Rule2024-25382
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
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 9, 2024
Effective
January 1, 2025
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This final rule addresses: changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; codification of establishment of new 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 and Medicare Parts C and D Overpayment Provisions of the Affordable Care Act.
Full Text
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<title>Federal Register, Volume 89 Issue 236 (Monday, December 9, 2024)</title>
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[Federal Register Volume 89, Number 236 (Monday, December 9, 2024)]
[Rules and Regulations]
[Pages 97710-99057]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-25382]
[[Page 97709]]
Vol. 89
Monday,
No. 236
December 9, 2024
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 401, 405, 410, 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;
Final Rule
Federal Register / Vol. 89 , No. 236 / Monday, December 9, 2024 /
Rules and Regulations
[[Page 97710]]
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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-F and CMS-4201-F5]
RIN 0938-AV33 and 0938-AU96
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: Final rule.
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SUMMARY: This final rule addresses: changes to the physician fee
schedule (PFS); other changes to Medicare Part B payment policies to
ensure that payment systems are updated to reflect changes in medical
practice, relative value of services, and changes in the statute;
codification of establishment of new 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 and
Medicare Parts C and D Overpayment Provisions of the Affordable Care
Act.
DATES: These regulations are effective on January 1, 2025.
FOR FURTHER INFORMATION CONTACT:
<a href="/cdn-cgi/l/email-protection#c984acada0aaa8bbac99a1b0baa0aaa0a8a78facac9aaaa1acadbca5ac89aaa4bae7a1a1bae7aea6bf"><span class="__cf_email__" data-cfemail="337e56575a50524156635b4a405a505a525d75565660505b5657465f5673505e401d5b5b401d545c45">[email protected]</span></a>, for any issues not identified
below. Please indicate the specific issue in the subject line of the
email.
Michael Soracoe, (410) 786-6312, Morgan Kitzmiller, (410) 786-1623,
or <a href="/cdn-cgi/l/email-protection#9dd0f8f9f4fefceff8cdf5e4eef4fef4fcf3dbf8f8cefef5f8f9e8f1f8ddfef0eeb3f5f5eeb3faf2eb"><span class="__cf_email__" data-cfemail="125f77767b71736077427a6b617b717b737c54777741717a7776677e7752717f613c7a7a613c757d64">[email protected]</span></a>, for issues related to
practice expense, work RVUs, conversion factor, and PFS specialty-
specific impacts.
Hannah Ahn, (814) 769-0143, or
<a href="/cdn-cgi/l/email-protection#501d3534393331223500382923393339313e1635350333383534253c3510333d237e3838237e373f26"><span class="__cf_email__" data-cfemail="8bc6eeefe2e8eaf9eedbe3f2f8e2e8e2eae5cdeeeed8e8e3eeeffee7eecbe8e6f8a5e3e3f8a5ece4fd">[email protected]</span></a>, for issues related to
potentially misvalued services under the PFS.
Mikayla Murphy, (667) 414-0093, or
<a href="/cdn-cgi/l/email-protection#95d8f0f1fcf6f4e7f0c5fdece6fcf6fcf4fbd3f0f0c6f6fdf0f1e0f9f0d5f6f8e6bbfdfde6bbf2fae3"><span class="__cf_email__" data-cfemail="e4a981808d87859681b48c9d978d878d858aa28181b7878c8180918881a4878997ca8c8c97ca838b92">[email protected]</span></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#eba68e8f82888a998ebb8392988288828a85ad8e8eb888838e8f9e878eab888698c5838398c58c849d"><span class="__cf_email__" data-cfemail="efa28a8b868c8e9d8abf87969c868c868e81a98a8abc8c878a8b9a838aaf8c829cc187879cc1888099">[email protected]</span></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#b8f5dddcd1dbd9cadde8d0c1cbd1dbd1d9d6feddddebdbd0dddccdd4ddf8dbd5cb96d0d0cb96dfd7ce"><span class="__cf_email__" data-cfemail="8ec3ebeae7edeffcebdee6f7fde7ede7efe0c8ebebddede6ebeafbe2ebceede3fda0e6e6fda0e9e1f8">[email protected]</span></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#29644c4d404a485b4c7941505a404a4048476f4c4c7a4a414c4d5c454c694a445a0741415a074e465f"><span class="__cf_email__" data-cfemail="c18ca4a5a8a2a0b3a491a9b8b2a8a2a8a0af87a4a492a2a9a4a5b4ada481a2acb2efa9a9b2efa6aeb7">[email protected]</span></a>, for issues related to office/
outpatient evaluation and management visit inherent complexity add-on.
Sarah Irie, (410) 786-1348, Emily Parris (667) 414-0418, or
<a href="/cdn-cgi/l/email-protection#cf82aaaba6acaebdaa9fa7b6bca6aca6aea189aaaa9caca7aaabbaa3aa8faca2bce1a7a7bce1a8a0b9"><span class="__cf_email__" data-cfemail="0b466e6f62686a796e5b6372786268626a654d6e6e5868636e6f7e676e4b68667825636378256c647d">[email protected]</span></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#b7fad2d3ded4d6c5d2e7dfcec4ded4ded6d9f1d2d2e4d4dfd2d3c2dbd2f7d4dac499dfdfc499d0d8c1"><span class="__cf_email__" data-cfemail="632e06070a00021106330b1a100a000a020d25060630000b0607160f0623000e104d0b0b104d040c15">[email protected]</span></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#7a371f1e13191b081f2a1203091319131b143c1f1f2919121f1e0f161f3a19170954121209541d150c"><span class="__cf_email__" data-cfemail="e8a58d8c818b899a8db880919b818b818986ae8d8dbb8b808d8c9d848da88b859bc680809bc68f879e">[email protected]</span></a>, for issues related to
advancing access to behavioral health services.
Michelle Cruse, (443) 478-6390, Erick Carrera, (410) 786-8949,
Zehra Hussain, (214) 767-4463, or
<a href="/cdn-cgi/l/email-protection#b0fdd5d4d9d3d1c2d5e0d8c9c3d9d3d9d1def6d5d5e3d3d8d5d4c5dcd5f0d3ddc39ed8d8c39ed7dfc6"><span class="__cf_email__" data-cfemail="3a775f5e53595b485f6a5243495359535b547c5f5f6959525f5e4f565f7a59574914525249145d554c">[email protected]</span></a>, for issues related to dental
services inextricably linked to other covered medical services.
Zehra Hussain, (214) 767-4463, or
<a href="/cdn-cgi/l/email-protection#8fc2eaebe6eceefdeadfe7f6fce6ece6eee1c9eaeadcece7eaebfae3eacfece2fca1e7e7fca1e8e0f9"><span class="__cf_email__" data-cfemail="733e16171a10120116231b0a001a101a121d35161620101b1617061f1633101e005d1b1b005d141c05">[email protected]</span></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#e8a58d8c818b899a8db880919b818b818986ae8d8dbb8b808d8c9d848da88b859bc680809bc68f879e"><span class="__cf_email__" data-cfemail="3a775f5e53595b485f6a5243495359535b547c5f5f6959525f5e4f565f7a59574914525249145d554c">[email protected]</span></a>, for issues related to
complex drug administration.
Glenn McGuirk, (410) 786-5723, or <a href="/cdn-cgi/l/email-protection#682b242e3b372106191d011a010d1b280b051b4600001b460f071e"><span class="__cf_email__" data-cfemail="75363933262a3c1b04001c071c1006351618065b1d1d065b121a03">[email protected]</span></a> for
issues related to Clinical Laboratory Fee Schedule.
