[Federal Register: December 31, 2002 (Volume 67, Number 251)]
[Rules and Regulations]
[Page 79965-80184]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31de02-21]
[[Page 79965]]
-----------------------------------------------------------------------
Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Parts 410, 414, and 485
Medicare Program; Revisions to Payment Policies Under the Physician Fee
Schedule for Calendar Year 2003 and Inclusion of Registered Nurses in
the Personnel Provision of the Critical Access Hospital Emergency
Services Requirement for Frontier Areas and Remote Locations; Final
Rule
[[Page 79966]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 410, 414, and 485
[CMS-1204-FC]
RIN 0938-AL21
Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule for Calendar Year 2003 and Inclusion of
Registered Nurses in the Personnel Provision of the Critical Access
Hospital Emergency Services Requirement for Frontier Areas and Remote
Locations
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
-----------------------------------------------------------------------
SUMMARY: This final rule with comment period refines the resource-based
practice expense relative value units (RVUs) and makes other changes to
Medicare Part B payment policy. In addition, as required by statute, we
are announcing the physician fee schedule update for CY 2003.
The update to the physician fee schedule occurs as a result of a
calculation methodology specified by law. That law required the
Department to set annual updates based in part on estimates of several
factors. Although subsequent after-the-fact data indicate that actual
increases were different to some degree from earlier estimates, the law
does not permit those estimates to be revised. A subsequent law
required estimates to be revised for FY 2000 and beyond.
Although we have exhaustively examined opportunities for a
different interpretation of law that would allow us to correct the flaw
in the formula administratively, current law does not permit such an
interpretation. Accordingly, without Congressional action to address
the current legal framework, the Department is compelled to announce
herein a physician fee schedule update for CY 2003 of -4.4 percent.
Because the Department would adopt a change in the formula that
determines the physician update if the law permitted it, we have
examined how proper adjustments to past data could result in a positive
update. The Department believes that revisions of estimates used to
establish the sustainable growth rates (SGR) for fiscal years (FY) 1998
and 1999 and Medicare volume performance standards (MVPS) for 1990-1996
would, under present calculations, result in a positive update.
The Department intends to work closely with Congress to develop
legislation that could permit a positive update, and hopes that such
legislation can be passed before the negative update takes effect.
Because the Department wishes to change the update promptly in the
event that Congress provides the Department legal authority to do so,
we are requesting comments regarding how physician fee schedule rates
could and should be recalculated prospectively in the event that
Congress provides the Department with legal authority to revise
estimates used to establish the sustainable growth rates (SGR) and for
1998 and 1999 and the NVPS for 1990-1996.
The other policy changes concern: the pricing of the technical
component for positron emission tomography (PET) scans, Medicare
qualifications for clinical nurse specialists, a process to add or
delete services to the definition of telehealth, the definition for ZZZ
global periods, global period for surface radiation, and an endoscopic
base for urology codes. In addition, this rule updates the codes
subject to physician self-referral prohibitions. We are expanding the
definition of a screening fecal-occult blood test and are modifying our
regulations to expand coverage for additional colorectal cancer
screening tests through our national coverage determination process. We
also make revisions to the sustainable growth rate, the anesthesia
conversion factor, and the work values for some gastroenterologic
services.
We are making these changes to ensure that our payment systems are
updated to reflect changes in medical practice and the relative value
of services.
This final rule also clarifies the enrollment of physical and
occupational therapists as therapists in private practice and clarifies
the policy regarding services and supplies incident to a physician's
professional services. In addition, this final rule discusses physical
and occupational therapy payment caps and makes technical changes to
the definition of outpatient rehabilitation services.
In addition, we are finalizing the calendar year (CY) 2002 interim
RVUs and are issuing interim RVUs for new and revised procedure codes
for calendar year (CY) 2003.
As required by the statute, we are announcing that the physician
fee schedule update for CY 2003 is -4.4 percent, the initial estimate
of the sustainable growth rate for CY 2003 is 7.6 percent, and the
conversion factor for CY 2003 is $34.5920.
This final rule will also allow registered nurses (RNs) to provide
emergency care in certain critical access hospitals (CAHs) in frontier
areas (an area with fewer than six residents per square mile) or remote
locations (locations designated in a State's rural health plan that we
have approved.) This policy applies if the State, following
consultation with the State Boards of Medicine and Nursing, and in
accordance with State law, requests that RNs be included, along with a
doctor of medicine or osteopathy, a physician's assistant, or a nurse
practitioner with training or experience in emergency care, as
personnel authorized to provide emergency services in CAHs in frontier
areas or remote locations.
DATES: Effective date: This rule is effective on March 1, 2003.
Comment date: We will consider comments on the definition of a
screening fecal-occult blood test, the critical access hospital
emergency services requirement, the physician self-referral designated
health services identified in Table 10, the interim work RVUs for
selected procedure codes identified in Addendum C, the practice expense
direct cost inputs, and on how physician fee schedule rates could and
should be recalculated prospectively in the event that Congress
provides the Department with legal authority to revise estimates used
to establish SGRs for 1998 and 1999 and the MVPS for 1990-1996, if we
receive them at the appropriate address, as provided in the addresses
section, no later than 5 p.m. on March 3, 2003.
ADDRESSES: In commenting, please refer to file code CMS-1204-FC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission. Mail written comments (one original and
two copies) to the following address ONLY: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS-1204-FC, P.O. Box 8013, Baltimore, MD 21244-8013.
Please allow sufficient time for us to receive mailed comments on
time in the event of delivery delays.
If you prefer, you may deliver (by hand or courier) your written
comments (one original and two copies) to one of the following
addresses: Room 445-G, Hubert H. Humphrey Building, 200 Independence
Avenue, SW., Washington, DC 20201, or Room C5-14-03, 7500 Security
Boulevard, Baltimore, MD 21244-8013.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are
[[Page 79967]]
encouraged to leave their comments in the CMS drop slots located in the
main lobby of the building. A stamp-in clock is available if you wish
to retain proof of filing by stamping in and retaining an extra copy of
the comments being filed.)
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and could be considered late.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Marc Hartstein, (410) 786-4539, or
Stephanie Monroe (410) 786-6864 (for issues related to resource-based
practice expense relative value units).
Jim Menas, (410) 786-4507 (for issues related to anesthesia).
Marc Hartstein, (410) 786-4539 (for issues related to the
sustainable growth rate).
Gail Addis, (410) 786-4522 (for issues related to PET scans).
Craig Dobyski, (410) 786-4584 (for issues related to telehealth).
Terri Harris, (410) 786-6830 or Pam West, (410) 786-2302 (for
issues related to physical and occupational therapy).
William Larson, (410) 786-4639 (for issues related to fecal-occult
blood test).
Regina Walker-Wren, (410) 786-9160 (for issues related to clinical
nurse specialists).
Dorothy Shannon, (410) 786-3396 (for issues related to services and
supplies incident to a physician's professional services).
Joanne Sinsheimer, (410) 786-4620 (for issues related to updates to
the list of certain services subject to the physician self-referral
prohibitions).
Mary Collins, (410) 786-3189 (for issues related to the critical
access hospital emergency services requirement).
Diane Milstead, (410) 786-1101 (for all other issues).
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: Comments
received timely will be available for public inspection as they are
recorded and processed, generally beginning approximately 4 weeks after
the publication of the document, at the headquarters of the Centers for
Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore,
Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4
p.m. To schedule an appointment to view public comments, phone (410)
786-7197.
Copies: To order copies of the Federal Register containing this
document, send your request to: New Orders, Superintendent of
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date
of the issue requested and enclose a check or money order payable to
the Superintendent of Documents, or enclose your Visa or Master Card
number and expiration date. Credit card orders can also be placed by
calling the order desk at (202) 512-1800 (or toll-free at 1-888-293-
6498) or by faxing to (202) 512-2250. The cost for each copy is $10. As
an alternative, you can view and photocopy the Federal Register
document at most libraries designated as Federal Depository Libraries
and at many other public and academic libraries throughout the country
that receive the Federal Register.
This Federal Register document is also available from the Federal
Register online database through GPO Access, a service of the U.S.
Government Printing Office. The Web site address is: http://www.access.gpo.gov/nara/index.html
.
Information on the physician fee schedule can be found on our
homepage. You can access this data by using the following directions:
1. Go to the CMS homepage (http://www.cms.hhs.gov).
2. Click on ``Medicare.''
3. Select Medicare Payment Systems.
4. Select Physician Fee Schedule.
To assist readers in referencing sections contained in this
preamble, we are providing the following table of contents. Some of the
issues discussed in this preamble affect the payment policies but do
not require changes to the regulations in the Code of Federal
Regulations. Information on the regulation's impact appears throughout
the preamble and is not exclusively in section XIII.
Table of Contents
I. Background
A. Legislative History
B. Published Changes to the Fee Schedule
C. Components of the Fee Schedule Payment Amounts
D. Development of the Relative Value Units
E. Delay in the Effective Date
II. Specific Provisions for Calendar Year 2003
A. Resource-Based Practice Expense Relative Value Units
B. Anesthesia Issues
C. Pricing of Technical Components (TC) for Positron Emissions
Tomography (PET) Scans
D. Enrollment of Physical and Occupational Therapists as
Therapists in Private Practice
E. Clinical Social Worker Services
F. Medicare Qualifications for Clinical Nurse Specialists
G. Process to Add or Delete Services to the Definition of
Telehealth
H. Definition for ZZZ Global Periods
I. Change in Global Period for CPT Code 77789 (Surface
Application of Radiation Source)
J. Technical Change for Sec. 410.61(d)(1)(iii) Outpatient
Rehabilitation Services
K. New HCPCS G-Codes From June 28, 2002 Proposed Rule
L. Endoscopic Base for Urology Codes
M. Physical Therapy and Occupational Therapy Caps
III. Other Issues
A. Definition of a Screening Fecal-Occult Blood Test
B. Clarification of Services and Supplies Incident To a
Physician's Professional Services: Conditions
C. Five-Year Review of Gastroenterology Codes
D. Critical Access Hospital Emergency Services Requirements
IV. Refinement of Relative Value Units for Calendar Year 2003 and
Response to Public Comments on Interim Relative Value Units for 2002
V. Update to the Codes for Physician Self-Referral Prohibition
VI. Physician Fee Schedule Update for Calendar Year 2003
VII. Allowed Expenditures for Physicians' Services and the
Sustainable Growth Rate
A. Medicare Sustainable Growth Rate
B. Physicians' Services
C. Provisions Related to the Sustainable Growth Rate
D. Preliminary Estimate of the Sustainable Growth Rate for 2003
E. Sustainable Growth Rate for 2002
F. Sustainable Growth Rate for 2001
G. Calculation of 2003, 2002, and 2001 Sustainable Growth Rates
VIII. Anesthesia and Physician Fee Schedule Conversion Factors for
CY 2003
IX. Provisions of the Final Rule
X. Waiver of Proposed Rulemaking for Definition of a Screening
Fecal-Occult Blood Test and Critical Access Hospital Emergency
Services Requirement
XI. Collection of Information Requirements
XII. Response to Comments
XIII. Regulatory Impact Analysis
Addendum A--Explanation and Use of Addendum B
Addendum B--2003 Relative Value Units and Related Information Used
in Determining Medicare Payments for 2003
Addendum C--Codes with Interim RVUs
Addendum D--2003 Geographic Practice Cost Indices by Medicare
Carrier and Locality
Addendum E--Updated List of CPT/HCPCS Codes Used to Describe Certain
Designated Health Services Under the Physician Self-Referral
Provision
Addendum F--Codes Refined by the PEAC for 2003
In addition, because of the many organizations and terms to which
we refer by acronym in this proposed rule, we are listing these
acronyms and their corresponding terms in alphabetical order below:
AMA American Medical Association
BBA Balanced Budget Act of 1997
[[Page 79968]]
BBRA Balanced Budget Refinement Act of 1999
CAH Critical Access Hospitals
CF Conversion factor
CFR Code of Federal Regulations
CMS Centers for Medicare & Medicaid Services
CNS Clinical Nurse Specialist
CPT [Physicians'] Current Procedural Terminology [4th Edition,
2002, copyrighted by the American Medical Association]
CPEP Clinical Practice Expert Panel
CRNA Certified Registered Nurse Anesthetist
E/M Evaluation and management
GPCI Geographic practice cost index
HCPCS Healthcare Common Procedure Coding System
HHA Home health agency
HHS [Department of] Health and Human Services
IDTFs Independent Diagnostic Testing Facilities
MCM Medicare Carrier Manual
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MSA Metropolitan Statistical Area
NCD National Coverage Decision
PC Professional Component
PEAC Practice Expense Advisory Committee
PET Positron Emission Tomography
PPS Prospective payment system
RUC [AMA's Specialty Society] Relative [Value] Update Committee
RVU Relative value unit
SGR Sustainable growth rate
SMS [AMA's] Socioeconomic Monitoring System
SNF Skilled Nursing Facility
TC Technical Component
I. Background
A. Legislative History
Since January 1, 1992, Medicare has paid for physicians' services
under section 1848 of the Social Security Act (the Act), ``Payment for
Physicians'' Services.'' This section provides for three major
elements--(1) A fee schedule for the payment of physicians' services;
(2) limits on the amounts that nonparticipating physicians can charge
beneficiaries; and (3) a sustainable growth rate for the rates of
increase in Medicare expenditures for physicians' services. The Act
requires that payments under the fee schedule be based on national
uniform relative value units (RVUs) based on the resources used in
furnishing a service. Section 1848(c) of the Act requires that national
RVUs be established for physician work, practice expense, and
malpractice expense. Section 1848(c)(2)(B)(ii)(II) of the Act provides
that adjustments in RVUs may not cause total physician fee schedule
payments to differ by more than $20 million from what they would have
been had the adjustments not been made. If adjustments to RVUs cause
expenditures to change by more than $20 million, we must make
adjustments to preserve budget neutrality.
B. Published Changes to the Fee Schedule
In the July 2000 proposed rule, (65 FR 44177), we listed all of the
final rules published through November 1999. In the August 2001
proposed rule (66 FR 40372) we discussed the November 2000 final rule
relating to the updates to the RVUs and revisions to payment policies
under the physician fee schedule.
In the November 2001 final rule with comment period (66 FR 55246),
we revised the policy for--resource-based practice expense RVUs;
services and supplies incident to a physician's professional service;
anesthesia base unit variations; recognition of CPT tracking codes; and
nurse practitioners, physician assistants, and clinical nurse
specialists performing screening sigmoidoscopies. We also addressed
comments received on the June 8, 2001 proposed notice (66 FR 31028) for
the 5-year review of work RVUs and finalized these work RVUs. In
addition, we acknowledged comments received in response to a discussion
of modifier-62, which is used to report the work of co-surgeons. The
November 2001 final rule also updated the list of services that are
subject to the physician self-referral prohibitions in order to reflect
CPT and Healthcare Common Procedure Coding System (HCPCS) code changes
that were effective January 1, 2002. These revisions ensure that our
payment systems are updated to reflect changes in medical practice and
the relative value of services.
The Medicare, Medicaid, and State Child Health Insurance Program
(SCHIP) Benefits Improvement and Protection Act of 2000 (Pub. L. 106-
554) (BIPA) modernized the mammography screening benefit and authorized
payment under the physician fee schedule effective January 1, 2002. It
provided for biennial screening pelvic examinations for certain
beneficiaries and expanded coverage for screening colonoscopies to all
beneficiaries effective July 1, 2001. It provided for annual glaucoma
screenings for high-risk beneficiaries and established coverage for
medical nutrition therapy services for certain beneficiaries effective
January 1, 2002. It expanded payment for telehealth services effective
October 1, 2001; required certain Indian Health Service providers to be
paid for some services under the physician fee schedule effective July
1, 2001; and revised the payment for certain physician pathology
services effective January 1, 2001. This final rule conformed our
regulations to reflect these statutory provisions.
The final rule also announced the calendar year 2002 physician fee
schedule conversion factor (CF) of $36.1992.
C. Components of the Fee Schedule Payment Amounts
Under the formula set forth in section 1848(b)(1) of the Act, the
payment amount for each service paid under the physician fee schedule
is the product of three factors--(1) A nationally uniform relative
value for the service; (2) a geographic adjustment factor (GAF) for
each physician fee schedule area; and (3) a nationally uniform
conversion factor (CF) for the service. The CF converts the relative
values into payment amounts.
For each physician fee schedule service, there are three relative
values--(1) An RVU for physician work; (2) an RVU for practice expense;
and (3) an RVU for malpractice expense. For each of these components of
the fee schedule, there is a geographic practice cost index (GPCI) for
each fee schedule area. The GPCIs reflect the relative costs of
practice expenses, malpractice insurance, and physician work in an area
compared to the national average for each component.
The general formula for calculating the Medicare fee schedule
amount for a given service in a given fee schedule area can be
expressed as:
Payment = [(RVU work x GPCI work) + (RVU practice expense x GPCI
practice expense) + (RVU malpractice x GPCI malpractice)] x CF
The CF for calendar year (CY) 2003 appears in section VIII. The
RVUs for CY 2003 are in Addendum B. The GPCIs for CY 2003 can be found
in Addendum D.
Section 1848(e) of the Act requires us to develop GAFs for all
physician fee schedule areas. The total GAF for a fee schedule area is
equal to a weighted average of the individual GPCIs for each of the
three components of the service. In accordance with the statute,
however,
[[Page 79969]]
the GAF for the physician's work reflects one-quarter of the relative
cost of physician's work compared to the national average.
D. Development of the Relative Value System
1. Work Relative Value Units
Approximately 7,500 codes represent services included in the
physician fee schedule. The work RVUs established for the
implementation of the fee schedule in January 1992 were developed with
extensive input from the physician community. A research team at the
Harvard School of Public Health developed the original work RVUs for
most codes in a cooperative agreement with us. In constructing the
vignettes for the original RVUs, Harvard worked with expert panels of
physicians and obtained input from physicians from numerous
specialties.
The RVUs for radiology services were based on the American College
of Radiology (ACR) relative value scale, which we integrated into the
overall physician fee schedule. The RVUs for anesthesia services were
based on RVUs from a uniform relative value guide. We established a
separate CF for anesthesia services, and we continue to recognize time
as a factor in determining payment for these services. As a result,
there is a separate payment system for anesthesia services.
2. Practice Expense and Malpractice Expense Relative Value Units
Section 1848(c)(2)(C) of the Act required that the practice expense
and malpractice expense RVUs equal the product of the base allowed
charges and the practice expense and malpractice percentages for the
service. Base allowed charges are defined as the national average
allowed charges for the service furnished during 1991, as estimated
using the most recent data available. For most services, we used 1989
charge data aged to reflect the 1991 payment rules, since those were
the most recent data available for the 1992 fee schedule.
Section 121 of the Social Security Act Amendments of 1994 (Pub. L.
103-432), enacted on October 31, 1994, required us to develop a
methodology for a resource-based system for determining practice
expense RVUs for each physician service. As amended by the BBA, section
1848(c) required the new payment methodology to be phased in over 4
years, effective for services furnished in 1999, with resource-based
practice expense RVUs becoming fully effective in 2002. The BBA also
required us to implement resource-based malpractice RVUs for services
furnished beginning in 2000.
E. Delay in the Effective Date
On November 5, 2002 we published a notice (67 FR 67319), delaying
the publication of this final rule due to concerns about the data used
to establish the physician fees and the need to further assess the
accuracy of the data. We have concluded our review and are moving
forward with our proposals unless otherwise indicated in this preamble.
This rule is effective on March 3, 2003.
II. Specific Provisions for Calendar Year 2003
In response to the publication of the June 28, 2002 proposed rule,
(67 FR 43846), and the interim final rule, (67 FR 43555), we received
approximately 236 comments. We received comments from individual
physicians, health care workers, and professional associations and
societies. The majority of comments addressed the proposals related to
the enrollment of therapists, anesthesia services and the SGR.
The proposed rule discussed policies that affected the number of
RVUs on which payment for certain services would be based. Certain
changes implemented through this final rule are subject to the $20
million limitation on annual adjustments contained in section
1848(c)(2)(B)(ii)(II) of the Act.
After reviewing the comments and determining the policies we would
implement, we have estimated the costs and savings of these policies
and added those costs and savings to the estimated costs associated
with any other changes in RVUs for 2003. We discuss in detail the
effects of these changes in the Regulatory Impact Analysis in section
XIII.
For the convenience of the reader, the headings for the policy
issues correspond to the headings used in the June 28, 2002 proposed
rule. More detailed background information for each issue can be found
in the June 2002 interim final rule with comment period and the June
2002 proposed rule.
A. Resource-Based Practice Expense Relative Value Units
1. Resource-Based Practice Expense Legislation
Section 121 of the Social Security Act Amendments of 1994 (Pub. L.
103-432), enacted on October 31, 1994, required us to develop a
methodology for a resource-based system for determining practice
expense RVUs for each physician's service beginning in 1998. In
developing the methodology, we were to consider the staff, equipment,
and supplies used in providing medical and surgical services in various
settings. The legislation specifically required that, in implementing
the new system of practice expense RVUs, we apply the same budget-
neutrality provisions that we apply to other adjustments under the
physician fee schedule.
Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L.
105-33), enacted on August 5, 1997, amended section 1848(c)(2)(ii) of
the Act and delayed the effective date of the resource-based practice
expense RVU system until January 1, 1999. In addition, section 4505(b)
of the BBA provided for a 4-year transition period from charge-based
practice expense RVUs to resource-based RVUs. Further legislation
affecting resource-based practice expense RVUs was included in the
Medicare, Medicaid and State Child Health Insurance Program (SCHIP)
Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113),
enacted on November 29, 1999. Section 212 of the BBRA amended section
1848(c)(2)(ii) of the Act by directing us 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. These data would supplement the data we
normally collect in determining the practice expense component of the
physician fee schedule for payments in CY 2001 and CY 2002. (In the
1999 final rule (64 FR 59380), we extended, for an additional 2 years,
the period during which we would accept supplementary data.)
2. Current Methodology for Computing the Practice Expense Relative
Value Unit System
Effective with services furnished on or after January 1, 1999, we
established a new methodology for computing resource-based practice
expense RVUs that used the two significant sources of actual practice
expense data we have available--the Clinical Practice Expert Panel
(CPEP) data and the American Medical Association's (AMA) Socioeconomic
Monitoring System (SMS) data. The methodology was based on an
assumption that current aggregate specialty practice costs are a
reasonable way to establish initial estimates of relative resource
costs for physicians' services across specialties. The methodology
allocated these aggregate specialty practice costs to specific
procedures and, thus, is commonly called a ``top-down'' approach.
[[Page 79970]]
a. Major Steps
A brief discussion of the major steps involved in the determination
of the practice expense RVUs follows. (Please see the November 1, 2001
final rule (66 FR 55249) for a more detailed explanation of the top-
down methodology.)
Step 1--Determine the specialty specific practice expense per hour
of physician direct patient care. We used the AMA's SMS survey of
actual aggregate cost data by specialty to determine the practice
expenses per hour for each specialty. We calculated the practice
expenses per hour for the specialty by dividing the aggregate practice
expenses for the specialty by the total number of hours spent in
patient care activities. For the CY 2000 physician fee schedule, we
also used data from a survey submitted by the Society of Thoracic
Surgeons (STS) in calculating thoracic and cardiac surgeons' practice
expenses per hour. (Please see the November 1999 final rule (64 FR
59391) for additional information concerning acceptance of these data.)
For 2001, we used these STS data, as well as survey data submitted by
the American Society of Vascular Surgery and the Society of Vascular
Surgery. (Please see the November 2000 final rule (65 FR 65385) for
additional information on the acceptance of these data.)
Step 2--Create a specialty specific practice expense pool of
practice expense costs for treating Medicare patients. To calculate the
total number of hours spent treating Medicare patients for each
specialty, we used the physician time assigned to each procedure code
and the Medicare utilization data. We then calculated the specialty
specific practice expense pools by multiplying the specialty practice
expenses per hour by the total physician hours.
Step 3--Allocate the specialty specific practice expense pool to
the specific services performed by each specialty. For each specialty,
we divided the practice expense pool into two groups based on whether
direct or indirect costs were involved and used a different allocation
basis for each group.
(i) Direct costs--For direct costs (which include clinical labor,
medical supplies, and medical equipment), we used the procedure
specific CPEP data on the staff time, supplies, and equipment as the
allocation basis.
(ii) Indirect costs--To allocate the cost pools for indirect costs,
including administrative labor, office expenses, and all other
expenses, we used the total direct costs combined with the physician
fee schedule work RVUs. We converted the work RVUs to dollars using the
Medicare CF (expressed in 1995 dollars for consistency with the SMS
survey years).
Step 4--For procedures performed by more than one specialty, the
final procedure code allocation was a weighted average of allocations
for the specialties that perform the procedure, with the weights being
the frequency with which each specialty performs the procedure on
Medicare patients.
b. Other Methodological Issues
(i) Non-Physician Work Pool--For services with physician work RVUs
equal to zero (including those services with a technical and
professional component), we created a separate practice expense pool
using the average clinical staff time from the CPEP data and the ``all
physicians'' practice expense per hour.
We then used the adjusted 1998 practice expense RVUs to allocate
this pool to each service. Also, for all radiology services that are
assigned physician work RVUs, we used the adjusted 1998 practice
expense RVUs for radiology services as an interim measure to allocate
the direct practice expense cost pool for radiology.
(ii) Crosswalks for Specialties Without Practice Expense Survey
Data--Since many specialties identified in our claims data did not
correspond exactly to the specialties included in the SMS survey data,
it was necessary to crosswalk these specialties to the most appropriate
SMS specialty.
Because we believe that most physical therapy services furnished in
physicians' offices are performed by physical therapists, we cross-
walked all utilization for therapy services in the CPT 97000 series to
the physical and occupational therapy practice expense pool.
Comment: We received several comments objecting to our policy of
cross-walking all utilization for therapy services in the CPT 97000
series to the physical and occupational therapy practice expense pool.
One commenter stated that we are currently employing an arbitrary
utilization crosswalk methodology to determine the resource-based
practice expense RVUs for physical and occupational therapy. Commenters
also indicated that this departure from the standard methodology has
not been previously published for review and comment. In addition, one
commenter challenged our assumption that most therapy services billed
by physicians are furnished by therapists and stated that it is neither
supported by explanatory text nor accompanying data. The commenter
indicates that if we did not employ this assumption to change the
resource-based practice expense methodology only for therapy services,
payments for these services would be as much as 18 percent higher.
Other commenters stated that use of the ``altered methodology'' has
resulted in inappropriate reductions in payments for physical and
occupational therapy services. One commenter expressed concern that the
adjustment affects SNFs, home health agencies, outpatient hospital
departments and CORFs in addition to therapists in private practice.
Other commenters also objected to use of a crosswalk for physical and
occupational therapy services stating that the policy is inconsistent
with the ``top-down'' methodology that bases the final RVUs for a
service on a weighted average of the practice expenses of the
specialties that bill Medicare. Another commenter indicated that there
is no evidence to suggest that practice expenses for therapy services
provided by physicians are any different from the practice expenses of
all other services they provide. This commenter indicated that
physician specialties were also disadvantaged because all therapy
services that a specialty billed were not included in calculating the
practice expense pool for that specialty, thus decreasing the dollars
that could be allocated to the services performed by that specialty.
The commenters strongly recommended that we discontinue use of the
crosswalk and employ the standard top down methodology for computing
the 2003 PERVUs for the 97000 CPT code series.
Response: We carefully reviewed comments on this issue. As
indicated in our proposed rule, we do not believe that physicians
provide most therapy services that are billed by physicians. We believe
that the practice expenses for therapy services provided in physicians'
offices by therapists are more likely to be comparable to those of
therapists than physicians. For this reason, we crosswalked utilization
for the therapy codes (CPT codes 97010 through 97750) to the physical
and occupational therapy practice cost pools. We used the physician
utilization data for the therapy evaluation codes (CPT codes 97001
through 97004) since we believe these services would be much more
likely to be performed by the billing physician. In the meantime, we
welcome further public comments on this issue. We note that physical
therapy was the only specialty for which we used their supplemental
survey data (as noted below). Use of
[[Page 79971]]
such survey data increases payments for physical therapy by 2 percent.
3. Practice Expense Provisions for Calendar Year 2003
a. Supplemental Practice Expense Surveys Criteria for Acceptance of
Supplemental Practice Expense Surveys From the June 28, 2002 Interim
Final Rule with Comment Period
On June 28, 2002 we published an interim final rule with comment
period (67 FR 43555) in the Federal Register, which made revisions to
the criteria that we apply to supplemental survey information supplied
by physician, non-physician, and supplier groups for use in determining
practice expense RVUs under the physician fee schedule. While this rule
was effective upon publication, we provided a comment period on the
revision to the criteria and are responding to the comments received in
this final rule.
The following criteria had been in effect:
[sbull] Physician groups must draw their sample from the AMA
Physician Masterfile to ensure a nationally representative sample that
includes both members and non-members of a physician specialty group.
Physician groups must arrange for the AMA to send the sample directly
to their survey contractor to ensure confidentiality of the sample;
that is, to ensure comparability in the methods and data collected,
specialties must not know the names of the specific individuals in the
sample.
[sbull] Non-physician specialties not included in the AMA's SMS
must develop a method to draw a nationally representative sample of
members and non-members. At a minimum, these groups must include former
members in their survey sample. The sample must be drawn by the non-
physician group's survey contractor, or another independent party, in a
way that ensures the confidentiality of the sample; that is, to ensure
comparability in the methods and data collected, specialties must not
know the names of the specific individuals in the sample.
[sbull] A group (or its contractors) must conduct the survey based
on the SMS survey instruments and protocols, including administration
and follow-up efforts and definitions of practice expense and hours of
direct patient care. In addition, any cover letters or other
information furnished to survey sample participants must be comparable
to the information previously supplied by the SMS contractor to its
sample participants.
[sbull] Physician groups must use a contractor that has experience
with the SMS or a survey firm with experience successfully conducting
national multi-specialty surveys of physicians using nationally
representative random samples.
[sbull] Physician groups or their contractors must submit raw
survey data to us, including all complete and incomplete survey
responses as well as any cover letters and instructions that
accompanied the survey, by August 1, 2002 for data analysis and editing
to ensure consistency. All personal identifiers in the raw data must be
eliminated.
[sbull] The physician practice expense data from surveys that we
use in our code-level practice expense calculations are the practice
expenses per physician hour in the six practice expense categories--
clinical labor, medical supplies, medical equipment, administrative
labor, office overhead, and other. Supplemental survey data must
include data for these categories.
In addition to the above survey criteria, we required a 90-percent
confidence interval with a range of plus or minus 10 percent of the
mean (that is, 1.645 times the standard error of the mean, divided by
the mean should be equal to or less than 10 percent of the mean).
Based on a review of these criteria and concern that the this
language had created confusion, in the June 2002 interim final rule we
revised this language to indicate that we will accept surveys that
achieve a sampling error of 0.15 or less at a confidence level of 90
percent. We noted that this change refines both the measurement of
precision and the level of precision we will accept and could result in
our acceptance of more surveys than the past criteria. In addition, we
stated that we would allow specialties that have submitted surveys
previously rejected under the present criteria to resubmit these
surveys to be evaluated under the revised criterion.
We also amended Sec. 414.22(b)(6) to reflect the 2-year extension
in the deadline for submitting supplemental data. Specifically, we will
accept supplemental data that meet the established criteria that we
received by August 1, 2002 to determine CY 2003 practice expense RVUs
and by August 1, 2003 to determine CY 2004 practice expense RVUs.
Comment: We received comments from several specialty organizations
on the change in the precision criteria for supplemental surveys.
Specialty organizations representing audiologists, physical therapists
and radiologists expressed support for the revised precision criterion.
The American Academy of Audiology indicated that the revised rule makes
it easier for specialty groups to submit information for our
consideration. The American College of Radiology (ACR) supported the
proposed change by suggesting that the previous requirements were not
reasonable. The ACR indicated that radiology and radiation oncology did
not conduct surveys previously because of concerns about the strictness
of the original criteria. The ACR also indicated concerns about
averaging the supplemental survey data with existing SMS survey data
and the requirement that the survey sample would have to be selected
from the AMA Masterfile. According to the ACR, the AMA Masterfile does
not adequately represent radiologists and radiation oncologists that
own and operate their own centers and equipment. The American Physical
Therapy Association (APTA) supported the new criterion and our decision
to allow previously completed surveys to be resubmitted and considered
using the new precision standard. The American Society Clinical
Oncology (ASCO) objected to the use of any precision criteria and
outlined a number of reasons why they opposed the use of this test. The
ASCO indicated that there may be wide variation in oncology practice
patterns (for example, hospital based versus non-hospital based, or
differentials in provision of chemotherapy) that could lead to wide
variation in practice expenses among surveyed practices. They suggested
that ``at least in the case of oncologists, a survey that is conducted
in accordance with the CMS rules should not be excluded from
consideration because of failure to meet the precision criteria.''
Response: If the data from physician and practitioner surveys is to
be used as the basis for physician payment, it is necessary that we
have assurance that the survey is both representative and reliable.
Applying numerical criteria for the statistical concepts of confidence
and precision give some basis for believing that the data accurately
represent practice costs for the specialty nationwide. We set the
criteria for precision and confidence after lengthy consultation with
our contractor, the Lewin Group, and agency experts on statistical
surveys. We believe the levels set are both fair and reasonable. In
addition, as indicated in the proposed rule, we are attempting to be as
flexible as possible consistent with our goal of obtaining new surveys
of practice expense that are scientifically sound and methodologically
consistent with
[[Page 79972]]
our existing estimates. We indicated that a specialty may include
different types of physician practices that exhibit different patterns
of practice expenses. We welcome stratified sampling of these different
types of practices and, would, as appropriate, apply the precision
criteria to subgroups of surveyed practices.
We considered the comment that suggests the AMA Masterfile may not
adequately represent radiologists and radiation oncologists that own
and operate their own equipment. However, since the AMA Masterfile is
the most comprehensive listing of physicians that practice in the
United States, we still believe it should be the best source of
information for selecting a representative sample of physicians. We do
acknowledge that there may be special issues related to diagnostic and
radiation oncology services. For instance, radiologists and radiation
oncologists that predominantly practice in hospitals may have
fundamentally different practice expenses than those providing services
in free-standing clinics and private offices where they likely incur
far higher costs for staff, supplies, equipment and indirect costs. In
addition, office-based radiologists and radiation oncologists may have
substantial but irregular expenses associated with medical equipment.
