply packs. We
are proposing to add:
<bullet> The kit, ocular photodynamic therapy (PDT) (SA137) supply
at a price of $26.00 as a component of the SA049 supply pack;
<bullet> The Abdominal Drape Laparotomy Drape Sterile (100 in x 72
in x 124 in) (SB056) supply at a price of $8.049 as a replacement for
the SA046 supply pack;
<bullet> The drape, surgical, legging (SB057) supply at a price of
$3.284 as a component of the SA045 supply pack;
<bullet> The drape, surgical, split, impervious, absorbent (SB058)
supply at a price of $8.424 as a component of the SA045 supply pack;
<bullet> The post-mydriatic spectacles (SB059) supply at a price of
$0.328 as a component of the SA082 supply pack;
<bullet> The y-adapter cap (SD367) supply at a price of $0.352 as a
component of the SA049 supply pack;
<bullet> The ortho-phthalaldehyde 0.55% (e.g., Cidex OPA) (SM030)
supply at a price of $0.554 as a component of the SA042 supply pack;
and
<bullet> The ortho-phthalaldehyde test strips (SM031) supply at a
price of $1.556 as a component of the SA042 supply pack.
The proposed new supply pack component items are listed in the
valuation of specific codes section of the preamble under Table 17, CY
2025 New Invoices.
We are also proposing the following additional supply substitutions
based on the recommendations of the RUC workgroup. We are proposing to
remove the deleted SA046 supply pack and replace it with the drape,
sterile, fenestrated 16in x 29in (SB011) supply for CPT codes 19020,
19101, 19110, 19112, 20101, and 20102. We are proposing to remove the
deleted SA046 supply pack and replace it with two supplies--the drape,
sterile, three-quarter sheet (SB014) and the drape, towel, sterile 18in
x 26in (SB019)--for CPT codes 19000 and 60300. We are proposing to
remove the deleted SA046 supply pack and replace it with two supplies--
the drape, towel, sterile 18in x 26in (SB019) and the newly created
Abdominal Drape Laparotomy Drape Sterile (100 in x 72 in x 124 in)
(SB056) supply--for CPT codes 22510, 22511, 22513, and 22514. We are
proposing to remove the deleted SA046 supply pack without replacing it
with anything for CPT code 22526; the RUC workgroup

[[Page 61610]]

did not make a recommendation on what to do with CPT code 27278, which
also previously contained the SA046 supply pack. Therefore, we are also
proposing not to replace the SA046 supply pack with any supplies for
this code. The RUC workgroup also recommended removing the SA046 supply
pack from CPT code 64595 with no replacement; however, this code was
recently reviewed at the April 2022 RUC meeting and it no longer
includes the SA046 supply.
The RUC workgroup also reviewed the issue of skin adhesives and
identified several generic alternatives to using the skin adhesive
(Dermabond) (SG007) supply. The workgroup stated that there are
multiple skin adhesive products, at different price points, available
that work similarly to Dermabond and requested that generic
alternatives be used overall in place of brand names in the CMS direct
PE database. The workgroup made a series of suggestions for CMS to
create new medical supply item codes to encompass the generic
formulations of cyanoacrylate skin adhesive in multidose form and
single use sterile application.
We appreciate the recommendations from the RUC workgroup and concur
that generic alternatives be used in place of brand names, where
appropriate, in the CMS direct PE database. However, we have no pricing
information or submitted invoices for the four generic formulations of
cyanoacrylate skin adhesive requested by the RUC workgroup (2-Octyl-
cyanoacrylate, n-Butyl-2-cyanoacrylate, Combined n-Butyl and 2-
Octylcyanoacrylate, and Ethyl-2-cyanoacrylate). Since these four
potential new supplies have no pricing information and are not
currently included as direct PE inputs for any HCPCS codes, we have not
added them to our direct PE database for the CY 2025 proposed rule due
to lack of available information.
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 pricing was last updated created a significant disparity
between CMS' clinical wage data and the market average for clinical
labor. In recent years, several 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 updating the
clinical labor pricing was important 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 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

[[Page 61611]]

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 instead of 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 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 clinical labor pricing update implementation over four 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. (86 FR 65025) 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 4.
[GRAPHIC] [TIFF OMITTED] TP31JY24.003

(1) CY 2023 Clinical Labor Pricing Updates

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).
Based on comments received on the CY 2023 proposed rule, we
finalized a change in the descriptive text of the L041A clinical labor
type from ``Angio Technician'' to ``Vascular Interventional
Technologist''. We also finalized an update in the pricing of 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) based on submitted wage data from the 2022
Radiologic Technologist Wage and Salary Survey (87 FR 69422 through
69425).

(2) CY 2024 Clinical Labor Pricing Updates

We did not receive new wage data or other additional information
for use in clinical labor pricing from interested parties prior to the
publication of the CY 2024 PFS proposed rule. Therefore, our proposed
clinical labor pricing for CY 2024 was based on the clinical labor
pricing that we finalized in the CY 2023 PFS final rule, incremented an
additional step for Year 3 of the update. Based on comments received on
the CY 2024 proposed rule, we finalized an update in the clinical labor
pricing of the cytotechnologist (L045A) clinical labor type from $0.76
to $0.85 based on submitted data from the 2021 American Society of
Clinical Pathologists (ASCP) Wage Survey of Medical Laboratories (88 FR
78838).

(3) CY 2025 Clinical Labor Pricing Update Proposals

We did not receive new wage data or other additional information
for use in clinical labor pricing from interested parties prior to the
publication of the CY 2025 PFS proposed rule. Therefore, our proposed
clinical labor pricing for CY 2025 in Table 5 is based on the clinical
labor pricing that we finalized in the CY 2024 PFS final rule,
incremented an additional step for the final Year 4 of the update:
BILLING CODE P

[[Page 61612]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.004

[[Page 61613]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.005

BILLING CODE C
As was the case for the market-based supply and equipment pricing
update, the clinical labor rates will remain open for public comment
during the 60-day comment period for this CY 2025 PFS proposed rule. We
expect to set the updated clinical labor rates for CY 2025 in the final
rule. We updated the pricing of some clinical labor types in the CY
2022, CY 2023, and CY 2024 PFS final rules 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).
5. Development of Strategies for Updates to Practice Expense Data
Collection and Methodology
a. Background
The AMA PPIS was first introduced in 2007 as a means to collect
comprehensive and reliable data on the direct and indirect PEs incurred
by physicians (72 FR 66222). In considering the use of PPIS data, the
goal was to improve the accuracy and consistency of PE RVUs used in the
PFS. The data collection process included a stratified random sample of
physicians across various specialties, and the survey was administered
between August 2007 and March 2008. Data points from that period of
time are integrated into PFS calculations today. In the CY 2009 PFS
proposed rule (73 FR 38507 through 3850), we discussed the indirect PE
methodology that used data from the AMA's survey that predated the
PPIS. In CY 2010 PFS rulemaking, we announced our intent to incorporate
the AMA PPIS data into the PFS ratesetting process, which would first
affect the PE RVU. In the CY 2010 PFS proposed rule, we outlined a 4-
year transition period, during which we would phase in the AMA PPIS
data, replacing the existing PE data sources (74 FR 33554). We also
explained that our proposals intended to update survey data only (74 FR
33530 through 33531). In our CY 2010 final rule, we finalized our
proposal, with minor adjustments based on public comments (74 FR 61749
through 61750). We responded to the comments we received about the
transition to using the PPIS to inform indirect PE allocations (74 FR
61750). In the responses, we acknowledged concerns about potential gaps
in the data, which could impact the allocation of indirect PE for
certain physician specialties and suppliers, which are issues that
remain important today. The CY 2010 PFS final rule explains that
section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L. 106-
113, November 29, 1999) (BBRA) directed the Secretary to establish a
process under which we accept and use, to the maximum extent
practicable and consistent with sound data practices, data collected or
developed by entities and organizations to supplement the data we
normally collect in determining the PE component. BBRA required us to
establish criteria for accepting supplemental survey data. Since the
supplemental surveys were specific to individual specialties and not
part of a comprehensive multispecialty survey, we had required that
certain precision levels be met in order to ensure that the
supplemental data was sufficiently valid, and acceptable for use in the
development of the PE RVUs. At the time, our rationale included the
assumption that because the PPIS is a contemporaneous, consistently
collected, and comprehensive multispecialty survey, we do not believe
similar precision requirements are necessary, and we did not propose to
establish them for the use of the PPIS data (74 FR 61742). We noted
potential gaps in the data, which could impact the allocation of
indirect PE for certain physician and suppliers. The CY 2010 final rule
adopted the proposal, with minor adjustments based on public comments,
and explained that these minor adjustments were in part due to non-
response bias that results when the characteristics of survey
respondents differ in meaningful ways, such as in the mix of practices
sizes, from the general population (74 FR 61749 through 61750).
Throughout the 4-year transition period, from CY 2010 to CY 2013,
we gradually incorporated the AMA PPIS data into the PFS rates,
replacing the previous data sources. The process involved addressing
concerns and making adjustments as necessary, such as refining the PFS
ratesetting methodology in consideration of interested party feedback.
For background on the refinements that we considered after the
transition began, we refer readers to discussions in the CY 2011
through 2014 final rules (75 FR 73178 through 73179; 76 FR 73033
through 73034; 77 FR 98892; 78 FR 74272 through 74276).
In the CY 2011 PFS proposed rule, we requested comments on the
methodology for calculating indirect PE RVUs, explicitly seeking input
on using survey data, allocation methods, and potential improvements
(75 FR 40050). In our CY 2011 PFS final rule, we addressed comments
regarding the methodology for indirect PE calculations, focusing on
using survey data, allocation methods, and potential improvements (75
FR 73178 through 73179). We recognized some limitations of the current
PFS ratesetting methodology but maintained that the approach was the
most appropriate at the time. In the CY 2012 PFS final rule, we
responded to comments related to indirect PE methodology, including
concerns about allocating indirect PE to specific services and using
the AMA PPIS data for certain specialties (76 FR 73033 through 73034).
We indicated that CMS would continue to review and refine the
methodology and work with interested parties to address their concerns.
In the CY PFS 2014 final rule, we responded to comments about fully
implementing the AMA PPIS data. By 2014, the AMA PPIS data had been
fully integrated into the PFS, serving as the primary source for
determining indirect PE inputs (78 FR 74235). We continued to review
data and the PE methodology annually, considering interested party
feedback and evaluating the need for updates or refinements to ensure
the accuracy and relevance of PE RVUs (79 FR 67548). In the years
following the full implementation of the AMA PPIS data, we further
engaged with interested parties, thought leaders and subject matter
experts to improve our PE inputs' accuracy and reliability. For further
background, we refer readers to our discussions in final rules for CY
2016 through 2022 (80 FR 70892; 81 FR 80175; 82 FR 52980 through 52981;
83 FR 59455 through 59456; 84 FR 62572; 85 FR 84476 through 84478; 86
FR 62572).
In our CY 2023 PFS final rule, we issued an RFI to solicit public
comment