Lisa Parker, (410) 786-4949, or <a href="/cdn-cgi/l/email-protection#0d4b5c454e205d5d5e4d6e607e2365657e236a627b"><span class="__cf_email__" data-cfemail="0640574e452b56565546656b75286e6e7528616970">[email protected]</span></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#9fcdd7dcdffcf2ecb1f7f7ecb1f8f0e9"><span class="__cf_email__" data-cfemail="82d0cac1c2e1eff1aceaeaf1ace5edf4">[email protected]</span></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#76392226293b13121f1517041336151b05581e1e0558111900"><span class="__cf_email__" data-cfemail="94dbc0c4cbd9f1f0fdf7f5e6f1d4f7f9e7bafcfce7baf3fbe2">[email protected]</span></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#74271c150611102715021d1a130724061b13061519341719075a1c1c075a131b02"><span class="__cf_email__" data-cfemail="6d3e050c1f08093e0c1b04030a1e3d1f020a1f0c002d0e001e4305051e430a021b">[email protected]</span></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#f6a59e97849392a597809f989185a684999184979bb6959b85d89e9e85d8919980"><span class="__cf_email__" data-cfemail="c192a9a0b3a4a592a0b7a8afa6b291b3aea6b3a0ac81a2acb2efa9a9b2efa6aeb7">[email protected]</span></a>,
for issues related to Shared Savings Program beneficiary assignment and
benchmarking methodology.
[[Page 97711]]
Richard (Chase) Kendall, (410) 786-1000, or
<a href="/cdn-cgi/l/email-protection#9ecdf6ffecfbfacdffe8f7f0f9edceecf1f9ecfff3defdf3edb0f6f6edb0f9f1e8"><span class="__cf_email__" data-cfemail="bfecd7decddadbecdec9d6d1d8ccefcdd0d8cdded2ffdcd2cc91d7d7cc91d8d0c9">[email protected]</span></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#5d0e353c2f38390e3c2b34333a2e0d2f323a2f3c301d3e302e7335352e733a322b"><span class="__cf_email__" data-cfemail="bbe8d3dac9dedfe8dacdd2d5dcc8ebc9d4dcc9dad6fbd8d6c895d3d3c895dcd4cd">[email protected]</span></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#aeefc3ccdbc2cfdac1dcd7dddecbcdc7cfc2dad7cdcfdccbeecdc3dd80c6c6dd80c9c1d8"><span class="__cf_email__" data-cfemail="3e7f535c4b525f4a514c474d4e5b5d575f524a475d5f4c5b7e5d534d1056564d10595148">[email protected]</span></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.
Alissa Stoneking, (410)786-1120, for issues related to Parts C and
D 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, 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 final 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 final rule, refer to item CMS-1807-F. Readers with questions
related to accessing any of the Addenda or other supporting documents
referenced in this final rule and posted on the CMS website identified
above should contact <a href="/cdn-cgi/l/email-protection#5e133b3a373d3f2c3b0e36272d373d373f30183b3b0d3d363b3a2b323b1e3d332d7036362d70393128"><span class="__cf_email__" data-cfemail="cb86aeafa2a8aab9ae9ba3b2b8a2a8a2aaa58daeae98a8a3aeafbea7ae8ba8a6b8e5a3a3b8e5aca4bd">[email protected]</span></a>.
CPT (Current Procedural Terminology) Copyright Notice: Throughout
this final rule, we use CPT codes and descriptions to refer to a
variety of services. We note that CPT codes and descriptions are
copyright 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 final rule revises payment policies under the Medicare PFS and
makes other policy changes, including the implementation of 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 final
rule includes provisions regarding other Medicare payment policies
described in sections III. and IV.
This rulemaking also codifies 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 Social
Security Act (the Act). This rulemaking establishes 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, 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 updates 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. These changes also aim to ensure RHCs are provided
flexibility in the services they offer, including specialty and
laboratory services.
This rulemaking also further advances 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 these 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 amends our regulations regarding the standard for
an ``identified overpayment'' under Medicare Parts A, B, C, and D to
align the regulations with the statutory language in section
1128J(d)(4)(A) of the Act, which provides that the terms ``knowing''
and ``knowingly'' have the meaning given to those terms in the Federal
False Claims Act. 87 FR 79559. This rulemaking also finalizes proposals
regarding timeframes for reporting and returning Parts A and B
overpayments that we made in the CY 2025 PFS proposed rule.
B. Summary of the Key Provisions
Section 1848 of 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
[[Page 97712]]
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 final rule, we 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 final 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 final 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> Provisions on Medicare Parts A and B Payment for Dental
Services Inextricably Linked to Other Covered Services (section II.J.)
<bullet> Payment for Skin Substitutes (section II.K.)
<bullet> Strategies for Improving Global Surgery Payment Accuracy
(section II.L.)
<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> Modifications to Coverage of 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> Medicare Parts C and D Overpayment Provisions of the
Affordable Care Act (section III.P.)
<bullet> Updates to the Quality Payment Program (section IV.)
<bullet> Collection of Information Requirements (section V.)
<bullet> Regulatory Impact Analysis (section VI.)
C. Summary of Costs and Benefits
We have determined that this final rule is economically
significant. We estimate the CY 2025 PFS conversion factor to be
32.3465 which reflects a 0.02 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 VI., Regulatory Impact
Analysis, of this final rule.
II. Provisions of the Final 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 final rule, unless otherwise noted,
the term ``practitioner'' is used to describe both physicians and
nonphysician practitioners (NPPs) who are permitted to bill Medicare
under the PFS for the services they furnish to Medicare beneficiaries.
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 referred 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
[[Page 97713]]
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
referred 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 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 final rule PE/HR'' on the
CMS website under downloads for the CY 2025 PFS final 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 proposed to use
proxy PE/HR values for these new specialties, as there are no PPIS data
for these specialties, by crosswalking the PE/HR as follows from
specialties that furnish similar services in the Medicare claims data:
<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 final rule PE/HR''
file available on the CMS website under the supporting data files for
the CY 2025 PFS final 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>.
Comment: One commenter stated that they supported the proposal to
include utilization data for MFTs and MHCs in calculating practice
expense Relative Value Units. The commenter stated that accurate RVUs
ensure that MFTs and MHCs receive appropriate reimbursement, covering
essential overhead costs and sustaining their practices, which supports
the financial viability of mental health practices and also promotes
equitable access to care for all patients, regardless of the complexity
of their conditions.
Response: We appreciate the support for our proposal from the
commenter.
After consideration of the comments, we are finalizing our proposed
PE/HR crosswalks for the Marriage and Family Therapist and Mental
Health Counselor specialties.
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
[[Page 97714]]
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 final
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>. 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
[[Page 97715]]
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.
We did not make any proposals associated with the list of expected
specialty assignments for low volume services, however we received
public comments on this topic from interested parties. The following is
a summary of the comments we received and our responses.
Comment: Several commenters stated that they had performed an
analysis to identify all codes that meet the criteria to receive a
specialty override under this CMS policy and drafted updated
recommendations for codes that meet these criteria for CY 2024.
Commenters stated that the purpose of assigning a specialty to these
codes was to avoid the significant adverse impact on MP RVUs that
results from errors in specialty utilization data magnified in
representation (percentage) by small sample size. These commenters
submitted a list of approximately 75 low volume HCPCS codes with
recommended expected specialty assignments.
Response: After reviewing the information provided by the
commenters to determine whether the specialty assignments they
recommended were appropriate for the services in question, based on
determining if the recommended specialty matches the dominant specialty
in the claims data, we are finalizing the additions to the list of
expected specialty assignments for low volume services identified in
Table 1. We agreed with the commenters that, based on claims data, CPT
codes 33231 and 33240 should be crosswalked to the Cardiac
Electrophysiology specialty and that CPT codes 33900-33904 and 93574-
93575 should be crosswalked to the Interventional Cardiology specialty.
We also agree with commenters that CPT codes 56633 and 58240 should be
crosswalked to the Gynecological Oncology specialty. However, we do not
have PE/HR data for these specialties as they were not part of the PPIS
when it was conducted in 2007; therefore, we are crosswalking these CPT
codes to the closest available specialties (Cardiology and Obstetrics/
Gynecology, respectively), as listed on Table 1.