That is, they may purchase equipment one year and amortize the costs
over several years. It is possible that modification to the survey
instrument may be necessary to accurately identify annual equipment
costs for some specialties. Further, independent diagnostic testing
facilities also bill Medicare for diagnostic services affected by the
non-physician work pool calculations. A sample of physicians selected
from the AMA Masterfile is unlikely to include independent diagnostic
testing facilities. We believe that all of these issues can be
addressed in a supplemental survey with stratified sampling, relevant
modifications to the survey instrument and augmentation of the AMA
Masterfile with a listing of independent diagnostic testing facilities.
As we indicated in our supplemental survey interim final rule, we are
attempting to be flexible to achieve our goal of incorporating the best
possible practice expense survey information into our methodology. We
believe all of these issues should be considered carefully. We advise
any party interested in conducting a supplemental survey to consult the
Lewin Group and us before proceeding with a survey.
Comment: We also received comments from two organizations
representing emergency medicine. The Emergency Department Practice
Management Association (EDPMA) is concerned that the requirement that
supplemental surveys be based on the SMS survey instrument will
preclude us from obtaining data on uncompensated care and emergency
physician practice expenses. The EDPMA suggests that we extend the
criteria to include data regarding indirect emergency medicine practice
expense or uncompensated care cost. The American College of Emergency
Physicians (ACEP) stated that we have failed to recognize the
legitimate practice costs associated with uncompensated care pursuant
to requirements imposed by the Emergency Medical Treatment and Active
Labor Act (EMTALA) and that these costs should be recognized by us.
Despite our acknowledgement of these costs, the commenter argues that
we have not made any movement in making payment for EMTALA's
uncompensated care costs.
Response: As we indicated in the November 2, 1998 final rule (63 FR
58821), we made an adjustment in the practice expense per hour for
emergency medicine because of our concern that emergency medicine
physicians could spend a significantly higher proportion of time than
other physicians providing uncompensated care to patients. We are
currently using a practice expense per hour of $33.00 for emergency
medicine. If we had not made the adjustment for uncompensated care, the
practice expense per hour for emergency medicine would be $14.90. Our
adjustment assumes that 55 percent ($14.9/(1-0.55)=$33.00) of emergency
physicians' time spent treating patients is uncompensated. This has the
effect of raising the practice expense per hour to reflect only the
physician's time spent in revenue-generating activities. If emergency
physicians believe that they spend more than 55 percent of their time
treating patients for which they are not compensated, we would welcome
specific data on this subject from a supplemental survey.
Comment: The American College of Cardiology (ACC) and the AMA, who
wrote in support of the ACC, indicated they are aware that we would
like data on practice expenses that shows the six categories of
practice expenses used in the practice expense methodology. However,
the ACC indicated that the AMA no longer collects data in this
disaggregated fashion and suggested that this data limitation can be
overcome by simply apportioning practice expense reported in the most
recent survey to the separate pools based on historical distribution
patterns.
Response: We will continue to require disaggregated data from
supplemental surveys because apportionment based on historical
distribution patterns might not reflect actual or current cost
patterns. Further, to accept this data would be inconsistent with our
clearly stated rule. In both the original interim final rule published
on May 3, 2000 (65 FR 25666) and in the interim final rule published on
June 28, 2002 (67 FR 43556), we indicated that ``* * * code-level
practice expense calculations are the practice expense per physician
hour in the six practice expense categories-clinical labor, medical
supplies, medical equipment, administrative labor, office overhead and
other. Supplemental survey data must include data for these
categories.''
Result of Evaluation of Comments
We are retaining the change to the precision and confidence levels
for supplemental surveys to reflect a confidence level of 90 percent
and a precision level of 0.15, as stated in our interim final rule.
(ii) Submission of Supplemental Surveys--We received surveys from
the American Physical Therapy Association (APTA), the American Society
of Clinical Oncology (ASCO), the American College of Cardiology (ACC),
and the American Academy of Pediatrics (AAP). The National Association
of Portable X-Ray Providers (NAPXP) also provided us with cost data for
their industry. Our contractor, the Lewin Group, has evaluated the data
submitted by each organization and recommends that we use the survey
information from APTA. We reviewed and agree with their analysis;
therefore, we are using the APTA survey to determine practice expense
RVUs for CY 2003 and subsequent years. The data supplied to the Lewin
Group reflects a 1999 cost year. As indicated in our June 2002 interim
final rule (67 FR 43556), we are deflating the figures by the MEI to
reflect a 1995 cost year. The revised practice expense per hour figures
that we are using for physical therapy (specialty code 65) and
occupational therapy (specialty code 67) are as follows:
[[Page 79973]]
Table 1
----------------------------------------------------------------------------------------------------------------
Admin. Office
Clinical staff staff expense Supplies Equipment Other Total
----------------------------------------------------------------------------------------------------------------
10.4.............................................. 6.5 13.4 2.4 2.2 7.7 42.5
----------------------------------------------------------------------------------------------------------------
The Lewin Group raised significant concerns about the data received
from ASCO. Specifically, the Lewin Group is concerned about
extraordinarily high expenses associated with clinical and clerical
staff and a more than 300 percent increase in ``other'' practice
expenses compared to the SMS value for oncology. As a result, the Lewin
Group carefully examined the underlying data. They report that
compensation (including salaries and fringe benefits) would average out
to $71,014 for clinical staff and $87,253 for clerical staff. They
believe it is unlikely that the average annual salary for clerical
staff would be higher than for clinical staff. Further, the Lewin Group
indicates that the average clerical compensation from the ASCO survey
is approximately 400 percent higher than the figure reported by the
Bureau of Labor Statistics for ``Office Clerks, General.'' While the
Lewin Group indicates that the high payroll expense for clinical staff
may be explained, in part, by recent changes in labor markets, we
remain concerned that the compensation reported in the survey is far
higher than independent information on oncology nursing salaries
provided to us by the Oncology Nursing Society. The Lewin Group also
indicated that ``other professional expenses'' increased more than 349
percent from the SMS to the supplemental survey and the contribution of
this category to total practice expenses increased from 9.4 percent to
22.3 percent. They believe that such a large increase in practice
expense per hour needs further examination. The Lewin Group believes
that we should confer with ASCO and request a rationale for the high
values found in the survey results or validate the data in some other
fashion. Therefore, at this time, we are not using the supplemental
survey received from ASCO. However, we would like to further examine
the data with the Lewin Group and discuss the survey results with ASCO
and will consider using the data in the future if our concerns are
addressed.
In the June 2002 proposed rule (67 FR 43850), we discussed an
adjustment made to the medical supplies practice expense per hour for
oncology. We made this adjustment because of a concern that the
inordinately high practice expense per hour includes expenses
associated with separately billable drugs. We expressed an interest in
reconsidering the adjustment consistent with a recommendation made by
the GAO in their October 2001 report. If we resolve concerns about the
oncology survey data, the adjustment for medical supplies will no
longer be necessary since the supplemental survey collects information
on medical supplies practice expenses net of separately billable drugs.
The Lewin Group indicated that the surveys from the ACC and the AAP
do not meet requirements established in regulations for supplemental
surveys. As a result, we will not be incorporating data from the ACC or
the AAP into the practice expense methodology. We will be making the
Lewin Group's full recommendations available on our website. The
National Association of Portable X-ray Providers (NAPXP) did not
provide us with data as part of the supplemental survey process.
However, they requested that we use their data to develop practice
expense RVUs for the physician fee schedule services they provide.
Since we were provided with survey information, we asked the Lewin
Group to evaluate the data using the same standards of review applied
to other specialty survey data. The Lewin Group evaluated whether the
cost information supplied by NAPXP meets our criteria for acceptance of
supplemental surveys. The Lewin Group found that (1) More information
is required to determine if the data are broadly representative of the
portable x-ray industry and (2) the data as presented are not
adequately detailed to support a practice expense per hour based on the
current practice expense methodology.
Comment: Health Trac, a supplier of portable x-rays and other
imaging services, commented that the practice costs associated with
set-up of portable x-ray equipment are not included in the SMS and
there are sufficient differences among geographic regions in the
performance of this procedure that warrant reclassifying this service
as carrier-priced.
Response: At this time, we are not making portable x-ray set-up
(Q0092) a carrier-priced service. However, we will continue to work
with the suppliers of portable x-ray services to find the best ways of
developing payment rates for these services.
b. CPEP Data
(i) 2001 PEAC/RUC Recommendations on CPEP inputs
In the November 2001 final rule (66 FR 55256), we responded to the
PEAC/RUC recommendations for the refinement to all or part of the CPEP
inputs for over 1,100 codes. These included refinements of large
numbers of orthopedic, dermatology, pathology, physical medicine, and
ophthalmology services. In addition, these recommendations confirmed
that there were no inputs for over 150 ZZZ-global procedures that are
performed only in a facility and no supply or equipment inputs for
almost 700 facility-only services with an XXX or 0-day global period.
We accepted almost all of the recommendations with only minor
revisions. We received the following comments on our responses and
modifications to the RUC recommendations on the CPEP inputs.
Comment: Specialty societies representing radiology and orthopedic
surgery both expressed appreciation about our willingness to work with
the RUC and PEAC on practice expense refinement, as well as for our
implementation of the refinements already submitted by the PEAC. Both
societies agreed with our establishment of revised practice expense
values as ``interim'' until the refinement process is complete.
Response: We are also pleased with the progress of the refinement
of the CPEP inputs and thank the PEAC, RUC and all the involved
specialty societies for the hard work and dedicated commitment that has
led to a successful refinement process.
Comment: A specialty society representing surgeons expressed
support for our decisions on CPEP revisions in general and commended
our staff for our efforts to develop appropriate and acceptable inputs
for a large number of codes. The commenter also agreed with the use of
the refined evaluation and management (E/M) inputs to refine post-
surgical visits, but recommended that the process should allow for
exceptions.
Response: We understand that the PEAC has developed a standard
[[Page 79974]]
approach to estimating the clinical staff time involved in post-
surgical visits in which the times associated with the assigned E/M
visits are applied to the post-surgical clinical staff times. It is
also our understanding that, as with all the standards and packages
that the PEAC has developed, a specialty would be free to argue that
something other than the standard should be applied to a given service.
Comment: One commenter representing family physicians noted that we
had accepted most of the practice expense recommendations submitted by
the PEAC/RUC and commended us for our willingness to accept these
recommendations. The commenter also suggested that the PEAC
recommendations for the fine needle aspiration CPT codes 88170 and
88171, which were deleted CPT codes for 2002, should be applied to CPT
codes 10021 and 10022 that replace these deleted codes.
Response: We agree with this suggestion. When CPT codes 10021 and
10022 were originally valued by the RUC, the practice expense inputs
were crosswalked from the then unrefined inputs for CPT codes 88170 and
88171. Now that these inputs have been refined, it is appropriate for
us to crosswalk the inputs for CPT codes 10021 and 10022 from this
updated CPEP data.
Comment: A commenter representing dermatologists was pleased with
our acceptance of PEAC revisions for the phototherapy codes. However,
the commenter expressed concern about the decrease in the practice
expense RVUs for the code for the application of an Unna boot, CPT code
29580, and for the cryotherapy code, CPT code 17340 and requested that
we explain the decrease. A specialty society representing podiatrists
agreed with decision to retain the Unna boot in the list of supplies
for CPT code 29580.
Response: Both CPT codes 29580 and 17340 were refined by the PEAC
in October 2001 and were included in the PEAC/RUC recommendations for
2002. We accepted these recommendations without change, except that we
retained an Unna boot in the supply list for CPT code 29580. The
recommendations contained lower direct cost inputs than the original
CPEP panel data, which explains the decrease in payment for these
services.
Comment: A specialty society representing urologists requested an
explanation of why the bougie a boule was deleted from the equipment
list for the cystourethroscopy code, CPT code 52281 and requested that
it be added as a supply.
Response: Since the inception of resource-based practice expense,
the supply list has been used for disposable items and we have only
included as equipment those items that are more than $500. The bougie a
boule is not a disposable item, and at a cost of $105 it does not meet
the definition of equipment. These definitions have applied across the
spectrum of physician fee schedule services and, therefore, we do not
believe that any specialty has been disadvantaged. If we did include a
$100 item in our equipment list with a five-year expected life, it
would add only $0.0004 per minute of use to the input costs of any
associated procedure and, thus, would have no effect on the practice
expense RVUs for that service.
Comment: Two organizations representing physical and occupational
therapists argued strongly that the revisions we made to the PEAC
recommendations on the practice expense inputs for the physical
medicine and rehabilitation (PM&R) codes were inappropriate. The
physical therapy comment commended the specialty societies
participating in the PEAC, as well as AMA and our staff, for their time
and assistance as the clinical inputs for the therapy codes were
developed. However, the commenter also expressed concern that we did
not accept the PEAC's recommendations in their entirety despite the
fact that we state in the rule that the PEAC refinement process is
working. The comment from the occupational therapists shared this
concern and both commenters urged us to revisit our decision and accept
the PEAC recommendations for the CPT codes in the 97000 series without
revisions.
Specifically, both commenters objected to the deletion of the PEAC
approved clinical staff time for obtaining vital signs and
measurements, patient education and phone calls. One commenter
contended that our decision is contrary to the standardized times that
we have allowed for physicians' clinical staff and to the survey data
presented which demonstrated that clinical staff do perform these
services in therapy practices. The other commenter argued that, because
we have allowed such clinical staff time for other specialties, our
revisions disrupt the resource-based relative value scale on which the
physician fee schedule is based. Further, the occupational therapy
comment states that the addition of 7 minutes only in the evaluation
and reevaluation codes for aide services is insufficient to counteract
the deletion of the physical therapy assistant time, and that this has
created anomalies in the practice expense RVUs within the PM&R family
of services.
Response: We deleted the times assigned to the physical therapy
assistant for taking vital signs, and for phone calls and patient
education because we were concerned that there could be an overlap
between the work of the physical therapist, which is reflected in the
work RVUs, and the work of the assistant, which is considered as
practice expense. However, the commenters are correct that we have
allowed such tasks to be considered as practice expense for other
services, even though there could also be some potential overlap
between practitioner and clinical staff work. We still believe that
this can be more problematic with therapy services because of the broad
range of clinical activities that the physical therapy assistant can
share with the therapist, but also believe that this issue might be
better addressed as a general issue across all specialties. Therefore,
we are revising the clinical staff times for all codes in the CPT 97000
series to reflect the 2001 PEAC recommendations for these services.
Comment: The specialty society representing physical therapy
commented that the relatively high practice expense of 0.45 RVUs for
CPT code 97530, therapeutic activities, cause a rank order anomaly with
other codes in the CPT 97000 series. For example, therapeutic exercise
(CPT code 97110) only has a PE value of 0.25. The commenter speculated
that this might be due to inclusion of the environmental module in the
equipment list for this code.
Response: On analyzing the differences in CPEP inputs between these
two codes, it became apparent that the major contributor to the
possible anomalous practice expense values lies not with the equipment
for CPT code 97530, but with the supplies. For the timed codes that are
billed in 15-minute increments, the PEAC recommendations generally
assumed that two 15-minute sessions would be performed during one
visit. Therefore, for all of these codes, including CPT code 97110, the
PEAC recommendations divided the supplies by half because they would
not have to be replaced for the second 15-minute session. However,
inadvertently, the recommendation for the therapeutic activities code,
CPT code 97530, did not make this adjustment, and the full cost of the
relatively expensive woodworking kit was assigned to the code. In
addition, it seems unlikely that a supply like a $13 woodworking kit
would necessarily be discarded after one visit. Therefore, we are
[[Page 79975]]
apportioning the cost of this kit over four sessions, and are assigning
one-fourth of a kit to CPT code 97530.
Comment: The comment from the physical therapy specialty society
raised the concern that there may be an inadvertent error in the
printing of the values of physical therapy and occupational therapy
evaluation and reevaluation CPT codes in the final rule. First, the
values for the occupational therapy codes are significantly higher than
values for the physical therapy codes, which did not change from the
2001 values, despite the refinement of these codes. Second, the
practice expense RVUs for the occupational therapy evaluation and re-
evaluation codes are the same, which appears inappropriate.
Response: The practice expense RVUs for the occupational therapy
evaluation and re-evaluation codes are higher than those for physical
therapy because the PEAC recommendations, which were based on the
specialty societies' presentation and which we later accepted, assigned
higher cost supplies and equipment to the occupational therapy codes
than to the physical therapy evaluation and re-evaluation services. In
addition, although the occupational therapy evaluation code had higher
cost equipment than the re-evaluation code, the opposite was true for
supplies. We would certainly consider information that might point to
specific problems in any inputs assigned to these codes, but, at this
point, have no basis for making any changes in the direct cost inputs.
Comment: A medical electronics manufacturer commented that the
practice expense RVUs assigned to short wave diathermy treatment (CPT
code 97024) may not take into account all of the resources required to
provide the service, because the cost of the equipment alone is not
covered by the practice expense reimbursement. The commenter suggested
that the cost of the diathermy machine has increased greatly since
1995, when the equipment was last priced, and stated that the current
price is between $18,000 and $30,000. The commenter urged us to
reevaluate and increase the 2002 fee schedule reimbursement to ensure
that diathermy continues to be available for beneficiaries.
Response: We accepted the PEAC recommendations for the direct cost
inputs for CPT code 97024, except for the deletion of one minute of
physical therapy assistant time. The PEAC recommendation was based on a
presentation that was made by the physical therapy specialty society.
The current CPEP inputs consist of 2 minutes for a physical therapy
aide and 3 minutes of physical therapy assistant time and 15 minutes of
a low mat table and diathermy machine. There were no supplies assigned
because the supplies are included in the procedures that are typically
delivered with this modality. We have seen no evidence that would
indicate that any of these inputs are incorrect. Therefore, we will
make no revisions to the inputs at this time. However, we have two
diathermy machines in our CPEP input database. We currently have
assigned the machine priced at $2850 to the diathermy code, but will
substitute the higher priced machine, which we have priced at $3120,
until we have more definitive information regarding the typical cost of
the equipment. We have a contractor who is currently updating the
prices of all the supplies and equipment listed in the CPEP database,
and will soon be proposing updated prices for all the CPEP inputs,
including the diathermy equipment.
(ii) PEAC/RUC Recommendations on CPEP Inputs for 2003
We have received recommendations from the PEAC on the refinement to
the CPEP direct practice expense inputs for over 1200 codes. (A list of
these codes can be found in Addendum F.) These include refinements to
codes from almost every major specialty. In addition, the PEAC has
continued to standardize inputs to streamline the refinement process.
Previously, the PEAC created standardized inputs for 90-day global
services as well as supply packages for evaluation and management,
neurosurgery, gynecology services, ophthalmology and postoperative
services. The PEAC has also established standard times for certain
clinical staff tasks, such as greeting and gowning the patient, the
taking of vital signs and post-service phone calls. These current
recommendations include standardized times for office-based clinical
staff for services provided during a patient's hospitalization and for
discharge day management services, as well as pre-service clinical
staff time data for 323 neurosurgery procedures. At an early PEAC
meeting a list was drawn up of the codes most in need of refining. Of
the 122 codes on this list, only seven have not yet been refined, which
is one important measure of the success of the PEAC's efforts.
As stated above, we are very pleased with the progress that the
PEAC has made so far and appreciate greatly the contributions that have
been made to our refinement effort by the PEAC members, as well as by
the staff from the AMA and the specialty societies. We have reviewed
the submitted PEAC recommendations and are also pleased that, because
of the expertise gained by the PEAC in evaluating the practice expense
inputs, we are able to accept all of the recommendations without any
revision. The complete PEAC recommendations and the revised CPEP
database can be found on our Web site. (See the SUPPLEMENTARY
INFORMATION section of this rule for directions on accessing our Web
site.)
(iii) Other Comments on the Refinement of the CPEP Inputs
Comment: We received comments from specialty societies representing
vascular surgery, radiation oncology, rheumatology, physical therapy
and internal medicine agreeing with the update we made to the clinical
staff categories and to the revised salary data. Several of these
commenters also thanked us for our analysis and use of the additional
data that was supplied by the specialty societies.
Response: We appreciate the positive response to our repricing of
clinical staff salaries.
Comment: The specialty society representing radiology expressed
appreciation for the establishment of new clinical wage rates for CT
technologist, MRI technologist, medical physicist, and dosimetrist.
However, the comment expressed disagreement with our decision to merge
the x-ray technician and radiation technologist staff types under the
title of ``radiologic technologist,'' because the education and scope
of practice for these staff types are different and merging them will
reduce the radiation technologists wage rate. The specialty society
also opposed the decision to blend the staff types of RN and
sonographers because they are trained to provide different services and
are not interchangeable.
Response: The original CPEP data listed both ``x-ray technician''
and ``radiation technologist'' and seemingly made no distinction
between these two staff types because the same wage rate was assigned
to both. We used the Bureau of Labor Statistics' salary data to
determine the wage rate for the ``radiologic technologist.'' Therefore,
we do not believe that the salary assigned has been reduced in any way.
If some of the radiology procedures typically use staff that are paid
at a lower rate than the radiologic technologist, this information
should be provided by the specialty society when the practice expense
inputs for the services are refined. Regarding the second concern, we
did not make a decision to blend the staff types, ``RN'' and
``diagnostic
[[Page 79976]]
medical sonographer.'' This blend currently exists in the original CPEP
data and has also been contained in several PEAC recommendations. Both
staff types are priced separately and we were merely listing what the
pricing would be when such a blend was applied to any service.
Comment: Three specialty societies, representing surgeons, thoracic
surgeons and ophthalmologists, commented on the issue of our previous
exclusion from the CPEP data of all claimed time associated with staff
brought to the hospital by the physician. The commenters from the
surgical and the thoracic surgery specialty societies claimed that a
recent report by the Office of the Inspector General (OIG) confirms
that over 70 percent of cardiac surgeons bring staff to the hospital,
but that only 19 percent are being reimbursed by the hospital. The
commenters further argued that this is an inequitable arrangement that
requires corrective action by us. The commenter from the ophthalmology
society claimed that ophthalmologists bring their staff to the facility
setting 50 percent of the time and some cost for this should be built
into their practice expense.
Response: In the November 2, 1999 final rule (64 FR 59399), we
adopted a policy to exclude all clinical staff time in the facility
setting from the input data used to develop practice expense RVUs.
Among other arguments, we indicated that Medicare should not pay twice
for the same service. That is, Medicare's payment to the hospital
includes payment for clinical staff and we should not also compensate a
physician for using their own staff in the hospital. In addition, we
argued that we also pay for physician-extender staff used in the
facility setting, such as physician assistants and nurse practitioners,
through the physician work RVUs, and we pay physician assistants
directly when performing as an assistant-at-surgery. In response to
this argument, thoracic surgeons contended that hospitals are no longer
providing the staff to furnish adequate care. While we did not change
our policy, we asked the Office of Inspector General (OIG) to conduct
an independent assessment of staffing arrangements between hospitals
and thoracic surgeons (see November 1, 2000 final rule 65 FR 65395). In
April, 2002 (OEI-09-01-00130, page ii), OIG concluded:
Medicare pays for non-physician staff even though surgeons do not
receive additional payment for some of the staff they bring to the
hospital. Instead, services of these staff are paid to either
physicians through the work relative value units, to the mid-level
practitioners directly, or to the hospital through Part A or the
Ambulatory Payment Classification system for outpatient services.
Recognizing this, some hospitals and cardiothoracic surgeons have
entered into arrangements whereby hospitals provide some compensation
to surgeons who bring their own staff.
We believe the OIG report clearly supports our position to exclude
the costs of clinical staff brought to the hospital from the practice
expense calculations. While it may be common for thoracic surgeons to
bring staff to hospitals, the OIG report makes clear that Medicare pays
for these costs either directly to physicians or the hospital. Since
the OIG report supports our position, we are not making any revisions
to our policy to exclude practice expense inputs associated with
bringing clinical staff to hospitals.
Comment: One commenter representing an independent diagnostic
testing facility commented that a review of the practice expense inputs
for the 24-hour cardiac monitoring HCPCS codes G0005, G0006 and G0007
and the corresponding CPT codes 93270, 93271, and 93272 revealed the
CPEP input lists contain items that are not needed to perform these
services. The commenter suggested the following deletions: G0005 and
CPT code 93270 (for the hookup of the equipment)--delete the ECG
electrodes, laser paper, king of hearts-20, computer, life receiving
center; G0006 and CPT code 93721 (for the monitoring and transmission
of data)-delete the razor, gloves, alcohol swab, and tape and exam
table; G0007 (interpretation and report)-delete all the supplies (G0007
currently has no equipment and CPT code 93272 currently has no
equipment or supplies assigned.
Response: We agree that the changes to the practice expense inputs
suggested above divide the inputs more appropriately between the two TC
codes and the PC code for this cardiac monitoring service. However, as
discussed in section IV, we are deleting the referenced G-codes for CY
2003 and these services will be reported using the CPT codes. On an
interim basis, until these codes are refined, we will make the
recommended revisions to the CPEP data for the CPT codes for these
services. It should be noted, however, that the TC codes are currently
in the non-physician work pool and that the CPEP data is not currently
used to calculate their practice expense RVUs. In addition, we do not
assign direct cost inputs to PC codes. Therefore, these changes will
not at this time have any effect on the payment for these codes.
Comment: A specialty society representing radiology commented that
the review cycle for pricing ``high tech'' equipment and supplies may
need to be reviewed more frequently than every 5 years and suggested a
3-year cycle.
Response: We plan to propose current pricing for all the supplies
and equipment in our CPEP database in next year's proposed rule. We
have made no final decision on how often this pricing update should be
done and will consult with the medical community on how best to ensure
that we have appropriate pricing for all of our direct cost inputs.
(iv) Proposed Changes from June 28, 2002 Proposed Rule
(A) Ophthalmology Services--Rank Order Anomalies
Based on a request from the American Academy of Ophthalmology we
proposed revisions to the CPEP data for five ophthalmology services:
For CPT code 67820, Revise eyelashes, we proposed to remove ophthane
from the supply list. For CPT code 67825, Revise eyelashes, we proposed
to remove the bipolar handpiece from the supply list. For CPT code
65220, Removal foreign body from eye, we proposed using the supply list
and clinical staff time assigned to CPT code 65222. The exam lane is
the only equipment assigned. For CPT codes 92081 and 92083, Visual
field examination(s), we proposed to assign the same supplies and
equipment as CPT code 92082 and to assign 35 minutes of clinical staff
time to 92081 and 70 minutes to 92083.
Comment and Response: Commenters were supportive of the proposed
revision to the CPEP inputs for the ophthalmology codes and we are
finalizing the revisions as proposed.
(B) Practice Expense Inputs for Thermotherapy Procedures
There are three CPT codes for transurethral destruction of prostate
tissue: CPT 53850, by microwave therapy, CPT 53852, by radiofrequency
thermotherapy, and CPT 53853, by water-induced thermotherapy (WIT).
Based on concerns expressed by a manufacturer of WIT equipment that
practice expense inputs were underestimated for CPT code 53853 relative
to the other two codes, we made a comparison and agreed that the WIT
procedure had not been assigned many of the basic supply and equipment
inputs that were included in the CPEP inputs for the other two
procedures. Therefore, we proposed to add, on an interim basis, the
following inputs: Power table, ultrasound unit, mayo stand, endoscopy
stretcher, light source,
[[Page 79977]]
chux, sani-wipe, patient education book, sterile towel, sterile gloves,
specimen cup, alcohol swab, gauze, tape, lidocaine, betadine, 10 cc
syringe, 30 cc syringe, sterile water, leg bag.
We also proposed to change on an interim basis the staff type for
CPT code 53853 from the RN/LPN/MTA blend to RN in order to make the
staff type consistent among these three similar procedures. In
addition, we corrected, for all three procedures, the minutes assigned
to each piece of equipment to reflect the intra- and post-clinical
staff times only, rather than the total clinical staff times.
We have also requested that these three procedures be reexamined by
the PEAC at the same time in order to ensure that there is a consistent
approach to the assignment of direct cost inputs.
Based on questions we received regarding the large disparity in
prices used for the three different thermotherapy machines and
indications that the prices have decreased dramatically since these
were initially priced in 1999, we proposed to set the price for
thermotherapy equipment at $60,000 for CPT code 53850 and $30,000 for
CPT code 53852. We also requested any additional available price
documentation that would assist us in ensuring assigned prices
accurately reflect actual costs.
Comment: Commenters were generally supportive of the proposed
revisions and in agreement that the PEAC should review the CPEP inputs
for these procedures. A specialty society representing urology agreed
that the best way to handle the CPEP inputs for these services is to
have the PEAC review the direct cost inputs for all the heat therapy
procedures concurrently and the comment from the RUC stated that it
plans to review these codes in time for inclusion in the physician fee
schedule for 2004. However, a few commenters also suggested that the
review be extended to other codes for treatment for benign prostatic
hypertrophy, such as the code for transurethral resection of the
prostate, CPT code 52612, and for laser coagulation of the prostate,
CPT code 52647.
Response: We agree that it would be advantageous to have the PEAC
review the CPEP inputs for all codes pertaining to the treatment of
benign prostatic hypertrophy at the same time. This would help ensure
that the same standards are applied to developing the direct cost
inputs for these codes so that the resulting practice expense RVUs
appropriately reflect the relative costs of each service. We will
request that the PEAC include for review all the codes suggested by the
commenters.
Comment: One commenter, representing a manufacturer, also indicated
that, as part of any review, it is imperative that cost data for all
medical devices that fall within the CPT code should be evaluated. The
commenter suggested that we work with the specialty groups to obtain
pricing information rather than using invoices for pricing. The comment
from the specialty society argued that we should maintain all the
proposed input changes unless we receive compelling data from
urologists or manufacturers that varies from the proposed inputs.
Another commenter stated that, while there has been a reduction in the
price of the thermotherapy control unit over the past few years, the
proposed price of $60,000 for thermotherapy equipment for CPT code
53850 was not representative. The commenter included an invoice that
indicated that the current price is closer to $80,000, after the
application of discounts.
Response: We will finalize the revisions to the CPEP inputs as
proposed with the exception of the price for the thermotherapy
equipment that we will increase to $80,000 on an interim basis. As part
of the practice expense refinement process we have awarded a contract
to update the pricing for both the supplies and equipment represented
in the CPEP inputs and we anticipate that the proposed pricing
revisions to the inputs will be included in next year's proposed rule.
Pricing of the thermotherapy equipment will be included in these
proposed changes and we will be seeking input from the specialty
society to help us in this endeavor.
(C) Revision to Inputs for Iontophoresis
It had been brought to our attention that the electrodes assigned
to the supply list for CPT code 97033, Iontophoresis, were not the type
required for this procedure. We proposed to substitute two electrodes
with a medication vesicle as the appropriate supply for iontophoresis.
(D) Correction to Price for Sterile Water
We proposed to change the price for 1000 ml of sterile water from
$40.00 to $3.00.
Comments and Responses: No comments were received on our proposals
to substitute two electrodes with a medication vesicle as the
appropriate supply for iontophoresis or to correct the price of sterile
water. Therefore, we are finalizing these as proposed.
b. Non-Physician Work Pool For Practice Expense
Comment: We received a comment objecting to use of the phrase
``zero work pool.'' The comment acknowledges that our preamble refers
to ``zero physician work pool'' but stated that the vernacular used by
the agency, Congressional staff and other stakeholders is ``zero work
pool.'' While acknowledging that we do not intend to connote a zero
value for oncology nurses' contributions, oncology nurses, social
workers, radiology technicians and others take offense to the use of
``zero work pool'' because it suggests that the work done by oncology
nurses and other clinical staff is without value. The comment suggested
four appropriate alternative titles: Non-physician clinical staff time,
Non-physician work components, Non-physician work pool or Non-physician
health professional pool.
Response: We did not intend to devalue the contribution of clinical
staff involved in providing physician fee schedule services. In fact,
we created the special methodology to value services that are provided
by clinical staff without a physician because of our concern that these
services could be valued inappropriately low under the top down
methodology. Nevertheless, it is clear that there are objections to the
nomenclature we have used. We appreciate the suggestions for
alternative nomenclature and will refer to the special methodology as
the ``Non-physician work pool.''
(i) Discussion of Alternatives to the Non-Physician Work Pool
In our June 2002 proposed rule (67 FR 43850) we summarized
alternatives to the non-physician work pool that have been included in
reports prepared by our contractor, the Lewin Group. Included in the
alternatives were: elimination of the non-physician work pool;
development of specialty specific non-physician work pools; making the
TC equal to the global less the PC RVUs; and, development of proxy
physician work RVUs for physician fee schedule services provided by
clinical staff without physicians. While we included a discussion of
each alternative and their feasibility, we did not propose eliminating
or replacing the non-physician work pool. We indicated that specialties
whose services are affected by the non-physician work pool may conduct
supplemental practice expense surveys if they believe there are
shortcomings in the practice expense per hour information that we use
as part of the basic methodology. We referenced
[[Page 79978]]
the interim final rule also published June 28, 2002 in the Federal
Register. The interim final rule modified the criteria for acceptance
of supplemental data. (See section II.A.3.(a) of this rule for a
summary of the interim final rule, the public comments, and our
responses.) We also noted that while the non-physician work pool is of
benefit to many of the services that were originally included, we have
allowed specialties to request that their services be removed.
As part of our analysis of alternatives to the non-physician work
pool, we proposed a change in the computation of practice expense RVUs
for some PC and TC services. Since it is far more common to receive a
global bill than a TC only bill, we believe that using the global to
value the TC service will result in a payment that is more typical of
the relative actual practice expense associated with the service.
Therefore, we proposed to make the TC value equal the difference
between the global and the PC for procedure codes that are not included
in the non-physician work pool. That is, we used the practice expense
value produced by the methodology for the global and subtracted the PC
to derive the TC practice expense RVU. As a result of concerns that we
had about the impact of this change on services that are affected by
the non-physician work pool calculations, we proposed continuing to
make the global value equal to the sum of the professional and the TC
values for non-physician work pool services.