[[Page 61614]]

on strategies to update PE data collection and methodology (87 FR 69429
through 69432). We solicited comments on current and evolving trends in
health care business arrangements, the use of technology, or similar
topics that might affect or factor into PE calculations. We reminded
readers that we have worked with interested parties and CMS contractors
for 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.
As described in previous rulemaking, we have continued interest in
developing a roadmap for updates to our PE methodology that account for
changes in the health care landscape. Of various considerations
necessary to form a roadmap for updates, we reiterate that allocations
of indirect PE continue to present a wide range of challenges and
opportunities. As discussed in multiple cycles of previous rulemaking,
our PE methodology relies on AMA PPIS data, which may represent the
best aggregated available source of information at this time. However,
we acknowledge the limitations and challenges interested parties have
raised about using the current data for indirect PE allocations, which
we have also examined in related ongoing research. We noted in our CY
2023 and CY 2024 rules that there are several 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.
b. Preparation for Incorporating Refreshed Data and Request for
Information on Timing To Effectuate Routine Updates
In the CY 2024 PFS proposed rule, we continued to encourage
interested parties to provide feedback and suggestions to CMS that give
an evidentiary basis to shape optimal PE data collection and
methodological adjustments over time. Considering our ratesetting
methodology and prior experiences implementing new data, we issued a
follow-up from the CY 2023 comment solicitation for general
information. We solicited comments from interested parties on
strategies to incorporate information that could address known
challenges we experienced in implementing the initial AMA PPIS data.
Our current methodology relies on the AMA PPIS data, legislatively
mandated supplemental data sources (for, example, we use supplemental
survey data collected in 2003, as required by section 1848(c)(2)(H)(i)
of the Act to set rates for oncology and hematology specialties), and
in some cases crosswalks to allocate indirect PE as necessary for
certain specialties and provider types. We also sought to understand
whether, upon completion of the updated PPIS data collection effort by
the AMA, contingencies or alternatives may be necessary and available
to address the lack of data availability or response rates for a given
specialty, set of specialties, or specific service suppliers who are
paid under the PFS.
In response to last year's RFI, most commenters stated that CMS
should defer significant changes until the AMA PPIS results become
available. For further background, refer to 88 FR 78841 to 78843. In
responding to our RFI, the AMA RUC provided a set of responses, which
many other commenters repeated in their separate, individual comments.
In summary, the AMA RUC letter submission from CY 2024 suggested that
CMS should not consider further changes until PPIS data collection and
analysis is complete. Overall, the AMA comments generally do not
support any change to the methodology and stated that CMS should wait
to consider any further changes until PPIS updates become available.
Further, we noted that through its contractor, Mathematica, the AMA
secured an endorsement for the PPIS updates from each State society,
national medical specialty society, and others prior to fielding the
survey (88 FR 78843). Refer to the AMA's summary of the PPIS, available
at <a href="https://www.ama-assn.org/system/files/physician-practice-information-survey-summary.pdf">https://www.ama-assn.org/system/files/physician-practice-information-survey-summary.pdf</a>. The AMA expects analysis, reporting,
and documentation to complete by the end of CY 2024, and the AMA would
share data with CMS when results become available.
We believe the AMA's approach may possibly mitigate nonresponse
bias, which created challenges using previous PPIS data. However, we
remain uncertain about whether endorsements prior to fielding the
survey may inject other types of bias in the validity and reliability
of the information collected. We believe it remains important to
reflect on the challenges with our current methodology, and to continue
to consider alternatives that improve the stability and accuracy of our
overall PE methodology. We reiterate our discussion summarizing the
responses to previous years' RFIs in each of the CY 2023 and CY 2024
final rules (refer to 87 FR 69429 through 69432 and 88 FR 78841 to
78843). We have started new work under contract with the RAND
Corporation to analyze and develop alternative methods for measuring PE
and related inputs for implementation of updates to payment under the
PFS. We continue to study possible alternatives, and would include
analysis of updated PPIS data, as part of our ongoing work. In the
meantime, we request general information from the public on ways that
CMS may continue work to improve the stability and predictability of
any future updates. Specifically, we request feedback from interested
parties regarding scheduled, recurring updates to PE inputs for supply
and equipment costs.
We believe that establishing a cycle of timing to update supply and
equipment cost inputs every 4 years may be one means of advancing
shared goals of stability and predictability. CMS would collect
available data, including, but not limited to, submissions and
independent third-party data sources, and propose a phase-in period
over the following 4 years. The phase-in approach maps to our
experience with previous updates. Additionally, we believe that more
frequent updates may have the unintended consequence of
disproportionate effects of various supplies and equipment that have
newly updated costs.
Further, we seek feedback on possible mechanisms to establish a
balance whereby our methodology would account for inflation and
deflation in supply and equipment costs. We remain uncertain how
economies of scale (meaning a general principle that cost per unit of
production decreases as the scale of production increases) should or
should not factor into future adjustments to our methodology. There
remains a diversity of perspectives among interested parties about such
effects. We seek information about specific mechanisms that may be
appropriate, and in particular, approaches that would leverage
verifiable and independent, third-party data that is not managed or
controlled by active market participants.

C. Potentially Misvalued Services Under the PFS

1. Background
Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a
periodic review, not less often than every 5 years, of the relative
value units (RVUs) established under the PFS. Section 1848(c)(2)(K) of
the Act requires the Secretary to periodically identify potentially
misvalued services using

[[Page 61615]]