We disagreed with the commenters on a series of additional
suggested assigned specialties. In each case, there was another
specialty which was reported more than twice as often in the claims
data as the specialty suggested by commenters and in some cases
reported as much as twenty times as often. Therefore, we are
crosswalking CPT code 22505 to the Neurosurgery specialty, CPT code
25670 to the Orthopedic Surgery specialty, CPT code 28116 to the
Podiatry specialty, CPT code 35231 to the Otolaryngology specialty, CPT
code 36585 to the General Surgery specialty, CPT code 36810 to the
Pulmonary Disease specialty, and CPT code 60522 to the Thoracic Surgery
specialty (which was additionally suggested by one commenter) as these
were the dominant specialties in the claims data. These crosswalks are
included in Table 1.
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After consideration of the public comments, we are finalizing the
additions to the list of expected specialty assignments for low volume
services as detailed in Table 1. The full list of expected specialty
assignments is included in the CY 2025 public use files, which are
available on the CMS website under downloads for the CY 2025 PFS final
rule at <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html">http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html</a>.
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
[[Page 97718]]
adding the product of the adjusted indirect PE allocator for each
service and the utilization data for that service.
Step 13: Using the specialty specific indirect PE/HR data,
calculate specialty specific aggregate pools of indirect PE for all PFS
services for that specialty by adding the product of the indirect PE/HR
for the specialty, the work time for the service, and the specialty's
utilization for the service across all services furnished by the
specialty.
Step 14: Using the results of Step 12 and Step 13, calculate the
specialty specific indirect PE scaling factors.
Step 15: Using the results of Step 14, calculate an indirect
practice cost index at the specialty level by dividing each specialty
specific indirect scaling factor by the average indirect scaling factor
for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service
level to ensure the capture of all indirect costs. Calculate a weighted
average of the practice cost index values for the specialties that
furnish the service. (Note: For services with TCs and PCs, we calculate
the indirect practice cost index across the global service, PCs, and
TCs. Under this method, the indirect practice cost index for a given
service (for example, echocardiogram) does not vary by the PC, TC, and
global service.)
Step 17: Apply the service level indirect practice cost index
calculated in Step 16 to the service level adjusted indirect allocators
calculated in Step 11 to get the indirect PE RVUs.
(d) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs
from Step 17 and apply the final PE budget neutrality (BN) adjustment.
The final PE BN adjustment is calculated by comparing the sum of steps
5 and 17 to the aggregate work RVUs scaled by the ratio of current
aggregate PE and work RVUs. This adjustment ensures that all PE RVUs in
the PFS account for the fact that certain specialties are excluded from
the calculation of PE RVUs but included in maintaining overall PFS BN.
(See ``Specialties excluded from ratesetting calculation'' later in
this final rule.)
Step 19: Apply the phase-in of significant RVU reductions and its
associated adjustment. Section 1848(c)(7) of the Act specifies that for
services that are not new or revised codes, if the total RVUs for a
service for a year would otherwise be decreased by an estimated 20
percent or more as compared to the total RVUs for the previous year,
the applicable adjustments in work, PE, and MP RVUs shall be phased in
over a 2-year period. In implementing the phase-in, we consider a 19
percent reduction as the maximum 1-year reduction for any service not
described by a new or revised code. This approach limits the year one
reduction for the service to the maximum allowed amount (that is, 19
percent), and then phases in the remainder of the reduction. To comply
with section 1848(c)(7) of the Act, we adjust the PE RVUs to ensure
that the total RVUs for all services that are not new or revised codes
decrease by no more than 19 percent, and then apply a relativity
adjustment to ensure that the total pool of aggregate PE RVUs remains
relative to the pool of work and MP RVUs. For a more detailed
description of the methodology for the phase-in of significant RVU
changes, we referred 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 2.
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<bullet> Crosswalk certain low volume physician specialties:
Crosswalk the utilization of certain specialties with relatively low
PFS utilization to the associated specialties.
<bullet> Physical therapy utilization: Crosswalk the utilization
associated with all physical therapy services to the specialty of
physical therapy.
<bullet> Identify professional and technical services not
identified under the usual TC and 26 modifiers: Flag the services that
are PC and TC services but do not use TC and 26 modifiers (for example,
electrocardiograms). This flag associates the PC and TC with the
associated global code for use in creating the indirect PE RVUs. For
example, the professional service, CPT code 93010 (Electrocardiogram,
routine ECG with at least 12 leads; interpretation and report only), is
associated with the global service, CPT code 93000 (Electrocardiogram,
routine ECG with at least 12 leads; with interpretation and report).
<bullet> Payment modifiers: Payment modifiers are accounted for in
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,
[[Page 97720]]
the intraoperative portion in the work time file is used; where it is
not present, the intraoperative percentage from the payment files used
by contractors to process Medicare claims is used instead. Where
neither is available, we use the payment adjustment ratio to adjust the
time accordingly. Table 3 details the manner in which the modifiers are
applied.
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We also adjust volume and time that correspond to other payment
rules, including special multiple procedure endoscopy rules and
multiple procedure payment reductions (MPPRs). We noted 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 proposed 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.L. of this final 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
final rule.
(6) Equipment Cost per Minute
The equipment cost per minute is calculated as:
(1/(minutes per year * usage)) * price * ((interest rate/(1 (1/((1 +
interest rate)[supcaret] life of equipment)))) + maintenance)
Where:
minutes per year = maximum minutes per year if usage were continuous
(that is, usage=1); generally, 150,000 minutes.
usage = variable, see discussion below in this proposed rule.
[[Page 97721]]
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 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 4.
[GRAPHIC] [TIFF OMITTED] TR09DE24.004
We did not propose 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 2017-based 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,
[[Page 97722]]
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 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 2017-based 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 2017-based 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 2017-based 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 2017-based 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 2017-based 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 the CY 2025 PFS proposed rule, we stated that 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 stated that 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. We stated
that 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 did
not propose to incorporate the 2017-based MEI in PFS ratesetting for CY
2025. We invited 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. The
following is a summary of the comments we received and our responses.
Comment: Many commenters supported our continued delayed
implementation of the 2017-based MEI in PFS ratesetting. Most of these
commenters urged CMS to delay consideration of other sources for the
MEI until the AMA's efforts to collect practice cost data from
physician practices have concluded. The AMA RUC commented that they
concluded survey efforts on August 31, 2024, and are working to analyze
the data. Some commenters requested a more frequent update of the PPIS
every three to five years given the dramatic redistributive impacts of
implementing updated data after many years. Some commenters requested a
separate MEI for behavioral health to adequately and appropriately
value outpatient mental health and substance use services. Another
commenter disagreed with more frequent PPIS efforts because they can be
burdensome, particularly for small, independent practices in
underserved areas where time must be taken away from direct patient
care to complete the survey. The commenter stated that larger health
systems and practices are more equipped to respond to these surveys
which leads to biased and unreliable survey results. The commenter
urged CMS to consider contingencies or alternatives to the PPIS to
address the lack of data availability or response rates for some
specialties. One commenter requested that CMS seek alternative, more
current data sources to rebase and revise the MEI if the AMA PPIS data
proves insufficient, stating that the 2017-based MEI derived
predominantly from the 2017 US Census Bureau's Service Annual Survey
(SAS) are outdated and should not be used for updates.
A few commenters urged CMS to implement the 2017-based MEI for PFS
ratesetting as soon as possible. One commenter stated that the SAS
Census Bureau data should be used to determine the MEI in the future
instead of the AMA's PPIS data because it is reliable, regularly
updated, and objectively collected.
Response: We appreciate commenters' feedback, specifically as it
relates to updating PFS ratesetting, and will consider the commenters'
feedback in future rulemaking.
Comment: One commenter stated that CMS finalized the 2017-based MEI
based primarily on a subset of data from the 2017 US Census Bureau's
SAS. The commenter stated that assumptions made for the updated weights
did not include physicians who are employed by hospitals and large
health systems. The commenter stated that data from facility-based
physicians should be included since MEI weights also cover physician
compensation and professional liability insurance.
Response: We refer the commenter to the discussion of methodologies
and a response to this concern in the CY 2024 PFS final rule (88 FR
78830 and 78831).
4. Changes to Direct PE Inputs for Specific Services
This section focuses on specific PE inputs. The direct PE inputs
are
[[Page 97723]]
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 final
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 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 directed 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 directed 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
[[Page 97724]]
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 final 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 referred readers to the CY 2019 PFS
final rule with comment period (83 FR 59473 through 59480).