Comment: One commenter, representing oncologists, argued that the
``normal top-down methodology discriminates against [non-physician work
pool] services * * * by assuming, without any basis, that indirect
costs are lower than comparable services that do involve physician
work.'' The commenter stated that both the GAO and Lewin reports
provide support for the conclusion that the indirect cost allocation is
biased against non-physician work services. According to the commenter,
our assertion that ``the indirect cost allocation must be correct
because not all of the services without a physician work component are
disadvantaged by its use is not a sound basis for maintaining the
current methodology.'' The commenter argues that estimates of practice
expense per hour and physician time may be overstated for some non-
physician work services resulting in an advantage outside of the non-
physician work pool. Furthermore, the comment argues that an increase
in payment resulting from services being ``withdrawn from the [non-
physician work pool] does not demonstrate that the normal top-down
methodology results in an appropriate payment amount for services that
do not have physician work components.'' The commenter also objected to
our rejection of the Lewin Group's idea to develop specialty-specific
non-physician work pools on the basis that a single methodology must
apply to all services. According to the commenter, our refusal would
only be appropriate if the methodology was not biased against non-
physician work pool services. Another comment suggested that we
allocated indirect costs by deeming direct costs as 33.2 percent of
total costs. Indirect costs would then be added to direct costs to
determine a total practice expense RVU.
Response: We do not believe the practice expense methodology is
biased against non-physician work services. The methodology allocates
indirect costs based on physician work and direct costs. While the
comment suggests the use of physician work in the indirect cost
allocation is biased against services that do not have physician work,
it ignores that direct costs are also used. Most services that do not
have physician work have significant direct expenses. Thus, any bias
against non-physician work services in the indirect cost allocation is
offset by the use of direct costs. Similarly, the use of physician work
in the indirect cost allocation will offset any bias against services
predominantly performed in facilities where the physician will have
few, if any, direct costs associated with the services. For example,
surgical services furnished in a hospital have few direct expenses,
thus the allocation of indirect expenses according to both work and
direct expenses helps offset any bias against surgical services.
We also disagree with the comment that suggests ``deeming'' direct
costs to be 33.2 percent of total costs for purposes of developing
practice expense RVUs. The proportion of costs attributable to direct
and indirect costs will be different for each service. Such a proposal
would be inherently unfair to services that have few direct costs (and
impossible to use for services that have no direct costs) and would
create a significant bias in favor of services that have high direct
expenses.
We further examined the assertion in the comment and in the Lewin
Group and GAO reports that the indirect cost allocation is a possible
explanation for the adverse payment impact that would occur under the
top-down methodology for some non-physician work pool services. It is
important to distinguish between the different types of services that
are affected by the non-physician work pool calculations. Professional/
TC services are the largest category of services included in the non-
physician work pool. While many professional/TC services were not
adversely affected by the adoption of the top-down methodology, the
ones remaining in the pool are the services that would be most
adversely affected by its elimination. Some ``Incident to'' services
are also included in the non-physician work pool. Elimination of the
non-physician work pool may cause payments for these services to go up
or down depending on the specialty that provides them.
Based on 2000 utilization data, the specialties with the largest
amount of Medicare allowed charges affected by the non-physician work
pool calculations are: radiology ($2.8 billion), cardiology ($2.1
billion), internal medicine ($568 million), radiation oncology ($465
million), multi-specialty clinics ($313 million), independent
diagnostic testing facilities ($309 million) and oncology ($226
million). Radiology receives 87 percent of its Medicare revenues from
services that are affected by the non-physician work pool calculations.
The figures are 47 percent for cardiology, 9 percent for internal
medicine, 65 percent for radiation oncology, 17 percent for multi-
specialty clinics, 86 percent for independent diagnostic testing
facilities and 26 percent for oncology. There are other smaller
specialties that also receive a significant proportion of their
revenues from services in the non-physician work pool (portable x-ray
suppliers, 100 percent, interventional radiology, 63 percent, allergy/
immunology 35 percent). The specialties that receive the highest
proportion of their revenues from professional/TC services remaining in
the non-physician work pool would be most adversely affected by its
elimination (independent diagnostic testing facilities, portable x-ray
suppliers, radiology, radiation oncology and interventional radiology).
Cardiology also receives substantial Medicare revenues from
professional/TC services remaining in the non-physician work pool but
would be less adversely affected by its elimination. Allergy/immunology
receives substantial revenues from ``incident to'' services in the non-
physician work pool and would experience a more modest decline in
payment under the top-down methodology. Payments to oncology for
``incident to'' services would increase if the non-physician work pool
were eliminated.
Radiology, radiation oncology and certain other diagnostic services
with professional and technical components
[[Page 79979]]
are likely to be the services most adversely affected by elimination of
the non-physician work pool. We do not believe the allocation of either
direct or indirect costs explains the effect of the top-down
methodology on these services. We examined this issue further by
modifying the indirect cost allocation using an idea suggested by the
Lewin Group that would retain work and direct expenses to allocate
indirect costs but create proxy physician work values for services that
do not have physician work (the Lewin Group, pages 22-23). As indicated
earlier, we proposed to modify the practice expense methodology to
calculate the TC practice expense RVU as the difference between the
global and the PC RVU for services unaffected by the non-physician work
pool. To analyze the Lewin idea, we followed this same approach for all
services. However, we further modified the methodology to use proxy
work RVUs for the TC (or non-physician work portion) of the global
service for the allocation of indirect costs. (We did this for TC
services as well, but it makes no difference whether a proxy physician
work RVU is used for the indirect cost allocation since the RVU
produced by the practice expense methodology for the TC is not used).
By developing a proxy work RVU for the global, in effect, we imputed
physician work RVUs for the technical portion of the global service and
added it to the existing work RVUs for the physician interpretation. If
such an approach were adopted, the indirect cost allocation would favor
the global service at the expense of professional component. That is,
the practice expense RVUs would increase for the global and decrease
for the PC but the overall impact for the specialty would be about the
same. Modifying the indirect cost allocation in this way would not
offset large decreases in payment for radiology, radiation oncology and
other specialties most adversely affected by elimination of the non-
physician work pool. In fact, such a methodological change would not
even raise payments to these specialties.
As we indicated in the June 2002 proposed rule, we believe a
relatively low practice expense per hour, and not the indirect cost
allocation, explains the adverse impact on diagnostic services that
would occur from eliminating the non-physician work pool. We encourage
radiology, radiology oncology and other diagnostic service providers
affected by the non-physician work pool to undertake a survey of the
practice expenses. Since practice expense methodology uses a weighted
average of the practice expenses of the specialties that bill Medicare,
we believe there are significant advantages to the survey being
undertaken with collaboration among the different providers of
diagnostic services. As indicated earlier, we advise any party
interested in conducting a supplemental survey to consult the Lewin
Group and us before proceeding.
Comment: Most comments we received supported making the TC practice
expense RVUs equal to the difference between the global and PC practice
expense RVUs. We received a number of comments from pathologists and
organizations representing independent laboratories, pathologists,
dermatologists, and others expressing concern about the effect of the
proposal on payment for pathology services. Some of the commenters
indicated that we did not provide an explanation of the necessity for
the change or indicate why a simple arithmetic change should result in
such a large difference in the proposed fee for TC services. Several of
these commenters stated that practice expenses for physician pathology
services are increasing, not decreasing. According to some of these
commenters, it is inequitable to apply the methodology to certain
specialties or groups of services that would experience significant
reductions while sparing other specialties or services that would
experience reductions under the same change. There were also comments
indicating that the reduction in payment for pathology services was
related to the mix of specialties that bill for global services;
specifically, there is concern that independent laboratories bill for a
higher proportion of global than TC services. The commenters noted that
we do not have a practice expense per hour for independent laboratories
and use a crosswalk practice expense per hour from ``all physicians.''
While this comment acknowledges our need to use a crosswalk when we do
not have a practice expense per hour, the comment indicated that there
is no reason to conclude that independent laboratories that provide
pathology services have practice expenses per hour similar to the all
physician average. The comments expressing concern about the impact of
the proposal on pathology services requested a one-year moratorium on
its implementation to allow for a survey of independent laboratory
practice expenses under the supplemental survey process. There were a
number of comments indicating that organizations representing
pathologists would undertake a survey of practice expenses for
independent laboratories that could be used to develop 2004 physician
fee schedule rates.
Response: We agree with the comments that suggest a one-year
moratorium on implementation of the proposed change for pathology
services paid under the physician fee schedule. Based on a consultation
with the College of American Pathologists, we will continue to
determine the global practice expense RVUs as the sum of the
professional plus TC for all of the global codes in the CPT 80000
series that are paid using the physician fee schedule, as well as the
following HCPCS and CPT codes:
Table 2
------------------------------------------------------------------------
CPT/HCPCS Description
------------------------------------------------------------------------
G0141.................................. Screening c/v, autosys, interp
P3001.................................. Screening c/v, interp
10021.................................. FNA w/o image
10022.................................. FNA w/image
36430.................................. Blood transfusion service
36440.................................. Blood transfusion service
36450.................................. Blood transfusion service
36455.................................. Exchange transfusion service
36460.................................. Transfusion service, fetal
36520.................................. Plasma and/or cell exchange
38220.................................. Bone marrow aspiration
38221.................................. Bone marrow biopsy
38230.................................. Bone marrow collection
38231.................................. Stem cell collection
------------------------------------------------------------------------
CPT codes and descriptions only are copyright 2002 American Medical
Association.
As we indicate in the background part of this preamble, the
practice expense methodology essentially takes a weighted average of
different specialty practice expenses to determine a practice expense
RVU. The methodology will independently produce a value for the global,
professional and technical components. For instance, CPT code 88305
(Tissue exam by pathologist) is a commonly provided pathology service.
The methodology produces a value of 1.60 for the global, 0.34 for the
PC and 1.39 for the technical component. The sum of the professional
and TC RVUs (0.34 + 1.39 = 1.73) is not equal to the global RVU (1.60).
The values are not equal because the mix of specialties that provide
the global and the TC are different and each specialty has a different
practice expense per hour. The specialties that bill CPT code 88305 to
Medicare for the global service most frequently have the following
practice expense per hour:
[[Page 79980]]
Table 3
------------------------------------------------------------------------
Practice expense Percent of total
Specialty per hour volume
------------------------------------------------------------------------
Independent Lab................... $69.00 56
Pathology......................... 66.30 29
Dermatology....................... 119.40 13
------------------------------------------------------------------------
The specialties that bill Medicare most frequently for the TC are:
Table 4
------------------------------------------------------------------------
Practice expense Percent of total
Specialty per hour volume
------------------------------------------------------------------------
Independent Lab................... $69.00 47
Dermatology....................... 119.40 33
Pathology......................... 66.30 16
------------------------------------------------------------------------
As shown in the tables above, dermatology has a very high practice
expense per hour relative to independent laboratories and pathology.
However, dermatologists bill Medicare for a smaller portion of the
global services. As a result, dermatology contributes less weight to
the global value than the TC value. Our practice has been to make the
global RVUs equal the sum of the PC and TC values. If the methodology
results in PC and TC values that do not sum to the global value, we
must change either the global or TC value. To date, we have used the PC
(0.34) and the TC value (1.39) to determine the global value (1.74).
However, in the proposed rule, we used the global value (1.60) minus
the PC (0.34) to obtain the TC (1.26). Using the TC to value the global
component for this code (88305) produces a higher RVU for both the
technical and the global components than using the global component to
value the TC.
As we have previously indicated, it is far more common for Medicare
to receive a global than technical-component-only bill. For this
reason, we believe it is valid to rely on the global to produce a value
for the technical rather than use the technical to value the global.
Nevertheless, since independent laboratories predominantly bill the
global for pathology services and we are using a crosswalk for the
practice expense per hour, we believe it makes sense to allow for a
one-year moratorium on implementation of this provision for pathology
services to allow for use of a supplemental survey that provides us
with specific data on practice expenses for independent laboratories.
Final Decision: We are not adopting the proposed change for
pathology services paid using the physician fee schedule at this time.
For all professional/TC services not included in the non-physician work
pool, excluding pathology services, we will make the TC value equal the
difference between the global and the professional component. We will
continue with the current practice for pathology services and non-
physician work pool services and sum the professional and TC values to
determine the global.
(ii) Other Proposals for Changes to the Non-Physician Work Pool
(A). Change to Staff Time Used To Create the Pool
In the November 2, 1998 final rule (63 FR 58841), we indicated that
average clinical staff time was used in the creation of the non-
physician work pool. Since the cost pools are created using physician
time and, by definition, services provided by clinical staff have no
physician time, we need staff time to create the non-physician cost
pool. If our database indicates that multiple staff types are typically
involved in the service, we have used an average of the different
clinical staff times. We proposed to create the non-physician cost pool
using the highest staff time in place of average staff time.
Comment: We received many comments that supported using the highest
staff time to create the non-physician work pool. Some comments
suggested that we should consider using ``total'' staff time especially
if we will use the clinical staff times being provided by the Practice
Expense Advisory Committee (PEAC). The comment indicates that the PEAC
has been particularly careful to avoid duplications of time. If the
PEAC has limited or eliminates concurrent staff time, the comment
suggests that ``total'' rather ``maximum'' staff time should be use to
determine the non-physician work pool. A number of comments expressed
concern about PEAC refinements of clinical staff times associated with
codes included in the non-physician work pool. These comments requested
that we not incorporate any PEAC revised clinical staff times for non-
physician work services until there has been an opportunity for public
notice and comment. There were two comments objecting to this proposal.
One comment indicated that the maximum staff time is not the
``typical'' time associated with provision of the service and urged us
not to implement the proposal. We received another comment that noted
that physician times used to establish practice expense cost pools for
physician work services use average or median times from RUC or Harvard
surveys. The comment indicates that the proposal to use maximum staff
time represents a step away from the stated goal of developing a
consistent method for all services. According to this commenter, the
proposal will penalize specialties that do not perform a large volume
of services in the non-physician work pool.
Response: We disagree with the comment that suggests we are not
using a time that is typical of the service and the one that implies
our staff time proposal is inconsistent with how we determine physician
time. For a physician's service, we develop time based on surveys.
While the comment is correct that we generally use average or median
time estimates from surveys to determine the typical time, the time
reflects the service of a single physician.
[[Page 79981]]
For non-physician work pool services, we are also using estimated
average staff times to represent the typical service. However, multiple
clinical staff are frequently involved in performing non-physician work
pool services. The staff may be working concurrently, consecutively or
overlapping time. Given the special circumstances associated with non-
physician work pool services that do not apply to physicians' services,
it was necessary for us to select among multiple time estimates to
develop the pool. We are currently using an average of the estimated
staff times but proposed to use the maximum. Once we address issues
related to the non-physician work pool, this will no longer be an issue
since we will use a single methodology for all physician fee schedule
services and staff time will not be used to create cost pools.
In response to the comment that refined clinical staff times not be
used at this time for non-physician work pool services, we agree that
there are special circumstances that apply to these services. Because
the clinical staff times are used to create the pool and can result in
RVU changes across all services, even those where no refinements have
been made, we are not using the revised clinical staff time to create
the non-physician work pool at this time. However, as indicated above,
this will no longer be an issue once we address other issues related to
the non-physician work pool.
(B). Removal of Non-Invasive Vascular Diagnostic Study Codes From the
Non-Physician Work Pool
We proposed to remove the non-invasive vascular diagnostic study
codes (CPT codes 93875-93990) from the non-physician work pool based on
a request from the American Association for Vascular Surgery (AAVS) and
the Society for Vascular Surgery (SVS).
Comment: We received support from vascular surgeons and others for
removing the non-invasive vascular diagnostic studies from the non-
physician work pool. These comments requested that AAVS/SVS should be
able to modify the request if CMS does not finalize its proposal to
calculate the TC practice expense RVU as the difference between the
global and professional components. We also received a number of
comments requesting that we remove other codes from the non-physician
work pool. The Society of Vascular Technology and Society of Diagnostic
Medical Sonography) requested that we remove 26 ultrasound codes in the
CPT code range 76506 through 76977. The American Society of
Neuroimaging also requested that some of these codes be removed. The
American Urological Association (AUA) also requested that we remove CPT
codes 76857, 76872, 76942 and 96400 from the non-physician work pool.
While there were no objections to removing the non-invasive vascular
diagnostic study codes, we received many comments that suggested
limiting the financial impact that removing codes from the non-
physician work pool have on the remaining codes. In particular, many of
these commenters expressed concern about the impact of removing
chemotherapy administration codes from the non-physician work pool.
Some comments provided suggestions for modifications to the non-
physician work pool (for example, using a different practice expense
per hour) that could be used if adverse impacts result from codes being
removed. One commenter suggested that we maintain the existing RVUs and
provide a downward adjustment to the CF to ensure no increase in
aggregate payment results from removing chemotherapy administration
services from the non-physician work pool.
Response: At this time, we have not received any requests to remove
chemotherapy administration from the non-physician work pool.
Nevertheless, if there are sound suggestions that could be adopted
consistent with changes in the composition of the non-physician work
pool that will improve the practice expense methodology, we may
consider adopting them in the future. Of course, as stated elsewhere,
our goal is to eliminate the non-physician work pool and apply a single
methodology to all physician fee schedule services so further
adjustments will be unnecessary. We expect this to be a top priority in
CY 2003 for determining CY 2004 physician fee schedule rates.
We have reviewed the comments to remove specific services from the
non-physician work pool. While our general policy has been that
``families'' of procedure codes should be removed from the non-
physician work pool (see the July 22, 1999 proposed rule (64 FR
39620)), we will allow individual codes to be removed if the requesting
specialty predominantly performs the requested code and other
specialties predominantly perform the other codes in the family. We
have reviewed 2001 utilization for the codes requested by the AUA.
Since urologists predominantly perform the requested codes and other
codes in the family are predominantly performed by other specialties,
we are removing the following codes from the non-physician work pool:
CPT codes 76857, 76872, 76942 and 96400. We are not removing other
codes requested in the comments because they are predominantly
performed by radiology, neurology or obstetrics-gynecology and the
specialty societies representing these physicians have not requested
that the codes be removed from the non-physician work pool.
Comment: The American College of Rheumatology (ACR) acknowledged
that the current average wholesale price (AWP) methodology provides for
a ``healthy margin overall'' in the provision of these services
[infusion agents and infusion therapy] through ``cross-subsidization.''
However, they indicated that payments for infusion therapy services are
``woefully insufficient.'' The comments from ACR and many
rheumatologists expressed concern about reductions in payment for
infusion agents in combination with maintaining the current payment
amounts for infusion therapy (CPT codes 90780 and 90781). The comments
indicated that a reduction in payment for infusion agents without an
increase in the payment for infusion therapy services will likely
result in Medicare beneficiaries being unable to receive infusion
services in physicians' offices. One commenter from a society
representing gastroenterologists indicated that we should consider
increasing the payment for non-chemotherapy infusion services. Other
comments suggested that we should use the rulemaking process to
establish HCPCS G codes to increase payment for non-chemotherapy drug
administration to a more appropriate level.
Response: We currently determine the practice expense RVUs for CPT
codes 90780 and 90781 using the non-physician work pool methodology.
One commenter suggested establishing a G code for non-chemotherapy
infusion services. While this option would allow infusion therapy to be
valued outside of the non-physician work pool, we want to avoid
establishment of G codes for services that are already described by
existing CPT codes. Another option for addressing these comments would
be to remove infusion therapy from the non-physician work pool and
allow for resource-based pricing under the top-down methodology.
However, oncologists predominantly perform these services and have not
requested removing the codes from the non-physician work pool. We are
reluctant to remove infusion therapy services from the non-physician
work pool without a request from the specialty that predominates the
data. As we previously noted, oncologists provided
[[Page 79982]]
us with a supplemental practice expense survey. At this time, we are
not incorporating the survey into the practice expense methodology
because of concerns raised by our contractor, the Lewin Group, about
the validity of some of the data. However, we hope to work with the
Lewin Group and ASCO to either get an explanation of the survey results
or use alternative data to validate the results. As we work to resolve
issues related to the ASCO survey, we will consider removing the
infusion therapy codes from the non-physician work pool.
In the interim, we note that Medicare pays for drugs based on 95
percent of AWP. This system has been widely criticized for paying
physicians for drugs at far higher rates than prices paid to obtain
them. Oncologists receive more than 70 percent of their Medicare
revenues from drugs. While we would prefer a statutory change to
address Medicare's drug pricing methodology, we are contemplating
administrative actions that may be taken under current law to address
this issue. As we consider options for changing Medicare's drug payment
methodology, we will continue examining the ASCO survey to determine
whether the data can be used to calculate the practice expense per hour
for oncology.
(C). Removal of Immunization CPT Codes 90471 and 90472 From the Non-
Physician Work Pool
We proposed to remove immunization administration services from the
non-physician work pool. We indicated this change would nearly double
payment for CPT code 90471 and slightly reduce payment for CPT code
90472. Procedure CPT code 90471 is used for immunization administration
of one vaccine and CPT code 90472 is used for the administration of
each additional vaccine. Since CPT code 90472 must be billed in
conjunction with CPT code 90471, the total payment for these procedures
would increase when billed together.
We also explained that we have not assigned immunization
administration physician work RVUs because this service does not
typically involve a physician. The nurse that administers the vaccine
typically provides the necessary counseling to the patient and this
time is accounted for in the practice expense RVU.
In addition, we noted that not all services represented by CPT
codes 90471 and 90472 are covered by Medicare. For example, medically
necessary administrations of tetanus toxoid (such as following a severe
injury) would be covered whereas preventive administration of this
vaccine would not be covered. We also indicated we would consider
whether coding changes might be appropriate to reflect the differences
in counseling of the patient and/or family for childhood immunizations.
Comment: Commenters supported our proposal to remove CPT codes
90471 and 90472 from the non-physician work pool. However, commenters
indicated elderly patients are at higher risk to acquire pathogens and
viruses and are in greater need of vaccinations. Medicare must
recognize that as part of their practice of medicine, physicians take
the time and responsibility to explain to their patients the benefits
of vaccination and the potential side effects. Physicians question the
patient about previous reactions to the vaccine and provide information
material. These comments indicated that we should assign work RVUs of
0.17 for the administration of vaccines as recommended by the RUC.
Response: The RUC has recommended that we both establish a work RVU
for CPT code 90471 and include 13 minutes of clinical staff time to
value the practice expense RVU. Further, our understanding from the RUC
is that these immunization services are also provided in conjunction
with a separately billable visit. We believe the clinical staff time
for these services is intended to account for patient counseling and
some of the activities described in the comment. Other activities
attributed to the physicians are likely being provided as part of a
separately billable office visit. For these reasons, we continue to
believe that these codes should not be assigned physician work RVUs.
Comment: Several commenters expressed concern that we did not
propose any change in the payment rate for the administration of
influenza (G0008), pneumonia (G0009), and hepatitis B (G0010) vaccines.
The commenters are concerned that we continue to link payment for the
administration of Medicare covered vaccines to a therapeutic injection
CPT code (90782) that pays at half of the proposed rate for CPT code
90471. Other commenters recommended that Medicare use the CPT codes
90471 and 90472 in place of the Medicare-only alphanumeric codes
(G0008, G0009, G0010). These comments indicated that if we are to
retain the G codes, we should publish RVUs for them that match CPT code
90471.
Response: We considered the comment to eliminate use of the G codes
and allow use of the CPT codes for the administration of Medicare
covered vaccines. However, we have decided that we will maintain these
G codes at this time. It is important that we be able to closely
monitor patient access to these important preventive services. However,
since CPT has established similar codes for immunization administration
that can be covered by Medicare, we will consider this issue further in
2003.
With respect to payment, we agree with the commenters. Rather than
link payment for procedures codes G0008, G0009, and G0010 to a service
paid under the physician fee schedule, we will develop practice expense
RVUs for these codes. Using the top-down methodology to develop
practice expense RVUs will nearly double payment for these codes and
make Medicare's payment for vaccine administration using the G codes
more consistent with the rates paid for the CPT codes. Since the
statute does not include the administration of pneumonia, influenza,
and hepatitis B vaccines within the definition of physicians' services
in section 1848(j) of the Act, the increased payment for these services
will not result in reductions to the practice expense RVUs associated
with physician fee schedule services. That is, there is no budget-
neutrality adjustment to be made for revisions in payments for the
administration of pneumonia, influenza, and hepatitis B vaccines.
Comment: One commenter indicated that Medicare does not pay for the
administration of influenza and pneumonia vaccines provided on the same
day as another physician's service.
Response: The commenter is incorrect. Medicare will pay separately
for the administration of these vaccines and other physicians' services
on the same day.
(D) Utilization Data
Medicare utilization is an important data source used in
determining the practice expense RVUs. Our current policy has been to
use the latest utilization data to develop each successive year's fully
implemented practice expense RVUs during each year of the transition.
While substituting the latest year's utilization data into the practice
expense methodology generally made little difference on total Medicare
payments per specialty, there has been a larger impact on services
affected by the non-physician work pool. Based on suggestions made by
specialty organizations, we proposed to use the CYs 1997 through 2000
utilization data to develop the CY 2003 practice expense RVUs and not
to update further the utilization data in this year's final rule
[[Page 79983]]
to incorporate the CY 2001 utilization data. Further, we proposed to
continue using the CYs 1997 through 2000 utilization data in the
practice expense methodology until we undertake the 5-year review of
practice expense RVUs.
Comment: We received comments both supporting and opposing use of
multi-year utilization data in the practice expense methodology. The
comments that ``applauded CMS's efforts to ensure the stability'' of
the practice expense RVUs largely came from organizations affected by
the non-physician work pool methodology. We also received support from
specialties that are largely unaffected by the proposal because of its
potential to provide more year-to-year stability in the practice
expense RVUs. Other commenters indicated that use of new utilization
data with a different ``mix'' of services produces unpredictable
changes in RVUs even though resource costs have not changed. There were
comments that indicated use of multi-year utilization data will restore
the unanticipated and extraordinary reductions experienced by
diagnostic imaging centers in CY 2002. These commenters urged that we
adopt our proposal in the final rule. One comment stated that
``utilization data adjustments should not change annually until the
[non-physician work pool] is eliminated and/or CMS undertakes the 5-
year review of practice expense RVUs.''
One commenter stated that it is unclear whether the multi-year
utilization will be used to develop practice expense RVUs for all
services or only those in the non-physician work pool. Another
commenter stated it is difficult to assess the impact of the proposal
and urged the agency ``not to make such a change, at least until it has
conducted extensive impact comparisons'' that can be evaluated by
physicians and other stakeholders. Other commenters suggested that we
should not update the practice expense methodology with new utilization
data without giving an opportunity for public notice and comment. A
number of commenters argued that application of a 10-percent payment
reduction in CY 1998 and the per beneficiary per facility payment cap
of $1500 cap in CY 1999 (in settings other than outpatient hospital
departments) make utilization data unreliable for therapy services
during the CYs 1997 through 2000 period. Commenters also noted that
outpatient physical and occupational therapy services provided in
facility settings were paid under cost-based reimbursement before CY
1999. The commenters questioned the accuracy of the utilization data
for Part B therapy services from CYs 1997 through 2000 and suggested
that the utilization data during this period would be biased by the
implementation of policy changes. One commenter recommended that we use
the most current available data as the base for examining therapy
utilization and should commit to an annual review of the data until it
can be established that a longer time horizon accurately reflects
utilization. Other comments requested clarification of how we use data
from this period for physical and occupational therapy.
Response: With respect to therapy services, we do not use claims of
institutional providers (rehabilitation agencies and comprehensive
outpatient rehabilitation facilities) in developing payment rates for
therapy services paid using the physician fee schedule. We only use the
claims for therapy services from physical and occupational therapists
in private practice. The proposal was intended to apply to all
physician fee schedule services, not just those in the non-physician
work pool. We are finalizing our proposal to use the CYs 1997 through
2000 utilization data to develop the practice expense RVUs for all
services. However, we believe the comments raise important issues about
policy changes that were occurring from CYs 1997 through 2000 that
could lead to changes in utilization patterns during this time. We may
analyze this issue further. In the interim, we welcome public comment
about using the latest utilization data in the practice expense
methodology.
(E) Site of Service
As part of our resource-based practice expense methodology, we make
a distinction between the practice expense RVUs for the non-facility
and the facility setting. This distinction is needed because of the
higher resource costs to the physician in the non-facility setting
where the practitioner typically bears the cost of the resources
associated with the service. In addition, the distinction ensures that
we do not make a duplicate payment for any of the practice expenses
incurred in performing a service for a Medicare beneficiary. Currently,
we have designated only hospitals, skilled nursing facilities (SNFs),
and community mental health centers (CMHCs) as facilities for purposes
of calculating practice expense. An ambulatory surgical center (ASC) is
designated as a facility if it is the place of service for a procedure
on the ASC list. All other places of service are currently considered
non-facility.
We proposed site-of-service designations for several new places of
service as well as revisions to the site-of-service designation for
several existing places of service. We proposed to assign a facility
site-of-service when a facility or other payment will be made, in
addition to the physician fee schedule payment to the practitioner, to
reflect the practice expenses incurred in providing a service to a
Medicare patient. We proposed to designate all other places of service
as non-facilities.
The following lists the place of service numerical code, the place
of service and the proposed site of service designations:
04 Homeless Shelter--Non-facility
15 Mobile Unit--Non-facility, however, if a mobile unit provides a
service to a facility patient, the appropriate place-of-service code
for the facility should be used.)
20 Urgent Care Facility--Non-facility
26 Military Treatment Facility--Facility
41 Ambulance-Land--Facility
42 Ambulance Air or Water--Facility
52 Psychiatric Facility Partial Hospitalization--Facility
56 Psychiatric Residential Treatment Facility--Facility (NOTE: the
chart included in the June 28, 2002 proposed rule at 67 FR 43854
incorrectly listed this as ``NF''--nonfacility)
We would also clarify two items in the chart published at 67 FR
43854:
61 Comprehensive Inpatient Rehabilitation Facility was listed as a non-
facility. This is currently considered a facility setting and we did
not propose changing this designation. The reference to non-facility
was in error.
We also made reference to four place of service codes for Indian
Health Service and Tribal 638 facilities and clinics. We were
considering these place of service codes to implement section 432 of
the BIPA that authorizes physician fee schedule payments to Indian
Health Service and Tribal 638 facilities and clinics. At this time, we
do not believe these place of service codes will be needed for
implementation of these provisions and do not expect them to be in use.
We are implementing section 432 of BIPA by using specialty codes, not
place of service codes to identify HIS providers.
Comment: One organization expressed appreciation for our efforts to
update the list and had no comments. Others commented requesting
clarification of site-of-service designations for the provision of Part
B therapy services in nursing facilities. One commenter expressed
particular concern about the use of place of service
[[Page 79984]]
code 32 (Nursing facility) in conjunction with outpatient therapy
services in nursing facilities. This commenter suggested we reiterate
in the final rule the current policy that fee schedule payments for
Part B therapy services delivered in a nursing home are classified as
``non-facility.'' They also suggested we redefine ``site-of-service''
for physicians services to non-Part A patients in nursing centers as
``non-facility,'' thereby applying the higher PERVUs to those services.
We received one comment from a carrier medical director that indicated
that physician practice costs for treating patients in skilled nursing
facilities (POS 31) and nursing facilities (POS 32) are the same and
that both should be designated as either facility or non-facility. This
comment also suggested deleting the POS 32 designation (NH), or
changing its meaning to a ``SNF or NF stay not covered by Medicare.'' A
physician who practices in nursing facilities also argued that our
current policy makes no sense because physician practice costs are the
same regardless of whether Medicare makes a payment to the SNF for
institutional services. This physician would like us to pay at the
higher non-facility rate for physicians' services in both entities, but
acknowledged that using the lower facility rate would be more
consistent with the practice expense methodology.
Response: We regret any ambiguity or concern that we may have
created in our proposed rule. In general, for purposes of the physician
fee schedule, we will consider a site to be a facility if the site also
receives a Medicare payment for institutional services (that is, a
payment under the inpatient prospective payment system (PPS),
outpatient PPS, and SNF PPS). Thus, since there is a payment for
institutional services to a hospital when a beneficiary receives care
in an inpatient or outpatient setting, we consider the site to be a
facility site and make a payment under the physician fee schedule using
the facility rate. For entities other than those that receive a payment
for institutional services, we consider the site a non-facility site
and pay under the physician fee schedule using the higher non-facility
rate. However, there are special provisions with respect to outpatient
physical and occupational therapy services. These services are paid
under the physician fee schedule even when provided in institutional
sites like skilled nursing facilities. For this reason, for these
services we calculate only a non-facility rate. Since there is no
facility payment under Medicare, we use a non-facility rate to
determine payment.
Place of service code 32--Nursing facility--was designated as non-
facility in our June 2002 proposed rule. Place of service code 31--
Skilled nursing facility--is designated as facility. We have instructed
physicians to use place of service code 31 for patients who are in an
inpatient stay in a skilled nursing facility. Since Medicare is making
a payment for institutional services that includes compensation for
staff, supplies, and equipment, we are paying physicians using the
lower facility rate when place of service code 31 is used. If the
patient exhausts eligibility for SNF benefits and Medicare is no longer
making payment to the SNF for institutional services, we have
instructed physicians to use place of service code 32--Nursing
facility, to allow Medicare to provide compensation to the physician
for the costs of staff, supplies and equipment that would otherwise not
be included in our payment. However, since it may be burdensome to the
physician to determine when a patient is entitled to SNF Part A
benefits, we always allow the physician to use place of service 31 and
receive the lower facility payment for physicians' services.
While we acknowledge the arguments of those who have written and
contacted us both prior to and as part of the rulemaking process, we
are reluctant to make any further changes in our policy at this time.
We believe existing policy is equitable in that it does not overly
burden physicians to have to determine whether a patient is in a Part A
SNF inpatient stay. Physicians can always bill using place of service
code 31 and be paid at the facility rate. Further, we allow use of
place of service code 32 and our payment will be at the higher non-
facility rate that includes compensation for staff, equipment, and
supplies that would not otherwise be paid since there is no payment for
the institutional services. In response to the request that we change
the nomenclature describing place of service code 32, we will consider
this further as updates are made to place of service coding. However,
we note that Medicaid uses the place of service codes as well and the
needs of this program will also need to be considered.
Comment: One commenter suggested the descriptor for place of
service code 23, ``emergency room-hospital,'' should be changed to
``emergency department.''