certain criteria and to review and make appropriate adjustments to the
relative values for those services. Section 1848(c)(2)(L) of the Act
also requires the Secretary to develop a process to validate the RVUs
of certain potentially misvalued codes under the PFS, using the same
criteria used to identify potentially misvalued codes, and to make
appropriate adjustments.
As discussed in section II.E. of this proposed rule, under
Valuation of Specific Codes, each year we develop appropriate
adjustments to the RVUs taking into account recommendations provided by
the American Medical Association (AMA) Resource-Based Relative Value
Scale (RBRVS) Update Committee (RUC), MedPAC, and other interested
parties. For many years, the RUC has provided us with recommendations
on the appropriate relative values for new, revised, and potentially
misvalued PFS services. We review these recommendations on a code-by-
code basis and consider these recommendations in conjunction with
analyses of other data, such as claims data, to inform the decision-
making process as authorized by statute. We may also consider analyses
of work time, work RVUs, or direct PE inputs using other data sources,
such as the Veterans Health Administration (VHA), National Surgical
Quality Improvement Program (NSQIP), the Society for Thoracic Surgeons
(STS), and the Merit-based Incentive Payment System (MIPS) data. In
addition to considering the most recently available data, we assess the
results of physician surveys and specialty recommendations submitted to
us by the RUC for our review. We also consider information provided by
other interested parties such as from the general medical-related
community and the public. We conduct a review to assess the appropriate
RVUs in the context of contemporary medical practice. We note that
section 1848(c)(2)(A)(ii) of the Act authorizes the use of
extrapolation and other techniques to determine the RVUs for
physicians' services for which specific data are not available and
requires us to take into account the results of consultations with
organizations representing physicians who provide the services. In
accordance with section 1848(c) of the Act, we determine and make
appropriate adjustments to the RVUs.
In its March 2006 Report to the Congress (<a href="https://www.medpac.gov/document/report-to-the-congress-2006-medicare-payment-policy/">https://www.medpac.gov/document/report-to-the-congress-2006-medicare-payment-policy/</a>), MedPAC
discussed the importance of appropriately valuing physicians' services,
noting that misvalued services can distort the market for physicians'
services, as well as for other health care services that physicians
order, such as hospital services. In that same report, MedPAC
postulated that physicians' services under the PFS can become misvalued
over time. MedPAC stated, ``When a new service is added to the
physician fee schedule, it may be assigned a relatively high value
because of the time, technical skill, and psychological stress that are
often required to furnish that service. Over time, the work required
for certain services would be expected to decline as physicians become
more familiar with the service and more efficient in furnishing it.''
We believe services can also become overvalued when PE costs decline.
This can happen when the costs of equipment and supplies fall, or when
equipment is used more frequently than is estimated in the PE
methodology, reducing its cost per use. Likewise, services can become
undervalued when physician work increases, or PE costs rise.
As MedPAC noted in its March 2009 Report to Congress (<a href="https://www.medpac.gov/docs/default-source/reports/march-2009-report-to-congress-medicare-payment-policy.pdf">https://www.medpac.gov/docs/default-source/reports/march-2009-report-to-congress-medicare-payment-policy.pdf</a>), in the intervening years since
MedPAC made the initial recommendations, CMS and the RUC have taken
several steps to improve the review process. Also, section
1848(c)(2)(K)(ii) of the Act augments our efforts by directing the
Secretary to specifically examine, as determined appropriate,
potentially misvalued services in the following categories:
<bullet> Codes that have experienced the fastest growth.
<bullet> Codes that have experienced substantial changes in PE.
<bullet> Codes that describe new technologies or services within an
appropriate time-period (such as 3 years) after the relative values are
initially established for such codes.
<bullet> Codes which are multiple codes that are frequently billed
in conjunction with furnishing a single service.
<bullet> Codes with low relative values, particularly those that
are often billed multiple times for a single treatment.
<bullet> Codes that have not been subject to review since
implementation of the fee schedule.
<bullet> Codes that account for the majority of spending under the
PFS.
<bullet> Codes for services that have experienced a substantial
change in the hospital length of stay or procedure time.
<bullet> Codes for which there may be a change in the typical site
of service since the code was last valued.
<bullet> Codes for which there is a significant difference in
payment for the same service between different sites of service.
<bullet> Codes for which there may be anomalies in relative values
within a family of codes.
<bullet> Codes for services where there may be efficiencies when a
service is furnished at the same time as other services.
<bullet> Codes with high intraservice work per unit of time.
<bullet> Codes with high PE RVUs.
<bullet> Codes with high cost supplies.
<bullet> Codes as determined appropriate by the Secretary.
Section 1848(c)(2)(K)(iii) of the Act also specifies that the
Secretary may use existing processes to receive recommendations on the
review and appropriate adjustment of potentially misvalued services. In
addition, the Secretary may conduct surveys, other data collection
activities, studies, or other analyses, as the Secretary determines to
be appropriate, to facilitate the review and appropriate adjustment of
potentially misvalued services. This section also authorizes the use of
analytic contractors to identify and analyze potentially misvalued
codes, conduct surveys or collect data, and make recommendations on the
review and appropriate adjustment of potentially misvalued services.
Additionally, this section provides that the Secretary may coordinate
the review and adjustment of any RVU with the periodic review described
in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of
the Act specifies that the Secretary may make appropriate coding
revisions (including using current processes for consideration of
coding changes), which may involve consolidating individual services
into bundled codes for payment under the PFS.
2. Progress in Identifying and Reviewing Potentially Misvalued Codes
To fulfill our statutory mandate, we have identified and reviewed
numerous potentially misvalued codes as specified in section
1848(c)(2)(K)(ii) of the Act, and we intend to continue our work
examining potentially misvalued codes in these areas over the upcoming
years. As part of our current process, we identify potentially
misvalued codes for review, and request recommendations from the RUC
and other public commenters on revised work RVUs and direct PE inputs
for those codes. The RUC, through its own processes, also identifies
potentially misvalued codes for review. Through our public nomination
process for potentially

[[Page 61616]]

misvalued codes established in the CY 2012 PFS final rule with comment
period (76 FR 73026, 73058 through 73059), other individuals and groups
submit nominations for review of potentially misvalued codes as well.
Individuals and groups may submit codes for review under the
potentially misvalued codes initiative to CMS in one of two ways.
Nominations may be submitted to CMS via email or through postal mail.
Email submissions should be sent to the CMS emailbox at
<a href="/cdn-cgi/l/email-protection#4e032b2a272d2f3c2b1e26373d272d272f20082b2b1d2d262b2a3b222b0e2d233d6026263d60292138">[email&#160;protected]</a>, with the phrase ``Potentially
Misvalued Codes'' and the referencing CPT code number(s) and/or the CPT
descriptor(s) in the subject line. Physical letters for nominations
should be sent via the U.S. Postal Service to the Centers for Medicare
& Medicaid Services, Mail Stop: C4-01-26, 7500 Security Blvd.,
Baltimore, Maryland 21244. Envelopes containing the nomination letters
must be labeled ``Attention: Division of Practitioner Services,
Potentially Misvalued Codes.'' Nominations for consideration in our
next annual rule cycle should be received by our February 10th
deadline. Since CY 2009, as a part of the annual potentially misvalued
code review and Five-Year Review process, we have reviewed over 1,700
potentially misvalued codes to refine work RVUs and direct PE inputs.
We have assigned appropriate work RVUs and direct PE inputs for these
services as a result of these reviews. A more detailed discussion of
the extensive prior reviews of potentially misvalued codes is included
in the CY 2012 PFS final rule with comment period (76 FR 73052 through
73055). In the same CY 2012 PFS final rule with comment period, we
finalized our policy to consolidate the review of physician work and PE
at the same time and established a process for the annual public
nomination of potentially misvalued services.
In the CY 2013 PFS final rule with comment period (77 FR 68892,
68896 through 68897), we built upon the work we began in CY 2009 to
review potentially misvalued codes that have not been reviewed since
the implementation of the PFS (so-called ``Harvard-valued codes'' \1\).
In the CY 2019 PFS proposed rule (73 FR 38589), we requested
recommendations from the RUC to aid in our review of Harvard-valued
codes that had not yet been reviewed, focusing first on high-volume,
low intensity codes. In the fourth Five-Year Review of Work RVUs
proposed rule (76 FR 32410, 32419), we requested recommendations from
the RUC to aid in our review of Harvard-valued codes with annual
utilization of greater than 30,000 services. In the CY 2013 PFS final
rule with comment period, we identified specific Harvard-valued
services with annual allowed charges that total at least $10,000,000 as
potentially misvalued. In addition to the Harvard-valued codes, in the
CY 2013 PFS final rule with comment period we finalized for review a
list of potentially misvalued codes that have stand-alone PE (codes
with physician work and no listed work time and codes with no physician
work that have listed work time). We continue each year to consider and
finalize a list of potentially misvalued codes that have or will be
reviewed and revised as appropriate in future rulemaking.
---------------------------------------------------------------------------

\1\ The research team and panels of experts at the Harvard
School of Public Health developed the original work RVUs for most
CPT codes, in a cooperative agreement with the Department of Health
and Human Services (HHS). Experts from both inside and outside the
Federal Government obtained input from numerous physician specialty
groups. This input was incorporated into the initial PFS, which was
implemented on January 1, 1992.
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3. CY 2025 Identification and Review of Potentially Misvalued Services
In the CY 2012 PFS final rule with comment period (76 FR 73058), we
finalized a process for the public to nominate potentially misvalued
codes. In the CY 2015 PFS final rule with comment period (79 FR 67548,
67606 through 67608), we modified this process whereby the public and
interested parties may nominate potentially misvalued codes for review
by submitting the code with supporting documentation by February 10th
of each year. Supporting documentation for codes nominated for the
annual review of potentially misvalued codes may include the following:
<bullet> Documentation in peer reviewed medical literature or other
reliable data that demonstrate changes in physician work due to one or
more of the following: technique, knowledge and technology, patient
population, site-of-service, length of hospital stay, and work time.
<bullet> An anomalous relationship between the code being proposed
for review and other codes.
<bullet> Evidence that technology has changed physician work.
<bullet> Analysis of other data on time and effort measures, such
as operating room logs or national and other representative databases.
<bullet> Evidence that incorrect assumptions were made in the
previous valuation of the service, such as a misleading vignette,
survey, or flawed crosswalk assumptions in a previous evaluation.
<bullet> Prices for certain high cost supplies or other direct PE
inputs that are used to determine PE RVUs are inaccurate and do not
reflect current information.
<bullet> Analyses of work time, work RVU, or direct PE inputs using
other data sources (for example, VA, NSQIP, the STS National Database,
and the MIPS data).
<bullet> National surveys of work time and intensity from
professional and management societies and organizations, such as
hospital associations.
We evaluate the supporting documentation submitted with the
nominated codes and assess whether the nominated codes appear to be
potentially misvalued codes appropriate for review under the annual
process. In the following year's PFS proposed rule, we publish the list
of nominated codes and indicate for each nominated code whether we
agree with its inclusion as a potentially misvalued code. The public
has the opportunity to comment on these and all other proposed
potentially misvalued codes. In each year's final rule, we finalize our
list of potentially misvalued codes.
a. Public Nominations
In each proposed rule, we seek nominations from the public and from
interested parties of codes that they believe we should consider as
potentially misvalued. We receive public nominations for potentially
misvalued codes by February 10th and we display these nominations on
our public website, where we include the submitter's name, their
associated organization, and the submitted studies for full
transparency. We sometimes receive submissions for specific, PE-related
inputs for codes, and discuss these PE-related submissions, as
necessary under the Determination of PE RVUs section of the rule. We
summarize below this year's submissions under the potentially misvalued
code initiative. For CY 2025, we received 5 nominations concerning
various codes. The nominations are as follows:
(1) CPT Codes 22210, 22212, 22214, 22216
An interested party nominated CPT codes 22210 (Osteotomy of spine,
posterior or posterolateral approach, 1 vertebral segment; cervical)
(090 day global code), 22212 (Osteotomy of spine, posterior or
posterolateral approach, 1 vertebral segment; thoracic) (090 day global
code), 22214 (Osteotomy of spine, posterior or posterolateral approach,
1 vertebral segment; lumbar) (090 day global code), and 22216
(Osteotomy of