For CY 2025, we proposed 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 20, CY
2025 Invoices Received for Existing Direct PE Inputs.
Comment: Several commenters stated that they commended CMS for
recognizing the importance and cost of Long-Term Electrocardiography
Monitoring (LT-ECG) Services, reflected in the updated pricing for
supply item SD339. The commenters stated that the updated pricing is
critical for ensuring patient access to LT-ECG services under CPT codes
93241, 93243, 93245, and 93247, while also providing essential payment
stability for providers.
Response: We appreciate the support from the commenters for our
proposed SD339 supply pricing.
Comment: A commenter stated that they supported the proposed
pricing increases for the EP112 equipment and the SL474, SL478, SL479,
SL480, SL482, and SL492 supplies. The commenter stated that they
supported the proposed changes to the pricing for these items and urges
CMS to finalize them as proposed. A separate commenter stated that they
supported the proposed change to the pricing of the SL474 supply as
they believe it improves the accuracy of pricing for practice expense
items within the overall fee schedule.
Response: We appreciate the support from the commenters for our
proposed supply and equipment pricing.
Comment: A commenter stated that they fully supported CMS's
proposal to create three new supply codes in the PE database (SD370,
SD371, and SD372) to facilitate appropriate pricing by the MACs for
Temporary Female Intraurethral Valve-Pump services. The commenter
stated that they agreed that short of establishing national pricing for
CPT codes 0596T and 0597T, creating supply codes with accurate pricing
for the devices should facilitate rate setting by the MACs that
appropriately accounts for the device costs. The commenter urged CMS to
finalize as proposed the creation of these supply codes and the
proposed prices that correspond to each.
Response: We appreciate the support from the commenter for our
proposed supply pricing of the SD370-SD372 items.
An interested party submitted 30 invoices to update pricing for the
human amniotic membrane allograft 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
proposed for the SD248 supply. We solicited 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.
Comment: Many commenters stated that they supported the proposed
payment increase for CPT 65778 based on the proposed pricing of the
SD248 supply. Commenters described the clinical benefits of the SD248
supply and how it has been instrumental in helping patients with
medical conditions that would not respond to conventional medical
treatment.
Response: We appreciate the support from the commenters for our
proposed pricing of the SD248 supply.
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 proposed the
updated total average price of $125.11 based on the eight submitted
invoices for the SL083 supply, however, we solicited 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.
Comment: Several commenters thanked CMS for updating the price of
the indocyanine green (25ml uou) (SL083) supply in the proposed rule
and recommended that this price be finalized. Commenters stated that
the differences in pricing for the SL084 supply contained on the
submitted invoices demonstrated an increase that occurred during the
second half of 2023 rather than a price differential between two
distinct products; commenters stated that practices paid an average of
[[Page 97725]]
$87 earlier in 2023 and by 2024 the price had increased to $141, with
some paying as much as $156.
Response: We appreciate the support from the commenters for our
proposed supply pricing of the SL083 supply, as well as the additional
information regarding its pricing.
Regarding the Reaction buffer 10X (Ventana 950-300) (SL478) supply,
we proposed 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 proposed
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 proposed
to make this correction for CY 2025; the corrected price of $2.66 for
the SL464 supply is included in Table 20.
Comment: A commenter stated that the proposed payment rates for
HCPCS codes G2082 and G2083 did not include the updated supply pricing
for esketamine described by the SH109 and SH110 supply codes, based on
wholesale acquisition cost (WAC) data submitted by the commenter to CMS
on May 31, 2024. The commenter stated that lack of consistent WAC
supply pricing updates has contributed to payment instability for these
services and puts beneficiary access at risk. The commenter stated that
their goal was to align on a clear process to ensure consistency and
predictability in the approach to updating the annual payment amounts
for the SH109 and SH110 supplies and urged CMS to incorporate the
updated WAC pricing data for these supplies in the PFS final rule.
Response: We did not propose to update the price of the SH109 and
SH110 esketamine supplies in the proposed rule. However, as part of our
process to act on public requests to update equipment and supply
prices, we have reviewed the WAC pricing data submitted by the
commenters. Based on this information, we are finalizing an increase in
the pricing of the SH109 supply from $735.63 to $772.41 and an increase
in the pricing of the SH110 supply from $1103.44 to $1158.62.
With regards to the process for submitting annual pricing updates
for these supply items, we remind the commenter that 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 will 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#c393869c93b1aaa0a69c8aadb3b6b79c96b3a7a2b7a683a0aeb0edababb0eda4acb5"><span class="__cf_email__" data-cfemail="e3b3a6bcb3918a8086bcaa8d939697bcb69387829786a3808e90cd8b8b90cd848c95">[email protected]</span></a>.
We did not propose 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
solicited 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 did not propose updates to
the prices for these supplies. We solicited 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 5 years since we most recently updated the pricing for
these supplies.
Comment: A commenter stated that they continue to believe that CPT
code 36516 suffers from a large reimbursement gap between the facility
and non-facility/physician office setting because CMS is using outdated
pricing data for essential liposorber supplies. The commenter therefore
submitted additional paid invoices for three liposorber supply items:
the tubing set (SC083), Plasma LDL adsorption column (SD186), and
plasma separator (SD188). The commenter stated that these invoices
clearly identified the unit quantity and provided a breakdown of the
costs to show the individual (per-supply item price) as well as case
price (6 items per case per different supply item).
Response: We appreciate the additional invoice submissions from the
commenter and the clarification on the supply quantities for the
associated supply items. Based on this additional pricing data, we are
finalizing price increases to $87.52 for the SC083 supply, to $1419.04
to the SD186 supply, and to $149.70 for the SD188 supply, in each case
based on an average of the six submitted invoices.
Comment: A commenter stated that Liposorber supplies are unique in
that they require special shipping, handling, storing, and insurance
requirements. The commenter stated that, for instance, the Plasma LDL
adsorption Column (SD186) and the Plasma Separator (SD188) are
sensitive to atmospheric conditions and must be packaged, shipped, and
stored at mandated temperatures, as well as avoid exposure to cold,
direct sunlight, high humidity, or excessive vibrations. The commenter
stated that the high cost and fragility of these supplies requires the
practice to purchase additional insurance coverage, and these
additional shipping and handling costs are not reflected in the
invoiced purchase price but add considerable expense to the provision
of apheresis services.
Response: We remind the commenter that shipping and storage costs
are not included in the price of supplies and equipment under our PE
methodology. This is because these costs are covered under the indirect
portion of the PE; it is not the case that these costs are not being
paid, but rather that they are addressed under a different part of the
PE methodology.
<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 did not
propose 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
[[Page 97726]]
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 did not propose 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 did not propose
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 did not propose 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 did not propose 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 did not propose increases to
the prices for these supplies.
(1) Invoice Submission
We reminded readers that we routinely accept public submissions of
invoices as part of our process for developing payment rates for new,
revised, and potentially misvalued codes. Often, these invoices are
submitted in conjunction with the RUC-recommended values for the codes.
To be included in a given year's proposed rule, we generally need to
receive invoices by the same February 10th deadline we noted for
consideration of RUC recommendations. However, we will consider
invoices submitted as public comments during the comment period
following the publication of the PFS proposed rule and will 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#0b5b4e545b7962686e5442657b7e7f545e7b6f6a7f6e4b68667825636378256c647d"><span class="__cf_email__" data-cfemail="3060756f60425953556f795e4045446f65405451445570535d431e5858431e575f46">[email protected]</span></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 welcomed 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.
Comment: Many commenters supported the concept of more regular and
comprehensive updates to supply and equipment pricing. Commenters
stated their support for a deliberate, systematic approach to supply,
equipment, and clinical labor updates and agreed that it would be
prudent to update pricing consistently, such as every 5 years. Many
commenters stated that such a process would provide transparency in the
timing of these updates, give greater granularity into the data sources
that serve as the basis of input pricing changes, and maintain the
current process that allows stakeholders to submit invoices in advance
of rulemaking. Several commenters requested the implementation of a 4-
year phase-in transition for any future pricing updates, as gradually
phasing in cost changes helps to prevent abrupt and potentially harmful
effects on specific providers or services. One commenter stated that
establishing a cycle of updates every four years was not advisable, as
updates that frequent could amplify the impact of short-term market
fluctuations, in addition to increasing the administrative burden for
both CMS and health care providers.