Response: We will consider this comment when further updates are
made to place of service codes.
Comment: One commenter expressed concern about the proposed
designation change of site of service from non-facility to facility for
both psychiatric facility partial hospitalization and psychiatric
residential treatment facility. The commenter felt this would
negatively impact physician reimbursement and could provide
disincentive for psychiatrists to treat patients in these settings.
Response: By developing practice expense RVUs that differ by site,
we intend to reflect the relativity of resource costs incurred by
physicians between sites. Our policies are not intended to provide
financial incentives for a physician to select one site over another.
Physicians should make these decisions based on the clinical needs of
the patient. We believe that both psychiatric residential treatment
facilities and psychiatric partial hospitalization programs are
institutional sites that provide staff, equipment and supplies used in
providing medical services and physicians will not incur these resource
costs when providing services in these settings.
(F). Other Practice Expense Issues
(1) Budget Neutrality
We received several comments suggesting that budget neutrality for
changes in practice expense RVUs be applied to the physician fee
schedule conversion factor. The comments indicated that payment for CPT
codes with significant practice expense RVUs are reduced when there are
aggregate increases in work RVUs but services that are predominantly
composed of work RVUs are not significantly affected by aggregate
increases in practice expense RVUs. According to the comments, such a
modification would ``help assure more year-to-year stability in the
practice expense RVUs.'' Since affected professional groups have not
had an opportunity to consider and comment on this important issue, one
comment suggests that we include this issue in the proposed notice for
the CY 2004 physician fee schedule.
Response: We will consider this idea for the future.
(2) Computerized Tomographic Angiography
Comment: We received a number of comments about Computed
Tomographic Angiography (CTA). The comments indicated that, before CY
2001, CTA services were billed as a CT scan of an anatomical region
plus an add-on code for 3-D image reconstruction. New codes
specifically for CTA that incorporated the image reconstruction were
developed for use
[[Page 79985]]
in 2001. The comments indicated that the TC RVUs for CTA established in
the November 1, 2000 final rule appear as though they were calculated
by cross-walking the RVUs from the anatomically analogous existing CT
procedure codes without accounting for the 3-D image reconstruction.
Response: Based on this comment, we have adjusted the current CTA
codes to incorporate image reconstruction.
(3) TC for Cardiac Catheterization
Comment: We received several comments that noted the TC RVU for
cardiac catheterization declined in the notice of proposed rulemaking
even though the codes are included in the non-physician work pool.
These comments noted that the practice expense RVUs for all other non-
physician work pool services increased in the proposed rule. One
comment expressed concern over our proposal to derive the TC RVU from
the global RVU service. The comment indicated that we currently have no
direct cost inputs for these services and it is unlikely that the PEAC
will be able to provide them since cardiac catheterization is generally
provided in hospital settings. According to the commenter, there are
only 80-100 non-hospital facilities that provide cardiac
catheterization services. It is unlikely that we will have physician
survey information that reflects the costs of these providers since
they normally bill for the TC service and not the global service. The
comment stated the cardiologist normally bills independently for
professional services.
Response: We have addressed the comment regarding the TC for the
cardiac catheterization. The TC RVUs for these services are changing by
the same percentage as all other non-physician work pool services. We
understand that the PEAC may consider providing inputs for cardiac
catheterization services. This will address one aspect of the
commenter's concern. With respect to valid SMS data for cardiac
catheterization services, we will consider this issue along with others
as we address issues related to the non-physician work pool in CY 2003.
B. Anesthesia Issues
1. Five-Year Review of Anesthesia Work
Section 1848(b)(2)(B) of the Act indicates that, to the extent
practicable, we will use the anesthesia relative value guide with
appropriate adjustment of the anesthesia conversion factor (CF) in a
manner to assure that the fee schedule amounts for anesthesia services
are consistent with the fee schedule amounts for other services. The
statute also requires us to adjust the CF by geographic adjustment
factors in the same manner as for other physician fee schedule
services. Unlike other physician fee schedule services, anesthesia
services are paid using a system of base and time units. The base and
time units are summed and multiplied by a CF. The base unit is fixed
depending on the type of anesthesia procedure performed, and the time
units vary based on the length of the anesthesia time associated with
the surgical procedure. Thus, our payment will increase as anesthesia
time lengthens. The same anesthesia service provided in two different
surgeries will be paid different amounts if the associated anesthesia
time is different. This system differs from other physician fee
schedule services for which RVUs for physician work, practice expense,
and malpractice are summed and multiplied by a CF to determine payment.
Payment for these non-anesthesia procedures will not vary based on the
length of time it takes to perform the procedure in a specific
instance.
In the June 2002 proposed rule (67 FR 43855) we explained that the
law requires that we review RVUs no less often than every 5 years.
There is a fundamental difference in how the 5-year review applies to
anesthesia services versus medical and surgical services. In general,
for medical and surgical services, the relevant physician specialty
society and the AMA's RUC review the current and proposed work RVUs on
a code-by-code basis. The RUC will make recommendations to us on work
values for specific codes and, if we accept or modify them, the new
physician work RVUs will be used to determine payment. However, each
anesthesia service does not have a work RVU. Therefore, adjustments for
anesthesia work (and practice expense) are made to the anesthesia CF
and payment for all anesthesia services is affected.
The second 5-year review (with the exception of anesthesia
services) was completed and revised work RVUs were implemented in 2002.
For the second 5-year review, the American Society of Anesthesiologists
(ASA) contended that the work of anesthesia services remained
undervalued by almost 31 percent. They subsequently argued for a 26
percent increase in work RVUs based on additional discussions with the
RUC. More recently, based on their further analysis and discussion with
the RUC, the ASA asked for a 13.6 percent increase in work.
The ASA derived a work value for an anesthesia code by dividing the
anesthesia service into five uniform components. The five components
are preoperative evaluation, equipment and supply preparation,
induction period, postinduction period, and postoperative care and
visits. These components were assigned work RVUs based on a comparison
to non-anesthesia services paid under the physician fee schedule. The
work of these components is then summed. Using this method, the ASA
proposed new work values for 19 high volume anesthesia codes. These
work values can be compared to imputed work values derived from current
anesthesia payments for these services.
Under the CPT coding system, anesthesia for various common surgical
procedures is reported under a single anesthesia code. For example, CPT
code 00790 is used to report anesthesia for over 250 intraperitoneal
procedures in the upper abdomen.
The ASA studied one surgical procedure for each of the anesthesia
codes. The 19 codes represent a range of surgical procedure types,
including general surgery, vascular surgery, neurosurgery, urology,
orthopedics, cardiac surgery, and ophthalmology. The 19 procedures
reviewed account for about 35 percent of Medicare allowed charges for
anesthesia services.
During the second 5-year review of work, several RUC workgroups
reviewed the ASA comments and received supplemental information from
them through presentations. Most of these workgroups expressed concerns
about some of the work intensity values the ASA assigned to the
individual anesthesia components, most notably, the induction and post
induction time periods. For about 50 percent of the codes, the RUC was
confident that the anesthesia work value of the surveyed service was
similar to the anesthesia work values for all of the other surgical
services assigned to the given anesthesia code. For the remaining
codes, the RUC was not confident that the work values of the surveyed
code could be applied to other anesthesia services that would be
reported under that anesthesia code.
The workgroups also expressed concern about extrapolating the
results from the 19 surveyed codes to all anesthesia services. At its
April 2002 meeting, the final meeting addressing anesthesia work values
for the second 5-year review, the RUC concluded it was unable to make a
recommendation regarding modification to the physician work values for
anesthesia services. Specifically, the RUC stated:
The RUC, having carefully considered the information presented, and
having a
[[Page 79986]]
reasonable level of confidence in the data, which was presented and
developed by the ASA, is unable to make a recommendation to CMS
regarding modification to the physician work valuation of anesthesia
services.
While the RUC did not make a recommendation to us regarding
extrapolation, it forwarded its analysis to us for review.
In the June 2002 proposed rule (67 FR 43856), we indicated our
intent to review the information forwarded by the RUC and all comments
we received during the comment period.
Comment: The ASA commented that, based on work values accepted by
the RUC anesthesia workgroup, the final RUC data show that anesthesia
services are undervalued by a weighted average of 13.57 percent. The
ASA urged us to adjust the anesthesia CF accordingly. The American
Association of Nurse Anesthetists (AANA) endorsed the ASA's comments
and provided similar comments. Several certified registered nurse
anesthetists and anesthesiologists also wrote in support of an increase
in the anesthesia CF. We also received several comments alleging that
the ratio of Medicare payment to private payer payments for anesthesia
services is considerably less than the analogous ratio for medical and
surgical services.
Response: The ASA and the AANA have requested that we apply the
RUC's analysis of the 19 codes to all anesthesia codes. They believe
that the weighted average increase in anesthesia work values that
results from the RUC's analysis is representative of work values for
all other anesthesia codes.
For some codes, the RUC seemed confident that the anesthesia work
value of the surveyed code was similar to the anesthesia work values
for all of the other surgical services assigned to the given anesthesia
code. However, for almost half of the surveyed codes, the RUC did not
have confidence that the work values of the surveyed code could be
applied to any other anesthesia services that would be reported under
that anesthesia code.
Due to the uncertainty of the RUC with regard to extrapolation,
even within the family of surgical procedures assigned to a single
anesthesia code, we have weighted each of the 19 anesthesia codes only
by the anesthesia allowed charges associated with the single surveyed
surgical procedure. Using this methodology, anesthesia for the surveyed
surgical codes account for approximately 23 percent of all anesthesia
allowed charges. This results in an increase in anesthesia work for the
19 codes of 9.13 percent. However, because we will apply a payment
increase only to these codes, we are increasing the physician work
portion of the anesthesia conversion factor by 2.10 percent which
reflects a 9.13 percent increase in payment applied to the 23 percent
of total anesthesia charges represented by the 19 codes. We provide
more detail on how this increase is applied to the anesthesia
conversion factor in the section VIII of this final rule.
Final Decision
We are increasing the physician work component of the anesthesia
conversion factor by 2.10 percent to reflect a 9.13 percent increase in
payment applied to 23 percent of anesthesia allowed charges. This as an
interim adjustment that is subject to comment.
2. Add-On Anesthesia Codes
Payment for anesthesia services is based on the sum of an
anesthesia code-specific base unit value plus anesthesia time units
multiplied by an anesthesia CF. Under our current policy at Sec.
414.46(g), if the physician is involved in multiple anesthesia services
for the same patient during the same operative session, payment is
based on the base unit assigned to the anesthesia service having the
highest base unit value and anesthesia time that encompasses the
multiple services.
Claims processing manuals instruct the carrier on the method for
handling anesthesia associated with multiple or bilateral surgical
procedures. Under the Medicare Carrier Manual (MCM) 4830 D, the
physician reports the anesthesia procedure with the highest base unit
value with the multiple procedures modifier-51 and total time of
anesthesia for all surgical procedures. Thus, the carrier is
recognizing payment for one anesthesia code.
In CYs 2001 and 2002, the CPT included new add-on anesthesia codes.
The objective is that the add-on code would be billed with a primary
code, each code having base units. We believe that anesthesia add-on
codes should be priced differently from other multiple anesthesia
codes. We proposed to revise the regulations at Sec. 414.46(g) to
include an exception to the usual multiple anesthesia services policy
for add-on codes.
Comment: The ASA, AANA and the AMA expressed support for our
adopting a payment policy for add-on anesthesia codes. The ASA asked
that we clarify the policy for recognition of base or time units or
both for add-on anesthesia codes.
Response: Of the 259 anesthesia codes, there are two codes, called
primary codes that may have add on codes, under certain circumstances.
These are:
Primary code: CPT code 01967
Add-on code: CPT code 01968 or 01969
Primary code: CPT code 01952
Add-on code: CPT code 01953
Based on comments received, we understand that the ASA is seeking
to bill only the base unit of the add-on code (01953) when it is billed
with the primary code 01952. The time of the add-on code is to be
included in the time of the primary code. Thus, all anesthesia time is
attributable to the primary code.
The ASA is seeking to bill both the base and time of the add-on
code, 01968 or 01969, when either is billed with the primary code
01967. Thus, the anesthesia provider would report the base and time
units of both the primary and the add-on code.
We recognize that the general policy for add-on codes is that the
carrier should allow only the base unit of the add-on code. As with
multiple anesthesia services, the anesthesia time of the add-on code
would be reported with the time of the primary code. In other words,
anesthesia time is reported for all the underlying surgical services.
However, in discussions with the ASA, we have learned that many
third party payors have more restrictive time units policies for
obstetrical anesthesia codes than for other anesthesia codes. If the
time of the add-on code, such as 01968 or 01969, were reported with the
primary code, the time units of the add-on code might be undervalued.
To prevent this result, we are requiring that (for the two obstetrical
anesthesia add-on codes) the anesthesia time be separately reported
with each of the primary and the add-on code based on the amount of
time appropriately associated with either code.
Further, we think the policy on multiple procedure codes as well as
add-on codes is an operational policy and should be addressed only in
program operating instructions. As a result, we are revising the
regulation text at Sec. 414.46(g) accordingly.
Final Decision
We are allowing the carriers to recognize the base unit of the add-
on codes. However, for the obstetrical add-on codes, the carrier may
recognize both the base unit and the anesthesia time associated with
the add-on code.
C. Pricing of Technical Components (TC) for Positron Emission
Tomography (PET) Scans
Currently, all components of HCPCS code G0125, Lung image PET scan,
are
[[Page 79987]]
nationally priced. However, the TC and the global value for all other
PET scans are carrier-priced. To keep pricing consistent with other PET
scans, we proposed to have carriers price the TC and global values of
HCPCS code G0125.
Comment: We received comments from one specialty organization in
support of carrier pricing. We received comments from another specialty
organization and a few providers stating that they were concerned that,
contrary to our stated purpose, this change would lead to inconsistent
payment by carriers. The commenters believe that some carriers use the
nationally-established TC RVUs for G0125 as a reference for payment for
the other PET scans.
Response: While we understand the commenter's concerns, we believe
the RVUs assigned before CY 2003 for the TC of G0125 do not accurately
reflect the resources used for furnishing this service, which is why we
proposed carrier pricing. Thus, using G0125 as a reference code for
pricing could lead to inappropriate pricing for all services. We
believe that adopting carrier-pricing, instead of a national fee
schedule amount, for the TC of G0125 will result in more appropriate
pricing for the TC of all PET scans. Carriers have a variety of methods
that they use to establish payment for codes. We believe using some of
these alternative methods will lead to more accurate pricing for this
service.
Final Decision
We will finalize our proposal to allow carriers to price the TC and
global values of code G0125.
D. Enrollment of Physical and Occupational Therapists as Therapists in
Private Practice
In the November 2, 1998 final rule (63 FR 58814), we defined
private practice for physical therapists (PTs) or occupational
therapists (OTs) to include a therapist whose practice is in an--
[sbull] Unincorporated solo practice;
[sbull] Unincorporated partnership; or
[sbull] Unincorporated group practice.
The term ``private practice'' also includes an individual who is
furnishing therapy services as an employee of one of the above, a
professional corporation, or other incorporated therapy practice. Some
carriers and fiscal intermediaries have interpreted the regulation to
mean that OTs and PTs employed by physicians cannot be enrolled as
therapists in private practice. In these carrier areas, therapy
services provided in a physician's office must instead be billed as
incident to a physician's service.
A specialty society representing OTs has requested that carriers be
able to enroll OTs in physician-directed groups as OTs in private
practice. A group representing PTs believes that provider numbers
should be issued only to PTs working as employees in practices owned
and operated by therapists.
We proposed to clarify national policy and revise Sec. Sec. 410.59
and 410.60 to state we would allow enrollment of therapists as PTs or
OTs in private practice when employed by physician groups. We believe
that this reflects actual practice patterns, will permit more flexible
employment opportunities for therapists and will also increase
beneficiaries' access to therapy services, particularly in rural areas.
Comments: We received many comments from associations, specialty
groups, therapists, and the public that strongly support the proposed
clarification that would allow carriers and fiscal intermediaries to
enroll therapists as PTs or OTs in private practice when they are
employed by physician groups. However, one association urged us to
confirm that this policy extends to therapists employed by a non-
professional corporation.
Response: We agree and will change the regulation to reflect that
carriers and fiscal intermediaries can enroll therapists as PTs or OTs
in private practice when the therapist is employed by physician groups
or groups that are not professional corporations, if allowed by State
law.
Comments: Several commenters suggested that we state clearly that
carriers and fiscal intermediaries are required to enroll physician-
employed therapists, who are otherwise qualified, and that carriers and
fiscal intermediaries may not refuse to enroll therapists simply on the
basis of employment. They requested that the regulation state
specifically that Medicare contractors must enroll therapists as PTs or
OTs in private practice when they are employed or under contractual
relationships with physician groups or groups that are not professional
corporations.
Response: We agree and will change the Medicare Carriers and Fiscal
Intermediaries Manuals' to reflect that carriers and fiscal
intermediaries ``will'' enroll Medicare therapists as PTs or OTs in
private practice for purposes of Medicare when the therapists are
employed by physician groups or groups that are not professional
corporations. However, we do not believe that we need to specify
further employee-employer relationships, which are detailed in the
Medicare Carriers Manual, Part 3, Chapter III.
Comment: One commenter believed that we should not enroll PTs who
are employees of physicians' offices as PTs or OTs in private practice
but, instead, should establish a separate section of the regulations
that would govern the issuance of provider numbers to PTs who are
employees in physicians' offices, and give these therapists a different
designation. The commenter suggested we also include protections that
currently exist when a non-physician practitioner provides services in
a physician's office and the physician bills for these services under
the physician's Medicare provider number.
Response: We disagree with this comment. We have established
procedures for issuing provider numbers that we believe are adequate.
The proposed changes to the regulations reflect actual practice
patterns, will permit more flexible employment opportunities for all
therapists, and also increase beneficiary access to therapy services,
particularly in rural areas. Therapists still have the flexibility of
providing outpatient therapy services incident to a physicians service
if they so choose. However, the services must meet the incident to
requirements at Sec. 410.26.
Final Decision
We will finalize our proposal to revise Sec. Sec. 410.59 and
410.60 with the modifications noted above.
E. Clinical Social Worker Services
In the June 28, 2002 proposed rule, (67 FR 43846), we indicated we
would be addressing comments received on the October 19, 2000 proposed
rule entitled, ``Clinical Social Worker Services,'' (65 FR 62681), in
this final rule. Upon further review, we have determined that we will
not include this issue in this final rule, but will address it in
future rulemaking.
F. Medicare Qualifications For Clinical Nurse Specialists
Currently, the qualifications for a clinical nurse specialist (CNS)
include a requirement that a CNS must be certified by the American
Nurses Credentialing Center (ANCC). We proposed to revise this
particular requirement under the CNS qualifications because of concerns
expressed that the ANCC does not provide certification for CNSs who
specialize in fields such as oncology, critical care, and
rehabilitation. Additionally, we noted that the proposed revision of
the certification requirement for CNSs is consistent with
[[Page 79988]]
the certification requirement under the nurse practitioner (NP)
qualifications. Accordingly, we proposed specifically to revise section
Sec. 410.76(b)(3) to read as follows:
``Be certified as a clinical nurse specialist by a national
certifying body that has established standards for clinical nurse
specialists and that is approved by the Secretary.''
Comments and Responses
We received comments on the proposed revision to the CNS
certification requirement from professional nursing societies, a
specialty nursing certification corporation, a college of radiology, a
major nurses association, a provider of health care and elder care and,
several independent clinical nurse specialists.
Comment: We received comments indicating that the current CNS
certification requirement poses a serious threat to ensuring Medicare
beneficiary access to quality care because it restricts CNSs who are
not certified by the ANCC from qualifying for Medicare payment. The
ANCC does not certify CNSs in oncology, rehabilitation, acute care or
critical care. Since the current CNS certification requirement
inherently precludes CNSs who are certified in oncology from Medicare
payment, the number of nurses available to care for Medicare
beneficiaries with cancer is limited. The proposed change to the CNS
qualifications is more inclusive, and it will enable the 415 oncology
CNSs who hold Advanced Oncology Nursing Certification (AOCN) provided
by the Oncology Nursing Certification Corporation (ONCC) to meet the
certification criteria for CNSs and therefore, qualify for Medicare
payment. An independent CNS stated that as a palliative care CNS, her
institution required advanced certification that is not offered by the
ANCC in many specialty areas of practice. However, the American Board
of Nursing Specialties is the credentialing board for the ONCC, which
is the only national certification that an advanced practice nurse can
obtain specific to his or her field of expertise. All of the commenters
support the proposed revision to the CNS certification requirement
because they stated that overall, the certification criteria for CNSs
will be consistent with the certification criteria for NPs and the
requirement will ensure that Medicare beneficiaries receive services
from advanced practice nurses who are certified by a national
certifying body.
Response: It has not been our intention to be overly restrictive in
our program requirements and consequently prevent qualified CNSs who
specialize in areas of medicine other than those certified by the ANCC
from participating under the Medicare program's CNS benefit and
rendering care to patients in need of specialized services. The intent
of the revised CNS certification requirement is to recognize all
appropriate national certifying bodies for CNSs as the program does for
NPs.
Result of Evaluation of Comments
We are implementing the proposed revision to the CNS certification
requirement under the CNS qualifications at Sec. 410.76.
G. Process To Add or Delete Services to the Definition of Telehealth
In the June 2002 proposed rule (67 FR 43862), we proposed to
establish a process for adding or deleting services from the list of
telehealth services, and to add specific services to the list of
telehealth services for CY 2003.
We stated that we would accept proposals from any interested
individuals or organizations from either the public or the private
sectors, for example, from medical specialty societies, individual
physicians or practitioners, hospitals, and State or Federal agencies.
We also mentioned that we might internally generate proposals for
additions or deletions of services.
We stated that we would post instructions on our website outlining
the steps necessary to submit a proposal. Please see the June 2002
proposed rule for the items that were to be addressed, the assignment
of categories, and the outcomes.
We proposed to remove a service from the telehealth list of
services if, upon review of the available evidence, we determine that a
telehealth service is not safe, effective, or medically beneficial when
performed as a telehealth service.
We proposed to make additions or deletions to the list of
telehealth services effective on a CY basis. We proposed to use the
annual physician fee schedule proposed rule published in the summer and
the final rule published by November 1 each year as the vehicle for
making these changes. Requests must be received no later than December
31 of each CY to be considered for the next proposed rule.
Based upon further review of the comments submitted in response to
the proposed rule for CY 2002, we believe that the psychiatric
diagnostic interview is similar to the telehealth services listed in
the statute. Specifically, we believe this service would meet the
criteria set forth in Category 1 of the proposed process for adding
services. Therefore, we proposed to add psychiatric diagnostic
interview examination as represented by CPT code 90801 to the list of
telehealth services and proposed to revise Sec. Sec. 410.78 and 414.65
to reflect the proposed addition to the list of telehealth services.
Comment: We received many comments expressing support for our
proposed process for adding and deleting telehealth services. The
commenters indicated that our proposed criteria for reviewing submitted
requests are reasonable and provide a viable mechanism for adding
existing services to the list of telehealth services. However, as part
of our review, one specialty college suggested that the CPT editorial
panel be an integral part of our process. The commenter stressed that
reviewing codes and determining how these services can be furnished is
the CPT editorial panel's area of expertise. With regard to deletion of
services, one association urged us to consult with the appropriate
medical society members to obtain clinical evidence based on peer-
reviewed information and medical journal articles before deleting
services from the list of telehealth services.
Response: Section 1834(m) of the Act requires us to develop a
process specifically for adding or deleting telehealth services on an
annual basis. The mandate for this statutory provision is separate and
distinct from the role of the AMA CPT editorial panels in developing
new codes and/or defining services for the CPT compendia. It would not
be appropriate to make the CPT editorial panel an integral part of the
process to add or delete services from the list of telehealth services.
We will review submitted requests for addition and deletion based on
the criteria discussed in this final rule and welcome input from
medical professionals with expertise in the service being reviewed as
part of the rulemaking process.
We are clarifying from the proposed rule that a decision to remove
a service from the list of telehealth services would be made using
evidence-based, peer-reviewed data which indicate that a specific
telehealth service is not safe, effective, or medically beneficial.
Such determination would not be made under section 1862(a)(1)(A) of the
Act. Therefore, a decision to delete a service under this process would
only apply to the list of Medicare telehealth services.
Comment: One commenter suggested that we publish a summary of any
requests that are rejected.
Response: As stated in the proposed rule, we will use the annual
physician fee schedule as a vehicle to make changes to the list of
telehealth services.
[[Page 79989]]
As part of the rulemaking process, we will publish a summary in the
proposed rule of the requests that we receive with an explanation as to
why a service is added, deleted, or a request is rejected.
Comment: One commenter requested that, if possible, we look for
ways to shorten the time frame between the submittal of a request and
the actual implementation. The commenter stated that actual
implementation of an additional telehealth service could take a year or
more from the date of the request.
Response: The statute requires us to establish a process that
provides for the addition or deletion of telehealth services on an
annual basis. We understand that in some cases our review and
subsequent implementation of a decision to accept a request may take up
to and possibly more than a full year. However, we believe that using
the annual physician fee schedule rulemaking schedule would be the most
efficient and time sensitive mechanism for publishing changes to the
list of telehealth services.
A national coverage determination (NCD) is a possible alternative
to the rulemaking process for adding or deleting telehealth services.
In formulating the proposed process to add services to the list of
telehealth services, we considered using the NCD process. For instance,
under this option, all requests for addition, whether the request is
considered an existing or new service, would be required to complete
the requirements for an NCD. We rejected this option because we believe
that many telehealth applications are existing services provided
through a different delivery mechanism. We believe that subjecting all
requests for addition to the evidence-based requirements of an NCD
would be unnecessary, and would be contrary to the public interest.
Comment: A large number of commenters applauded the addition of the
psychiatric diagnostic interview examination to the list of telehealth
services. Commenters generally agreed that the psychiatric diagnostic
interview includes components that are comparable to an initial office
visit or consultation, which are currently telehealth services.
Response: We agree with the comment.
Comment: We received two comments regarding general telehealth
policy. One commenter urged us to expand the definition of an
originating site. For example, the commenter believes that hospitals
with inadequate physician ratios relative to the treatment of acute
ischemic stroke patients should be considered as an originating site,
regardless of geographic location or whether the hospital is located in
a designated health professional shortage area. The other comment
pertained to the physician or practitioner who provides the telehealth
service at the distant site. In this regard, one association encouraged
us to support the addition of speech language pathologists and
audiologists to the list of practitioners that may provide and receive
payment for telehealth services.
Response: The statute permits hospitals to serve as originating
sites for any Medicare telehealth service as long as the hospital is
located in a rural HPSA or in a non-MSA county. Thus, the commenter
would be able to serve as an originating site for the treatment of
acute ischemic stroke patients if the hospital is located in these
geographic areas. The statute is explicit regarding the types of
practitioners who can provide and receive payment for telehealth
services. Speech language pathologists and audiologists are not
included within the list of medical professionals that may provide and
or receive payment for telehealth services at the distant site. We are
reviewing these issues as part of a report to the Congress as required
by the BIPA.
Result of Evaluation of Comments
We are adopting the process to add or delete telehealth services
and adding the psychiatric diagnostic interview examination to the list
of telehealth services as stated in the proposed rule. Additionally, we
are referencing the process to add or delete services at new Sec.
410.78(f).
H. Definition for ZZZ Global Periods
Services with ZZZ global periods are add-on services that can be
billed only with another service. Before CY 2003, we paid only the
incremental intraservice work and practice expense RVUs associated with
the add-on service for a code with a global indicator of ZZZ. Any pre-
service or post-service work associated with a service with a global
indicator of ZZZ is considered accounted for in the base procedure with
which these add-on services must be billed. However, based on comments
from the RUC and specialty societies that some add-on services contain
separately identifiable post-service work and practice expense RVUs, we
proposed to revise the current definition of a ZZZ global period as
follows:
``ZZZ = Code related to another service and is always included in
the global period of the other service (Note: Physician work is
associated with intra-service time and in some instances the post-
service time).''
Comments: The commenters supported this change. However, several
specialty organizations, as well as the RUC, stated that there are
instances when pre-service time should be considered, and they
recommended that we amend the definition to include pre- and post-
service time.
Response: We agree with the commenters and will revise the
definition to consider pre-service time as well post-service time.
However, when a code with a ZZZ global indicator is considered by the
RUC or PEAC, we will require that all base codes with which the ZZZ
codes are billed are also considered by the RUC and PEAC to assure that
both physician work and practice expense RVUs are appropriate for the
base and add-on codes and to assure that no duplicate payment is made.
Result of Evaluation of Comments
The definition of a ZZZ global period will be revised as follows:
``ZZZ = Code related to another service and is always included in
the global period of the other service (Note: Physician work is
associated with intra-service time and in some instances the pre- and
post-service time).''
I. Change in Global Period for CPT Code 77789 (Surface Application of
Radiation Source)
Based on a suggestion from the RUC, we proposed to change the
global period for CPT code 77789 (surface application of radiation
source) from a 90-day global period to a 000-day global period. We
stated that we did not need to adjust the current work values or the
practice expense inputs for supplies and equipment, but we would adjust
the clinical staff practice expense inputs to reflect that there is no
post-procedure visit.
Comment: The commenters supported this change and noted that the
PEAC attributed clinical times for this CPT code of 34 minutes for the
registered nurse and 6 minutes for the physicist. The commenters did
not believe the practice expense RVUs should change significantly, if
at all, as a result of this adjustment in the global period.
Response: We had not received the PEAC recommendations at the time
the proposed rule was written, and we proposed a change to the original
CPEP inputs that included time for a post-procedure visit. We have
reviewed and accepted the above PEAC recommended clinical staff times.
[[Page 79990]]
Result of Evaluation of Comments
We are changing the global period for CPT code 77789 (surface
application of radiation source) from a 90-day global period to a 000-
day global period as proposed.
J. Technical Change for Sec. 410.61(d)(1)(iii) Outpatient
Rehabilitation Services
Based on comments received that Sec. 410.61(d)(1)(iii) incorrectly
references ``physical'' therapy when it should reference
``occupational'' therapy, we proposed to revise Sec. 410.61(d)(1)(iii)
to correct this error.
Final Decision
No comments were received on this proposed technical correction. We
will correct Sec. 410.61(d)(1)(iii) by replacing the word ``physical''
with ``occupational'' as proposed.
K. HCPCS G-Codes From June 28, 2002 Proposed Rule
In the June 28, 2002 rule we proposed the following new HCPCS G
codes.
1. Codes for Treatment of Peripheral Neuropathy
Effective for services furnished on or after July 1, 2002, Medicare
will cover an evaluation (examination and treatment) of the feet every
six months for individuals with a documented diagnosis. This policy is
a national coverage determination.
G0245: Initial physician evaluation of a diabetic patient with
diabetic sensory neuropathy resulting in a loss of protective sensation
(LOPS) which must include the procedure used to diagnose LOPS; a
patient history; and a physical examination that consists of at least
the following elements--
(a) Visual inspection of the forefoot, hindfoot and toe-web spaces;
(b) Evaluation of protective sensation;
(c) Evaluation of foot structure and biomechanics;
(d) Evaluation of vascular status and skin integrity;
(e) Evaluation and recommendation of footwear; and
(f) Patient education.
We proposed to crosswalk work and malpractice RVUs and the practice
expense inputs from CPT code 99202, a level two, new patient office
visit code. We proposed to revalue the practice expense RVUs using the
practice expense methodology once we have utilization data for these
codes.
G0246: Follow-up evaluation of a diabetic patient with diabetic
sensory neuropathy resulting in a loss of protective sensation (LOPS)
to include at least the following, a patient history and physical
examination that includes--
(a) Visual inspection of the forefoot, hindfoot and toe-web spaces;
(b) Evaluation of protective sensation;
(c) Evaluation of foot structure and biomechanics;
(d) Evaluation of vascular status and skin integrity;
(e) Evaluation and recommendation of footwear; and
(f) Patient education.
We proposed to crosswalk the work and malpractice RVUs from CPT
code 99212, a level two, established-patient office visit code. We also
proposed to crosswalk the practice expense inputs from CPT code 99212
and to revalue the practice expense RVUs using the practice expense
methodology once we have utilization data for these codes.
G0247: Routine foot care of a diabetic patient with diabetic
sensory neuropathy resulting in a loss of protective sensation (LOPS)
to include if present, at least the following--
(a) Local care of superficial wounds;
(b) Debridement of corns and calluses; and
(c) Trimming and debridement of nails.
We proposed to crosswalk the work and malpractice RVUs and the
practice expense inputs from CPT code 11040, Debridement; skin; partial
thickness. We would revalue the practice expense RVUs using the
practice expense methodology once we have utilization data for this
code.
Comment: The American Podiatric Medical Association (APMA) believes
that the RVUs assigned to HCPCS codes G0245 and G0246 are too low. They
do not believe that the assigned RVUs account for the physician work
and practice expense required to perform those services. They
recommended that we crosswalk the RVUs from CPT codes 99203 and 99213
to these codes instead of the crosswalk we actually used, from CPT
codes 99202 and 99212. They also commented that the RVUs assigned for
G0247 were too low and should be increased as the assigned RVUs did not
account for the required physician work. Alternatively, they
recommended that we delete G0247 and allow a physician to report CPT
codes that described similar services. A large medical clinic commented
that they were not sure why CMS had implemented these codes. They
believe that if the only reason for creating codes was to permit us to
track the services, this reason is insufficient because the codes cause
significant administrative burden to physician practices. They believe
that providers could use other CPT codes to report these services
instead of the G codes. A carrier medical director familiar with these
services commented that G0247 is overvalued because the most common
service provided using this code will be toe nail trimming and
debridement and that the CPT code for toe nail trimming and debridement
is valued much lower then G0247.
Response: These G codes were created to implement a national
coverage determination (NCD). The coverage determination was very
specific with regard to the required components of each service.