[[Page 61617]]

spine, posterior or posterolateral approach, 1 vertebral segment; each
additional vertebral segment (List separately in addition to primary
procedure) (add-on ZZZ) as potentially misvalued for six reasons: (1)
incorrect global period; (2) incorrect inpatient days; (3) incorrect
intraservice work description; (4) overvalued intraservice times; (5)
changed surgical practice; and (6) incorrect use of posterior osteotomy
codes. The posterior osteotomy codes were last valued by the RUC in
1995. Currently, CPT code 22210 has a work RVU of 25.38, CPT code 22212
has a work RVU of 20.99, CPT code 22214 has a work RVU of 21.02, and
CPT code 22216 has a work RVU of 6.03. CPT codes 22210, 22212, and
22214 have 7 inpatient days each, while CPT code 22216 has 0 inpatient
days, and it is an add-on code.
First, the nominator stated that these posterior osteotomies are
always performed as an optional addition to a spinal fusion and should
be valued as add-on services and not as 90-day global services. We note
that no references are provided to support the statement that the
service is always performed as an optional addition to a spinal fusion.
Second, the nominator explained that the average hospital stay for
scoliosis fusion with osteotomy is 4 to 5 days according to the current
literature,2 3 4 in contrast with the currently included 7
inpatient days. We note that the majority of the medical literature
submitted by the nominator presented outcome information on adolescent
patients, which may be different from the Medicare population.
Furthermore, the nominator stated that the intraservice work
description for CPT code 22216 describes removal of the pedicle, which
is not a typical part of a Ponte/Schwab II osteotomy. Among the
posterior osteotomy codes, only CPT code 22216 had vignettes and we do
not have information to decide whether the code descriptor is correct.
We believe this issue would benefit from further review by the medical
community and welcome comments and considerations, including from the
AMA CPT.
---------------------------------------------------------------------------

\2\ Halanski, Matthew Aaron, and Jeffrey A Cassidy. ``Do
multilevel Ponte osteotomies in thoracic idiopathic scoliosis
surgery improve curve correction and restore thoracic kyphosis?''
Journal of spinal disorders & techniques vol. 26,5 (2013): 252-5.
doi:10.1097/BSD.0b013e318241e3cf.
\3\ Floccari, Lorena V et al. ``Ponte osteotomies in a matched
series of large AIS curves increase surgical risk without improving
outcomes.'' Spine deformity vol. 9,5 (2021): 1411-1418. doi:10.1007/
s43390-021-00339-x.
\4\ Buckland, Aaron J et al. ``Ponte Osteotomies Increase the
Risk of Neuromonitoring Alerts in Adolescent Idiopathic Scoliosis
Correction Surgery.'' Spine vol. 44,3 (2019): E175-E180.
doi:10.1097/BRS.0000000000002784.
---------------------------------------------------------------------------

The nominator also asserted that intraservice times were too high,
particularly for these osteotomy services furnished with scoliosis
fusion procedures. The nominator explained that a typical scoliosis
fusion would be billed with an intraservice time of up to 840 minutes
for pediatric scoliosis fusion and 915 minutes for adult cases.
However, referencing current literature, they observed that a typical
scoliosis fusion in a child requires approximately 278 minutes (243-296
minutes),5 6 7 which contrasts significantly with the
durations indicated for the current codes. The nominator provided no
studies to support a typical scoliosis fusion time in adults. Drawing
from the literature, the nominators assert that intraservice times are
overvalued for these services and propose that these times should be
adjusted to align more closely with average and/or typical surgery
times.
---------------------------------------------------------------------------

\5\ Samdani, Amer F et al. ``Do Ponte Osteotomies Enhance
Correction in Adolescent Idiopathic Scoliosis? An Analysis of 191
Lenke 1A and 1B Curves.'' Spine deformity vol. 3,5 (2015): 483-488.
doi:10.1016/j.jspd.2015.03.002.
\6\ Pizones, Javier et al. ``Ponte osteotomies to treat major
thoracic adolescent idiopathic scoliosis curves allow more effective
corrective maneuvers.'' European spine journal: official publication
of the European Spine Society, the European Spinal Deformity
Society, and the European Section of the Cervical Spine Research
Society vol. 24,7 (2015): 1540-6. doi:10.1007/s00586-014-3749-1.
\7\ Feng, Jing et al. ``Clinical and radiological outcomes of
the multilevel Ponte osteotomy with posterior selective segmental
pedicle screw constructs to treat adolescent thoracic idiopathic
scoliosis.'' Journal of orthopaedic surgery and research vol. 13,1
305. 29 Nov. 2018, doi:10.1186/s13018-018-1001-0.
---------------------------------------------------------------------------

The nominator further asserted that this code family is potentially
misvalued because surgical practice for these procedures has evolved
since 1995. Approximately 30 years ago, osteotomies were infrequently
performed and usually reserved for addressing completely ankylosed or
fused spinal segments.\8\ However, according to the nominator,
contemporary surgical techniques often involve posterior osteotomies to
release multiple stiff vertebral segments, thereby enhancing coronal
correction and reducing thoracic hypokyphosis. In addition to changes
in surgical techniques over time, there are notable shifts in the
trends regarding the utilization of osteotomies. For instance, between
2007 and 2015, the use of posterior osteotomies in scoliosis cases
nearly doubled, increasing from 17 percent to 35 percent.\9\
Additionally, 73 percent of patients undergoing scoliosis surgery
received posterior osteotomies.\4\ This information supports the
nominator's assertion that there have been notable changes in the
surgical practice for these codes over time.
---------------------------------------------------------------------------

\8\ Ponte, Alberto et al. ``The True Ponte Osteotomy: By the One
Who Developed It.'' Spine deformity vol. 6,1 (2018): 2-11.
doi:10.1016/j.jspd.2017.06.006.
\9\ Shaheen, Mohammed et al. ``Complication risks and costs
associated with Ponte osteotomies in surgical treatment of
adolescent idiopathic scoliosis: insights from a national
database.'' Spine deformity vol. 10,6 (2022): 1339-1348.
doi:10.1007/s43390-022-00534-4.
---------------------------------------------------------------------------

Lastly, the nominator highlighted incorrect usage of posterior
osteotomy codes. They noted instances where facet/soft tissue releases,
such as Schwab type I osteotomies, are inaccurately reported with these
codes. According to the nominator, isolated partial facetectomy and
soft tissue release are already included in spinal fusion procedures
and should not be separately billed with an osteotomy code.
Additionally, CMS in reviewing data for these services identified
potential bundling of services within this code family. For instance,
CPT code 22210 is frequently billed alongside CPT code 22600
(Arthrodesis, posterior or posterolateral technique, single interspace;
cervical below C2 segment) (090-day global code), approximately 83
percent of the time. This indicates a common billing pattern,
suggesting potential for coding revisions, including the consideration
of consolidating individual services into bundled codes. Overall, based
on the six reasons provided by the nominator, along with the fact that
these codes were last valued almost 30 years ago, and given the
identified billing practices, we concur that CPT codes 22210, 22212,
22214, and 22216 are potentially misvalued. The nominator suggested two
options to address this concern: (1) developing add-on codes to
differentiate between the number of vertebral segments involved in the
osteotomy procedure and whether it occurs in the cervical, thoracic, or
lumbar regions; and (2) removing the current posterior osteotomy codes
and incorporating osteotomies into new deformity fusion codes, both
with and without osteotomy. We are proposing to consider this code
family as potentially misvalued and we appreciate the detailed
information submitted by the nominator with sufficient supporting
evidence. We believe that this code family would benefit from a
comprehensive review by the RUC, and we welcome comments on a broader
understanding of these codes. Additionally, we seek input on current
standard billing practices. For example, information on whether the
standard of

[[Page 61618]]