Response: We appreciate the feedback from the commenters regarding
potential future updates to supply and equipment pricing, which we will
consider for use in potential 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.
[[Page 97727]]
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 proposed to implement the supply pack pricing
update and associated revisions as recommended by the RUC's workgroup.
We proposed 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 also proposed to delete the
``pack, drapes, laparotomy (chest-abdomen)'' (SA046) supply entirely.
The updated prices for these supply packs are listed in the valuation
of specific codes section of the preamble under Table 20, CY 2025
Invoices Received for Existing Direct PE Inputs.
In accordance with the RUC workgroup's recommendations, we also
proposed to create 8 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
proposed 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% (eg, 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 new supply pack component items are listed in the valuation of
specific codes section of the preamble under Table 21, CY 2025 New
Invoices.
We also proposed the following additional supply substitutions
based on the recommendations of the RUC workgroup. We proposed to
remove the deleted SA046 supply pack and replace it with the drape,
sterile, fenestrated 16 in x 29 in (SB011) supply for CPT codes 19020,
19101, 19110, 19112, 20101, and 20102. We proposed 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 18
in x 26 in (SB019)--for CPT codes 19000 and 60300. We proposed to
remove the deleted SA046 supply pack and replace it with 2 supplies--
the drape, towel, sterile 18 in x 26 in (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
proposed to remove the deleted SA046 supply pack without replacing it
with anything for CPT code 22526; the RUC workgroup did not make a
recommendation on what to do with CPT code 27278, which also previously
contained the SA046 supply pack. Therefore, we also proposed 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.
Comment: Several commenters stated their appreciation that CMS
proposed to implement the supply pack pricing update and associated
revisions as recommended by the RUC's workgroup.
Response: We appreciate the support for our proposal from the
commenters.
Comment: Several commenters supported the proposed supply pack
pricing update as recommended by the RUC workgroup, however they
indicated concern over the proposed decrease in the price of the
urology cystoscopy visit pack (SA058) from $113.70 to $37.63.
Commenters stated that the proposed pricing reduction in the SA058
supply could result in drastic payment rate cuts for physicians
performing cystoscopy services in the office setting. Commenters
requested that CMS either delay the pricing update or phase-in the
supply pack changes over a four-year period like it has done for other
PE changes with significant redistributive effects, allowing
independent urology practices to better prepare for the negative
financial impact this change will have. One commenter requested that
pricing reductions should be implemented over a 7- to 10-year period.
Response: We appreciate the feedback from the commenters regarding
the proposed changes in pricing for these supply packs, particularly
the decrease in pricing for the urology cystoscopy visit pack (SA058).
After considering the comments, we agree that the use of a phased-in
transition period would be appropriate to allow practitioners to adjust
to the updated pricing of these supplies. During our previous supply
and equipment pricing update in the CY 2019 PFS final rule, we
finalized a policy to phase in any updated pricing that we established
during the 4-year transition period for very commonly used supplies and
equipment, such as sterile gloves (SB024) or exam tables (EF023), even
if invoices were provided as part of the formal review of a code family
(83 FR 59475). Based on this previously established policy, we are
finalizing the use of a pricing transition for three supply packs:
[[Page 97728]]
[GRAPHIC] [TIFF OMITTED] TR09DE24.005
Following the same pattern as our previous supply/equipment and
clinical labor pricing updates, we are finalizing 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 2025, one-third of the difference between the CY
2025 price and the final price is implemented for CY 2026, and one-half
of the difference between the CY 2026 price and the final price is
implemented for CY 2027, with the new direct PE prices fully
implemented for CY 2028 (86 FR 65025). For the other proposed supply
packs, the cystoscopy drapes pack (SA045) is only included in 7 HCPCS
codes and the ocular photodynamic therapy pack (SA049) is only included
in a single HCPCS code which do not meet these criteria established in
previous rulemaking. We are therefore finalizing each of them at their
updated pricing for CY 2025 as proposed in the proposed rule. We
believe that the use of this pricing transition will minimize any
potential disruptive effects during the 4-year transition period that
could be caused by other sudden shifts in RVUs due to the high number
of services that make use of these very common supply packs.
Comment: Several commenters stated that although five incomplete
packs would have their pricing updated in the proposed rule,
mathematical errors still remained for a number of additional supply
packs. Commenters stated that only 3 of the 18 affirmed packs were
priced correctly to match their components and provided tables showing
the pricing of an additional 15 packs that needed mathematical
correction by deconstructing the packs to determine the correct price
through summing their individual components. Commenters requested that
CMS initiate a correction of the packs pricing such that the sum of the
individual components match the price of the corresponding pack.
Response: We appreciate the additional information provided by the
commenters regarding the pricing of these supply packs. We have
compiled this information provided by the commenters for the 15
affected supply packs into Table 6.
[GRAPHIC] [TIFF OMITTED] TR09DE24.006
[[Page 97729]]
While we share the concerns of the commenters regarding the need
for accuracy in the pricing of these supply packs, we have reservations
about their potential for pricing disruptions. Ten of these supply
packs are included in the direct PE inputs for at least 100 HCPCS
codes, and three of the packs are included in more than 1000 HCPCS
codes. Many of these pricing updates would lead to drastic changes in
pricing for these supply packs which are included in hundreds of HCPCS
codes, such as the SA051 pelvic exam pack decreasing in price from
$20.16 to $2.81 (-86 percent) and the SA048 minimum multi-specialty
visit pack decreasing in price from $5.02 to $1.98 (-61 percent). We
are particularly concerned that these changes in supply pack pricing
could lead to significant shifts in the overall PE RVU for affected
HCPCS codes, without these proposed rates appearing in the proposed
rule or allowing any opportunity for public comment.
Therefore, we are not finalizing pricing updates for these
additional 15 supply packs as requested by commenters. We anticipate
returning to this subject in future rulemaking to allow any changes in
associated pricing for HCPCS codes to appear in the proposed rule and
provide an opportunity for the public to comment. Should these supply
pack pricing updates be proposed in future rulemaking, we anticipate
that we may propose the same pricing transition described above due to
the number of potentially affected HCPCS codes. We are finalizing all
of the other supply pack pricing changes as proposed, with the
exception of the 4-year pricing transition for three supply packs as
described above.
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 appreciated the recommendations from the RUC workgroup and
concur that generic alternatives should be used in place of brand
names, where appropriate, in the CMS direct PE database. However, we
had no pricing information or submitted invoices for the 4 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
4 potential new supplies had no pricing information and are not
currently included as direct PE inputs for any HCPCS codes, we did not
add them to our direct PE database for the CY 2025 proposed rule due to
lack of available information.
Comment: Several commenters, including the RUC, stated that they
solicited invoices for Dermabond and its generic alternatives. The
commenters stated that they were able to find and submit invoices for
the Dermabond (SG007) supply but were unable to find invoices for the
generic skin adhesives. Commenters stated that they continued to
believe that generic versions overall are a better alternative than the
use of brand names in the CMS direct PE database and encouraged CMS to
explore other sources of information regarding generic skin adhesives.
Response: We appreciate the feedback from commenters regarding
these skin adhesives and the submission of invoices associated with the
SG007 supply. We agree with the commenters that the use of generic
alternatives is preferred in place of brand names when naming new
supply and equipment items for use in the CMS direct PE database.
However, many of the supply and equipment items such as the SG007
supply have existed in the CMS files for decades at this point. We
believe that it would be more disruptive and potentially confusing to
attempt to rename items like the SG007 supply given how the current
Dermabond name has been in common use for PFS ratesetting for at least
20 years. We are not finalizing a change to the name of this supply,
and since we received no pricing information or submitted invoices for
the four generic formulations of cyanoacrylate skin adhesive, we are
not finalizing any changes to their status as well.