Furthermore, the NCD specifically allowed these services to be
performed no more than every six months and allowed the initial visit
to be performed only once per physician for the lifetime of a
beneficiary. Creation of these G codes allows us to implement the
coverage decision, especially with regard to the required frequency
limitation and to track the utilization of these services while
minimizing provider burden. Reporting these services with CPT
evaluation and management (E/M) codes and procedure codes would have
resulted in numerous post-pay audits while creation of a modifier to be
used in conjunction with such CPT codes would have been quite
burdensome and resulted in just as many post pay audits. Therefore, we
plan to continue requiring these G codes for reporting of these
services.
With regard to the valuation of these services we will finalize the
proposed RVUs. This service is provided to those diabetic beneficiaries
who are ``at risk'' for foot-care problems but who do not have an
injury or illness of the foot. Any service provided to a diabetic
beneficiary with an illness or injury to the foot (for example, foot
pain, foot ulcer, foot infection) should be reported using the
appropriate CPT codes (for example, E/M service, debridement service).
Furthermore, the requirements for provision of care to LOPS patients
are clearly set forth in the NCD. Nothing beyond those requirements
need be performed in order to report a LOPS HCPCS code. Careful
scrutiny of the requirements for provision of initial LOPS services
shows that they are most similar to the requirements of a level 2 E/M
service. The lack of illness, injury, or deformity in these patients
and the requirements that the practitioners need only to take a history
and to examine the foot are quite similar to the requirements of CPT
code 99202: an expanded problem focused history, an expanded problem
focused examination, and straightforward medical decision making. For
follow-up patients who do not have an illness, injury, or deformity,
the requirements of
[[Page 79991]]
the NCD are quite similar to the requirements of CPT code 99212: a
problem focused history, a problem focused examination, and
straightforward medical decision making. With regard to G0247, we agree
with the carrier medical director who stated that the most commonly
performed procedure would be toenail trimming and or debridement.
However, review of the work RVUs for CPT codes 11719 (0.17), 11720
(0.32), 11721 (0.54), 11055 (0.43), 11056 (0.61), 11057 (0.79), and
11040 (0.50) shows that we have properly valued this service. We
believe that a work value of 0.50 RVUs appropriately accounts for what
is likely to be the typical combination of services provided to
eligible beneficiaries.
Result of Evaluation of Comments
We will continue requiring these G codes for reporting of these
services and are finalizing the RVUs as proposed.
2. Current Perception Sensory Nerve Conduction Threshold Test
(SNCT)
G0255: Current Perception Threshold/Sensory Nerve Conduction Test,
(SNCT) per limb, any nerve
We proposed a G-code that represents SNCT as a diagnostic test used
to diagnose sensory neuropathies. This test is noninvasive and uses a
transcutaeous electrical stimulus to evoke a sensation. However, we
determined that there is insufficient scientific or clinical evidence
to consider the use of this device as reasonable and necessary within
the meaning of section 1862(a)(1)(A) of the Act and indicated Medicare
will not pay for this type of test.
Comment: One commenter requested that the descriptor for this code
be revised, as the current descriptor ``Current Perception Threshold/
Sensory Nerve Conduction Test'' is very similar to other codes for
example, the short descriptor for CPT code 95904 is ``Sense Nerve
Conduction Test''. The commenter recommended changing the descriptor
for this G code to ``Current Perception Threshold Test''.
Response: We appreciate the commenters bringing this to our
attention and have revised the short descriptor for this G code to
address the concern they raised. The short descriptor for this G code
will be ``Current perception threshold test''.
Result of Evaluation of Comments: We will finalize our proposal for
G0255 but will revise the short descriptor as discussed above.
3. Positron Emission Tomography (PET) Codes for Breast Imaging
Medicare has expanded the coverage indications for PET scanning to
include imaging for breast cancer, and we have created codes that
describe staging and restaging after or prior to the course of
treatment of breast cancer. We also created a PET scan code to evaluate
the response to treatment of breast cancer.
PET imaging for initial diagnosis of breast cancer and/or surgical
planning for breast cancer are described by a CPT code, but Medicare
will not cover the procedure for this diagnosis.
G0252: PET imaging for initial diagnosis of breast cancer and /or
surgical planning for breast cancer (for example, initial staging of
axillary lymph nodes), not covered by Medicare.
We stated that this code is not covered by Medicare because there
is a national non-coverage determination for the use of PET imagery for
the initial diagnosis of breast cancer and initial staging of axillary
lymph nodes.
G0253: PET imaging for breast cancer, full and partial-ring PET
scanners only, staging/restaging after or prior to course of treatment.
G0254: PET imaging for breast cancer, full and partial-ring PET
scanners only, evaluation of response to treatment, performed during
course of treatment.
We proposed that the TC and global for both of these codes be
carrier-priced. For the PC for codes G0253 and G0254, we proposed to
make the PC work RVU equal to 1.87 and use practice expense RVUs of
0.58 and malpractice RVUs of 0.07 since there are no direct inputs for
PC services.
Comments: Commenters expressed appreciation for creation of these G
codes; however, one commenter was concerned that the TC and global
component of these codes will be carrier-priced which, the commenter
contended, could lead to widely varying and unjustifiably low payment
rates, particularly if there is no national benchmark.
Response: Carriers use a variety of methods and resources when
developing payment rates for services that they are responsible for
pricing. We do not believe that having the carriers price these codes
will lead to unjustifiably low payment rates.
Result of Evaluation of Comments: We are adopting the proposals for
these G codes; however, we have made editorial revisions to the
descriptors for G0252 and G0253 to more accurately describe the service
provided. The revised descriptors are as follows:
G0252: PET imaging, full and partial-ring PET scanners only, for
initial diagnosis of breast cancer and /or surgical planning for breast
cancer (for example, initial staging of axillary lymph nodes).
G0253: PET imaging for breast cancer, full and partial-ring PET
scanners only, staging/restaging of local regional recurrence or
distant metastases (that is, staging/restaging after or prior to course
of treatment).
4. Home Prothrombin Time International Normalized Ratio (INR)
Monitoring for Anticoagulation Management
For services furnished on or after July 1, 2002, Medicare will
cover the use of home prothrombin time or INR monitoring in a patient's
home for anticoagulation management for patients with mechanical heart
valves. A physician must prescribe the testing. The patient must have
been anticoagulated for at least three months prior to use of the home
INR device, and the patient must undergo an education program. The
testing with the device is limited to a frequency of once per week.
G0248: Demonstration, at initial use, of home INR monitoring for a
patient with mechanical heart valve(s) who meets Medicare coverage
criteria, under the direction of a physician; includes: demonstration
use and care of the INR monitor, obtaining at least one blood sample
provision of instructions for reporting home INR test results and
documentation of a patient's ability to perform testing.
We proposed that this code be assigned no work RVUs and .01
malpractice RVUs. For the practice expense inputs, we proposed 75
minutes of RN/LPN/MTA staff time; a supply list including four test
strips, lancets and alcohol pads, a patient education booklet, and
batteries for the monitor; and equipment consisting of a home INR
monitor. These proposed inputs result in an estimated practice expense
RVU of 2.92.
G0249: Provision of test materials and equipment for home INR
monitoring to patient with mechanical heart valve(s) who meets Medicare
coverage criteria. Includes provision of materials for use in the home
and reporting of test results to physician; per 4 tests.
We proposed this code be assigned no work RVUs and .01 malpractice
RVUs. For the practice expense inputs, we proposed 13 minutes of RN/
LPN/MTA staff time; a supply list including four test strips, lancets
and alcohol pads, and equipment consisting of a home INR monitor. These
resulted in an estimated practice expense RVU of 2.08.
G0250: Physician review/interpretation and patient management of
home INR test for a patient with mechanical heart valve(s) who meets
other coverage criteria; per 4 tests (does not require face-to face
service)
[[Page 79992]]
We proposed this code be assigned 0.18 work RVUs and .01
malpractice RVUs. We stated that there would be no direct practice
expense inputs for this code, and the use of the practice expense
methodology to develop the indirect practice expense of the physician
performing this service resulted in an estimated practice expense RVU
of 0.07. Note: Subsequent to the publication of the proposed rule, we
updated the payment rates for home PT/INR monitoring via Program
Memorandum AB-02-112 (July 31, 2002). Based on a correction in the
practice expense methodology used to calculate the practice expense
RVUs issued in the Program Memorandum AB-02-064 on May 2, 2002 and
included in the June 28, 2002 proposed rule there was an increase in
practice expense RVUS for G0248 to 3.06 and to 3.28 for G0249 effective
for services performed after October 1, 2002.
Comment: A manufacturer of equipment used to perform INR monitoring
at home was concerned that the proposed RVUs for the HCPCS codes used
to report Home INR monitoring services were inconsistent with the RVUs
published in Program Memorandum AB-02-112 issued on July 31, 2002.
(This program memorandum was issued to correct an error that had
resulted in the original RVUs for these codes being too low.) The
commenter also requested that we clarify the descriptor for the HCPCS
code used to report provision of Home INR materials to assure that
Medicare only paid for properly controlled INR tests that were
consistent with FDA labeling.
Response: The aforementioned program memorandum was issued after
the Proposed Rule (NPRM) was published. We agree with the commenter
that the physician fee schedule for 2003 should reflect the RVUs as
published in the July 31, 2002 program memorandum and will make this
change.
With regard to changing the descriptors for the HCPCS code used to
report provision of home INR test materials, we will review this issue
and, if appropriate, clarify the descriptor as requested for CY 2004.
Comment: Several commenters asked CMS to expand the covered
indications for home INR monitoring.
Response: We direct these commenters to the published process for
requesting a national coverage determination. In order for the covered
indications to be expanded on a national level this process must be
followed.
Comment: A manufacturer of equipment used for home INR monitoring
pointed out that there were several companies who manufacture test
strips. Producing a test result may require one or three test strips
depending on the manufacturer. Additionally, the cost of test strips
from each manufacturer is different and Medicare based its payment on
the cost of a test strip from only one manufacturer.
Response: We agree that there are several types of test strips
available. However, we also understand that not all manufacturers are
currently providing new home INR monitoring equipment and that the
market share for each product is in flux. We will review the
appropriate payment for this service, including the appropriate amount
to include for test strips, after we have sufficient experience paying
for this service. The earliest time that we could consider proposing a
change in payment rate would be for the 2005 physician fee schedule; at
that time, we would have 18 months worth of payment data upon which we
could base a proposal.
Result of Evaluation of Comments
As indicated above, payment for CY 2003 for these services will
reflect the corrections made in the Program Memorandum AB-02-112 issued
on July 31, 2002.
5. Bone Marrow Aspiration and Biopsy on the Same Date of Service
We proposed a new G code (GXXXX) that reflects a bone marrow biopsy
and aspiration procedure that is performed on the same date, at the
same encounter, through the same incision, based on our understanding
that the typical case involves an aspiration and biopsy through the
same incision.
We proposed physician work RVUs of 1.56 and malpractice RVUs of
0.04. We also proposed to crosswalk the practice expense inputs from
CPT code 38220, Bone marrow aspiration, with the assignment of an
additional five minutes of clinical staff time. These proposed inputs
in the practice expense methodology resulted in an estimated practice
expense RVU of 3.32 in the nonfacility setting and 0.60 in the facility
setting.
We also noted that if the two procedures, aspiration and biopsy,
are performed at different sites (for example, contralateral illiac
crests, sternum/illiac crest, two separate incisions on the same iliac
crest or two patient encounters on the same date of service), the CPT
codes for aspiration and biopsy would each be used along with the -59
modifier.
Comment: Two commenters, one representing a provider and the other
a specialty organization, agreed with the proposal to create a G code
for bone marrow aspiration and biopsy on the same date of service.
However, another specialty organization and the AMA did not agree with
the creation of this new G code and felt its creation was unnecessary.
These commenters indicated that CPT currently has sufficient and
accurate coding for these services that is, CPT codes 38220 and 38221
which when performed through the same incision could both be reported
with the modifier 51 (used in reporting of multiple procedures
performed in the same incision) appended. In addition, the commenters
stated that the descriptor for this code does not adequately describe
the procedure for which it is intended as it does not specifically
state ``through the same incision.'' This could lead to a denial of
services of all bone marrow aspiration and biopsies performed on the
same date of service.
Response: After review of the comments, we agree that this code
should go through the CPT process. Therefore, we are withdrawing our
proposal to create this code. We will submit a code for ``Bone Marrow
Biopsy and Aspiration performed in the same bone'' to CPT in time for
the 2004 CPT cycle.
Result of Evaluation of Comments
We will not proceed with a separate G code for bone marrow biopsy
and aspiration procedure that is performed on the same date, at the
same encounter.
Creation of G Codes
Comment: Several commenters expressed concern about the increasing
frequency of G codes being issued by us. Commenters believed that, in
the interest of coding standardization, accuracy, and clarity, G codes
should only be developed as a last resort and should be temporary.
Commenters believed that an annual meeting with us to discuss codes
that may be necessary to accommodate new payment and coverage policies
would help reduce the number of G codes. Some commenters also asked for
greater physician involvement in the HCPCS editorial process (for
example, direct representation of the physician community on the
panel).
Response: We agree that, where appropriate, G codes should be
temporary. Unfortunately, it is sometimes necessary to develop G codes
to accommodate changes in legislation, regulation, coverage, and
payment policy. The timetable for such changes
[[Page 79993]]
is not necessarily consistent with the timetable for CPT publication
and frequently these changes must be made on a quarterly basis.
In 2002 CMS and CPT staff, working together, reviewed all existing
G codes and agreed to transition over 20 of them to CPT codes.
Therefore, for 2003 many G codes are being deleted in favor of newly
created CPT codes. (See section IV for a discussion of deleted G
codes). We believe that an annual review of G codes by CMS and CPT
staff is the best way to determine which G codes should be transitioned
to CPT codes and the process to use for such a transition. Therefore,
we plan to continue working with CPT staff on an annual basis to
continue transitioning existing G codes to CPT codes. We believe such
an annual comprehensive review will address the commenters' concerns.
However, we do wish to emphasize that we, when appropriate, does
consult with interested providers prior to the creation of G codes in
order to facilitate coding clarity and minimize physician burden.
L. Endoscopic Base For Urology Codes
Cystoscopy and treatment CPT codes 52234, 52235, and 52240 were
inadvertently identified in the Medicare Physician Fee Schedule
Database as services subject to the reductions for multiple procedures
as opposed to the procedural reduction rules specific to endoscopic
services. This has resulted in our overpaying for these services. We
proposed applying the endoscopic reduction rules to these services and
identified CPT code 52000 as the endoscopic base code for these
services.
Comment: The American Urological Association was in agreement with
our proposal to apply the endoscopic reduction rules to CPT codes
52234, 52235, and 52240.
Final Decision: The endoscopic reduction rules will be applied to
these three codes as proposed.
M. Physical Therapy and Occupational Therapy Caps
Section 4541(c) of the Balanced Budget Act of 1997 required
application of a payment limitation to all rehabilitation services
provided on or after January 1, 1999. The limitation was an annual per
beneficiary limit of $1500 on all outpatient physical therapy (PT)
services (including speech-language pathology services). A separate
$1500 limit was applied to all occupational therapy (OT) services. (The
limitation amounts were to be increased to reflect medical inflation.)
The annual limitation did not apply to services furnished directly or
under arrangement by a hospital to an outpatient or to an inpatient who
is not in a covered Part A stay.
Section 221 of the Balanced Budget Refinement Act of 1999 (BBRA)
(Pub. L. 106-113, enacted on November 29, 1999) placed a moratorium on
the application of the payment limitation for two years from January 1,
2000 through December 31, 2001. Section 421 of the Medicare, Medicaid,
and SCHIP Beneficiary Improvement and Protection Act of 2000 (BIPA)
(Pub. L. 106-554, enacted on December 21, 2000), extended the
moratorium on application of the limitation to claims for outpatient
rehabilitation services with dates of service January 1, 2002 through
December 31, 2002. As we explained in the June 28, 2002 proposed rule,
outpatient rehabilitation claims for services rendered on or after
January 1, 2003 will be subject to the payment limitation unless the
Congress acts to extend the moratorium.
Comments: We received comments from associations and societies
urging us to support the permanent repeal of the $1500 financial
limitation on PT, including speech language pathology, and a separate
$1500 financial limitation on OT. All commenters stated that this
financial limitation would adversely affect nursing home beneficiaries
who receive Part B therapy services.
Response: As stated before, we will implement the outpatient
rehabilitation therapy financial limitation via a Program Memorandum to
Carriers and Fiscal Intermediaries, unless the Congress acts to extend
the moratorium or repeals the legislation.
III. Other Issues
A. Definition of a Screening Fecal-Occult Blood Test
One commenter suggested that the current definition of a screening
fecal-occult blood test at Sec. 410.37(a)(2) that limits coverage to
guaiac-based tests should be expanded to permit coverage of another
test. The commenter suggested that this change be made in the final
rule because the June 2002 proposed rule added a variety of new HCPCS G
codes similar to the G code for which the commenter has requested for
its new fecal-occult blood test.
Based on our analysis of the preliminary information we have on the
new test, we believe that it may have the potential for effective
screening for colorectal cancer, and thus, we have agreed with the
commenter to broaden the definition in Sec. 410.37(a)(2) to permit
coverage of non-guaiac based tests. However, in order to establish
national coverage of the new test under the Medicare colorectal cancer
screening benefit we must first compare the clinical utility of the
test to the existing guaiac-based test. If, for instance, the test is
not as effective as the currently covered test, it would not make sense
to authorize coverage as permitted by section 1861(pp)(1)(D) of the
Act.
To facilitate our consideration of future coverage of other new
types of fecal-occult blood tests, we have decided to amend Sec.
410.37(a)(2) to provide that in addition to the guaiac-based screening
test, other types of fecal-occult blood tests may be covered under the
screening benefit, if we determine that this is appropriate through a
national coverage determination (NCD). This change will allow us to
conduct a more timely assessment of other new types of fecal-occult
blood tests that may have been approved or cleared for marketing by the
Food and Drug Administration (FDA) than is possible under the standard
rulemaking process. We intend to use the NCD process, which includes an
opportunity for public comments, for evaluating the medical and
scientific issues relating to the coverage of additional tests that may
be brought to our attention in the future. Use of an NCD to establish a
change in the scope of benefits is authorized by section 1871(a)(2) of
the Act.
In accordance with section 1861(pp)(1)(D) of the Act, we have
discretion to determine that additional tests or procedures are
appropriate and can be used for the early detection of colorectal
cancer. This authority is currently reflected in Sec. 410.37(a)(1)(v).
We are amending that section to announce that approval of any new tests
or procedures for use in early detection of colorectal cancer will be
made through an NCD. The use of an NCD, authorized by section
1871(a)(2) of the Act, will permit public participation. The NCD
process, however will allow Medicare to expand coverage for additional
tests or procedures when warranted more rapidly than the notice and
comment procedures of the Administrative Procedure Act would normally
permit.
B. Clarification of Services and Supplies Incident to a Physician's
Professional Services: Conditions
In the November 2001 final rule (66 FR 55238) we revised
regulations on services and supplies furnished incident to a
physician's professional services. In the revised regulations at Sec.
410.26(a)(7) we defined such services and supplies as `` * * * any
services and supplies * * * that are included in section
[[Page 79994]]
1861(s)(2)(A) of the Act and are not specifically listed in the Act as
a separate benefit included in the Medicare program.''
We are clarifying that services having their own statutory benefit
category are covered under that category rather than as incident to
services. This means that they are subject to manual and other program
operating instructions pertaining to their specific statutory benefit
category. In addition, they are not required to meet incident to
implementing instructions such as those in section 2050 of Part III of
the Medicare Carriers Manual (MCM). For example, diagnostic tests are
covered under section 1861(s)(3) of the Act and are subject to the
requirements for diagnostic tests in MCM section 2070. Depending on the
particular test, the supervision requirement in section 2070 may be
more or less stringent than that in section 2050 for incident to
services. When diagnostic tests are furnished, the requirements for
diagnostic tests apply, and not those for incident to services.
Likewise, pneumococcal, influenza, and hepatitis B vaccines are covered
under section 1861(s)(10) of the Act and do not need to meet incident
to requirements.
While we believe our regulations are clear on this point, one of
the comments and responses published in our November 2001 final rule
has caused some confusion on this issue. The comment and response were
as follows:
Comment: ``Many commenters wanted us to re-emphasize that incident
to services set forth in section 1861(s)(2)(A) of the Act do not
include Medicare benefits separately and independently listed in the
Act, such as diagnostic services set forth in section 1861(s)(3). Some
requested that we not permit these separately and independently listed
services to be furnished as incident to services.''
Response: ``We realize, as did the Congress with the enactment of
section 4541(b) of the BBA, that many services--even those that are
separately and independently listed--can be furnished as incident to
services. However, this fact of medical practice is not inconsistent
with our policy. We maintain that a separately and independently listed
service can be furnished as an incident to service but is not required
to be furnished as an incident to service. Furthermore, even if a
separately and independently listed services is provided as an incident
to service, the specific requirements of that separately and
independently listed service must be met. For instance, a diagnostic
test under section 1861(s)(3) of the Act may be furnished as an
incident to service. Nevertheless, it must also meet the requirements
of the diagnostic test benefit set forth in Sec. 410.32. Specifically,
the test must be ordered by the treating practitioner, and it must be
supervised by a physician. Thus, if a test requires a higher level of
physician supervision than direct supervision, then that higher level
of supervision must exist even if the test is furnished as an incident
to service. Accordingly, we decline to prohibit a separately and
independently listed service from being furnished as an incident to
service. Instead, we reiterate that a separately and independently
listed service need not meet the requirements of an incident to
service.''
The intent of the above response was to state that for a service
having its own separately and independently listed statutory benefit
category, Medicare carriers should apply the requirements of that
separately listed benefit category and not also apply the incident to
requirements. We interpret Sec. 410.26(a)(7) literally. That is,
incident to services and supplies covered under 1861(s)(2)(A) of the
Act means services and supplies not having their own independent and
separately listed statutory benefit category.
Perhaps it could be argued that any service provided under the
direct supervision of a physician could be considered an incident to
service. However, the Congress specifically provided for the many
separate benefit categories of medical and health services in the Act.
We believe that the Congress intended for incident to services to be a
catch-all category to allow payment for certain services and supplies
commonly furnished in a physician's office and not having their own
separate benefit category. The billing of services with their own
separate and independent coverage benefit categories as incident to may
circumvent the coverage and payment rules applicable to those other
categories. Therefore, only services that do not have their own benefit
category are appropriately billed as incident to a physician service.
Examples of benefit categories are diagnostic X-ray tests (section
1861(s)(3) of the Act) and influenza vaccine and its administration
(section 1861(s)(10)(A) of the Act).
However, since section 4541(b) of the BBA allows certain services
with their own benefit category (that is, outpatient physical therapy
services (including speech-language pathology services) and outpatient
occupational therapy) to also be provided as incident to services, we
cannot prohibit physicians and practitioners from billing these
services as incident to. However, when these services are billed
incident to, requirements in Medicare Carriers Manual section 2050 must
also be met. Note that the personal (in-the-room) supervision
requirements for physical and occupational therapy assistants apply
only to the private practice setting. The services of nurse
practitioners, clinical nurse specialists and physician's assistants
may be billed as incident to a physician's service if the incident to
requirements are met, or those practitioners may bill their services
separately under their own benefit.
C. Five-Year Review of Gastroenterology Codes
In the November 2001 final rule, (66 FR 55246), we finalized work
RVUs for several gastrointestinal endoscopy codes that were reviewed by
the RUC during the five-year review of physician work. However, we
asked the RUC to review several families of gastrointestinal endoscopy
codes to ensure that no rank order anomalies existed within those
families. The procedures for gastrointestinal stent placement were
among those families. Although we have not received further RUC
recommendations for any gastrointestinal endoscopy codes, several
specialty societies have submitted further information regarding the
physician work required to perform gastrointestinal stent placement
services. We have reviewed this information and are making several
adjustments to the RVUs for these services. These adjustments are
interim and we will respond to comments concerning these adjustments in
next year's final rule.
CPT code 43219 Esophagoscopy, rigid or flexible; with insertion of
plastic tube or stent
Based on the information we have reviewed (including physician
intraservice time data), there is no compelling evidence that the
physician work of this procedure is inappropriate. The work increment
(1.21 work RVUs) beyond the base procedure CPT code 43200,
Esophagoscopy, rigid or flexible; with or without collection of
specimen(s) by brushing or washing (separate procedure) is appropriate.
Therefore we are maintaining 2.8 work RVUs for CPT code 43219.
CPT code 43256 Upper gastrointestinal endoscopy including
esophagus, stomach, and either the duodenum and/or jejunum as
appropriate; with transendoscopic stent placement (includes
predilation)
This code currently has 4.60 work RVUs. We reviewed physician time
data for this service and believe that it is overvalued compared to the
value of
[[Page 79995]]
other stent placement procedures. Therefore, to place it in the proper
rank order to other stent placement codes, we are assigning it 4.35
work RVUs. This makes the incremental work (1.96 work RVUs) above the
base procedure CPT code 43235, Upper gastrointestinal endoscopy
including esophagus, stomach and either the duodenum and/ or jejunum as
appropriate; diagnostic, with or without collection of specimen(s) by
brushing or washing (separate procedure), in line with other stent
placement codes.
CPT code 44383 Ileoscopy, through stoma; with transendoscopic stent
placement (includes predilation)
This code currently has 3.26 work RVUs. We reviewed physician time
data for this code and compared it to other stent placement codes. The
incremental work value (2.21 work RVUs) above the base procedure CPT
code 44380, Ileoscopy, through stoma; diagnostic, with or without
collection of specimen(s) by brushing or washing (separate procedure),
is high. Therefore, we are reducing the work RVUs to 2.94. This gives
it an incremental work value of 1.89 work RVUs which is similar to the
incremental work value of CPT code 44397, Colonoscopy through stoma;
with transendoscopic stent placement (includes predilation), and places
it in the proper rank order with other stent placement codes.
D. Critical Access Hospital Emergency Services Requirements
Section 1820 of the Act provides for a nationwide Medicare Rural
Hospital Flexibility Program (MRHF). The Act also provides that certain
rural providers may be designated as critical access hospitals (CAHs)
under the MRHF program if they meet qualifying criteria and the
conditions for designation specified in the statute. Implementing
regulations for section 1820 of the Act are located at 42 CFR part 485,
subpart F.
Section 1820(c)(2)(B) of the Act implements specific conditions of
participation (CoPs) that a facility must meet to be designated a CAH.
The statutory criteria for State designation as a CAH require, in part,
that the facility makes available 24-hour emergency care services that
a State determines are necessary for ensuring access to emergency care
services in each area served by a CAH. To help protect the health and
safety of Medicare patients who seek emergency medical care at a CAH,
our regulations at Sec. 485.618 require CAHs to provide emergency care
necessary to meet the needs of its patients.
In 2002, we received letters requesting a special waiver from the
current emergency services personnel requirement (specified in Sec.
485.618(d)) for CAHs in frontier areas and remote locations. The
requests included the following comments; (1) A number of remote CAHs
have been struggling to comply with the current CAH requirement; (2)
the personnel requirement places a hardship on isolated frontier
communities that have only one medical practitioner; and (3) often
these remote facilities have a very low volume of patients which makes
it difficult to recover all of their costs and to recruit other
practitioners.
As of September 2002, the Cecil G. Sheps Center for Health Services
Research at Chapel Hill, North Carolina has identified approximately
173 CAHs that are located in frontier areas (identified as having six
individuals per square mile). The average population for a frontier CAH
community is 7,024. We have no empirical data to indicate which of
these 173 CAHs are currently experiencing workforce issues that create
a hardship for the facility or any sole provider. However, the
University of Washington conducted a survey of CAHs in May 2001 and
learned that, of the 388 CAHs that responded to the survey, 146
facilities are in an isolated small rural census tract. Of these
facilities, 10 have no physicians, 24 have only 1 physician, 39 have 2
physicians, and 26 have 3 physicians. Of the CAHs with no doctors, 6
have only 1 mid-level provider (4 of these are in Montana), and 3 have
2 mid-level providers (1 apparently had no physician or mid-level
provider at the time of the survey). Of the 39 CAHs that had 2
physicians, 3 had no mid-level providers, and 12 had only 1 mid-level
provider.
The Rural Health Research Center at the University of Washington,
through its CAH National Tracking Project, reported that CAHs
frequently cite problems with recruitment and retention of emergency
medical personnel. Based on 2002 data, more than half of the designated
CAHs are serving counties dually designated as both a Medically
Underserved Area (MUA) and a Health Professional Shortage Area (HPSA).
Less than 1 in 10 CAHs are located in counties without a HPSA or an MUA
designation.
The delicate balance of providing access to care in very rural and
remote areas without jeopardizing quality of care continues to be
challenging. We believe that if a small CAH is forced to close because
of the lack of qualified personnel, adding RNs to the list of approved
personnel would greatly help CAHs with nogreater than 10 beds, in
frontier areas or remote locations to serve the emergency health care
needs of residents of these areas. Often CAHs in frontier or remote
areas are located 50 miles or farther from the nearest health care
facility. We believe that allowing RNs, as needed on a temporary basis,
to work in CAHs with no greater than 10 beds, with training or
experience in emergency care to be included in the list of personnel to
be on call and immediately available within 60 minutes is the best
means of ensuring that patients in frontier or remote areas will
continue to have access to high-quality emergency health care services.
However, we are requesting comments on other viable alternatives on how
CAHs that are currently experiencing workforce issues can provide
emergency care in frontier and remote areas.
Our regulations at Sec. 485.618(d) require a doctor of medicine or
osteopathy, a physician's assistant, or a nurse practitioner with
training or experience in emergency care to be on call and immediately
available by telephone or radio and to be available on site within 30
minutes, or 60 minutes if the CAH is located in a designated frontier
area or a remote location designated by the State in its rural health
plan. In addition, Sec. 485.618(e) requires that the CAH must
coordinate with the emergency response system in the area and ensure
the 24-hour telephone or radio availability of a doctor of medicine or
osteopathy to receive emergency calls, provide information on treatment
of patients, and refer patients to the CAH or other appropriate
locations for treatment.
We understand that it may be difficult for small CAHs in frontier
areas or remote locations to meet the personnel requirements set forth
in Sec. 485.618(d). However, section 1820(c)(2)(B)(ii) of the Act
requires a qualifying CAH to make available the 24-hour emergency care
services that a State determines are necessary for ensuring access to
emergency care services in each area served by a CAH. Although the
statute does not provide authority to waive the requirement for
continuous emergency care services, we believe that the statute
provides the flexibility for States to assess their emergency care
service needs and permit small CAHs that experience the absence of
emergency personnel required by Sec. 485.618(d) to nonetheless provide
emergency services. Accordingly, this final rule with comment provides
a mechanism for States with CAHs with no greater than 10 beds, in
frontier areas and remote locations to include registered nurses (RNs),
with training or
[[Page 79996]]
experience in emergency care, as authorized emergency services
personnel under our current general emergency service personnel
requirements at Sec. 485.618(d). Therefore, in this final rule with
comment we are revising Sec. 485.618(d) to add the possibility for
States to include RNs among authorized personnel, at Sec.
485.618(d)(3). This will permit State Governors, following consultation
on the issue of using RNs on a temporary basis as part of their State
rural healthcare plan with the State Boards of Medicine and Nursing,
and in accordance with State laws, to request in writing the inclusion
of RNs to our current personnel requirements, so that RNs may fulfill
the emergency personnel requirements of Sec. 485.618 for frontier area
or remote location CAHs with no greater than 10 beds. The letter from
the Governor must attest that he or she has consulted with State Boards
of Medicine and Nursing about issues related to access to and the
quality of emergency services in the State. The letter from the
Governor must also describe the circumstances and duration of the
temporary request to include the RN on a list of emergency personnel
specified in Sec. 485.618(d)(1). The request for such inclusion, and
any withdrawal of a request for this inclusion, may be submitted at any
time, and will be effective on the date we receive the request. In
addition, once a State submits a letter to us signed by the Governor
requesting that an RN be included in the list of specified personnel
for CAHs with no greater than 10 beds, a CAH must submit documentation
to the State survey agency demonstrating that it has not been able,
despite reasonable attempts, to hire a sufficient number of physicians,
physician assistants, or nurse practitioners to provide 24-hour
emergency services on-call coverage. In a frontier or remote area when
a CAH has only one physician or mid-level provider, we would expect the
facility to provide relief to the sole provider by using an RN with
training or experience in emergency services to provide emergency on-
call services.
IV. Refinement of Relative Value Units for Calendar Year 2003 and
Response to Public Comments on Interim Relative Value Units for 2002
A. Summary of Issues Discussed Related to the Adjustment of Relative
Value Units
Section IV.B of this final rule describes the methodology used to
review the comments received on the RVUs for physician work and the
process used to establish RVUs for new and revised CPT codes. Changes
to codes on the physician fee schedule reflected in Addendum B are
effective for services furnished beginning January 1, 2003.
B. Process for Establishing Work Relative Value Units for the 2003
Physician Fee Schedule
Our November 1, 2001 final rule (66 FR 55294) announced the final
work RVUs for Medicare payment for existing procedure codes under the
physician fee schedule and interim RVUs for new and revised codes. The
RVUs contained in the final rule applied to physician services
furnished beginning January 1, 2002. We announced that we considered
the RVUs for the interim codes to be subject to public comment under
the annual refinement process. In this section, we summarize the
refinements to the interim work RVUs published in the November 2001
final rule and our establishment of the work RVUs for new and revised
codes for the 2003 physician fee schedule.
Work Relative Value Unit Refinements of Interim and Related Relative
Value Units
1. Methodology (Includes Table titled ``Work Relative Value Unit
Refinements of the 2002 Interim and Related Relative Value Units'')
Although the RVUs in the November 2001 final rule were used to
calculate 2002 payment amounts, we considered the RVUs for the new or
revised codes to be interim. We accepted comments for a period of 60
days. We received substantive comments from many individual physicians
and several specialty societies on approximately 19 CPT codes with
interim work RVUs. Only comments on codes listed in Addendum C of the
November 2001 final rule were considered.
To evaluate these comments we used a process similar to the process
used in 1997. (See the October 31, 1997 final rule (62 FR 59084) for
the discussion of refinement of CPT codes with interim work RVUs.) We
convened a multispecialty panel of physicians to assist us in the
review of the comments. The comments that we did not submit to panel
review are discussed at the end of this section, as well as those that
were reviewed by the panel. We invited representatives from the
organization from which we received substantive comments to attend a
panel for discussion of the code on which they had commented. The panel
was moderated by our medical staff, and consisted of the following
voting members:
[sbull] One or two clinicians representing the commenting
organization.