practice has evolved over time, and if so, how it has evolved, could
aid in identifying potential coding issues related to this matter.
(2) CPT Code 27279
CPT code 27279 (Arthrodesis, sacroiliac joint, percutaneous or
minimally invasive (indirect visualization), with image guidance,
includes obtaining bone graft when performed, and placement of
transfixing device) (090 day global code) has been re-nominated as
potentially misvalued based on the absence of separate direct PE inputs
for this 090 day global code in the nonfacility setting. Currently, CPT
code 27279 is only priced under the PFS in the facility setting, but
the nominator is requesting that we establish separate direct PE inputs
for this service to value the service when performed in the
nonfacility/office setting (for example, in an office-based lab). The
nominator stated that establishing payment for direct PE inputs in the
nonfacility/office setting would increase access to this service for
Medicare patients.
We did not nominate CPT code 27279 as potentially misvalued in the
CY 2024 PFS final rule, mainly due to a lack of consensus on whether
these services may be safely and effectively furnished in the
nonfacility/office setting. In this year's submission, the nominator
provided three post-market surveillance publications and two
independent reviews of minimally invasive sacroiliac (SI) joint fusion
procedures to support their assertion that this 90-day surgical service
could be safely and effectively furnished in the nonfacility/office
setting. Based on the studies, the nominator stated that the current
medical literature provides evidence supporting the conclusion that
percutaneous or minimally invasive SI joint arthrodesis (CPT code
27279) carries a complication rate that is acceptably low, comparable
to other spinal procedures commonly performed in the office-based lab
(OBL). For instance, the risk of major complications during lateral
trans iliac (LTI) SI joint fusion (CPT code 27279) is lower than the
risks associated with other OBL procedures. These include the risk of
iliac perforation during angioplasty, the risk of death, myocardial
infarction (MI), and stroke during diagnostic cardiac catheterization.
The nominator did not reference literature regarding the rates of major
complications for other OBL procedures in their submission.
Based on the information submitted we recognize the possibility
that CPT code 27279 may be potentially misvalued, given the nominator's
assertion that its complication rate is acceptably low based on the
five studies they submitted. The results of the studies may suggest
that CPT code 27279 can be safely performed in the office-based lab
setting, as asserted by the nominator, with a relatively low
complication rate. However, upon reviewing the submitted information,
we also note that these studies collectively report heterogeneous
safety outcomes. The large variabilities in safety outcomes reported in
the studies, coupled with several unreported outcomes, may indicate
that we have little knowledge about the effect of the service on safety
outcomes, prompting the need for further investigation. Therefore, we
are not proposing to consider this code as potentially misvalued, and
we are instead seeking comments and additional studies from the broader
medical community regarding whether this code should be priced under
the PFS for the non-facility/office setting.
(3) CPT code 95800
An interested party re-nominated CPT code 95800 (Sleep study,
unattended, simultaneous recording; heart rate, oxygen saturation,
respiratory analysis (e.g., by airflow or peripheral arterial tone),
and sleep time) to update practice expenses that were last reviewed in
2017. This code was nominated as potentially misvalued in the CY 2024
PFS proposed rule (88 FR 52283). For the CY 2024 final rule, we stated
that we were unable to properly assess whether CPT code 95800 is
potentially misvalued based on the evidence submitted with the original
nominations and subsequent comments that CMS received (88 FR 78849-
78850). This year, an interested party re-nominated CPT code 59800
noting two significant changes: (1) in the technologies available to
perform home sleep apnea testing (HSAT) services; and (2) in clinical
practice that leads to the typical procedure reported with the CPT code
95800. According to the nominator, the current practice utilizes
disposable HSAT technology, such as the WatchPat One device, more often
than the reusable equipment currently included in the procedure's
direct practice expense (PE) inputs.
To account for these changes, the nominator requested the deletion
of three direct PE input codes: (1) equipment code EQ335 (WatchPAT 200
Unit with strap, cables, charger, booklet, and patient video); (2)
equipment code EQ336 (Oximetry and Airflow Device); and (3) supply code
SD263 (WatchPAT pneumo-opt sleep probes), which are WatchPAT probes
used with the reusable WatchPAT unit. Instead, the nominator requested
the addition of a supply code SD362 (the WatchPAT ONE device), a
disposable HSAT technology, as a replacement. According to our PE
supply list, the combined price of the items that the nominator
requested to delete (EQ335, EQ336, and SD263) is $4.71 + $4.55 + $73.32
= $82.58, which is $15.62 less than the price of the item that the
nominator requested to add (SD362), priced at $98.20. The price of
$98.20 is mentioned in the nomination letter without an accompanying
specific invoice. Last year, the nominator submitted invoices, showing
a price of $99.00 each (a case of 12 totaling $1,188.00) for the
WatchPat One Device (SD362) (see Table 6).

[[Page 61619]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.006

The nominator asserted that testing trends have shifted away from
traditional airflow-based tests, with a noticeable rise in peripheral
arterial tone (PAT)-based (non-airflow) tests. The traditional airflow-
based tests use the reusable supplies and equipment, whereas the PAT-
based non-airflow tests use the disposable HSAT device. While
describing these changes in trends, the nominator did not provide us
with their internal data, thus we are unable to verify its validity.
The nominator also stated that disposable HSAT devices were used for
nearly 50 percent of CPT code 95800 services in 2023 and attributed the
increased use of disposable devices to the COVID-19 public health
emergency (PHE). Furthermore, the nominator projected that over 50
percent of CPT code 95800 services will be furnished using disposable
devices in 2024 and 2025. Explaining the patterns and predictions, the
nominator concluded that the pandemic significantly altered the
delivery of HSAT services, with many sleep physicians transitioning to
single-use, disposable sleep tests as an alternative to the reusable
testing equipment that is shipped from patient-to-patient after post-
use cleaning. The nominator believes that, going forward, the typical
procedure described by CPT code 95800 in CY 2024 and beyond will be
furnished using disposable HSAT devices rather than reusable equipment.
Since the COVID-19 PHE ended in 2023, we are still unclear as to
whether the typical procedure reported with CPT code 95800 involves the
use of a reusable or disposable HSAT device. Given that we only have
access to the nominator's summary of their internal data to observe
changes in usage trends, which may not be generalizable, we propose to
maintain the current direct PE supply and equipment inputs for CPT code
95800. While we are not currently proposing to review CPT code 95800 as
potentially misvalued for CY 2025, we seek public comments on this
nomination. In particular, we seek comments on whether the typical
procedure described by CPT code 95800 now involves the use of a
disposable HSAT device rather than reusable equipment.
(4) CPT codes 10021, 10004, 10005, 10006
An interested party nominated the CPT code 10021 (Fine needle
aspiration biopsy, without imaging guidance; first lesion), CPT code
10004 (Fine needle aspiration biopsy, without imaging guidance; each
additional lesion), CPT code 10005 (Fine needle aspiration biopsy,
including ultrasound guidance; first lesion) and CPT code 10006 (Fine
needle aspiration biopsy, including ultrasound guidance; each
additional lesion) as potentially misvalued. We note that this code
family has been nominated several times in recent years. We discussed
our review of these codes and our rationale for finalizing the current
values extensively in the CY 2019 PFS final rule (83 FR 59517), and CY
2021 PFS final rule (85 FR 84602). Furthermore, this code family was
nominated as potentially misvalued and discussed in the CY 2020 PFS
final rule (84 FR 62625). For more information we encourage the
interested parties to go to our previous PFS final rules.
The nominator specifically requested that we revisit our work RVU
decisions for these codes, stating that the underpinnings of the
reduction in work RVUs from the RUC-recommended values were flawed. The
nominator suggested that CMS should adopt the RUC-recommended work
RVUs. For CPT code 10021, the RUC recommended a work RVU of 1.20, but
we adopted a lower value of 1.03. Similarly, for CPT code 10005, the
RUC recommended a work RVU of 1.63, but we adopted 1.46. The nominator
disagreed with these reductions from the RUC-recommended values by CMS,
raising particular concerns about our choice for the RVU crosswalk for
CPT code 36440 (Push blood transfusion, patient 2 years or younger).
According to the nominator, the CPT code we chose is not comparable to
fine needle aspiration in any respect other than service time. The
nominator raised several points, including that CPT code 36440 is
rarely utilized and is almost never billed to Medicare because it
pertains to a pediatric procedure conducted on neonates, while CPT code
10021 is never performed on neonates. They further asserted that the
training and experience levels required to properly perform these
procedures differ significantly; neonatal transfusions can be conducted
by less experienced personnel, while performing a thyroid fine needle
aspiration demands more experience. Specifically, they argued that
there is a notable difference in the work intensity between the two
procedures. The thyroid is closely positioned to vital structures such
as the carotid artery, jugular vein, lymphatic vessels, nerves,
trachea, and esophagus. When sampling thyroid nodules, they are often
in proximity to the carotid artery, jugular vein, or both. According to
the nominator, even a slight deviation of 1-2 millimeters during the
sampling procedure can result in accidental puncture of these critical
blood vessels or other nearby structures. Factors such as respiratory
movements, patient swallowing, or anxiety may cause the thyroid to
move, further increasing the

[[Page 61620]]