With regards to the submitted invoices for the SG007 supply, the
six invoices refer to different Dermabond products and their unit
quantity size is unclear. The current SG007 supply simply has the unit
size of ``item'' and we were unable to determine how the submitted
invoices relate in terms of pricing to the current supply. We are
therefore not finalizing an update to the price of the SG007 supply at
this time.
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
[[Page 97730]]
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 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 4 years to
transition from current prices to the final updated prices in CY 2025.
We finalized the implementation of this pricing transition over 4
years, such that one-quarter of the difference between the current
price and the fully phased-in price is implemented for CY 2022, one-
third of the difference between the CY 2022 price and the final price
is implemented for CY 2023, and one-half of the difference between the
CY 2023 price and the final price is implemented for CY 2024, with the
new direct PE prices fully implemented for CY 2025. (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 7.
[GRAPHIC] [TIFF OMITTED] TR09DE24.007
[[Page 97731]]
(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 8 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:
[[Page 97732]]
[GRAPHIC] [TIFF OMITTED] TR09DE24.008
[[Page 97733]]
[GRAPHIC] [TIFF OMITTED] TR09DE24.009
As was the case for the market-based supply and equipment pricing
update, the clinical labor rates remained open for public comment
during the 60-day comment period for the CY 2025 PFS proposed rule. We
stated that we expect to set the updated clinical labor rates for CY
2025 in this 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 directed readers to the CY 2022 PFS
final rule (86 FR 65020 through 65037).
Comment: Several commenters urged CMS to freeze the final year of
implementation of the clinical labor policy in CY 2025 to avoid further
redistributions and instability in the PFS. Commenters asked CMS to
hold harmless the specialties that were most affected by the clinical
labor pricing update and not move forward with the final year of the
phase-in. One commenter disagreed with the finalized BLS 2021 benefit
multiplier of 1.296 and stated that CMS should use the originally
proposed 1.366 benefits multiplier instead.
Response: We finalized the use of a 4-year transition in the CY
2022 PFS final rule to help smooth out the changes in payment resulting
from the clinical labor pricing update, avoiding potentially disruptive
changes in payment for affected stakeholders, and promoting payment
stability from year-to-year. As we stated in the CY 2022 PFS final
rule, under section 1848 of the Act, we are required to base payment
for services under the PFS on relative resource costs. To accomplish
that, it is necessary periodically to update the information on which
we base relative values. We believe, and commenters overwhelmingly
agreed, that the BLS wage data is the best source to use for clinical
labor pricing, and commenters did not identify alternative sources of
data that could be used to update pricing. Although we recognize that
payment for some services will be reduced as a result of the pricing
update due to the BN requirements of the PFS, we do not believe that
this is a reason to refrain from updating clinical labor pricing to
reflect changes in resource costs over time as suggested by some
commenters. The PFS is a resource-based relative value payment system
that necessarily relies on accuracy in the pricing of resource inputs;
continuing to use clinical labor cost data that are nearly two decades
old would maintain distortions in relativity that undervalue many
services which involve a higher proportion of clinical labor. As noted
above, we also finalized the implementation of the pricing update
through a 4-year transition to help address the concerns of the
commenters about stabilizing RVUs and reducing large fluctuations in
year-to-year payments. We direct readers to this prior discussion in
the CY 2022 PFS final rule at 86 FR 65025.
Comment: Several commenters stated that the ongoing clinical labor
pricing update was having the effect of driving patient care from the
non-facility to the facility setting. The commenters stated that access
to care for beneficiaries is increasingly constrained for many
essential services and listed a series of procedures most impacted,
such as hemorrhagic and ischemic strokes, maternal health, PAD,
dialysis access, limb salvage services, and CPT code 93229 (External
mobile cardiovascular telemetry with electrocardiographic recording,
concurrent computerized real time data analysis and greater than 24
hours of accessible ECG data storage (retrievable with query) with ECG
triggered and patient selected events transmitted to a remote attended
surveillance center for up to 30 days; technical support for connection
and patient instructions for use, attended surveillance, analysis and
transmission of daily and emergent data reports as prescribed by a
physician or other qualified health care professional).
Response: We previously addressed these concerns about site of
service and patient access to care when we finalized the clinical labor
pricing update; we direct readers to this prior discussion in the CY
2022 PFS final rule at 86 FR 65025.
Comment: A commenter stated that, to promote predictability and
stability in physician payments and mitigate the financial impacts of
significant fluctuations in physician payments that might accompany the
clinical labor pricing update, CMS should consider using a threshold to
limit the level of reductions in payments for specific services that
would occur in a single year. The commenter stated that CMS consider
implementing a cap on payment cuts to individual codes in a single
year.
Response: We agree with the commenter on the importance of avoiding
potentially disruptive changes in payment for affected interested
parties and the need to promote payment stability from year-to-year.
This is why we finalized the use of a multi-year transition for the
clinical labor update in the CY 2022 PFS final rule to help smooth out
the changes in payment resulting from the updated data (86 FR 65024).
We also note for the commenter that section 1848(c)(7) of the Act, as
added by section 220(e) of the PAMA, specifies that for services that
are not new or revised codes, if the total RVUs for a service for a
year would otherwise be decreased by an estimated 20 percent or more as
compared to the total RVUs for the previous year, the applicable
adjustments in work, PE, and MP RVUs shall be phased-in over a 2-year
period. For additional information regarding the phase-in of
significant RVU reductions, we direct readers to the CY 2016 PFS final
rule with comment period (80 FR 70927 through 70929).
Comment: A commenter thanked CMS for raising the clinical labor
rate paid to nurses, however the commenter stated that this was only
one step and nurses are consistently undervalued across all settings.
The commenter stated that nursing care should be valued more highly
than it is today and that nursing care is still undervalued in today's
healthcare system. The commenter stated that RNs are mentioned in ten
separate rows on the clinical labor pricing table, with the rate per
minute for nurses varying from $0.52 per minute to $0.81 per minute,
which brings uncertainty to the fee schedule as the value of the nurse
fluctuates depending on the situation.
Response: We note for the commenter that the proposed CY 2025
clinical labor rate for the RN (L051A) type is $0.76,
[[Page 97734]]
which is based upon Bureau of Labor Statistics wage data as outlined in
our methodology above. We believe that the BLS wage data continues to
be the most accurate source to use as a basis for clinical labor
pricing, and we did not receive any alternate wage data from commenters
to suggest alternate RN pricing. With regards to the multiple listing
of RNs on the table, there are a number of ``blended'' clinical labor
types which often include RNs as one of the staffing types being
averaged together. Blended clinical labor types have been a historical
part of PFS services since we adopted the current PE methodology. We
have done our best to identify which staffing types, including RNs, are
included in these blends along with how they are averaged together to
arrive at the final clinical labor pricing. We also note for the
commenter that the pricing for the RN (L051A) clinical labor type is
drawn directly from BLS wage data and the inclusion of RNs in other
``blended'' clinical labor types has no effect on the pricing of the
L051A category itself.
Comment: A commenter stated that CMS must reevaluate the pricing
for the Behavioral Health Care Manager (L057B) clinical labor type. The
commenter noted that CMS maintained the current clinical labor pricing
for the Behavioral Health Care Manager clinical labor type rather than
update it in the CY 2022 PFS final rule because, although the BLS data
reflected a decreased clinical labor rate for the Behavioral Health
Care Manager labor type, CMS did not believe that the typical wages had
decreased for this clinical labor type given that every other clinical
labor type had increased (86 FR 65022). The commenter stated that
growth for Behavioral Health Care Managers has increased on a similar
trajectory as other clinical labor types and has in fact outpaced wage
growth for other types of behavioral health providers. The commenter
stated that BLS data indicates that salaries for clinicians who work as
Behavioral Health Care Managers have increased at a rate of
approximately 5 percent per year between 2021 and 2023, outpacing the
wage increases for other types of related practitioners, such as
psychiatrists, nurse practitioners, and physician assistants, which
increased at rates below 4 percent per year. The commenter stated that
Behavioral Health Care Manager wages increased at a pace that is
consistent with the increase in wages for other clinical labor types
(such as registered nurses, licensed practical nurses, and medical
assistants), increasing by 27.2 percent from 2017 to 2023, compared
with a 30.2 percent increase among other clinical labor types during
the same period. The commenter requested that rather than holding the
clinical labor rate for Behavioral Health Care Managers steady, the
rate should be increased at a rate similar to the costs associated with
other clinical labor types.