[sbull] Two primary care clinicians nominated by the American
Academy of Family Physicians and the American College of Physicians/
American Society of Internal Medicine.
[sbull] Four carrier medical directors.
[sbull] Four clinicians with practices in related specialties, who
were expected to have knowledge of the service under review.
The panel discussed the work involved in the procedure under review
in comparison to the work associated with other services under the
physician fee schedule. We assembled a set of reference services and
asked the panel members to compare the clinical aspects of the work of
the service a commenter believed was incorrectly valued to one or more
of the reference services. In compiling the set, we attempted to
include--(1) Services that are commonly performed whose work RVUs are
not controversial; (2) services that span the entire spectrum from the
easiest to the most difficult; and (3) at least three services
performed by each of the major specialties so that each specialty would
be represented. The set listed approximately 300 services. Group
members were encouraged to make comparisons to reference services. The
intent of the panel process was to capture each participant's
independent judgement based on the discussion and his or her clinical
experience. Following the discussion, each participant rated the work
for the procedure. Ratings were individual and confidential, and there
was no attempt to achieve consensus among the panel members.
We then analyzed the ratings based on a presumption that the
interim RVUs were correct. To overcome this presumption, the inaccuracy
of the interim RVUs had to be apparent to the broad range of physicians
participating in each panel.
Ratings of work were analyzed for consistency among the groups
represented on each panel. In general, we used statistical tests to
determine whether there was enough agreement among the groups of the
panel and whether the agreed-upon RVUs were significantly different
from the interim RVUs published in Addendum C of the November 2001
final rule. We did not modify the RVUs unless there was a clear
indication for a change. If there was agreement across groups for
change, but the groups did not agree on what the new RVUs should be, we
eliminated the outlier group and looked for agreement among the
remaining groups as the basis for new RVUs. We used the same
methodology in analyzing the ratings
[[Page 79997]]
that we first used in the refinement process for the 1993 physician fee
schedule. The statistical tests were described in detail in the
November 25, 1992 final rule (57 FR 55938).
Our decision to convene multispecialty panels of physicians and to
apply the statistical tests described above was based on our need to
balance the interests of those who commented on the work RVUs against
the redistributive effects that would occur in other specialties.
We also received comments on RVUs that were interim for 2002, but
which we did not submit to the panel for review for a variety of
reasons. These comments and our decisions on those comments are
discussed in further detail below.
The table below lists the interim code reviewed during the
refinement process described in this section. This table includes the
following information:
[sbull] CPT Code. This is the CPT code for a service.
[sbull] Description. This is an abbreviated version of the
narrative description of the code.
[sbull] 2002 Work RVU. The work RVUs that appeared in the November
2001 rule are shown for each reviewed code.
[sbull] Requested Work RVU. This column identifies the work RVUs
requested by commenters.
[sbull] 2003 Work RVU. This column contains the final RVUs for
physician work.
Table 5.--Work RVU Refinement of 2002 Interim Codes and Related RVUs
----------------------------------------------------------------------------------------------------------------
CPT code Requested work
\1\ Description 2002 Work RVU RVU 2003 Work RVU
----------------------------------------------------------------------------------------------------------------
53853 Transurethral destruction of prostate 4.14 8.75 5.24
tissue; by water-induced thermotherapy...
----------------------------------------------------------------------------------------------------------------
\1\ All CPT codes and descriptions copyright 2003 American Medical Association.
2. Interim 2002 Codes
CPT Code 00797 Anesthesia for Intraperitoneal Procedures in Upper
Abdomen Including Laparoscopy; Gastric Restrictive Procedure for Morbid
Obesity CPT Code 01968 Cesarean Delivery Following Neuraxial Labor
Analgesia/Anesthesia (List Separately in Addition to Code for Primary
Procedure
The RUC recommended that 9 base units be assigned to CPT code 00797
and 3 base units be assigned to the add-on code CPT code 01968. We did
not accept the RUC recommended values for these two anesthesia services
and assigned 8 base units to CPT code 00797 and 2 base units to the
add-on code CPT code 01968.
The AMA and the RUC disagreed with the reductions we made to the
base units and the reasoning as stated in the November 1, 2001 final
rule behind these reductions. No other comments were received on these
codes.
Final Decision: Given that the only comments received were from the
AMA and RUC and these provided no additional information, we are
maintaining the base units of 8 for CPT code 00797 and 2 base units for
the CPT code 01968.
CPT code 47382 Ablation, one or more liver tumor(s), percutaneous,
radiofrequency
We had not received recommendations from the RUC for this procedure
and assigned work RVUs of 12.00 to this service.
Specialty organizations indicated that the value assigned was
inappropriately low and that this would be revisited by the RUC in
February 2002. They recommended that we take the RUC values into
consideration for the 2003 Medicare fee schedule.
Final Decision: We did receive a RUC recommendation of 15.19 for
CPT code 47382 and are in agreement with the recommended work RVU.
CPT code 52001 Cystourethroscopy with irrigation and evacuation of
clots.
The RUC recommended 5.45 work RVUs based on a comparison to certain
reference procedures. We had concerns about the descriptor associated
with this code and based on the descriptor of this CPT code for 2002
assigned 2.37 RVUs to this procedure. We felt the time and intensity of
the physician work for this procedure as described was comparable to
CPT Code 52005. Commenters acknowledged that the descriptor was being
revised and felt that this would enable us to accept the original RUC
recommendation of 5.45.
Final decision: The descriptor for CPT code 52001 has been revised
for 2003 and the RUC provided a new recommended work RVU of 5.45. We
agree with the RUC recommended work RVU of 5.45 for CPT code 52001.
CPT code 53853 Transurethral destruction of prostatic tissue; by
water induced thermotherapy).
The RUC recommended 6.41 work RVUs for this procedure. We did not
agree with the RUC recommendation and based on an analysis of
intraservice activities, we believed it more appropriate to compare CPT
code 53853 to 90-day global procedures with less than 30 minutes of
intraservice time. Based on this we assigned a work RVU of 4.14 to this
code.
Commenters disagreed with the RVUs assigned. One commenter provided
detailed information in support of an increase in work RVUs. Based on
these comments we referred this code to the multispecialty validation
panel for review.
Final decision: As a result of the statistical analysis of the 2002
multispecialty validation panel ratings, we have assigned 5.24 work
RVUs to CPT code 53853.
CPT code 76490 Ultrasound guidance for, and monitoring of, tissue
ablation
We did not receive a recommendation from the RUC for this
procedure. We compared the time and intensity of this procedure to
other radiologic guidance codes and to radiologic supervision and
interpretation codes and assigned work RVUs of 2.00 to this code. Two
specialty groups expressed concern that the assigned RVUs were not
appropriate and indicated the RUC would be revisiting work RVUs for
this service in February 2002. They recommended that we take the RUC
values into consideration for the 2003 Medicare fee schedule.
Final Decision: We did receive a RUC work RVU recommendation of
4.00 for this service and are in agreement with this recommendation.
CPT code 90471 Immunization administration (includes percutaneous,
intradermal, subcutaneous, intramuscular and jet injections); one
vaccine (single or combination vaccine/toxoid) and CPT code 90472
Immunization administration (includes percutaneous, intradermal,
subcutaneous, intramuscular and jet injections); each additional
vaccine/toxoid (List separately in addition to code for primary
procedure) one vaccine
We disagreed with the RUC recommended work RVU of .17 for CPT code
90471 and .15 work RVUs for CPT code 90472. To the extent the physician
[[Page 79998]]
performs any counseling related to this service, it is considered part
of the work of the preventive medicine visit during which the
immunization was administered. If the vaccine is administered during a
visit other than a preventive medicine service, any physician
counseling should be billed separately as an E/M service. Commenters
disagreed that there is no physician work associated with this service
particularly in light of the required counseling that must be provided
by the physician concerning possible reactions to vaccines. Commenters
also continue to be concerned that Medicaid and private payors will
base their payment amounts on the ``incomplete'' RVUs established under
the physician fee schedule, which do not include physician work for
these services.
Final Decision: We have addressed the issue of immunization
administration in a separate section of this rule. We continue to
believe that there is no physician work associated with this service.
Please see Section A.(3)(c) (Practice Expense provisions for CY 2003)
for discussion of this issue.
CPT code 90473 Immunization administration by intranasal or oral
route; one vaccine (single or combination vaccine/toxoid); and, CPT
code 90474 Immunization administration by intranasal or oral route each
additional vaccine/toxoid (List separately in addition to code for
primary procedure)
The RUC recommended a work RVU of .17 for CPT code 90473 and .15
work RVUs for CPT code 90474. Medicare does not cover self-administered
vaccines. We did not assign work RVUs to these services as these are
noncovered services. Commenters disagreed with our assessment that
there is no physician work associated with these codes.
Final Decision: As we had previously indicated, Medicare does not
cover self-administered vaccines. Since these services are not covered
under Medicare, RVUs are not listed under the physician fee schedule.
CPT code 93609 Intraventricular and/or intra-atrial mapping of
tachycardia site(s) with catheter manipulation to record from multiple
sites to identify origin of tachycardia
We did not receive a recommendation from the RUC for this service.
The descriptor for this service did not change, but the AMA CPT
editorial panel changed the global period for this service from a zero
day global to a ZZZ global. This means that this is now an ``add-on''
code and the physician work RVUs no longer include any pre- or
postservice work. (It previously had a work RVU of 10.07.) To
appropriately value this add-on service, we compared it to several
other electrophysiology services and assigned a work RVU of 4.81 to CPT
code 93609. Commenters disagreed with the assigned work RVUs and stated
that this code would be presented at the February 2002 RUC meeting.
Commenters encouraged us to reconsider the work RVUs for this code
based on the forthcoming RUC recommendation.
Final Decision: We have received a RUC recommendation of 5.00 for
CPT code 93609 for 2003 and are in agreement with this recommendation.
CPT code 93613 Intracardiac electrophysiologic 3-dimensional
mapping
This was a new add-on code for 2002 for which we did not receive a
recommendation from the RUC. This is a service that does not include
any pre-or postservice work. Based on a comparison to similar services,
we believed the intraservice time and intensity of 93613 was slightly
less than that of CPT code 93619 and therefore assigned 7.00 work RVUs
to CPT code 93613. Commenters disagreed with our rationale and stated
that this code would be presented at the February 2002 RUC meeting.
Commenters encouraged us to reconsider the work RVUs for this code.
Final Decision: We have received a RUC recommendation of 7.00 for
CPT code 93613 for 2003 and are in agreement with this recommendation.
CPT code 93701 Bioimpedence, thoracic, electrical
We did not accept the RUC recommendation of 0.00 work RVUS but
assigned this service 0.17 work RVUs based on the value assigned to
HCPCS code M0302 which is the code used to pay for this service in
2001. We did indicate that we would consider the RUC recommendation but
that, if we considered revising the work RVUs, we would discuss any
proposed change in a future proposed rule. Commenters expressed concern
that we would revisit this issue as we had addressed valuing of this
service through rulemaking in 2000. While we retained the work RVUs
that had been assigned based on rulemaking in 2000 for this service, we
did want to indicate that, in consideration of the RUC recommendation,
should we determine that any revisions to the RVUs are necessary, we
would address revisions in future rulemaking.
Final Decision: We are retaining the work RVU of 0.17.
CPT code 95250 Glucose monitoring for up to 72 hours by continuous
recording and storage of glucose values from interstitial tissue fluid
via a subcutaneous sensor (includes hook-up, calibration, patient
initiation and training, recording, disconnection, downloading with
printout of data)
We agreed with the RUC recommendation that the physician work value
for this service was 0.00. Though the physician can bill an E/M code
for the physician review and interpretation associated with this
service, commenters believe that use of the E/M code to reflect the
physician work is not adequate and that the present reimbursement for
this code will discourage its use.
Final Decision: The CPT descriptor for this code indicates that it
is for the ``TC'' only and that, to report the physician review,
interpretation and written report associated with this code, the
practitioner should use the E/M service codes. Based on this, we
believe that the assignment of 0.00 work RVUs is appropriate.
CPT code 97602 Removal of devitalized tissue from wound(s); non-
selective debridement, without anesthesia (e.g., wet-to-moist
dressings, enzymatic, abrasion), including topical applications(s),
wound assessment and instruction(s) for ongoing care, per session
The HCPAC recommended a work RVU of 0.32 for this service. We
disagreed with this recommendation and stated that the services of this
code are bundled into CPT code 97601 and did not establish work RVUs
for this service. Commenters disagreed with our determination that this
service should be bundled. Commenters felt that, despite the fact that
there may be some elements of the service that are common to both
codes, these codes describe distinct services that are not used
simultaneously. We have re-examined our determination but have not
changed our decision. As we explained in last year's final rule, CPT
code 97602 describes services that typically involve placement of a
wound covering, for example, wet-to-dry gauze or enzyme-treated
dressing. It also includes nonspecific removal of devitalized tissue
that is an inherent part of changing a dressing. This service is
already included in the work and practice expenses of CPT code 97601.
In the typical service described by CPT code 97601, the patient has a
dressing placed over the wound. We would add that the services
described by CPT code 97602 are also included in the work and practice
expenses of the whirlpool code, CPT code 97022. For this reason, we
consider this a bundled service that is not paid separately.
[[Page 79999]]
Final Decision: As discussed above we will continue to consider
this a bundled service that is not paid separately.
CPT code 99091 Collection and interpretation of physiologic data
(e.g., ECG, blood pressure, glucose monitoring) digitally stored and/or
transmitted by the patient and/or caregiver to the physician or other
qualified health care professional, requiring a minimum of 30 minutes
of time
The RUC recommended work RVUs of 1.10 for this code. We disagreed
since this work is considered part of the pre- and post-service work of
an E/M service and payment for this code is bundled into payment for
the E/M service. Commenters objected to our bundling of this code and
believed that the work associated with this service is not captured in
other services, as this is not a face-to-face service. Some commenters
felt that the work involved in this code was similar to care plan
oversight codes, for which we provide separate payment.
Final Decision: Some portion of both the pre- and post-service work
of an evaluation and management visit will not be face-to-face. We
still conclude, as discussed above, that this a bundled service that is
not paid separately.
CPT codes 99289 Physician constant attention of the critically ill
or injured patient during an interfacility transport; first 30-74
minutes, and 99290, each additional 30 minutes (List separately in
addition to code for primary service)
We did not agree with the RUC recommended values of 4.8 work RVUs
for CPT code 99289 and 2.4 work RVUs for CPT code 99290. We also had
concerns as to whether the code descriptors for these two new codes, as
written, met the requirements for critical care. Based on the concerns
outlined in the November 1, 2001 rule, we decided not to recognize
these codes for Medicare purposes and created two HCPCS Level II codes
for use in CY 2002 to describe critical care services provided to
patients during inter-facility transport. These codes (G0240--Critical
Care Service delivered by a physician; face-to-face, during inter-
facility transport of a critically ill or critically injured patient:
first 30-74 minutes of active transport and G0241--each additional 30
minutes (list separately in addition to G0240) were valued at 4.00 work
RVUs and 2.00 work RVUs, respectively. Commenters indicated that the
descriptors for the CPT codes were being revised and requested that we
reconsider the work relative values for these codes in light of the
changes that CPT will be making to these codes.
Final Decision: Based on the changes the CPT Editorial Panel has
made to the descriptors for CPT codes 99289 and 99290, we are in
agreement with the RUC recommended work RVUs of 4.80 for 99289 and 2.40
for 99290 and will use these CPT codes for Medicare purposes. We are
also eliminating HCPCS codes G0240 and G0241 that had previously been
used to report these services.
RUC Recommendations on Practice Expense Inputs for 2002 New and Revised
Codes
In the November 2001 final rule (66 FR 55310), we responded to the
RUC recommendations on the practice expense inputs for the new and
revised CPT codes for CY 2002. We have received two comments on this
issue.
Comment: The AMA commented that it was pleased that we accepted
nearly all of the RUC's recommendations for direct practice expense
inputs for new and revised codes for CPT 2002.
Response: We are also pleased that we are receiving recommendations
on the practice expense inputs that need no modification and thank the
RUC for the time and effort expended on developing appropriate
recommendations.
Comment: Two organizations representing radiation oncologists were
opposed to the reduction of the recommended clinical staff time for a
radiation therapist from 123 to 60 minutes for CPT code 77418,
intensity modulated treatment delivery. One of the comments argued that
there is no overlap of clinical staff time with other services and that
the typical time is over 60 minutes for this procedure. Both comments
contend that for quality of care purposes two therapists are required.
Response: In the November 2001 final rule (66 FR 55310), we
accepted, as interim, the RUC's recommendations for practice expense
inputs for CPT code 77418, except that we reduced the staff time from
120 minutes (60 minutes for each of two radiation technologists) to 60
minutes (for one radiation technologist). We still believe that this
reduction in staff time is appropriate. IMRT is currently delivered in
multiple fractions on a daily basis and is usually administered to
patients with prostate cancer or tumors of the head and neck. Most of
the treatments take considerably less than 60 minutes and only one
technologist is required to actually deliver the treatment, as the
parameters are preprogrammed into a computer. Further, any time spent
adjusting the radiation fields using ultrasound or computed tomography
is separately payable. We believe that 60 minutes of staff time
adequately accounts for the pre-, intra-, and post-service staff
resources used to provide this service.
We received the following comments on HCPCS codes established in
the November 1, 2001 final rule.
[sbull] Respiratory Therapy Codes
G0237 Therapeutic Procedures To Increase Strength or Endurance of
Respiratory Muscles, Face-to-Face, One-on-One, Each 15 Minutes
(Includes Monitoring); G0238 Therapeutic Procedures To Improve
Respiratory Function, Other Than Described by G0237, One-on-One, Face-
to-Face, per 15 Minutes (Includes Monitoring); and G0239 Therapeutic
Procedures To Improve Respiratory Function, Two or More Patients
Treated During the Same Period, Face-to-Face (Includes Monitoring).
Note that we have revised the descriptor for G0239 for clarity, and
discussed this in section IV(C).
While several organizations expressed appreciation for the
establishment of these codes, they requested clarification on the
following points:
Comment: Commenters asked whether nurses could also use these
codes.
Response: Physicians can use these codes if nurses are providing
services ``incident to'' a physician's service, with the physician in
the suite in his or her office, and the codes may be used in a
comprehensive outpatient rehabilitation facility (CORF) or a hospital
outpatient department. Since there is no respiratory therapy or
pulmonary rehabilitation benefit, respiratory therapists can provide
these services only in a CORF or under the ``incident to'' provision in
a physician's office or in the hospital outpatient setting.
Comment: Commers requested clarification of the term ``monitoring''
used in all three of these code descriptions.
Response: Monitoring provides physiologic or other data about the
patient during the period before, during, and after the activities. It
can represent, for example, pulse oximetry readings,
electrocardiography data, pulmonary testing measurements, or
measurements of strength or endurance performed to assess the status of
the patient before, during, and after the activities. An example would
be pursed-lip breathing which involves nasal inspiration followed by
slow exhalations through partially closed pursed lips to create
positive pressure in upper respiratory tract, and improve respiratory
muscles action. If, after this training, the practitioner were to check
the patient's oxygen saturation level (via pulse oximetry), peak
respiratory flow, or
[[Page 80000]]
other respiratory parameters, then this would be considered
``monitoring.'' Payment for this monitoring is bundled into G0237 and
not paid separately as a diagnostic test.
Comment: Another asked about the differences between the G codes.
Response: G0237 involves therapeutic procedures specifically
targeted at improving the strength and endurance of respiratory
muscles. Examples include pursed-lip breathing, diaphragmatic
breathing, and paced breathing (strengthening the diaphragm by
breathing through tubes of progressively increasing resistance to
flow). G0238 involves a variety of activities including teaching
patients strategies for performing tasks with less respiratory effort
and the performance of graded activity programs to increase endurance
and strength of upper and lower extremities. G0238 does not include
demonstration of the use of nebulizer or inhaler or chest percussions
because these services are described by other CPT codes (94664 and
94667, respectively). G0239 represents situations in which two or more
patients are receiving services simultaneously (such as those described
above in G0237 or G0238) during the same time period. The practitioners
must be in constant attendance but need not be providing one-on-one
contact. For example, a therapist provides medically necessary
therapeutic procedures to two patients (A and B) in the same gym, for a
30-minute period. Both are performing different graded activities
(described by G0238) to increase endurance of their upper and lower
extremities while the therapist divides his/her time--in intermittent,
brief episodes--between patients A and B. In this scenario the
therapist would bill each patient for group therapy (G0239) because the
treatment was provided simultaneously to two patients, and not one-on-
one, as required by G0238.
Comment: Commers requested clarification concerning use of G0237,
G0238, and G0239 codes and whether these codes can be billed more than
once a day.
Response: G0237 and G0238 are timed codes, reported for each 15
minutes of one-on-one face-to-face treatment. They can be reported with
more than one unit per patient per day, depending upon the duration of
treatment. G0239 is not a timed code and thus should be reported only
once a day for each patient in the group.
Comment: Clarification was also requested about whether the
physician must certify the services every 30 days.
Response: The 30-day certification and recertification of the plan
of care requirement applies to the services of physical therapists,
occupational therapists, and speech language pathologists as described
in section 1861(p) of the Act. Since we expected G0237, G0238, and
G0239 typically to be provided by respiratory therapists, the 30-day
certification and recertification of the plan of care requirement does
not generally apply. If the services are performed by either a physical
or occupational therapist (or by a therapy assistant under his or her
direction), the requirement for the 30-day certification and
recertification applies. Additionally, all services provided in the
CORF setting including G0237, G0238, and G0239 require 60-day
certification and recertification of the plan of care.
Comment: One commenter asked whether the ``NA'' in the facility
total column indicated that these codes are not for use in the hospital
outpatient setting.
Response: As stated above, these codes are appropriate for use in
the hospital outpatient setting. The ``NA'' refers to the fact that in
the hospital outpatient setting, these codes are paid under the
hospital outpatient prospective payment system and are assigned to an
APC, rather than being paid on the physician fee schedule.
Comment: Commenters also asked for the specific clinical situations
in which the use of these codes is appropriate.
Response: All services must meet the test of being ``reasonable and
necessary'' pursuant to section 1862(a)(1)(A) of the Act.
Determinations of medical necessity have been made by carriers and
intermediaries on a claim-by-claim basis in their local medical review
policies. We believe that this is the appropriate manner to address
these questions, and many of our contractors have already developed
these policies. We note however, there is no explicit pulmonary
rehabilitation benefit.
Comment: Commenters asked whether respiratory therapists would be
precluded from using additional CPT codes to bill for their pulmonary-
rehabilitation related services.
Response: We reiterate that codes G0237, G0238, and G0239 were
developed to provide more specificity about the services being
delivered. Thus, CPT codes 97000 to 97799 are not to be billed by
professionals involved in treating respiratory conditions, unless these
services are delivered by physical or occupational therapists and meet
the other requirements for physical and occupational therapy services.
Also CPT code 99211, (office or other outpatient visit for evaluation
and management), should not be used by practitioners providing
outpatient respiratory or pulmonary therapy services.
Revisions to Malpractice RVUs for New and Revised CPT Codes for 2002
Malpractice RVUs are calculated using the methodology described in
detail at Addendum G of our November 1, 2000 final rule (65 FR 65589).
Because of the timing of the release of new and revised CPT codes each
year, the malpractice RVUs for the first year of these codes are
extrapolated from existing similar codes based on the advice of our
medical consultants and are considered interim subject to public
comment and our revision. The following year, these codes are given
values based on our malpractice RVU methodology and a review of any
comments received.
The malpractice RVUs for new and revised codes for CY 2002
published in Addendum B of the November 2001 final rule, were
extrapolated from existing similar codes. The malpractice RVUs for
these codes in this year's Addendum B were calculated by our
consultant, KPMG, using the same methodology used for all other codes.
Likewise, the malpractice RVUs for new and revised codes for CY 2003
are being extrapolated from existing similar codes and will be
calculated using the malpractice RVU methodology next year.
Comment: The American College of Radiology continues to be
concerned about the increasing liability costs for radiology and
radiation oncology. They would like us to explore and ultimately
implement a change in the malpractice methodology. They stated that
radiologists and radiation oncologists bear the majority of costs for
liability insurance; therefore, the larger proportion of malpractice
value should be included in the PC and the smaller portion in the TC.
Response: While we can understand the concern about rising
liability costs, we do not believe that radiology and radiation
oncology are the only specialties facing such increases. We also do not
agree that the larger proportion of malpractice values should be
associated with the PC component of the service. As we have explained
in previous physician fee schedule rules, the total TC RVUs (practice
expense and malpractice) for the TC of radiology diagnostic tests
represent the expenses required to perform the test--equipment,
supplies, and technicians plus malpractice insurance. The total PC RVUs
(work, practice expense and malpractice insurance) represent only
[[Page 80001]]
the interpretation of the test by the physician. Generally, the TC RVUs
for radiology services are significantly higher than the PC RVUs
because of the very expensive equipment and supplies. The malpractice
RVUs are generally split in similar proportion between PC and TC as are
the practice expense RVUs. In cases when the physician or group
provides both the TC and PC and bills for both components, the split is
not a significant issue since the physician or group would receive the
total payment. In many cases, the TC is provided by an entity--hospital
or free standing imaging center--other than the physician providing the
interpretation. The entity providing the TC, which includes a
supervising physician who is most likely a radiologist, assumes the
risk, such as excessive irradiation of the patient, of providing the
TC. We can think of no reason to transfer any portion of malpractice
RVUs from the entity (which would include a supervising physician)
providing the majority of the service, the TC, to a physician who is
providing only the interpretation. The malpractice liability associated
with interpreting the test is reflected in the PC malpractice RVUs.
Comment: The American Occupational Therapy Association indicated
that for computing malpractice RVUs, occupational therapy was
incorrectly crosswalked to occupational medicine (Insurance Service
Office (ISO) code 80233). They suggested the appropriate crosswalk is
to physical medicine and rehabilitation (ISO 80235).
Response: We agree with the commenter that a more appropriate
crosswalk for occupational therapy is to physical medicine and
rehabilitation as opposed to occupational medicine. The original data
that were used to calculate malpractice RVUs were based upon 1993 to
1995 malpractice premium data. These data were replaced with more
recent premium data (1996 to 1998). The resulting risk factors are
published in the November 2000 final rule (65 FR 65594). These more
recent premium data place occupation medicine, occupational therapy,
and physical medicine and rehabilitation into the same risk
classification. Due to this update to the risk classifications,
revising the crosswalk for occupational therapy will have no effect;
nonetheless, for purposes of accuracy, we will change the occupational
therapy crosswalk at the next scheduled update to malpractice premium
data in CY 2005.
Establishment of Interim Work Relative Value Units for New and Revised
Physician's Current Procedural Terminology (CPT) Codes and New
Healthcare Common Procedure Coding System Codes (HCPCS) for 2003
(Includes Table titled American Medical Association Specialty Relative
Value Update Committee and Health Care Professionals Advisory Committee
Recommendations and CMS's Decisions for New and Revised 2003 CPT Codes)
One aspect of establishing RVUs for 2003 was related to the
assignment of interim work RVUs for all new and revised CPT codes. As
described in our November 25, 1992 notice on the 1993 physician fee
schedule (57 FR 55983) and in section III.B. of the November 22, 1996
final rule (61 FR 59505 through 59506), we established a process, based
on recommendations received from the AMA's RUC, for establishing
interim work RVUs for new and revised codes.
This year we received work RVU recommendations for approximately
249 new and revised CPT codes from the RUC. Our staff and medical
officers reviewed the RUC recommendations by comparing them to our
reference set or to other comparable services for which work RVUs had
previously been established, or to both of these criteria. We also
considered the relationships among the new and revised codes for which
we received RUC recommendations. We agreed with the majority of the
relative relationships reflected in the RUC values. In some instances,
when we agreed with the relationships, we nonetheless revised the work
RVUs to achieve work neutrality within families of codes, that is, the
work RVUs have been adjusted so that the sum of the new or revised work
RVUs (weighted by projected frequency of use) for a family will be the
same as the sum of the current work RVUs (weighted by projected
frequency of use). For approximately 96 percent of the RUC
recommendations, proposed work RVUs were reviewed and accepted, and,
for approximately 4 percent, we disagreed with the RUC recommended
values. In the majority of these instances, we agreed with the
relativity established by the RUC, but needed to adjust work RVUs to
retain budget neutrality.
There were also 22 CPT codes for which we did not receive a RUC
recommendation. After a review of these CPT codes by our staff and
medical officers, we established interim work RVUs for the majority of
these services. For those services for which we could not arrive at
interim work RVUs, we have assigned a carrier-priced status until such
time as the RUC provides work RVU recommendations.
We received 22 recommendations from the Health Care Professionals
Advisory Committee (HCPAC). We agreed with approximately 86 percent of
the HCPAC recommendations and disagreed with approximately 14 percent
of the HCPAC recommendations.
We have also included, in Table 6, 34 codes for which the RUC has
submitted revisions to their original 2002 recommendations. These CPT
codes are identified with an ``L'' in Table 6.
Table 6, titled ``AMA RUC and HCPAC Recommendations and CMS
Decisions for New and Revised 2003 CPT Codes'', lists the new or
revised CPT codes, and their associated work RVUs, that will be interim
in 2003. This table includes the following information:
[sbull] A ``'' identifies a new code for 2003.
[sbull] CPT code. This is the CPT code for a service.
[sbull] Modifier. A ``26'' in this column indicates that the work
RVUs are for the professional component of the code.
[sbull] Description. This is an abbreviated version of the
narrative description of the code.
[sbull] RUC recommendations. This column identifies the work RVUs
recommended by the RUC.
[sbull] HCPAC recommendations. This column identifies the work RVUs
recommended by the HCPAC.
[sbull] CMS decision. This column indicates whether we agreed with
the RUC recommendation (``agree'') or we disagreed with the RUC
recommendation (``disagree''). Codes for which we did not accept the
RUC recommendation are discussed in greater detail following this
table. An ``(a)'' indicates that no RUC recommendation was provided.
[sbull] 2003 Work RVUs. This column establishes the 2003 work RVUs
for physician work.
[[Page 80002]]
Table 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
RUC HCPAC
*CPT code Mod Description recommendation recommendation CMS decision 2003 Work RVU
--------------------------------------------------------------------------------------------------------------------------------------------------------
11400 .......................... Exc tr-ext b9+marg 0.5 < 0.85 ................. Agree..................... 0.85
cm.
11401 .......................... Exc tr-ext b9+marg 0.6-1 1.23 ................. Agree..................... 1.23
cm.
11402 .......................... Exc tr-ext b9+marg 1.1-2 1.51 ................. Agree..................... 1.51
cm.
11403 .......................... Exc tr-ext b9+marg 2.1-3 1.79 ................. Agree..................... 1.79
cm.
11404 .......................... Exc tr-ext b9+marg 3.1-4cm 2.06 ................. Agree..................... 2.06
11406 .......................... Exc tr-ext b9+marg 4.0 cm.
11420 .......................... Exc h-f-nk-sp b9+marg 0.5 0.98 ................. Agree..................... 0.98
<.
11421 .......................... Exc h-f-nk-sp b9+marg 0.6- 1.42 ................. Agree..................... 1.42
1.
11422 .......................... Exc h-f-nk-sp b9+marg 1.1- 1.63 ................. Agree..................... 1.63
2.
11423 .......................... Exc h-f-nk-sp b9+marg 2.1- 2.01 ................. Agree..................... 2.01
3.
11424 .......................... Exc h-f-nk-sp b9+marg 3.1- 2.43 ................. Agree..................... 2.43
4.
11426 .......................... Exc h-f-nk-sp b9+marg 4 cm.
11440 .......................... Exc face-mm b9+marg 0.5 < 1.06 ................. Agree..................... 1.06
cm.
11441 .......................... Exc face-mm b9+marg 0.6-1 1.48 ................. Agree..................... 1.48
cm.
11442 .......................... Exc face-mm b9+marg 1.1-2 1.72 ................. Agree..................... 1.72
cm.
11443 .......................... Exc face-mm b9+marg 2.1-3 2.29 ................. Agree..................... 2.29
cm.
11444 .......................... Exc face-mm b9+marg 3.1-4 3.14 ................. Agree..................... 3.14
cm.
11446 .......................... Exc face-mm b9+marg 4 cm.
11600 .......................... Exc tr-ext mlg+marg 0.5 < 1.31 ................. Agree..................... 1.31
cm.
11601 .......................... Exc tr-ext mlg+marg 0.6-1 1.80 ................. Agree..................... 1.80
cm.
11602 .......................... Exc tr-ext mlg+marg 1.1-2 1.95 ................. Agree..................... 1.95
cm.
11603 .......................... Exc tr-ext mlg+marg 2.1-3 2.19 ................. Agree..................... 2.19
cm.
11604 .......................... Exc tr-ext mlg+marg 3.1-4 2.40 ................. Agree..................... 2.40
cm.
11606 .......................... Exc tr-ext mlg+marg 4 cm.
11620 .......................... Exc h-f-nk-sp mlg+marg 0.5 1.19 ................. Agree..................... 1.19
<.
11621 .......................... Exc h-f-nk-sp mlg+marg 0.6- 1.76 ................. Agree..................... 1.76
1.
11622 .......................... Exc h-f-nk-sp mlg+marg 1.1- 2.09 ................. Agree..................... 2.09
2.
11623 .......................... Exc h-f-nk-sp mlg+marg 2.1- 2.61 ................. Agree..................... 2.61
3.
11624 .......................... Exc h-f-nk-sp mlg+marg 3.1- 3.06 ................. Agree..................... 3.06
4.
11626 .......................... Exc h-f-nk-sp mlg+mar 4 cm.
11640 .......................... Exc face-mm malig+marg 0.5 1.35 ................. Agree..................... 1.35
<.
11641 .......................... Exc face-mm malig+marg 0.6- 2.16 ................. Agree..................... 2.16
1.
11642 .......................... Exc face-mm malig+marg 1.1- 2.59 ................. Agree..................... 2.59
2.
11643 .......................... Exc face-mm malig+marg 2.1- 3.10 ................. Agree..................... 3.10
3.