risk during the procedure. In contrast, neonatal phlebotomy does not
require such measures. Also, the CPT code 36440 is designated as
facility-only, meaning it does not include any clinical staff pre-
service time and has no associated practice expense inputs. According
to the nominator, fine needle aspiration is a very complex and high-
risk procedure that may require significant physician work and a higher
level of clinical expertise to furnish the service, which is very
different from CPT code 36440. We appreciated the survey (N=74) results
that the nominator submitted to support their statements. The
nominator-conducted survey, and their survey questions aimed to gather
information on the practitioners' experiences, opinions, and practices
related to fine needle aspiration procedures. However, no other
references such as peer reviewed medical literature or other nationally
representative survey data were provided to reinforce their argument.
The nominator further stated that thyroid fine needle aspiration
should exclusively be performed as an outpatient procedure and does not
require hospitalization. The nominator emphasized that the reduction in
payment for the code family due to the reduction in work RVUs from the
RUC-recommended values has led endocrinologists in office-based
practices, those who are not affiliated with facilities, to discontinue
furnishing this service. According to the nominator, as a consequence
of this payment decrease, patients are now being referred to hospital-
based radiology practices, despite the fact that thyroid fine needle
aspiration should ideally be conducted exclusively in nonfacility
outpatient settings. The nominator asserted that radiologists in
hospital settings are often unfamiliar with the patient's medical
history and risk factors for suspected thyroid cancer. The nominator
further noted that radiologists' training in thyroid cancer primarily
emphasizes imaging and procedures, rather than considering the
patient's overall health perspective. This result may further lead to
an increase in medically unnecessary procedures. Additionally, the
nominator believes that the payment reduction for this code family has
the potential to diminish the specialist workforce trained to perform
these procedures, thereby presenting future challenges in patient care
and access to specialized services.
Overall, we appreciate the comprehensive information and level of
detail provided by the nominator. The nominator disagreed with the
choice of crosswalk CPT code 36440 made by CMS, emphasizing the
differences in provider training, procedure risk, and patient
population. They noted the rarity of Medicare billing for this code.
Additionally, they emphasized the importance of outpatient thyroid fine
needle aspiration being performed by endocrinologists. The shift to
facility settings, prompted by reduced work RVUs, could raise Medicare
costs. This, along with a potential decline in specialist workforce,
may hinder patient access. However, in discussing this group of codes,
we must note that these codes have been recently reviewed multiple
times through the annual PFS rulemaking process. We would like to
clarify once again that we disagree with the nominator that this code
family is potentially misvalued. We acknowledge the possibility that
there could be significant changes in the practice of delivering
services described by these codes that were not fully reflected in the
current work RVU. In such cases, it would be appropriate to refer the
codes to the RUC to conduct a new survey to capture these changes
accurately. However, we note that these codes underwent thorough RUC
survey and review processes during the October 2017 and January 2018
RUC meetings. Based on these considerations, we disagree with the
assertion that this code family is potentially misvalued. Nevertheless,
we welcome comments on whether these codes should be re-reviewed in
light of the arguments made by the nominator.
(5) Tympanostomy codes
CMS routinely interacts with interested parties, and in our most
recent review, we have observed several new devices that could be
beneficial for populations but are not currently included in our coding
system. While there are variations in the described devices, they
commonly share the following descriptions. This device uses an
innovative surgical technology that combines the separate functions of
creating a myringotomy (incision in the eardrum), and positioning and
placing a ventilation tube across the tympanic membrane. The new device
is intended to deliver a tympanostomy tube (also referred to as a
ventilation tube) through the tympanic membrane of the patient and is
indicated to be used in office settings for pediatric patients 6 months
and older. This device allows the tympanostomy service to be furnished
to patients without general anesthesia and the service could therefore
be performed in the office setting.
Regarding the delivery of this service using innovative surgical
technology, CMS recognizes that CPT code 69433 (Tympanostomy (requiring
insertion of ventilating tube), local or topical anesthesia) (010-day
global code) may serve as a sufficient base code, adequately describing
the majority of the surgeon's work and facility resources. However, a
practitioner may incur additional resources, due to the higher expected
intraservice work driven by both time and intensity factors, especially
when furnishing a service to a child, and the cost of the device when
using these devices as part of the performed procedure. While the
existing CPT code 69433 is not age-specific, both the vignette and the
RVU associated with this procedure are established for adult patients
who can respond to surgeon direction, and do not have risk of movement
during the procedure. We believe that potentially establishing
additional coding and payment for tympanostomy services may enable the
provision of these services utilizing new technologies to a broader
patient population who may benefit from innovative surgical technology.
To improve the accuracy of the payment for these services, we are
soliciting comments on several alternatives that we are considering for
adoption in the CY 2025 PFS final rule or future rulemaking. First, we
are seeking comment on whether to establish a new G code that accounts
for the work and practice expense for a procedure involving the
positioning and placement of a ventilation tube across the tympanic
membrane using an innovative surgical technology that combines the
separate functions of creating a myringotomy (incision in the eardrum).
We could assign contractor pricing to this potential G code for
generalizable innovative tympanostomy tube delivery devices and/or
systems falling under emerging technology and services categories.
Alternatively, we are seeking comment on whether we should establish an
add-on payment for the service using inputs from CPT code 69433 as a
crosswalk reference, plus direct costs from invoices for the surgical
devices referenced above. We are seeking comments regarding these
potential approaches, particularly on whether there is additional
information we should consider if we were to establish additional
coding and payment for these services.

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

As discussed in prior rulemaking, several conditions must be met
for Medicare to make payment for telehealth services under the PFS. See

[[Page 61621]]

further details and full discussion of the scope of Medicare telehealth
services in the CY 2018 PFS final rule (82 FR 53006), the CY 2021 PFS
final rule (85 FR 84502) and the CY 2024 PFS final rule (88 FR 78861
through 78866) and in 42 CFR 410.78 and 414.65. For a discussion of
Telemedicine Evaluation and Management (E/M) Services, we refer readers
to section II.E.4.18 of this proposed rule.
1. Payment for Medicare Telehealth Services Under Section 1834(m) of
the Act
a. Changes to the Medicare Telehealth Services List
In the CY 2003 PFS final rule with comment period (67 FR 79988), we
established a regulatory process for adding services to or deleting
services from the Medicare Telehealth Services List in accordance with
section 1834(m)(4)(F)(ii) of the Act. This process provides the public
with an ongoing opportunity to submit requests for adding services,
which are then reviewed by us and assigned to categories established
through notice and comment rulemaking. Under the process we established
beginning in CY 2003, we evaluated whether a service meets the
following criteria:
<bullet> Category 1: Services similar to professional
consultations, office visits, and office psychiatry services currently
on the Medicare Telehealth Services List. In reviewing these requests,
we looked for similarities between the requested and existing
telehealth services for the roles of, and interactions among, the
beneficiary, the physician (or other practitioner) at the distant site,
and, if necessary, the telepresenter, a practitioner who was present
with the beneficiary in the originating site. We also looked for
similarities in the telecommunications system used to deliver the
service, for example, the use of interactive audio and video equipment.
<bullet> Category 2: Services that are not similar to those on the
current Medicare Telehealth Services List. Our review of these requests
included assessing whether the service was accurately described by the
corresponding code when furnished via telehealth and whether using a
telecommunications system to furnish the service produces demonstrated
clinical benefit to the patient. Submitted evidence should have
included both a description of relevant clinical studies that
demonstrated the service furnished by telehealth to a Medicare
beneficiary improves the diagnosis or treatment of an illness or injury
or improves the functioning of a malformed body part, including dates
and findings, and a list and copies of published peer-reviewed articles
relevant to the service when furnished via telehealth. Our evidentiary
standard of clinical benefit did not include minor or incidental
benefits. Some examples of other clinical benefits that we considered
include the following:
<bullet> Ability to diagnose a medical condition in a patient
population without access to clinically appropriate in-person
diagnostic services.
<bullet> Treatment option for a patient population without access
to clinically appropriate in-person treatment options.
<bullet> Reduced rate of complications.
<bullet> Decreased rate of subsequent diagnostic or therapeutic
interventions (for example, due to reduced rate of recurrence of the
disease process).
<bullet> Decreased number of future hospitalizations or physician
visits.
<bullet> More rapid beneficial resolution of the disease process
treatment.
<bullet> Decreased pain, bleeding, or other quantifiable signs or
symptoms.
<bullet> Reduced recovery time.
In the CY 2021 PFS final rule (85 FR 84507), we created a third
category of criteria for adding services to the Medicare Telehealth
Services List on a temporary basis following the end of the PHE for the
COVID-19 pandemic. This new category described services that were added
to the Medicare Telehealth Services List during the PHE, for which
there was likely to be clinical benefit when furnished via telehealth,
but there was not yet sufficient evidence available to consider the
services for permanent addition under the Category 1 or Category 2
criteria. Services added on a temporary, Category 3 basis ultimately
needed to meet the criteria under Category 1 or 2 in order to be
permanently added to the Medicare Telehealth Services List. To add
specific services on a Category 3 basis, we would conduct a clinical
assessment to identify those services for which we could foresee a
reasonable potential likelihood of clinical benefit when furnished via
telehealth.
In the CY 2024 PFS final rule (88 FR 78861 through 78866), we
consolidated these three categories and implemented a revised 5-step
process for making additions, deletions, and changes to the Medicare
Telehealth Services List (5-step process), beginning for the CY 2025
Medicare Telehealth Services List. Rather than categorizing a service
as ``Category 1'' or ``Category 2,'' each service is now assigned a
``permanent'' or ``provisional'' status. As described further below, a
service is assigned a ``provisional'' status if there is not enough
evidence to demonstrate that the service is of clinical benefit, but
there is enough evidence to suggest that further study may demonstrate
such benefit. The 5-step process review criteria are set forth in the
CY 2024 PFS final rule (88 FR 78861 through 78866), listed at <a href="https://www.cms.gov/medicare/coverage/telehealth/criteria-request">https://www.cms.gov/medicare/coverage/telehealth/criteria-request</a>, and
summarized below. Consistent with the deadline for our receipt of code
valuation recommendations from the American Medical Association's
Relative Value Scale Update Committee (AMA RUC) and other interested
parties (83 FR 59491) and with the process set forth in prior calendar
years, for CY 2025, requests to add services to the Medicare Telehealth
Services List must have been submitted to and received by CMS by
February 10, 2024. Each request to add a service to the Medicare
Telehealth Services List must have included any supporting
documentation the requester wishes us to consider as we review the
request. Because we use the annual PFS rulemaking process to make
changes to the Medicare Telehealth Services List, requesters are
advised that any information submitted as part of a request is subject
to public disclosure for this purpose. For more information on
submitting a request to add services to the Medicare Telehealth
Services List, including where to send these requests, and to view the
current Medicare Telehealth Service List, see our website at <a href="https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html">https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html</a>.
Step 1. Determine whether the service is separately payable under
the PFS.
When considering whether to add, remove, or change the status of a
service on the Medicare Telehealth Services List, we first determine
whether the service, as described by the individual HCPCS code, is
separately payable under the PFS because, as further discussed in CY
2024 PFS final rule (88 FR 78861 through 78866), Medicare telehealth
services are limited to those services for which separate Medicare
payments can be made under the PFS. Before gathering evidence and
preparing to submit a request to add a service to the Medicare
Telehealth Services List, the submitter should therefore first check
the payment status for a given service and ensure that the service (as
identified by a HCPCS code), is a covered and separately payable
service under the PFS (as identified by payment status indicators A, C,
T, or R on our public use files).
Step 2. Determine whether the service is subject to the provisions
of section 1834(m) of the Act.