Response: We appreciate the additional information provided by the
commenter with regards to the Behavioral Health Care Manager (L057B)
clinical labor type. However, we continue to believe that the proposed
pricing for this clinical labor type remains accurate, as it was based
directly on BLS wage data (BLS category 21-1018: Substance Abuse,
Behavioral Disorder, and Mental Health Counselors) rather than relying
on a crosswalk or third party information. Although we understand that
it appears unfair that the L057B clinical labor type maintained the
same pricing while all of the other clinical labor types increased in
valuation, this was due to the fact that the L057B type had been valued
much more recently than the other clinical labor types. The L057B
clinical labor type was added to the PFS for the CY 2017 final rule and
therefore was priced at $0.57 per minute based on then-current rates
for genetic counselors (81 FR 80350). Almost all of the other clinical
labor types were last valued based on 2002 wage data, which caused the
L057B clinical labor type to be artificially inflated in pricing
relative to the other clinical labor types. For example, before the
current clinical labor pricing update, Behavioral Health Care Managers
were priced at $0.57 per minute, higher than the $0.51 per minute
valuation of the Registered Nurse (L051A) clinical labor type, which
clearly did not reflect market-based salaries. The commenter included a
table in their submission indicating that salaries for Registered
Nurses are approximately 40 higher than salaries for Behavioral Health
Care Managers, which matches our current proposed pricing for these
clinical labor types ($0.76 and $0.57 respectively). We believe that
the current clinical labor pricing update has brought valuation of the
L057B clinical labor type into relativity with the other clinical labor
types by virtue of valuing all of them at the same time.
After consideration of the comments, we did not receive any new
wage data for use in clinical labor pricing. Therefore, we are
finalizing the clinical labor prices as proposed in Table 8 without
refinement.
d. Technical Corrections to Direct PE Input Database and Supporting
Files
We received the following comments on technical corrections to the
direct PE input database and supporting files:
Comment: Several commenters, including the RUC, requested that CMS
separately identify and pay for high-cost disposable supplies.
Commenters highlighted the outsized impact that high-cost disposable
supplies have within the current practice expense RVU methodology,
which not only accounts for a large amount of direct practice expense
for these supplies but also allocates a large amount of indirect
practice expense into the PE RVU for the procedure codes that include
these supplies. Commenters stated that if high-cost supplies were paid
separately with appropriate HCPCS codes, the disproportionate indirect
expense would no longer be associated with that service, with the
result that indirect PE RVUs would be redistributed throughout the
specialty practice expense pool and the practice expense for all other
services. Commenters requested that CMS separately identify and pay for
high-cost disposable supplies priced more than $500 using appropriate
Healthcare Common Procedure Coding System (HCPCS) codes. Commenters
provided several examples from the proposed rule where they stated this
policy would be appropriate, including new HCPCS code GMEM1, the
potential for a new add-on service based on tympanostomy CPT code
69433, and the price of the SD248 supply (human amniotic membrane
allograft mounted on a non-absorbable self-retaining ring). In each
case, commenters stated that these issues would be better addressed
through the creation of standalone Q codes separately paid from the PFS
so those prices could be monitored and, when appropriate, updated
annually.
Response: We have received a number of prior requests from
interested parties, including the RUC, to implement these separately
billable alpha-numeric Level II HCPCS codes to allow practitioners to
be paid the cost of high cost disposable supplies per patient encounter
instead of per CPT code. We stated at the time, and we continue to
believe, that this option presents a series of potential problems that
we have addressed previously in the context of the broader challenges
regarding our ability to price high cost disposable supply items. We
are therefore not finalizing the implementation of standalone Level II
HCPCS codes for high cost disposable supplies at this time. For further
discussion of this issue, we direct the
[[Page 97735]]
reader to our discussion in the CY 2011 PFS final rule with comment
period (75 FR 73251).
We are aware of the issues with the current PE methodology caused
by very expensive supply and equipment items, and this is a subject
that we may consider for future rulemaking alongside other updates to
the PE methodology. We appreciate the continued feedback from
commenters as we consider potential approaches to this complicated
topic.
Comment: A commenter echoed the request from other interested
parties that CMS separately identify and pay for high-cost disposable
supplies priced more than $500. This commenter stated that they
believed these services should be paid outside of the PFS, since PFS
budget neutrality rules compound the challenge of appropriately valuing
high-cost technology inputs without underpaying for physician
professional services. The commenter recommended that CMS designate
such services as office based procedures under a new place of service
designation and establish payment under the outpatient prospective
payment system (OPPS)/ambulatory surgical center rulemaking instead of
the PFS.
Response: We appreciate the feedback from the commenter on
potential methods for implementing separate payment for high-cost
disposable supplies. Although we have no current plans for such a
policy, we will take under consideration for potential future
rulemaking.
Comment: Several commenters asked for clarification regarding the
proposed PE RVUs for HCPCS code G2251. Commenters stated that the
proposed non-facility and facility PE RVUs for HCPCS code G2251 showed
a significant reduction from 0.15 to 0.00 despite no mention of a
policy proposal for this service. Commenters stated that they wanted to
bring this valuation to the attention of CMS and sought clarification
on whether this was a data entry error or an intentional change related
to the proposed Advanced Primary Care Management (APCM) codes.
Response: We appreciate the commenters for bringing this issue to
our attention, and we clarify that the published 0.00 PE RVUs for HCPCS
code G2251 was an unintended technical error. When we investigated this
issue, we found that it was due to a previously finalized crosswalk: we
finalized a policy in the CY 2021 PFS final rule to value HCPCS code
G2251 identically to HCPCS code G2012 (85 FR 84532). However, we also
proposed to delete HCPCS code G2012 for CY 2025 which inadvertently
resulted in HCPCS code G2251 crosswalking over a zero value for its PE
RVUs. Since HCPCS code G2012 will no longer exist in CY 2025, we are
finalizing the removal of this crosswalk for HCPCS code G2251 which
should correct this error and restore its PE RVUs.
Comment: A commenter requested that CMS consider changing the
assistant at surgery payment policy indicator to ``2'' for CPT codes
37211, 37212, 37242, and 37197 to allow for the use of assistant
surgeons. The commenter stated that these transcatheter procedures
involve the infusion of thrombolytic therapy, precise embolization of
arteries, and foreign body retrieval, which have the potential to be
extremely technical in nature and may require a highly functional team,
including an assistant surgeon in select cases. The commenter stated
that select cases that are particularly challenging may necessitate the
skills of two operators to perform distinct parts of the navigation and
procedure for the precise and safe delivery of thrombolytic therapy and
vascular embolization devices, as well as the safe and effective
retrieval of foreign bodies. The commenter stated that changes to these
payment policy indicators will ensure patient procedural safety and
bring policy alignment to these complex transcatheter procedures.
Response: The four CPT codes identified by the commenter each
currently have an assistant at surgery payment policy of ``1'' under
which an assistant at surgery may not be paid. After reviewing the four
CPT codes identified by the commenter, we agree that an assistant at
surgery may be medically necessary in some particularly challenging
cases. However, we believe that it would be more accurate to finalize
an assistant as surgery payment policy of ``0'' rather than the
requested ``2'', which establishes that the payment restriction for an
assistant at surgery applies to this procedure only if supporting
documentation is submitted to establish medical necessity. We believe
that this will ensure that an assistant at surgery will only be
employed in the particularly challenging and medically necessary cases
described by the commenter. Therefore we are finalizing an assistant at
surgery payment policy indicator of ``0'' for CPT codes 37211, 37212,
37242, and 37197.