11644 .......................... Exc face-mm malig+marg 3.1- 4.03 ................. Agree..................... 4.03
4.
11646 .......................... Exc face-mm mlg+marg 4 cm.
L 11981 .......................... Insert drug implant device 1.48 ................. Agree..................... 1.48
L 11982 .......................... Remove drug implant device 1.78 ................. Agree..................... 1.78
L 11983 .......................... Remove/insert drug implant 3.30 ................. Agree..................... 3.30
17304 .......................... 1 stage mohs, up to 5 spec 7.60 ................. Agree..................... 7.60
17305 .......................... 2 stage mohs, up to 5 spec 2.85 ................. Agree..................... 2.85
17306 .......................... 3 stage mohs, up to 5 spec 2.85 ................. Agree..................... 2.85
17307 .......................... Mohs addl stage up to 5 2.85 ................. Agree..................... 2.85
spec.
17310 .......................... Mohs any stage 0.95 ................. Disagree.................. 0.62
5 spec each.
L 20526 .......................... Ther injection, carp 0.94 ................. Agree..................... 0.94
tunnel.
L 20550 .......................... Inj tendon sheath/ligament 0.75 ................. Agree..................... 0.75
L 20551 .......................... Inject tendon origin/ 0.75 ................. Agree..................... 0.75
insert.
L 20552 .......................... Inject trigger point, 1 or 0.66 ................. Agree..................... 0.66
2.
L 20553 .......................... Inject trigger points, =/ 0.75 ................. Agree..................... 0.75
3.
L 20600 .......................... Drain/inject, joint/bursa. 0.66 ................. Agree..................... 0.66
L20605 .......................... Drain/inject, joint/bursa. 0.68 ................. Agree..................... 0.68
# 20612 .......................... Aspirate/inj ganglion cyst 0.70 ................. Agree..................... 0.70
21030 .......................... Excise max/zygoma b9 tumor (a) ................. (a)...................... 3.89
21034 .......................... Excise max/zygoma mlg 16.17 ................. Agree..................... 16.17
tumor.
21040 .......................... Removal of jaw bone lesion (a) ................. (a)...................... 3.89
# 21046 .......................... Remove mandible cyst 13.00 ................. Agree..................... 13.00
complex.
# 21047 .......................... Excise lwr jaw cyst w/ 18.75 ................. Agree..................... 18.75
repair.
# 21048 .......................... Remove maxilla cyst 13.50 ................. Agree..................... 13.50
complex.
# 21049 .......................... Excise uppr jaw cyst w/ 18.00 ................. Agree..................... 18.00
repair.
21740 .......................... Reconstruction of sternum. 16.50 ................. Agree..................... 16.50
# 21742 .......................... Repair sternum/nuss w/o (a) ................. (a)....................... carrier
scope.
# 21743 .......................... Repair sternum/nuss w/ (a) ................. (a)....................... carrier
scope.
23410 .......................... Repair rotator cuff, acute 12.45 ................. Agree..................... 12.45
23412 .......................... Repair rotator cuff, 13.31 ................. Agree..................... 13.31
chronic.
L 24344 .......................... Reconstruct elbow lat 14.00 ................. Agree..................... 14.00
ligmnt.
L 24346 .......................... Reconstruct elbow med 14.00 ................. Agree..................... 14.00
ligmnt.
25320 .......................... Repair/revise wrist joint. 10.77 ................. Agree..................... 10.77
27425 .......................... Lat retinacular release 5.22 ................. Agree..................... 5.22
open.
27730 .......................... Repair of tibia epiphysis. 7.41 ................. Agree..................... 7.41
27732 .......................... Repair of fibula epiphysis 5.32 ................. Agree..................... 5.32
27734 .......................... Repair of lower leg 8.48 ................. Agree..................... 8.48
epiphysis.
[[Page 80003]]
27870 .......................... Fusion of ankle joint, 13.91 ................. Agree..................... 13.91
open.
29806 .......................... Shoulder arthroscopy/ 14.37 ................. Agree..................... 14.37
surgery.
# 29827 .......................... Arthroscop rotator cuff 15.36 ................. Agree..................... 15.36
repr.
# 29873 .......................... Knee arthroscopy/surgery.. 6.00 ................. Agree..................... 6.00
# 29899 .......................... Ankle arthroscopy/surgery. 13.91 ................. Agree..................... 13.91
# 33215 .......................... Reposition pacing-defib 4.44 ................. Disagree.................. 4.76
lead.
33216 .......................... Insert lead pace-defib, 5.39 ................. Disagree.................. 5.78
one.
33217 .......................... Insert lead pace-defib, 5.75 ................. Agree..................... 5.75
dual.
# 33224 .......................... Insert pacing lead & 9.05 ................. Agree..................... 9.05
connect.
# 33225 .......................... L ventric pacing lead add- 8.34 ................. Agree..................... 8.34
on.
# 33226 .......................... Reposition L ventric lead. 8.69 ................. Agree..................... 8.69
# 33508 .......................... Endoscopic vein harvest... 0.31 ................. Agree..................... 0.31
\L\ 33979 .......................... Insert intracorporeal 46.00 ................. Agree..................... 46.00
device.
\L\ 33980 .......................... Remove intracorporeal 56.25 ................. Agree..................... 56.25
device.
34812 .......................... Xpose for endoprosth, 6.75 ................. Agree..................... 6.75
femorl.
34825 .......................... Endovasc extend prosth, 12.00 ................. Agree..................... 12.00
init.
34826 .......................... Endovasc extend prosth, 4.13 ................. Agree..................... 4.13
addl.
# 34833 .......................... Xpose for endoprosth, 12.00 ................. Agree..................... 12.00
iliac.
# 34834 .......................... Xpose, endoprosth, 5.35 ................. Agree..................... 5.35
brachial.
# 34900 .......................... Endovasc iliac repr w/ 16.38 ................. Agree..................... 16.38
graft.
# 35572 .......................... Harvest femoropopliteal 6.82 ................. Agree..................... 6.82
vein.
36415 .......................... Routine venipuncture...... 0.00 ................. Agree..................... 0.00
# 36416 .......................... Capillary blood draw...... 0.00 ................. Agree..................... 0.00
# 36511 .......................... Apheresis wbc............. (a) ................. (a)....................... 1.74
# 36512 .......................... Apheresis rbc............. (a) ................. (a)....................... 1.74
# 36513 .......................... Apheresis platelets....... (a) ................. (a)....................... 1.74
# 36514 .......................... Apheresis plasma.......... (a) ................. (a)....................... 1.74
# 36515 .......................... Apheresis, adsorp/reinfuse (a) ................. (a)....................... 1.74
# 36516 .......................... Apheresis, selective...... (a) ................. (a)....................... 1.74
# 36536 .......................... Remove cva device obstruct 3.60 ................. Agree..................... 3.60
# 36537 .......................... Remove cva lumen obstruct. 0.75 ................. Agree..................... 0.75
36540 .......................... Collect blood venous 0.00 ................. Agree..................... 0.00
device.
# 37182 .......................... Insert hepatic shunt 17.00 ................. Agree..................... 17.00
(tips).
# 37183 .......................... Remove hepatic shunt 8.00 ................. Agree..................... 8.00
(tips).
# 37500 .......................... Endoscopy ligate perf 11.00 ................. Agree..................... 11.00
veins.
37760 .......................... Ligation, leg veins, open. 10.47 ................. Agree..................... 10.47
# 38204 .......................... Bl donor search management 2.00 ................. Disagree.................. 0.00
# 38205 .......................... Harvest allogenic stem 1.50 ................. Agree..................... 1.50
cells.
# 38206 .......................... Harvest auto stem cells... 1.50 ................. Agree..................... 1.50
# 38207 .......................... Cryopreserve stem cells... (a) ................. (a)....................... 0.00
# 38208 .......................... Thaw preserved stem cells. (a) ................. (a)....................... 0.00
# 38209 .......................... Wash harvest stem cells... (a) ................. (a)....................... 0.00
# 38210 .......................... T-cell depletion of (a) ................. (a)....................... 0.00
harvest.
# 38211 .......................... Tumor cell deplete of (a) ................. (a)....................... 0.00
harvest.
# 38212 .......................... Rbc depletion of harvest.. (a) ................. (a)....................... 0.00
# 38213 .......................... Platelet deplete of (a) ................. (a)....................... 0.00
harvest.
# 38214 .......................... Volume deplete of harvest. (a) ................. (a)....................... 0.00
# 38215 .......................... Harvest stem cell (a) ................. (a)....................... 0.00
concentrte.
# 38242 .......................... Lymphocyte infuse 1.71 ................. Agree..................... 1.71
transplant.
# 43201 .......................... Esoph scope w/submucous 2.09 ................. Agree..................... 2.09
inj.
# 43236 .......................... Uppr gi scope w/submuc inj 2.92 ................. Agree..................... 2.92
43245 .......................... Uppr gi scope dilate 3.18 ................. Agree..................... 3.18
strictr.
# 44206 .......................... Lap part colectomy w/stoma 27.00 ................. Agree..................... 27.00
# 44207 .......................... L colectomy/ 30.00 ................. Agree..................... 30.00
coloproctostomy.
# 44208 .......................... L colectomy/ 32.00 ................. Agree..................... 32.00
coloproctostomy.
# 44210 .......................... Laparo total 28.00 ................. Agree..................... 28.00
proctocolectomy.
# 44211 .......................... Laparo total 35.00 ................. Agree..................... 35.00
proctocolectomy.
# 44212 .......................... Laparo total 32.50 ................. Agree..................... 32.50
proctocolectomy.
# 44701 .......................... Intraop colon lavage add- 3.10 ................. Agree..................... 3.10
on.
# 45335 .......................... Sigmoidoscope w/submuc inj 1.46 ................. Disagree.................. 1.36
# 45340 .......................... Sig w/balloon dilation.... 1.96 ................. Disagree.................. 1.66
# 45381 .......................... Colonoscope, submucous inj 4.30 ................. Disagree.................. 4.20
# 45386 .......................... Colonoscope dilate 4.58 ................. Agree..................... 4.58
stricture.
# 46706 .......................... Repr of anal fistula w/ 2.95 ................. Disagree.................. 2.39
glue.
\L\ 47370 .......................... Laparo ablate liver tumor 19.69 ................. Agree..................... 19.69
rf.
\L\ 47371 .......................... Laparo ablate liver 19.69 ................. Agree..................... 19.69
cryosurg.
\L\ 47380 .......................... Open ablate liver tumor rf 23.00 ................. Agree..................... 23.00
\L\ 47381 .......................... Open ablate liver tumor 23.27 ................. Agree..................... 23.27
cryo.
\L\ 47382 .......................... Percut ablate liver rf.... 15.19 ................. Agree..................... 15.19
# 49419 .......................... Insrt abdom cath for 6.65 ................. Agree..................... 6.65
chemotx.
# 49904 .......................... Omental flap, extra-abdom. 20.00 ................. Agree..................... 20.00
[[Page 80004]]
49905 .......................... Omental flap, intra-abdom. 6.55 ................. Agree..................... 6.55
# 50542 .......................... Laparo ablate renal mass.. 20.00 ................. Agree..................... 20.00
# 50543 .......................... Laparo partial nephrectomy 25.50 ................. Agree..................... 25.50
# 50562 .......................... Renal scope w/tumor resect 10.90 ................. Agree..................... 10.90
# 55866 .......................... Laparo radical 30.74 ................. Agree..................... 30.74
prostatectomy.
# 51701 .......................... Insert bladder catheter... 0.50 ................. Agree..................... 0.50
# 51702 .......................... Insert temp bladder cath.. 0.50 ................. Agree..................... 0.50
# 51703 .......................... Insert bladder cath, 1.47 ................. Agree..................... 1.47
complex.
# 51798 .......................... Us urine capacity measure. 0.38 ................. Disagree.................. 0.11
53440 .......................... Male sling procedure...... 13.62 ................. Agree..................... 13.62
53442 .......................... Remove/revise male sling.. 11.57 ................. Agree..................... 11.57
# 56820 .......................... Exam of vulva w/scope..... 1.50 ................. Agree..................... 1.50
# 56821 .......................... Exam/biopsy of vulva w/ 2.05 ................. Agree..................... 2.05
scope.
# 57420 .......................... Exam of vagina w/scope.... 1.60 ................. Agree..................... 1.60
# 57421 .......................... Exam/biopsy of vag w/scope 2.20 ................. Agree..................... 2.20
# 57452 .......................... Exam of cervix w/scope.... 1.50 ................. Agree..................... 1.50
# 57454 .......................... Bx/curett of cervix w/ 2.33 ................. Agree..................... 2.33
scope.
# 57455 .......................... Biopsy of cervix w/scope.. 1.99 ................. Agree..................... 1.99
# 57456 .......................... Endocerv curettage w/scope 1.85 ................. Agree..................... 1.85
# 57460 .......................... Bx of cervix w/scope, leep 2.83 ................. Agree..................... 2.83
# 57461 .......................... Conz of cervix w/scope, 3.44 ................. Agree..................... 3.44
leep.
58140 .......................... Myomectomy abdom method... 14.60 ................. Agree..................... 14.60
58145 .......................... Myomectomy vag method..... 8.04 ................. Agree..................... 8.04
# 58146 .......................... Myomectomy abdom complex.. 19.00 ................. Agree..................... 19.00
58260 .......................... Vaginal hysterectomy...... 12.98 ................. Agree..................... 12.98
58262 .......................... Vag hyst including t/o.... 14.77 ................. Agree..................... 14.77
58263 .......................... Vag hyst w/t/o & vag 16.06 ................. Agree..................... 16.06
repair.
58267 .......................... Vag hyst w/urinary repair. 17.04 ................. Agree..................... 17.04
58270 .......................... Vag hyst w/enterocele 14.26 ................. Agree..................... 14.26
repair.
# 58290 .......................... Vag hyst complex.......... 19.00 ................. Agree..................... 19.00
# 58291 .......................... Vag hyst incl t/o, complex 20.79 ................. Agree..................... 20.79
# 58292 .......................... Vag hyst t/o & repair, 22.08 ................. Agree..................... 22.08
compl.
# 58293 .......................... Vag hyst w/uro repair, 23.06 ................. Agree..................... 23.06
compl.
# 58294 .......................... Vag hyst w/enterocele, 20.28 ................. Agree..................... 20.28
compl.
# 58545 .......................... Laparoscopic myomectomy... 14.60 ................. Agree..................... 14.60
# 58546 .......................... Laparo-myomectomy, complex 19.00 ................. Agree..................... 19.00
58550 .......................... Laparo-asst vag 14.19 ................. Agree..................... 14.19
hysterectomy.
# 58552 .......................... Laparo-vag hyst incl t/o.. 14.19 ................. Agree..................... 14.19
# 58553 .......................... Laparo-vag hyst, complex.. 19.00 ................. Agree..................... 19.00
# 58554 .......................... Laparo-vag hyst w/t/o, 19.00 ................. Agree..................... 19.00
compl.
# 61316 .......................... Implt cran bone flap to 1.39 ................. Agree..................... 1.39
abdo.
# 61322 .......................... Decompressive craniotomy.. 29.50 ................. Agree..................... 29.50
# 61323 .......................... Decompressive lobectomy... 31.00 ................. Agree..................... 31.00
61340 .......................... Subtemporal decompression. 18.66 ................. Agree..................... 18.66
# 61517 .......................... Implt brain chemotx add-on 1.38 ................. Agree..................... 1.38
# 61623 .......................... Endovasc tempory vessel 9.96 ................. Agree..................... 9.96
occl.
61624 .......................... Transcath occlusion, cns.. 20.15 ................. Agree..................... 20.15
# 62148 .......................... Retr bone flap to fix 2.00 ................. Agree..................... 2.00
skull.
# 62160 .......................... Neuroendoscopy add-on..... 3.00 ................. Agree..................... 3.00
# 62161 .......................... Dissect brain w/scope..... 20.00 ................. Agree..................... 20.00
# 62162 .......................... Remove colloid cyst w/ 25.25 ................. Agree..................... 25.25
scope.
# 62163 .......................... Neuroendoscopy w/fb 15.50 ................. Agree..................... 15.50
removal.
# 62164 .......................... Remove brain tumor w/scope 27.50 ................. Agree..................... 27.50
# 62165 .......................... Remove pituit tumor w/ 22.00 ................. Agree..................... 22.00
scope.
62201 .......................... Brain cavity shunt w/scope 14.86 ................. Agree..................... 14.86
62263 .......................... Epidural lysis mult 6.14 ................. Agree..................... 6.14
sessions.
# 62264 .......................... Epidural lysis on single 4.43 ................. Agree..................... 4.43
day.
64415 .......................... N block inj, brachial 1.48 ................. Agree..................... 1.48
plexus.
# 64416 .......................... N block cont infuse, b 3.50 ................. Agree..................... 3.50
plex.
64445 .......................... N block inj, sciatic, sng. 1.48 ................. Agree..................... 1.48
# 64446 .......................... N blk inj, sciatic, cont 3.25 ................. Agree..................... 3.25
inf.
# 64447 .......................... N block inj fem, single... 1.50 ................. Agree..................... 1.50
# 64448 .......................... N block inj fem, cont inf. 3.00 ................. Agree..................... 3.00
64450 .......................... N block, other peripheral. 1.27 ................. Agree..................... 1.27
# 66990 .......................... Ophthalmic endoscope add- 1.51 ................. Agree..................... 1.51
on.
# 75901 26........................ Remove cva device obstruct 0.49 ................. Agree..................... 0.49
# 75902 26........................ Remove cva lumen obstruct. 0.39 ................. Agree..................... 0.39
75953 26........................ Abdom aneurysm endovas rpr 1.36 ................. Agree..................... 1.36
# 75954 26........................ Iliac aneurysm endovas rpr 2.93 ................. Disagree.................. 1.36
76070 26........................ Ct bone density, axial.... 0.25 ................. Agree..................... 0.25
# 76071 26........................ Ct bone density, 0.22 ................. Agree..................... 0.22
peripheral.
[[Page 80005]]
L 76085 26........................ Computer mammogram add-on. 0.06 ................. Agree..................... 0.06
L 76362E 26........................ CAT scan for tissue 4.00 ................. Agree..................... 4.00
ablation.
L 76394 26........................ MRI for tissue ablation... 4.25 ................. Agree..................... 4.25
L 76490 26........................ US for tissue ablation.... 4.00 ................. Agree..................... 4.00
# 76801 .......................... Ob us < 14 wks, single 0.99 ................. Agree..................... 0.99
fetus.
# 76802 .......................... Ob us < 14 wks, addl fetus 0.83 ................. Agree..................... 0.83
76805 .......................... Ob us = 14 wks, 0.99 ................. Agree..................... 0.99
sngl fetus.
76810 .......................... Ob us = 14 wks, 0.98 ................. Agree..................... 0.98
addl fetus.
# 76811 .......................... Ob us, detailed, sngl 1.90 ................. Agree..................... 1.90
fetus.
# 76812 .......................... Ob us, detailed, addl 1.78 ................. Agree..................... 1.78
fetus.
76815 .......................... Ob us, limited, fetus(s).. 0.65 ................. Agree..................... 0.65
76816 .......................... Ob us, follow-up, per 0.85 ................. Agree..................... 0.85
fetus.
# 76817 .......................... Transvaginal us, obstetric 0.75 ................. Agree..................... 0.75
# 92601 .......................... Cochlear implt f/up exam < ................. 0.00 Agree..................... 0.00
7.
# 92602 .......................... Reprogram cochlear implt < ................. 0.00 Agree..................... 0.00
7.
# 92603 .......................... Cochlear implt f/up exam 7 ................. 0.00 Agree..................... 0.00
.
# 92604 .......................... Reprogram cochlear implt 7 ................. 0.00 Agree..................... 0.00
.
# 92605 .......................... Eval for nonspeech device ................. 0.00 Agree..................... 0.00
rx.
# 92606 .......................... Non-speech device service. ................. 0.00 Agree..................... 0.00
# 92607 .......................... Ex for speech device rx, ................. 0.00 Agree..................... 0.00
1hr.
# 92608 .......................... Ex for speech device rx ................. 0.00 Agree..................... 0.00
addl.
# 92609 .......................... Use of speech device ................. 0.00 Agree..................... 0.00
service.
# 92610 .......................... Evaluate swallowing ................. 0.00 Agree..................... 0.00
function.
# 92611 .......................... Motion fluoroscopy/swallow ................. 0.00 Agree..................... 0.00
# 92612 .......................... Endoscopy swallow tst ................. 1.27 Agree..................... 1.27
(fees).
# 92613 .......................... Endoscopy swallow tst ................. 0.99 Disagree.................. 0.00
(fees).
# 92614 .......................... Laryngoscopic sensory test ................. 1.27 Agree..................... 1.27
# 92615 .......................... Eval laryngoscopy sense ................. 0.88 Disagree.................. 0.00
tst.
# 92616 .......................... Fees w/laryngeal sense ................. 1.88 Agree..................... 1.88
test.
# 92617 .......................... Interprt fees/laryngeal ................. 1.10 Disagree.................. 0.00
test.
# 93580 .......................... Transcath closure of asd.. 18.00 ................. Agree..................... 18.00
# 93581 .......................... Transcath closure of vsd.. 24.43 ................. Agree..................... 24.43
L 93609 26........................ Map tachycardia, add-on... 5.00 ................. Agree..................... 5.00
L 93613 .......................... Electrophys map 3d, add-on 7.00 ................. Agree..................... 7.00
L 93619 26........................ Electrophysiology 7.32 ................. Agree..................... 7.32
evaluation.
L 93620 26........................ Electrophysiology 11.59 ................. Agree..................... 11.59
evaluation.
L 93621 26........................ Electrophysiology 2.10 ................. Agree..................... 2.10
evaluation.
L 93622 26........................ Electrophysiology 3.10 ................. Agree..................... 3.10
evaluation.
# 95990 .......................... Spin/brain pump refil & (a) ................. (a)....................... 0.00
main.
L 96000 .......................... Motion analysis, video/3d. ................. 1.80 Agree..................... 1.80
L 96001 .......................... Motion test w/ft press ................. 2.15 Agree..................... 2.15
meas.
L 96002 .......................... Dynamic surface emg....... ................. 0.41 Agree..................... 0.41
L 96003 .......................... Dynamic fine wire emg..... ................. 0.37 Agree..................... 0.37
L 96004 .......................... Phys review of motion ................. 2.14 Agree..................... 2.14
tests.
96530 .......................... Syst pump refill & main... 0.00 ................. Agree..................... 0.00
# 96920 .......................... Laser tx, skin < 250 sq cm 1.15 ................. Agree..................... 1.15
# 96921 .......................... Laser tx, skin 250-500 sq 1.17 ................. Agree..................... 1.17
cm.
# 96922 .......................... Laser tx, skin 2.10 ................. Agree..................... 2.10
500 sq cm.
# 99026 .......................... In-hospital on call (a) ................. (a)....................... 0.00
service.
# 99027 .......................... Out-of-hosp on call (a) ................. (a)....................... 0.00
service.
99289 .......................... Ped crit care transport... 4.80 ................. Agree..................... 4.80
99290 .......................... Ped crit care transport 2.40 ................. Agree..................... 2.40
addl.
# 99293 .......................... Ped critical care, initial 16.00 ................. Agree..................... 16.00
# 99294 .......................... Ped critical care, subseq. 8.00 ................. Agree..................... 8.00
99295 .......................... Neonate crit care, initial 18.49 ................. Agree..................... 18.49
99296 .......................... Neonate critical care 8.00 ................. Agree..................... 8.00
subseq.
99298 .......................... Neonatal critical care.... 2.75 ................. Agree..................... 2.75
# 99299 .......................... Ic, lbw infant 1500-2500 2.50 ................. Agree..................... 2.50
gm.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(a) No Final RUC recommendation provided.
# New CPT codes.
*All CPT codes copyright 2002 American Medical Association.
L Revised 2002 RUC recommendations.
Table 7, which is titled ``AMA RUC ANESTHESIA RECOMMENDATIONS AND
CMS DECISIONS FOR NEW AND REVISED 2003 CPT CODES'', lists the new or
revised CPT codes for anesthesia and their base units that will be
interim in 2003. This table includes the following information:
[sbull] CPT code. This is the CPT code for a service.
[sbull] Description. This is an abbreviated version of the
narrative description of the code.
[[Page 80006]]
[sbull] RUC recommendations. This column identifies the base units
recommended by the RUC.
[sbull] CMS decision. This column indicates whether we agreed with
the RUC recommendation (``agree'') or we disagreed with the RUC
recommendation (``disagree''). Codes for which we did not accept the
RUC recommendation are discussed in greater detail following this
table.
[sbull] 2003 Base Units. This column establishes the 2003 base
units for these services.
Table 7
----------------------------------------------------------------------------------------------------------------
RUC
*CPT code Description recommendation CMS decision 2003 base units
----------------------------------------------------------------------------------------------------------------
#00326 Anesth, larynx/trach, < 1 yr.. 7 Agree........................ 7
#00539 Anesth, trach-bronch reconst.. 18 Agree........................ 18
#00540 Anesth, chest surgery......... 12 Agree........................ 12
#00541 Anesth, one lung ventiliation. 15 Agree........................ 15
#00640 Anesth, spine manipulation.... 3 Agree........................ 3
#00834 Anesth, hernia repair < 1 yr.. 5 Agree........................ 5
#00836 Anesth hernia repair, preemie. 6 Agree........................ 6
#00921 Anesth, vasectomy............. 3 Agree........................ 3
#01829 Anesth, dx wrist arthroscopy.. 3 Agree........................ 3
#01991 Anesth, nerve block/inj....... 3 Agree........................ 3
#01992 Anesth, nerve block/inj, prone 5 Agree........................ 5
----------------------------------------------------------------------------------------------------------------
*All CPT codes copyright 2003 American Medical Association.# New CPT codes.
Discussion of Codes for Which There Were No RUC Recommendations or for
Which the RUC Recommendations Were Not Accepted
The following is a summary of our rationale for not accepting
particular RUC work RVU or base unit recommendations. It is arranged by
type of service in CPT order. Additionally, we also discuss those CPT
codes for which we received no RUC recommendations for physician work
RVUs. This summary refers only to work RVUs or base units.
New and Revised Codes for 2003
CPT code 17310 Chemosurgery (Mohs micrographic technique) including
removal of all gross tumor, surgical excision of tissue specimens,
mapping, color coding of specimens, microscopic examination of
specimens by the surgeon, and complete histopathological preparation
including the first routine stain (e.g., hematoxylin and eosin,
toluidine blue); each additional specimen after the first 5 specimens,
fixed or fresh tissue, any stage (List separately in addition to code
for primary procedure).
This add-on code is used to report specimens generated during Mohs
surgery. Prior to the changes made for 2003, the code was reported once
for all specimens over five, generated during a particular stage of
Mohs surgery. In 2003, the code will be used to report each specimen
over five during a particular stage of Mohs surgery. The RUC
recommended maintaining 0.95 work RVUs for this code as an interim
value. We disagree. We share the concerns of the RUC that the specialty
society recommendation was based on a survey that did not take into
account the ZZZ global period of this code. Additionally, in order to
determine whether the current work RVU for 17310 was appropriate, we
analyzed the current work RVU for 17310 in the context of the work RVUs
for other Mohs surgery CPT codes. Mohs surgery work RVUs are based on
Harvard data which is depicted in Table 8 below (all codes have 000
global periods for 2002):
Table 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Histotechnician Time
CPT code 2002 Work RVUs Total time Intra-service time Work intensity (work RN Time (minutes) (minutes) (CPEP
(minutes) (minutes) RVU/total time) (CPEP data) data)
--------------------------------------------------------------------------------------------------------------------------------------------------------
17304 7.6 89 50 .085 202 50
17305 2.85 62 .................... .046 101 25
17306 2.85 62 .................... .046 101 25
17307 2.85 62 .................... .046 101 25
17310 0.95 31 .................... .031 32 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
These data clearly show that the Harvard data appropriately rank
these services in terms of intensity. We note that, because intra-
service times are not given for all codes, it is impossible to
calculate intra-service work intensity. The RUC recommendation of 0.95
work RVUs which is based on a median time of 20 minutes yields a work
intensity of 0.047 which is higher than the work intensities for CPT
codes 17305-17307. This would create a rank order anomaly in this
family of codes.
We also note that the 2002 descriptor for CPT code 17310 says that
this code should be reported only once for all specimens more than five
for a given stage of Mohs. Therefore, we believe that the current work
RVU represents the total work required for the typical number of
specimens obtained (beyond five) per stage of Mohs.
We compared CPT code 17310 with CPT codes 88331 Pathology
consultation during surgery; first tissue block, with frozen
section(s), single specimen, and 88332 Pathology consultation during
surgery; each additional tissue block with frozen section(s). CPT code
88332 has a work RVU of 0.59 and total physician time of 15 minutes. We
note that if the RUC survey time (20 minutes) for CPT code 17310 is
multiplied by the Harvard
[[Page 80007]]
intensity (.031) that a work value of 0.62 is obtained.
Therefore, we are assigning a work value of 0.62 work RVUs to CPT
code 17310 pending further recommendations from the RUC. We believe
this value is appropriate for the new descriptor, which allows
reporting of CPT code 17310 for each specimen rather than once for all
specimens. We also believe this work value places this code in correct
rank order with CPT codes 17304-17307 and with CPT codes 88331 and
88332.
We also note that a work value of 0.62 RVUs will not require any
work neutrality adjustment because it already takes our claims data for
CPT code 17310 into account.
CPT Codes 21030, Excision of benign tumor or cyst of maxilla or
zygoma, by enucleation and curettage, and 21040, Excision of benign
tumor or cyst of mandible, by enucleation or curettage.
CPT changed the descriptors for these codes to make the procedure
more specific, and we have not yet received RUC recommendations for
these codes. We compared these services to CPT Codes 21555, Excision
tumor, soft tissue of neck or thorax; subcutaneous (work RVU of 4.35),
28043, Excision, tumor, foot; subcutaneous tissue (work RVU 3.54),
28108, Excision or curettage of bone cyst or benign tumor, phalanges of
foot (work RVU 4.16), 21501, Incision and drainage, deep abscess or
hematoma, soft tissues of neck or thorax (work RVU 3.81), 26115
Excision, tumor or vascular malformation, soft tissue of hand or
finger; subcutaneous (work RVU 3.86), and 24075 Excision, tumor, soft
tissue of upper arm or elbow area; subcutaneous (work RVU 3.92). We
believe that 21030 and 21040 are most similar to 24075 and 26115 in
terms of physician work and are assigning interim RVUs of 3.89 for both
of these procedures. We are crosswalking the malpractice RVUs from
current CPT Code 21030 (0.60 RVUs) to these procedures.
CPT Codes 21740 Reconstructive repair of pectus excavatum or
carinatum; open and 21742 Reconstructive repair of pectus excavatum or
carinatum; minimally invasive approach (Nuss procedure) with
thoracoscopy
We have not received the final recommendation from the RUC on these
services and carriers will price these services in 2003.
CPT codes 33215 Repositioning of previously implanted transvenous
pacemaker or pacing cardioverter-defibrillator (right atrial or right
ventricular) electrode and 33216 Insertion of transvenous electrode;
single chamber (one electrode) permanent pacemaker or single chamber
pacing cardioverter-defibrillator
We received a RUC recommendation of 4.44 work RVUs for CPT code
33215 and a RUC recommendation of 5.39 work RVUs for CPT code 33216.
Previously, both the insertion and repositioning of the electrodes were
billed under CPT code 33216. Effective January 1, 2003, CPT code 33215
will be used to report the repositioning of a previously implanted
transvenous pacemaker or pacing cardioverter-defibrillator electrode,
while CPT 33216 will be used to report the insertion of a transvenous
electrode. Although we agree with the relativity established by the
RUC, in order to retain work neutrality between these two services, we
have scaled the total relative values that will be paid in 2003 to what
would have been paid in 2003 if CPT code 33215 had not been
established. This results in work RVUs of 4.76 for CPT code 33215 and
5.78 work RVUs for CPT code 33216.
CPT Codes 36511 Therapeutic apheresis; for white blood cells, 36512
Therapeutic apheresis; for red blood cells, 36513 Therapeutic
apheresis; for platelets, 36514 Therapeutic apheresis; for plasma
pheresis, 36515 Therapeutic apheresis; with extracorporeal
immunoadsorption and plasma reinfusion, and 36516 Therapeutic
apheresis; with extracorporeal adsorption or selective filtration and
plasma reinfusion
We have not yet received the RUC recommendations for these CPT
codes. We are assigning 1.74 work RVUs to all these procedures. This is
the work RVU for both CPT codes 36520 and 36521 (deleted for CPT 2003)
which are currently being used to report these procedures. We are also
crosswalking the malpractice RVUs for CPT code 36520 to these
procedures (0.06 RVU).
CPT Codes 38204 Management of recipient hematopoietic progenitor
cell donor search and cell acquisition, 38205 Blood-derived
hematopoietic progenitor cell harvesting for transplantation, per
collection; allogenic, 38206 Blood-derived hematopoietic cell
harvesting for transplantation, per collection; autologous, 38207
Transplant preparation of hematopoietic progenitor cells;
cryopreservation and storage, 38208 Transplant preparation of
hematopoietic progenitor cells; thawing of previously frozen harvest,
38209 Transplant preparation of hematopoietic progenitor cells; washing
of harvest, 38210 Transplant preparation of hematopoietic progenitor
cells; specific cell depletion within harvest, T-cell depletion, 38211
Transplant preparation of hematopoietic progenitor cells; tumor cell
depletion, 38212 Transplant preparation of hematopoietic progenitor
cells; red blood cell removal, 38213 Transplant preparation of
hematopoietic progenitor cells; platelet depletion, 38214 Transplant
preparation of hematopoietic progenitor cells; plasma (volume)
depletion, 38215 Transplant preparation of hematopoietic progenitor
cells; cell concentration in plasma, mononuclear, or buffy coat layer,
38242 Bone marrow or blood-derived peripheral stem cell
transplantation; allogeneic donor lymphocyte infusions
We agree with the RUC work recommendations for CPT codes 38205,
38206, and 38242. We disagree with the RUC recommendations for the CPT
code 38204. CPT codes 38207 through 38215 were reviewed at the April
RUC meeting but final work RVUs were not established. We did not
receive final recommendations on work RVUs for these services in time
for publication in this final rule, but will review any RUC
recommendations for next year.