[[Page 61622]]

If we determine at Step 1 that a service is separately payable
under the PFS, we apply Step 2 under which we determine whether the
service at issue is subject to the provisions of section 1834(m) of the
Act. Section 1834(m) of the Act provides for payment to a physician (or
other practitioner) for a service furnished via an interactive
telecommunications system, notwithstanding that the furnishing
practitioner and patient are not in the same location, at the same
amount that would have been paid if the service was furnished without
the telecommunications system. We have historically interpreted this to
mean that only services that are ordinarily furnished with the
furnishing practitioner and patient in the same location can be
classified as a ``telehealth service'' for which payment can be made
under section 1834(m) of the Act. Given that there may be a range of
services delivered using certain telecommunications technology that,
though they are separately payable under the PFS, do not fall within
the definition of telehealth service set forth in section 1834(m) of
the Act, the aim of Step 2 is therefore to determine whether the
service at issue is, in whole or in part, inherently a face-to-face
service. Such services generally include services that do not require
the presence of, or involve interaction with, the patient (for example,
remote interpretation of diagnostic imaging tests, and certain care
management services). Other examples include virtual check-ins, e-
visits, and remote patient monitoring services which involve the use of
telecommunications technology to facilitate interactions between the
patient and practitioner, but do not serve as a substitute for an in-
person encounter, for example, to assess whether an in-person or
telehealth visit is needed or to transmit health information to the
practitioner.
In determining whether a service is subject to the provisions of
section 1834(m) of the Act, we therefore review during this Step 2
whether one or more of the elements of the service, as described by the
particular HCPCS code at issue, ordinarily involve direct, face-to-face
interaction between the patient and practitioner such that the use of
an interactive telecommunications system to deliver the service would
be a substitute for an in-person visit.
Step 3. Review the elements of the service as described by the
HCPCS code and determine whether each of them is capable of being
furnished using an interactive telecommunications system as defined in
Sec. 410.78(a)(3).
Step 3 is corollary to Step 2, and is used to determine whether one
or more elements of a service are capable of being delivered via an
interactive telecommunication system as defined in Sec. 410.78(a)(3).
In Step 3, we consider whether one or more face-to-face component(s) of
the service, if furnished via audio-video communications technology,
would be equivalent to the service being furnished in-person, and we
seek information from requesters to demonstrate evidence of substantial
clinical improvement in different beneficiary populations that may
benefit from the requested service when furnished via telehealth,
including, for example, in rural populations. The services are not
equivalent when the clinical actions, or patient interaction, would not
be of similar content as an in-person visit, or could not be completed.
Step 4. Consider whether the service elements of the requested
service map to the service elements of a service on the list that has a
permanent status described in previous final rulemaking.
The purpose of Step 4 is to simplify and reduce the administrative
burden of submission and review. For Step 4, we review whether the
service elements of a code that we are considering for addition to, or
removal from, the Medicare Telehealth Services List map to the service
elements of a service that is already on the list and is assigned
permanent status. Any code that satisfies this criterion would require
no further analysis. If the service elements of a code maps to the
service elements of a code that is already included on the Medicare
Telehealth Services List and is assigned permanent basis, we will add
the code to the Medicare Telehealth Services List and assign it
permanent status. While we have not previously found that the service
elements of a code we are considering for addition to the list map to
the elements of a service that was previously added to the list and
assigned permanent basis, we believe that it is appropriate to apply
this step 4 analysis to compare the candidate service with any
permanent code that is on the list on a permanent basis. When Step 4 is
met, further evidence review is not necessary. We continue to Step 5 if
Step 4 is not met.
Step 5. Consider whether there is evidence of clinical benefit
analogous to the clinical benefit of the in-person service when the
patient, who is located at a telehealth originating site, receives a
service furnished by a physician or practitioner located at a distant
site using an interactive telecommunications system.
Similar to Steps 3, 4, and 5 above, the purpose of the proposed
step 5 is to simplify and reduce the administrative burden. Under Step
5, we review the evidence provided with a submission to determine the
clinical benefit of a service. We then compare the clinical benefit of
that service, when provided via telehealth, to the clinical benefit of
the service if it were to be furnished in person. If there is enough
evidence to suggest that further study may demonstrate that the
service, when provided via telehealth, is of clinical benefit, CMS will
assign the code a ``provisional'' status on the Medicare Telehealth
Services List. Where the clinical benefit of a service, when provided
via telehealth, is clearly analogous to the clinical benefit of the
service when provided in person, CMS will assign the code ``permanent''
status on the Medicare Telehealth Services List, even if the code's
service elements do not map to the service elements of a service that
already has permanent status. We reminded readers that our evidentiary
standard of demonstrated clinical benefit does not include minor or
incidental benefits (81 FR 80194). We review the evidence submitted by
interested parties, and other evidence that CMS has on hand. The
evidence should indicate that the service can be safely delivered using
two-way interactive audio-video communications technology. Clinical
practice guidelines, peer-reviewed literature, and similar materials,
should illustrate specifically how the methods and findings within the
material establish a foundation of support that each element of the
defined, individual service described by the existing face-to-face
service code has been studied in the typical setting of care, typical
population of beneficiaries, and typical clinical scenarios that
practitioners would encounter when furnishing the service using only
interactive, two-way audio-video communications technology to complete
the visit or encounter with Medicare beneficiaries. General evidence
may also answer the question of whether a certain beneficiary
population requiring care for a specific illness or injury may benefit
from receiving a service via telehealth versus receiving no service at
all, but must establish that the service is a substitute for an
equivalent in-person service. Evidence should demonstrate how all
elements described by the individual service code can be met when two-
way, interactive audio-video communications technology is used as a
complete substitute for any face-to-face interaction required between
the patient and practitioner that are described in the individual code
descriptor. We further remind readers that submissions

[[Page 61623]]

reflecting practitioner services furnished to Medicare beneficiaries
are helpful in our considerations.
b. Requests To Add Services to the Medicare Telehealth Services List
for CY 2025
We received several requests to permanently add various services to
the Medicare Telehealth Services List, effective for CY 2025. The
requested services are listed in Table 7.
BILLING CODE P

[[Page 61624]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.007

BILLING CODE C

[[Page 61625]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.008

Many services were added to the Medicare Telehealth Services List
on a temporary basis as discussed in the March 31st COVID-19 interim
final rule with comment period (IFC) (85 FR 19235 through 19237) for
the PHE for Covid-19, and we subsequently retained these services on a
provisional basis. All of the received submissions were requests for
addition on a permanent basis. We believe that, rather than selectively
adjudicating only those services for which we received requests for
potential permanent status, it would be appropriate to complete a
comprehensive analysis of all provisional codes currently on the
Medicare Telehealth Services List before determining which codes should
be made permanent. We are therefore not making determinations to
recategorize provisional codes as permanent until such time as CMS can
complete a comprehensive analysis of all such provisional codes which
we expect to address in future rulemaking.
The following is a discussion of the requests received for addition
of services to the Medicare Telehealth Services List:
(1) Continuous Glucose Monitoring
We received a request to add CPT code 95251 (Ambulatory continuous
glucose monitoring of interstitial tissue fluid via a subcutaneous
sensor for a minimum of 72 hours; analysis, interpretation and report)
to the Medicare Telehealth Services List and assign it permanent
status. This code is not on the Medicare Telehealth Services List, nor
had it been previously added and removed. The requester stated that the
ability of the practitioner to interpret continuous glucose monitoring
data and communicate changes in the diabetes care plan to our patients
is enhanced by the availability of video visits, and the code should
therefore be added to the Medicare Telehealth Services List. This
service does not meet the criteria described by Step 2 of the 5-step
process: determination of whether the service is subject to the
provisions of section 1834(m) of the Act. Section 1834(m) of the Act
limits the definition of Medicare telehealth services to those services
that would ordinarily be furnished with the furnishing practitioner and
patient in the same location (88 78863). In other words, as stated
above, for a service to be considered a Medicare telehealth service
subject to and payable under section 1834(m) of the Act, the service
must be so analogous to in-person care such that the telehealth
service, as defined in Sec. 410.78, is essentially a substitute for a
face-to-face encounter. We do not consider this service a Medicare
telehealth service because it is not an inherently face-to-face
service; the patient does not need to be present for the service to be
furnished in its entirety. CPT code 95251 describes sensor placement
and monitoring over a 72-hour period. We do not consider CPT code 95251
a telehealth service under section 1834(m) of the Act or our regulation
at Sec. 410.78. Therefore, we are not proposing to add this service to
the Medicare Telehealth Services List.
(2) Cardiovascular and Pulmonary Rehabilitation
We received requests to permanently add cardiovascular
rehabilitation services (CPT codes 93797 and 93798) and pulmonary
rehabilitation services (CPT codes 94625 and 94626) to the Medicare
Telehealth Services List. These services are currently on the Medicare
Telehealth List and are assigned provisional status. We had originally
added CPT codes 93797 and 93798 and HCPCS codes G0422 and G0423 on a
temporary basis in the CY 2022 PFS final rule (FR 86 65054 through
65055). A requester cited studies that they say demonstrate that the
availability of these services via telehealth enhances access and
patient equity. Another requester cited evidence of improved outcomes
for patients that had access to these services via telehealth. As
explained previously, we are not proposing to revise the status of
codes from provisional to permanent in this proposed rule because we
intend to conduct a comprehensive review. While considering these
issues for future rulemaking, we are not proposing to assign CPT codes
93797 and 93798 or CPT codes 94625 and 94626 permanent status on the
Medicare Telehealth Services List and would instead maintain the
services on the Medicare Telehealth Services List on a provisional
basis for CY 2025.
(3) Health and Well Being-Coaching
We received a request to add Health and Well-Being Coaching (CPT
codes 0591T-0593T) to the Medicare Telehealth Services List with
permanent status. These services are currently on the Medicare
Telehealth Services List and are assigned a provisional status. We
originally added these codes on a provisional basis in the CY 2024 PFS
final rule (FR 88 78859 and 78860). One requester stated that health
and well-being coaching, including content education, delivered in a
telehealth modality is an evidence-based, cost-