Comment: A commenter stated that the direct PE inputs for CPT code
65426 do not contain a supply item for human amniotic membrane
allograft product (the SD247 supply). The commenter stated that as a
result, the practice expense valuation does not account for the
significant cost of this item when it is purchased and used. The
commenter stated that while they are working with stakeholders to
submit a potentially misvalued CPT code request for review in future
rulemaking, they also wanted to note this issue and concern within the
public comment period for this CY 2025 PFS rule.
Response: We appreciate the feedback from the commenter on this
topic, and we would encourage them to continue pursuing the potentially
misvalued code process if they believe that CPT code 65426 does not
properly capture its typical direct PE inputs. We note the commenter
did not present data indicating that the use of the expensive $835
SD247 supply is typical in CPT code 65426. We are not finalizing any
changes to the code at this time.
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
[[Page 97736]]
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 referred 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 referred 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 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
[[Page 97737]]
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.
As we stated in the proposed rule, 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 will continue to
study possible alternatives, and would include analysis of updated PPIS
data, as part of our ongoing work. In the meantime, we requested
general information from the public on ways that CMS may continue work
to improve the stability and predictability of any future updates.
Specifically, we requested feedback from interested parties regarding
scheduled, recurring updates to PE inputs for supply and equipment
costs.
We stated that 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 stated that more
frequent updates may have the unintended consequence of
disproportionate effects of various supplies and equipment that have
newly updated costs.
Further, we solicited 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 sought 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.
Comment: Numerous commenters expressed concerns regarding CMS's
current PE methodology, particularly highlighting its inadequacies in
accommodating modern medical technologies and services, such as
Software as a Medical Device (SaMD) and artificial intelligence (AI).
These commenters stated that there is a need for CMS to revise its PE
methodology to better reflect the actual costs of running medical
practices today, which includes more frequent updates and the
incorporation of direct costs for software and innovative technologies.
Many also supported the AMA's ongoing Physician Practice Information
Survey (PPIS) to ensure updated and accurate data informs PE
calculations. Commenters urged CMS to collaborate closely with medical
associations and incorporate broad stakeholder feedback without
increasing reporting burdens, particularly for smaller practices.
Response: We thank commenters for their feedback and may consider
this information for future rulemaking.
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 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 outlined in section II.E. of this final 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 practice expense (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
[[Page 97738]]
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 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#b0fdd5d4d9d3d1c2d5e0d8c9c3d9d3d9d1def6d5d5e3d3d8d5d4c5dcd5f0d3ddc39ed8d8c39ed7dfc6"><span class="__cf_email__" data-cfemail="e0ad85848983819285b0889993898389818ea68585b383888584958c85a0838d93ce888893ce878f96">[email protected]</span></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
[[Page 97739]]
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.
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\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 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
noted in the proposed rule that no references were 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,<SUP>2 3 4</SUP> in contrast
with the currently included 7 inpatient days. We noted in the proposed
rule that the
[[Page 97740]]
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 stated that we believed this issue would
benefit from further review by the medical community and welcomed
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),<SUP>5 6 7</SUP> 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.
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\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 what they believe is 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 stated in the proposed
rule that we concurred that CPT codes 22210, 22212, 22214, and 22216
were 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 proposed to consider this code family as
potentially misvalued and expressed appreciation for the detailed
information submitted by the nominator with sufficient supporting
evidence. We stated that we believed that this code family would
benefit from a comprehensive review by the RUC, and we welcomed
comments on a broader understanding of these codes. Additionally, we
sought input on current standard billing practices. For example,
information on whether the standard of practice has evolved over time,
and if so, how it has evolved, could aid in identifying potential
coding issues related to this matter.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters, including the AMA RUC, supported our
proposal. The RUC stated that, since the osteotomy of the spine codes
(CPT codes 22210, 22212, 22214, and 22216) were last reviewed in 1995,
these codes may benefit from updated descriptions and consideration of
bundling with related procedures. They suggested options such as
developing add-on codes for segment-specific osteotomies or integrating
these into new deformity fusion codes. They further stated they will
place the nominated osteotomy codes (CPT codes 22210, 22212, 22214, and
22216) on the next Level of Interest (LOI) list for review at the
January 2025 RUC meeting.
Response: We thank the commenters for their feedback.
Comment: A few commenters disagreed that the osteotomy of spine
codes are potentially misvalued. The commenters stated that the
procedures are primary interventions, not add-ons, and that the current
global periods, inpatient days, and intraservice work descriptions
accurately reflect the complexity of adult deformity surgery. They
further stated that surgical techniques have not changed significantly
and they believe that the codes are accurately valued and that altering
them could disrupt coding practices and negatively impact patient care.
Response: While we acknowledge the comments asserting that CPT
codes 22210, 22212, 22214 and 22216 are appropriately valued, we agree
with the RUC that services such as those
[[Page 97741]]
described by the nominator would benefit from review by the AMA RUC.
Therefore, we are finalizing our proposal to finalize CPT codes 22210,
22212, 22214 and 22216 as potentially misvalued.
(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 requested 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 in the
medical community 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 recognized 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 noted 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
did not propose to consider this code as potentially misvalued, and we
instead sought comments and additional studies from the broader medical
community regarding whether this code should be priced under the PFS
for the nonfacility/office setting.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters stated that they opposed creating a
nonfacility/office payment rate for CPT code 27279 due to patient
safety concerns regarding this service being performed in the office
setting. These commenters agreed with CMS on the lack of sufficient
safety evidence for CPT code 27279 in nonfacility settings and
recommended to maintain the current policy with respect to CPT code
27279 and not extend its use to nonfacility settings. They expressed
that they were unaware that the service described by CPT code 27279 was
being performed in nonfacility settings and stated their belief that it
would be challenging for a medical practice to consistently meet the
sanitary requirements necessary to safely perform this procedure on an
ongoing basis. In addition, one commenter indicated that although this
service is performed in hospital outpatient departments (HOPDs) and
ambulatory surgical centers (ASCs), both of those settings have
rigorous conditions of participation that hold them to higher safety
standards than physician offices. Regarding patient safety
specifically, commenters shared CMS's concerns regarding the safety of
delivering sacroiliac joint procedures in the office setting. The
majority of the commenters recommended that CMS maintain its current
policy and refrain from valuing CPT code 27279 in the non-facility
setting and not adopt nonfacility PE values for CY 2025.
Response: We thank commenters for their feedback.
Comment: A few commenters supported establishing payment in the
nonfacility/office setting for CPT code 27279. Commenters stated that
the procedure described by CPT code 27279 can be safely performed in an
office or nonfacility setting by referencing studies showing a low
complication rate in OBL. They indicated that establishing direct PE
inputs for the nonfacility setting would improve patient access to this
service and supported obtaining direct PE inputs to increase patient
access to care.
Response: We appreciate the comments and the additional information
to support the establishment of nonfacility/office valuation for CPT
code 27279. However, after review, the studies submitted by the
nominator were not found to be persuasive. While we are seeking further
information, commenters stated that they were not aware of any studies
demonstrating the quality or safety of this procedure in a nonfacility
setting. Based on Medicare claims data, CPT code 27279 is not regularly
furnished in the nonfacility/office setting; the majority of
utilization has occurred in the facility setting, with less than 1.0%
in the nonfacility setting over the past 7 years. As with last year,
the majority of commenters recommended that CMS maintain its current
policy regarding CPT code 27279 and not extend its use to nonfacility
settings. Since this service is not routinely furnished in a
nonfacility setting, we believe that this procedure should only be paid
in the facility settings at this time. Therefore, for CY 2025, we are
finalizing our proposal not to nominate CPT code 27279 as potentially
misvalued.
We continue to welcome the submission of new information regarding
these services that was not part of our CY 2024 review of CPT code
27279. We would appreciate receiving any additional information,
particularly published studies with sound methodology (for example, a
systematic review or meta-analysis covering at least three databases)
or new data.
(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 PEs that were last reviewed in 2017. This
code was nominated as potentially misvalued
[[Page 97742]]
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 and 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 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 t
[…truncated; see source link]Indexed from Federal Register on December 9, 2024.
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