[[Page 61626]]

effective, sustainable, and common sense approach to facilitating
lifestyle/behavioral intervention and treating the Medicare population
with or at heightened risk for chronic diseases. As explained
previously, we are not proposing to revise the status of codes from
provisional to permanent in this proposed rule because we intend to
conduct a comprehensive review. Therefore, we are not proposing to
assign them to the Medicare Telehealth Services List with permanent
status.
(4) Psychological Testing and Developmental Testing
We received a request to add Psychological Testing and
Developmental Testing (CPT codes 96112, 96113, 96130, 96136, and 96137)
to the Medicare Telehealth Services List on a permanent basis. These
services are currently on the Medicare Telehealth Services List and are
assigned provisional status. In the March 31, 2020 interim final rule
with comment period (IFC-1) (85 FR 19239), we originally added CPT
codes 96130, 96136, and 96137 to the Medicare Telehealth Services List
for the duration of the PHE for COVID-19, and in the CY 2021 PFS final
rule (85 FR 85003), we stated we were retaining them on the list on a
category 3 basis. In the CY 2023 PFS final rule (87 FR 69460), we added
CPT codes 96112 and 96113 on a temporary basis.
As explained previously, we are not proposing to revise the status
of codes from provisional to permanent in this proposed rule because we
intend to conduct a comprehensive review. Therefore, we are not
proposing to either remove these services from or to assign them
permanent status on the Medicare Telehealth Services List.
(5) Therapy/Audiology/Speech Language Pathology
We received multiple requests to add the Therapy services described
by CPT codes 97110, 97112, 97116, 97161 through 97164, 97530 and 97535,
97165 through 97168, and Audiology and Speech Language Pathology
services CPT codes 92507, 92508, 92521 through 92524, 92526, 92607
through 92610, 96105 92626, 92627, 96125, 97129, 97130, 92607 through
92609 92550 through 92557, 92563, 92565 92567, 92568, 92570, 92587,
92588, 92601 through 92604, 92625 through 92627, and 92651 and 92652 to
the Medicare Telehealth Services List on a permanent basis stating that
continuing Telehealth flexibilities for these services could lead to
reduced health care expenditures, increased patient access, and
improved management of chronic disease and quality of life. These
services are currently available on the Medicare Telehealth Services
List and are assigned provisional status, and we refer readers to
section II.D.1. for further discussion of these services. In the CY
2023 PFS final rule (87 FR 69451), we originally added CPT codes 90901,
97150, 97530, 97537, 97542, 97763, and 98960-98962 to the Medicare
Telehealth Services List on a Category 3 basis. As explained
previously, we are not proposing to revise the status of codes from
provisional to permanent in this proposed rule because we intend to
conduct a comprehensive review. Therefore, we are not proposing to
assign them permanent status on the Medicare Telehealth Services List.
(6) Care Management
We received a request to permanently add General Behavioral Health
Integration (CPT code 99484) and Principal Care Management (CPT codes
99424-99427) to the Medicare Telehealth Services List. These services
are not on the Medicare Telehealth Services List, nor have they been
previously added and removed. These services do not meet the criteria
described by Step 2 of the 5-step process: determination of whether the
service is subject to the provisions of section 1834(m) of the Act. As
stated above, the scope of section 1834(m) of the Act is limited to
services that would ordinarily be furnished with the furnishing
practitioner and patient in the same location (88 78863), and for a
service to be considered a telehealth service subject to and payable
under section 1834(m) of the Act, the service must be so analogous to
in-person care such that the telehealth service, as defined in Sec.
410.78, is essentially a substitute for a face-to-face encounter. We do
not consider these services to be Medicare telehealth services because
they are not inherently face-to-face services, and the patient need not
be present for the services to be furnished in its entirety. Therefore,
we do not consider CPT codes 99484 and 99424-99427 to be telehealth
services under section 1834(m) of the Act or our regulation at Sec.
410.78. Therefore, we are not proposing to add this service to the
Medicare Telehealth Services List.
(7) Posterior Tibial Nerve Stimulation for Voiding Dysfunction
We received a request to permanently add Posterior tibial
neurostimulation (CPT code 64566) to the Medicare Telehealth Services
List. This code is not on the Medicare Telehealth Services List, nor
had it been previously added and removed. This service does not meet
the criteria for addition described by Step 3 of the 5-step process,
namely the review the elements of the service as described by the HCPCS
code and determine whether each of them is capable of being furnished
using an interactive telecommunications system as defined in Sec.
410.78(a)(3). The requestor describes the services underlying CPT code
64566 as the continual or recurring treatments over a period of time
consisting of the remote monitoring of device utilization and bladder
diary for the generation of reports for review by the care provider.
Based on our review, this description does not align with the elements
of the service as described by CPT code 64566. CPT code 64566 describes
a single treatment provided by a clinician who has direct contact with
the patient and inserts an electrode into the skin overlying the
posterior tibial nerve. Upon conclusion of the treatment, the clinician
removes the electrode and examines and dresses the puncture wound.
Providing these services would require in-person interaction. We are
therefore not proposing to add the service to the Medicare Telehealth
Services List because we do not believe the service elements can be met
in full using two-way audio-video telecommunications technology.
(8) Radiation Treatment Management
We received requests to permanently add Radiation Treatment
Management (CPT code 77427) to the Medicare Telehealth Services List.
The code is currently on the Medicare Telehealth List with provisional
status. In the March 31, 2020 IFC (85 FR 9240), we originally added CPT
code 77427 on the Medicare Telehealth Services List for the duration of
the PHE for Covid-19. A requester stated that data collected during the
PHE demonstrates that the telehealth option is as safe as the in-person
equivalent. We also received a request that we remove this code from
the Medicare Telehealth Services List, citing the importance of in-
person physical examination to ensure quality of care and stating that
a telehealth modality presents patient safety concerns such as those
related to the ability of the practitioner to address side effects of
radiation therapy. Given the safety concerns raised by members of the
practitioner community, we believe this service may not be safely and
effectively furnished, and therefore believe that such concerns merit
removing this item from the telehealth list. We are therefore proposing
to remove this code from the Medicare Telehealth Services List, and we
are

[[Page 61627]]

soliciting comment on these quality of care concerns.
(9) Home International Normalized Ratio (INR) Monitoring
We received a request to permanently add Home INR Monitoring (HCPCS
code G0248) to the Medicare Telehealth Services List. This service is
not on the Medicare Telehealth Services List, nor had it been
previously added and removed. We are proposing to add HCPS code G0248
to the Medicare Telehealth Services List with provision status because
our clinical analyses of these services indicate that they can be
furnished in full using two-way, audio and video technology, and
information provided by requesters indicates that there may be clinical
benefit; however, there is not yet sufficient evidence available to
consider the services for permanent status. This service as described
by the HCPCS code describes face-to-face demonstration of use and care
of the INR monitor, obtaining at least one blood sample, provision of
instructions for reporting home INR test results, and documentation of
patient's ability to perform testing and report results, and we believe
each of these service elements the elements is capable of being
furnished using an interactive telecommunications system. Adding this
service on a provisional basis will allow additional time for the
development of evidence of clinical benefit when this service is
furnished via telehealth for CMS to consider when evaluating this
service for potential permanent addition to the Medicare Telehealth
Services List.
(10) Caregiver Training
We received a request to permanently add Caregiver Training
services, as described by HCPCS codes 97550 (Caregiver training in
strategies and techniques to facilitate the patient's functional
performance in the home or community (eg, activities of daily living
[ADLs], instrumental ADLs [iADLs], transfers, mobility, communication,
swallowing, feeding, problem solving, safety practices) (without the
patient present), face to face; initial 30 minutes) and CPT code 97551
(Caregiver training in strategies and techniques to facilitate the
patient's functional performance in the home or community (eg,
activities of daily living [ADLs], instrumental ADLs [iADLs],
transfers, mobility, communication, swallowing, feeding, problem
solving, safety practices) (without the patient present), face to face;
each additional 15 minutes (List separately in addition to code for
primary service)) to the Medicare Telehealth Services List. These codes
do not currently appear on the Medicare Telehealth Services List nor
had they previously been added or removed. We are proposing to add
these services to the Medicare Telehealth List with provisional status
for CY 2025, in addition to the other currently payable caregiver
training service codes (CPT codes 97550, 97551, 97552, 96202, 96203).
These codes are new services that were added to the PFS beginning in
2024. Given the limited utilization of those codes added for 2024,
there are not peer-reviewed studies supporting these codes' ability to
be furnished remotely. Adding these services on a provisional basis
will allow additional time for the development of evidence of clinical
benefit when these services are furnished via telehealth for CMS to
consider when evaluating these services for potential permanent
addition to the Medicare Telehealth Services List. Contingent upon
finalizing the service code descriptions that we propose in section
II.E. of this proposed rule, we also propose that HCPCS code GCTD1-3
and GCTB1-2 be added to the Medicare Telehealth Services list for CY
2025 on a provisional basis. We believe that these codes are similar to
other services already available on the Medicare Telehealth Services
List, including education and training for patient self-management (CPT
codes 98960-98962), self-care/home management training (CPT codes
97535), and caregiver-focused health risk assessment (CPT code 96161).
Further, it appears that all elements of these services may be
furnished when using two-way interactive communications technology.
Adding these services on a provisional basis will allow additional time
for the development of evidence of clinical benefit when this service
is furnished via telehealth for CMS to consider when evaluating these
services for potential permanent addition to the Medicare Telehealth
Services List.
c. Other Services Proposed for Addition to the Medicare Teleheal

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