CPT code 38204 is reported by the physician managing a search for
potential hematopoietic progenitor cell donors. We are giving this code
a status indicator ``B,'' meaning that we will not make separate
payment for this service. We believe we are already making payment for
any physician work associated with this service as part of our payment
for other bone marrow transplant codes (that is, CPT codes 38205,
38206, 38240, 38241, and 38242). Furthermore, we have significant
concerns about how this code would be used in actual practice. Would
beneficiaries be billed for failed donor searches, and, if so, how
many? How would beneficiaries be able to determine whether one or more
searches had actually been conducted? This problem is compounded by the
fact that the beneficiary would probably never meet the physician
conducting the search. Additionally, it is unclear from the specialty
society vignette what is actually physician work and what is the work
of clinical and administrative staff. It would seem most appropriate
that any payment would be made to the physician who is performing the
cell harvesting or bone marrow transplant services (that is, CPT codes
38205, 38206, 38240, 38241, and 38242). We welcome RUC's further review
of these codes to determine whether any physician work associated with
a cell donor search is already included. If the RUC determines that
such work is not included, we would review
[[Page 80008]]
recommendation for changing the RUC values of these codes to include
such work.
CPT codes 38207, 38208, 38209. These codes represent an unbundling
of CPT codes 88240 Cryopreservation, freezing and storage of cells,
each cell line, and 88241 Thawing and expansion of frozen cells, each
aliquot. Both codes 88240 and 88241 are paid under the laboratory fee
schedule. We also note that CPT 2003 has added a parenthetical note
under 88240 and 88241, which implies that, starting in January 2003,
they should be used only for diagnostic services, and codes 38207,
38208, and 38209 should be used for therapeutic services.
[sbull] It is unclear from the specialty vignettes whether any
physician work is typically required to perform these services. The
descriptions of typical physician involvement in these procedures
indicate that the only physician services are laboratory oversight or
quality management services for which we do not make separate payment
to physicians.
[sbull] We also believe these services will be reported on a ``per
aliquot'' basis. However, even though blood-derived stem cells are
usually stored in aliquots, the processes of freezing, thawing, and
washing are done in batches. This means that the physician oversight of
these processes does not occur on a ``per aliquot'' basis and
therefore, it does not seem appropriate to pay for physician services
on a ``per aliquot'' basis.
[sbull] We believe that the analysis the RUC was using to arrive at
its interim recommendation for assigning physician work to CPT codes
38207, 38208, and 38209 was flawed. The RUC discussed assigning
physician work to these services based on its review of 38210 which it
compared to CPT code 86077 Blood bank physician services; difficult
cross match and/or evaluation of irregular antibody(s), interpretation
and written report (work RVU 0.94). The RUC then used the specialty
societies' relative ranking of services 38207-38215 as the basis for
recommending work values for CPT codes 38207-38209 and 38211-38215.
With regard to this analysis, we note: (1) the descriptor for CPT code
86077 requires a physician service and an ``interpretation and written
report,'' while CPT code 38210 is not described as a physician service,
nor does it require an ``interpretation and written report.''
Therefore, we believe it is inappropriate to compare 38210 with 86077,
(2) 38210 is currently reported as CPT code 86915, Bone Marrow or
peripheral stem cell harvest, modification or treatment to eliminate
cell types (e.g., T cells, metastatic carcinoma) which is paid under
the laboratory fee schedule, and (3) 38207, 38208, and 38209 describe
entirely different services from 38210, 86077, and 86915, thus making
it difficult to understand how a work value for 38210 could be
extrapolated to 38207-38209.
At this time we are assigning status indicator ``I'' to 38207-38209
making them not valid for Medicare purposes. We are creating two G
codes, G0265 Cryopreservation, freezing and storage of cells for
therapeutic use, each cell line, and G0266 Thawing and expansion of
frozen cells for therapeutic use, each aliquot. These codes will be
paid under the laboratory fee schedule at the same rate as CPT codes
88240 and 88241 respectively. The descriptors will allow us to continue
to recognize CPT codes 88140 and 88141 as described in CPT 2003 for
diagnostic use, thus making it unnecessary for us to change the status
indicators for these services. The G codes will also enable us to track
the utilization of these services. We believe that continuing the
status quo with regard to these procedures will not affect beneficiary
access to transplantation services and will give us more time to
analyze the services and recommendations.
CPT codes 38210-38215. Currently CPT codes 38210-38213 are
described by CPT code 86915, Bone Marrow or peripheral stem cell
harvest, modification or treatment to eliminate cell types (for
example, T cells, metastatic carcinoma). Currently, CPT code 86915 is
paid under the laboratory fee schedule. With regard to CPT codes 38210-
38215, we have many of the same concerns as we have for CPT codes
38207-38209.
[sbull] It is unclear from the specialty vignettes whether any
physician work is typically required to perform these services. The
descriptions of typical physician involvement in these procedures
indicate that a significant portion of the physician work is procedure
oversight or quality management services for which we do not make
separate payment to physicians. In fact, the only references in the
specialty society vignettes for these procedures to services paid under
the physician fee schedule are references to performance of flow
cytometry. Therefore, if there is any physician work associated with
these services it is currently payable under the CPT code 88180 Flow
cytometry; each cell surface, cytoplasmic or nuclear marker.
[sbull] We do not believe that unbundling of these services is
warranted because CPT codes 38210, 38212, 38213, 38214, and 38215 may
be performed together on a single harvest of stem cells during an
allogeneic transplant. Further, when these services are performed
together, if there is any physician work associated with these
activities, it must be allocated to each service and it is not clear
that this can be accomplished.
[sbull] As discussed above, we have concerns about the RUC's
preliminary discussions for work RVUs for these codes. CPT code 86077
to which 38210 was compared requires physician services, an
interpretation and report, and has forty minutes of intra-service time
associated with it. In contrast 38210 has no requirement for physician
work, and it is stated that the physician will only perform this
service in an emergency. Further, there is no requirement for
interpretation of data or a written report, and the intra-service time
is 23 minutes. We do not believe the stress involved with these
procedures is any greater than the stress involved with 86077 or other
pathology services that require correct interpretation of clinical
laboratory data or surgical specimens to make a correct diagnosis
essential in determining appropriate treatment. Furthermore, we know
the RUC is continuing to review these codes and we also require further
time to review them.
Therefore, we are assigning status indicator ``I'' to CPT codes
38210-38215, making them invalid for Medicare purposes. We are creating
G0267, Bone marrow or peripheral stem cell harvest, modification or
treatment to eliminate cell type(s) (for example, T-cells, metastic
carcinoma). This G code will replace deleted code CPT code 86915, and
it will be paid under the laboratory fee schedule.
We welcome any comments from the RUC or other interested parties
concerning these codes and ask that such comments specifically address
the concerns discussed above. We will continue to review these codes
internally, obtain payment and utilization data for CPT code 86915, and
track utilization of all three G codes.
CPT code 45335 Sigmoidoscopy, flexible; with directed submucosal
injection(s) any substance and 45381 Colonoscopy, flexible, proximal to
splenic flexure; with directed submucosal injection(s) any substance
The RUC recommended work RVUs of 1.46 for CPT code 45335 and 4.30
for CPT code 45381. For CPT code 45335, the RUC used CPT code 45330 as
the base code (0.96 work RVUs) and added an increment of 0.50 work RVUs
based upon the increased pre-, intra-, and post-service work associated
with CPT code 45335 as compared to CPT code 45330. For CPT code 45381,
the RUC
[[Page 80009]]
used CPT code 45378 (3.70 work RVUs) as the base code and added an
increment of 0.60 work RVUs based upon the increased pre-, intra-, and
post-service work associated with CPT code 45381 as compared to CPT
code 45378.
In order to review the RUC recommended values for CPT code 45335
and 45381, we compared these services to the analysis and
recommendations provided by the RUC for CPT codes 43201 and 43236. We
agree with the RUC recommendations for CPT codes 43201 and 43236, which
are also new submucosal injection codes. We further note that the
intra-service intensities of CPT codes 43201 and 43236 should be higher
than the intra-service intensities of CPT codes 45335 and 45381 because
of the increased risk of complications, and the fact that several sites
are being injected instead of one.
In reviewing the pre-, intra-, and post-service times for CPT codes
43201, 43236, 45335, and 45381, we are unsure why these times vary so
much. The pre-service time for CPT code 45381 is 25 minutes longer than
the pre-service time for CPT code 45378 and there is nothing in the RUC
vignette to indicate the reason for the increased pre-service time.
Moreover, it is unclear why the post-service time for CPT code 45381 is
9 minutes less than the post-service time for CPT code 45378.
Interestingly, less than 10 minutes of extra pre- and post-service time
(beyond the base codes) was allotted for the incremental work of CPT
codes 43201 and 43236 that we believe are more intensive procedures
than CPT codes 45335 and 45381. Therefore, we believe that the pre- and
post-service time increment for CPT codes 45335 and 45381 should be
less than for CPT codes 43201 and 43236. In short, we had a great deal
of difficulty interpreting the RUC time data.
In assigning work values to CPT codes 45335 and 45381, we compared
them to the incremental work values and times for CPT codes 43201 and
43236 because we agreed with the RUC recommendations and times for
those codes. The intra-service intensities for CPT codes 43201 and
43236 are 0.05 RVU per minute and 0.035 RVU per minute, respectively.
We believe the intra-service intensity of CPT code 45335 is less than
the intensity of CPT code 43201. After accounting for a few minutes of
extra post-service time and an intra-service intensity of 0.04 RVU per
minute, we are left with an incremental work value of 0.4 work RVUs for
CPT code 43201, which is what we will apply to CPT code 45335. We also
believe the intensity of CPT code 45381 is less than the intensity of
CPT code 43201. Therefore, accounting for approximately 10 minutes of
extra pre- and post-service time, and assigning an intra-service
intensity of 0.04 RVU per minute leaves an incremental work value of
0.5 work RVUs, which is what we will apply to CPT code 45381.
Therefore, we are assigning work RVUs of 1.36 and 4.20 to CPT codes
45335 and 45381, respectively.
CPT code 45340 Sigmoidoscopy, flexible; with dilation by balloon,
each stricture
The RUC recommended a work RVU of 1.96 for this CPT code. This
includes 1.00 for the incremental work based on the need for conscious
sedation to perform this procedure (other flexible sigmoidoscopies do
not require conscious sedation). This means the incremental work for
CPT code 45340 is greater than the incremental work for other
endoscopic dilation codes (CPT codes 43245 and 45386) because those
codes have base procedures that include use of conscious sedation. The
RUC has been considering the issue of conscious sedation in general for
some time and has not been able to conclude that there is any
incremental physician work associated with conscious sedation. In the
absence of a specific RUC recommendation affirmatively stating that
specific physician work is associated with conscious sedation, we do
not believe it is appropriate to assign a work RVU for CPT code 45340
that is based on the presumption that a portion of the work value is
for using conscious sedation. Therefore, we compared the RUC
recommendations for work and physician time for CPT code 45386 to the
incremental times for CPT code 45340. We believe that the intra-service
intensity of CPT code 45340 should be no greater than the intra-service
intensity for CPT code 45386. Therefore, we calculated the increment in
pre- and post-service work (.341 work RVUs) and the intra-service
intensity (0.036 RVU per minute) of CPT code 45386. We multiplied this
intensity by 10 minutes to arrive at an intra-service work of .36 RVU
for CPT code 45340 and added .341 RVUs for pre- and post-service work
to arrive at an RVU of 0.7 for the total incremental work of CPT code
45340. Therefore, we are assigning an interim work RVU of 1.66 to CPT
code 45340.
CPT code 46706 Repair of Anal Fistula with fibrin glue. The RUC
recommended 2.95 work RVUs for this service based on a comparison to
CPT codes 46020, Placement of Seton (work RVU 2.90) and 46940,
Curettage or Cautery of Anal Fissure, including dilation of anal
sphincter (separate procedure); initial (work RVU 2.32). The intra-
service time for CPT code 46706 is less than the intra-service time for
CPT code 46940 and requires similar physician work to CPT code 46612,
Anoscopy with removal of multiple tumors, polyps, or other lesions by
hot biopsy forceps, bipolar cautery or snare technique (work RVU 2.34).
The post-service work for CPT code 46706 is comparable to that of CPT
code 46940. Therefore, we are assigning a work RVU of 2.39 to CPT code
46706. Malpractice RVUs are crosswalked from CPT code 46940 at 0.17
RVUs.
CPT code 51798 Measurement of post-voiding residual urine and/or
bladder capacity by ultrasound, nonimaging. The RUC recommended 0.38
work RVUs based on a comparison of this procedure to CPT code 76857,
Ultrasound, pelvic (nonobstetric), B-scan and/or real time with image
documentation; complete. The RUC recommended 0.38 work RVUs based on a
urology survey that reported that this procedure is performed 75
percent of the time by the physician and based on a comparison of this
procedure to CPT code 76857, Ultrasound, pelvic (nonobstetric, B-scan
and/or real time with image documentation; complete. We disagree. This
code has been a HCPCS level two code that was assigned 0.00 work RVUs
because we believe that it is typically performed by a nurse or other
clinical staff. We continue to believe that this is a non-physician
service and are assigning 0.00 work RVUs to this service. We will
accept the practice expense inputs recommended by the RUC and will
crosswalk the malpractice RVUs from G0050. It is not appropriate to
bill CPT code 51798 in a SNF, hospital, or other setting in which
nursing care is provided by the facility, since it is a routine nursing
service, not really a diagnostic test.
CPT code 75954 Endovascular graft placement for repair of iliac
artery (for example, aneurysm, pseudoaneurysm, ateriovenous
malformation, trauma) radiological supervision and interpretation.
The RUC agreed with the specialty societies and recommended a value
of 2.93 work RVUs based on comparing this code to CPT code 75952,
Endovascular repair of infrarenal abdominal aortic anuerysm or
dissection, radiological supervision and interpretation (work RVU of
4.5) and CPT code 75953, Placement of proximal or distal extension
prosthesis for endovascular repair of infra renal abdominal aortic
aneurysm, radiological supervision and
[[Page 80010]]
interpretation (work RVU or 1.36). The recommended RVUs are midway
between the RVUs of the reference procedures. The specialty societies
presented the following to the RUC: ``Unlike many of the other
radiological supervision and interpretation (S&I) codes, 75954 includes
all routine supervision and interpretation of the endovascular iliac
graft placement procedure with the only exception being that 75953 is
added if an extension prosthesis is required. This more inclusive
approach makes 75954 very similar in concept to the inclusive S&I for
endovascular aortic aneurysm repair CPT 75952.'' The specialties go on
to say that survey respondents believed that the code should be valued
less than CPT code 75952 but more than CPT code 75953. We disagree.
First, we note that CPT code 75953, which was reviewed by the RUC in
February of 2001, is not an ``add-on'' code. It is a stand-alone code
that is billed with a stand-alone surgical procedure. Furthermore,
total procedure time for CPT code 75954 (85 minutes) is less than the
total procedure time for CPT code 75953 (95 minutes), and the intra-
service times of CPT codes 75954 and 75953 are identical (45 minutes).
This is consistent with the specialty societies' description of the
work of CPT code 75954, which is virtually identical to the description
of the work for CPT code 75953. Therefore, in order to maintain correct
rank order in this family of codes we are assigning a work RVU of 1.36
to CPT code 75954.
CPT codes 92605 Evaluation for prescription of non-speech
generating augmentative and alternative communication device and 92606
Therapeutic service(s) for the use of non-speech generating device,
including programming and modification
We will consider CPT codes 92605 and 92606 bundled for Medicare
payment purposes. The RUC's evaluation of these services implied that
they are similar to the new CPT codes for speech generating devices. We
believe that CPT codes 92605 and 92606 typically do not involve the
same type of highly specialized equipment as the codes for speech
generating devices. We believe that the work associated with these
services is already contained in CPT codes 92506 Evaluation of speech,
language, voice communication, auditory processing, and/or aural
rehabilitation status and 92507 Treatment of speech, language, voice
communication, auditory processing disorder (includes aural
rehabilitation); individual, and will consider CPT codes 92605 and
92606 bundled.
We note that CPT also created new codes to describe programming and
analysis of cochlear implants. These CPT codes are 92601 Diagnostic
analysis of cochlear implant, patient under 7 years of age; with
programming; 92602 Diagnostic analysis of cochlear implant, patient
under 7 years of age; subsequent reprogramming; 92603 Diagnostic
analysis of cochlear implant, age 7 years or older, with programming;
and 92604 Diagnostic analysis of cochlear implant, age 7 years or
older, subsequent reprogramming. Codes 92601 and 92603 describe post-
operative analysis and fitting of previously placed external devices,
connection to the cochlear implant, and programming of the stimulator.
CPT Codes 92602 and 92604 describe subsequent sessions for measurements
and adjustment of the external transmitter and re-programming of the
internal stimulator.
An existing CPT code, 92510 Aural rehabilitation following cochlear
implant (includes evaluation of aural rehabilitation status and
hearing, therapeutic services) with or without speech processor
programming, will no longer be used for Medicare services since it
represents services which have considerable overlap with the services
described by the new CPT codes, 92601, 92602, 93603, and 92604. For the
remaining services that do not involve reprogramming of the cochlear
implant, CPT code 92507 Treatment of speech, language, voice,
communication, and/or auditory processing disorder (includes aural
rehabilitation); individual describes the services, so a code specific
to cochlear implant patients is no longer needed. The use of CPT code
92507 for this service is consistent with the note in the CPT manual
under CPT code 92602.
CPT codes 92613 Flexible fiberoptic endoscopic evaluation of
swallowing by cine or video recording; physician interpretation and
report only, 92615 Flexible fiberoptic endoscopic evaluation, laryngeal
sensory testing by cine or video recording; physician interpretation
and report only, and 92617 Flexible fiberoptic endoscopic evaluation of
swallowing and laryngeal sensory testing by cine or video recording;
physician interpretation and report only.
Effective January 1, 2003, CPT created several codes to describe
fiberoptic endoscopic evaluation services that are currently described
by temporary G-codes. For specific information related to both the
former G-codes and the new CPT codes that will replace the deleted G-
codes, refer to the end of this section. We agreed with the RUC
recommended values for all of the fiberoptic endoscopic evaluation
services (CPT codes 92612, 92614, and 92616) with the exception of CPT
codes 92613, 92615, and 92617. For these three services that refer only
to a separately identified physician review and interpretation of the
fiberoptic endoscopic evaluation, we consider the physician
interpretation and report bundled into an evaluation and management
service. We believe the physician who does not perform the testing
should only bill the patient when performing an evaluation and
management service, not as the supervisor of another professional
performing and reviewing the initial fiberoptic endoscopic evaluation.
The interpretation of this test is an integral part of the testing
itself. If a nonphysician professional has the credentials and
experience to perform this testing, then that professional should also
provide the interpretation of the findings.
CPT codes 93784 Ambulatory blood pressure monitoring, utilizing a
system such as magnetic tape and/or computer disk, for 24 hours or
longer; including recording, scanning analysis, interpretation and
report, 93786 Ambulatory blood pressure monitoring, utilizing a system
such as magnetic tape and/or computer disk, for 24 hours or longer;
recording only, 93788 Ambulatory blood pressure monitoring, utilizing a
system such as magnetic tape and/or computer disk, for 24 hours or
longer; scanning analysis with report, and 93790 Ambulatory blood
pressure monitoring, utilizing a system such as magnetic tape and/or
computer disk, for 24 hours or longer; physician review with
interpretation and report.
We have not yet received RUC recommendations for these codes. We
established RVUs for these services during this past year in response
to a national coverage determination. We will maintain these RVUs until
we receive a RUC recommendation.
CPT code 95990 Refilling and maintenance of implantable pump or
reservoir for drug delivery; spinal (intrathecal, epidural) or brain
(intraventricular).
We understand that performance of CPT code 95990 requires the use
of an expensive kit, the cost of which may not be reflected in the RVUs
for CPT code 96530, the code under which it was previously reported.
CPT code 96530 has practice expense RVUs of 1.01 and malpractice RVUs
of 0.05. We are assigning 1.50 practice expense RVUs because we
estimate that the practice expense for CPT code 95990 is 50 percent
higher than it is for CPT code
[[Page 80011]]
96530. We are crosswalking the malpractice RVUs from CPT code 96530 to
CPT code 95990.
We are not assigning work RVUs to CPT code 95990 for 2003 since we
believe that this procedure is typically (greater than 50 percent of
the time) performed by a nurse. We understand that there has been
discussion with the CPT Editorial Committee about revising this code so
that it would be billed only when performed in the presence of a
physician. If the code were to be so revised, we would consider any RUC
recommendations regarding work RVUs for this service.
These values are interim for 2003 and we will address comments
about the RVUs for this code in next year's final rule.
CPT codes 99026 Mandated On-call service; in hospital and 99027
Mandated physician on call services
No RUC recommendation was received for these codes. Note that
stand-by and on-call services are not covered by Medicare and we would
not pay for these services billed using these codes.
Establishment of Interim Practice Expense RVUs for New and Revised
Physician's Current Procedural Terminology (CPT) Codes and New
Healthcare Common Procedure Coding System (HCPCS) Codes for 2003
We have developed a process for establishing interim practice
expense RVUs for new and revised codes that is similar to that used for
work RVUs. Under this process, the RUC recommends the practice expense
direct inputs, that is, the staff time, supplies and equipment,
associated with each new code. We then review the recommendations in a
manner similar to our evaluation of the recommended work RVUs.
The RUC recommendations on the practice expense inputs for the new
and revised 2003 codes were submitted to us as interim recommendations.
We, therefore, consider that these recommendations are still subject to
further refinement by the PEAC, or by us, if it is determined that such
future review is needed. We may also revisit these inputs in light of
future decisions of the PEAC regarding supply and equipment packages
and standardized approaches to pre- and post-service clinical staff
times.
We have accepted, in the interim, all of the practice expense
recommendations submitted by the RUC for the codes listed in the
following table titled ``AMA RUC and HCPAC RVU Recommendations and CMS
Decisions for New and Revised 2003 CPT Codes.''
C. Other Changes to the 2003 Physician Fee Schedule
We are establishing the following HCPCS codes for CY 2003.
GO262 Small intestinal imaging; intraluminal, from ligament of
Treitz to the ileo cecal valve, includes physician interpretation and
report
We are creating this code to describe a new diagnostic test for
which we will make separate payment under the physician fee schedule
and the Hospital Outpatient Prospective Payment System (OPPS). The
procedure involves ingesting a small camera through the mouth. As the
camera traverses the gastrointestinal tract, it produces two images per
second and transmits those images to a receiver worn by the patient.
After eight hours (the battery life of the camera) the belt containing
the receiver is removed from the patient. The images are then developed
and reviewed by a physician who interprets them and makes a written
report. The capsule is excreted in the patient's stool and discarded.
Images taken in the esophagus, stomach and large intestine (colon) are
hard to interpret; therefore, current use of this imaging modality is
limited to evaluation of the small intestine. The G-code descriptor is
designed to ensure accurate reporting of this diagnostic test. Although
this test has been referred to as ``capsule endoscopy'', the term
``endoscopy'' is a misnomer because ``endoscopy'' refers to physician-
controlled viewing the gastrointestinal tract through an endoscope.
Physician Work
We understand from recently published clinical studies that the
average small intestine transit time was 257 minutes and the transit
time from ingestion to the cecum was 302 minutes. Review of the images
includes a first pass overview to mark areas of special interest, a
review of the entire video recording, and a focused review of
abnormalities, if any are found. The average time to review the capsule
images in two recently published studies was 50 and 56 minutes.
Therefore, we believe that, typically, 53 minutes of physician time
will be spent reviewing the video. To assign a work value, we compared
the work of this code to the work of other diagnostic tests and
procedures that require review of significant amounts of data.
Specifically, we reviewed the work RVUs and intra-service times for
electroencephalography (EEG) reading and interpretation, magnetic
resonance angiography (MRA), computed tomographic angiography (CTA),
Holter monitor reading and interpretation, prolonged esophageal acid
reflux testing, echocardiography, duplex scanning of the carotid
arteries, and anorectal manometry. Based on these comparisons, we are
assigning a work value of 2.12 RVUs. This results in an intensity of
.04 RVU per minute and places it in correct rank order with the
procedures to which it was compared. We note that this assumes that a
complete study from the ligament of Treitz to the ileocecal valve was
performed and that the camera functioned normally throughout the
procedure and produced two images per second. If an incomplete
evaluation of the small intestine is accomplished, this code should be
billed with a CPT code 52-modifier indicating reduced services, and the
payment amount would also be reduced. The amount of reduction is
determined by the carrier. Until such time as we make a NCD for this
service, coverage is at the discretion of carriers and intermediaries.
Malpractice
We are crosswalking the value from CPT code 74230 with the same PC/
TC split because they have similar physician times and intensities.
Practice Expense
For the physician fee schedule we are assigning the following
inputs for practice expense:
[sbull] Staff Time--RN/LPN/MA mix--90 minutes--includes pre-service
education, attachment of the receiver, administration of the camera,
removal of the receiver, and processing of the images
[sbull] Supplies--Single use camera; Razor
[sbull] Equipment--Workstation
GO268 Removal of impacted cerumen (one or both ears) by physician
on same date of service as audiologic function testing
This code was created in order to allow payment to a physician who
removes impacted cerumen on the same date as his or her employed
audiologist performs audiologic function testing. We will assign the
same physician work RVUs, practice expense inputs, and malpractice RVUs
to this code as are assigned to CPT code 69210, Removal impacted
cerumen (separate procedure), one or both ears.
First, we emphasize that routine removal of cerumen is not paid
separately. It is considered to be part of the procedure with which it
is billed (for example, audiologic function testing). To assure the
appropriate reporting of this code, we note that it
[[Page 80012]]
should only be used in those unusual circumstances when an employed
audiologist who bills under a physician UPIN number performs audiologic
function testing on the same day as removal of impacted cerumen
requiring physician expertise for removal. This code should not be used
when the audiologist removes cerumen, because removal of cerumen is
considered to be part of the diagnostic testing and is not paid
separately.
GO269 Placement of occlusive device into either a venous or
arterial access site, post surgical or interventional procedure (for
example, angioseal plug, vascular plug)
We are creating this G code to assure proper reporting of this
service. It has come to our attention that this service is being
inappropriately reported with codes for such procedures as ``blood
vessel repair'' and ``repair of arterial pseudoaneurysm.'' We are
assigning a status indicator of ``B'' (payment bundled into payment for
other services) to this service, as the work, practice expense, and
malpractice risk of closing an arteriotomy or venotomy site at the
conclusion of an invasive percutaneous procedure, whether by manual
compression, suture, or use of a closure device, is included in the
main invasive procedure. Therefore, there is no separate payment for
this procedure.
GO270 Medical nutrition therapy; reassessment and subsequent
intervention(s) following second referral in same year for change in
diagnosis, medical condition, or treatment regimen (including
additional hours needed for renal disease), individual, face-to-face
with the patient, each 15 minutes and
GO271 Medical nutrition therapy, reassessment and subsequent
intervention(s) following second referral in same year for change in
diagnosis, medical condition, or treatment regimen (including
additional hours needed for renal disease) group (2 or more
individuals), each 30 minutes
In our NCD dated May 1, 2002, we established basic coverage for
medical nutrition therapy billed under CPT codes 97802 through 97804 as
3 hours per year for beneficiaries with either diabetes or renal
disease. However, we also pay for additional hours if a physician makes
a second referral in the same year based on a change in the
beneficiary's medical condition, diagnosis, or treatment regimen. These
new codes allow us to edit for basic coverage and reimburse for
additional coverage when appropriate.
We are crosswalking the RVUs from CPT code 97803 to G0270 and CPT
code 97804 to G0271 because these are the corresponding CPT medical
nutrition codes.
GO272 Naso/oro gastric tube placement, requiring physician's skill
and fluoroscopic guidance (includes fluoroscopy, image documentation
and report)
We are creating this code for one year until an identical CPT code
becomes effective.
Physician Work
We compared this code to other gastroenterology and radiologic
procedures including CPT codes 91105 Gastric intubation, and aspiration
or lavage for treatment (e.g, for ingested poisons) (work RVU of 0.37);
44500 Introduction of long gastrointestinal tube (e.g., Miller-Abbott)
(separate procedure) (work RVU of 0.49); 74340 Introduction of long
gastrointestinal tube (e.g., Miller-Abbott), including multiple
fluoroscopies and films, radiological supervision and interpretation
(work RVU of 0.54), and 76000 Fluoroscopy (separate procedure), up to
one hour physician time, other than 71023 or 71034 (e.g., cardiac
fluoroscopy) (work RVU of 0.17).
This procedure is most similar to CPT code 91105 (16 minutes of
physician time), but requires less work because it is done in a
controlled setting with fluoroscopy to aid in placement. It is not
similar to CPT codes 44500 and 74340 because placement of Miller-Abbott
tubes is a more lengthy and involved procedure than placement of naso/
oro gastric tubes. In fact, the physician time for placement of Miller-
Abbott tubes is over 30 minutes, while placement of a naso/oro gastric
tube takes about 15 minutes. We are assigning this G code a work RVU of
0.32, which is the sum of the work RVU for CPT code 76000 and the work
intensity of CPT code 44500 times 15 minutes.
Malpractice
We are assigning 0.02 malpractice RVUs to this procedure.
Practice Expense
We believe this procedure will only be performed in facilities, so
we are not assigning any practice expense inputs to this code.
GO273 Radiopharmaceutical biodistribution, single or multiple scans
on one or more days, pre-treatment planning for radiopharmaceutical
therapy of non-Hodgkin's lymphoma, includes administration of
radiopharmaceutical (e.g., radiolabeled antibodies).
We are creating this code to describe radionuclide scanning to
determine the biodistribution of Zevalin. The procedure encompasses
administration of Indium labeled Zevalin followed by whole body
radionucliide scanning 2-24 hours and 48-72 hours after the
administration of Zevalin. Rarely, a third scan is necessary. The
purpose of the scanning is to ensure that the biodistribution of
Zevalin is normal, thus decreasing the risk of toxic effects from the
administration of a therapeutic dose. The published criteria for
determining appropriate biodistribution involve making a qualitative
comparison of isotope uptake in several organ systems between the two
scans. Therefore, these scans cannot be read in isolation, and this
code should only be reported once, no matter how many scans are
performed.
Physician Work
We are assigning 0.86 work RVUs to this code which is equivalent to
the work for CPT code 78802, Radiopharmaceutical localization of tumor;
whole body. We believe the total physician time of 41 minutes for CPT
code 78802, and the intensity are similar to the time and intensity
required for this service.
Malpractice
We are assigning 0.28 RVU to the global procedure, 0.25 RVU to the
technical component, and 0.03 RVU to the professional component. These
are identical values to CPT code 78802.
Practice Expense
The TC of this code is being priced in the nonphysician work pool,
where we crosswalked it to the charge-based practice expense RVUs for
CPT code 78802, taking into account that the radiopharmaceutical is
administered once, but that there are two scans obtained.
We wish to emphasize that this code is only reported once and
includes the administration of the radiopharmaceutical and performance
and interpretation of all scans. We also note that the infusion of
rituxumab prior to the administration of Zevalin is separately payable.
GO274 Radiopharmaceutical therapy, non-Hodgkin's lymphoma, includes
administration of radiopharmaceutical (e.g., radiolabeled antibodies)
We are establishing this code to allow appropriate reporting of
this new service. Radiopharmaceutical therapy using radiolabeled
monoclonal antibodies is a new form of treatment for non-Hodgkins
lymphoma and is not currently described by any existing HCPCS code.
[[Page 80013]]
After review of information regarding this service, we are
assigning the following RVUs:
Physician Work
We believe that physicians typically take 60 minutes to perform
this service on the day of the procedure. Of this time, 45 minutes is
spent counseling the patient and family, while 15 minutes are spent
setting up and infusing the radiopharmaceutical. Additionally, there is
post-procedure time spent reviewing platelet counts, which requires
calling the patient or another physician 25 percent of the time. We
compared this procedure to the physician work RVUs, physician times,
and intensity (RVU per minute) of other nuclear medicine and radiation
oncology procedures CPT codes 79400, 77790, 79030, 79035, and 79100;
infusion procedures CPT codes 36520, 36521, 37201, and 37202;
hemodialysis CPT codes 90935, and 90937; evaluation and management CPT
codes 99214 and 99215.
Based on this comparison we are assigning a work RVU of 2.07 to
this code. This represents the work of CPT code 99214 (counseling a
complex patient), 15 minutes for infusion at an intensity of 0.05 RVU
per minute (similar to the intensity of CPT code 77790), and 10 minutes
of post service work (at an intensity of 0.022 RVU per minute). This
also places the code in the correct rank order with all of the above
procedures.
Malpractice
We are assigning malpractice RVUs of 0.20 to this procedure, with
0.12 assigned to the technical component and 0.08 assigned to the
professional component. These are identical to the RVUs for CPT code
79400.
Practice Expense
The TC of this code is being priced in the nonphysician workpool
where we crosswalked it to the charge-based practice expense RVUs for
CPT code 79400.
GO275 Renal angiography (unilateral or bilateral) performed at the
time of cardiac catheterization, includes catheter placement in the
renal artery, injection of dye, flush aortogram and radiologic
supervision and interpretation and production of images (List
separately in addition to primary procedure) and
GO278 Iliac artery angiography performed at the same time of
cardiac catheterization, includes catheter placement in the iliac
artery, injection of dye, radiologic supervision and interpretation and
production of images (List separately in addition to primary procedure)
We are creating these add-on codes to assure proper reporting of
and payment for renal and iliac angiography performed at the time of
cardiac angiography. These procedures are performed frequently on
Medicare patients and are currently reported using codes that describe
placement of a catheter in the renal and/or iliac artery(s) (CPT codes
36245 and 36246) and radiological supervision and interpretation of
renal and/or iliac angiography (CPT codes 75710, 75716, 75722, and
75724).
Physician Work
Based on the information we reviewed, the typical performance of
these procedures involves the use of a pigtail catheter positioned in
the aorta (not the renal or iliac artery(s)), injection of a minimal
dye load (because of the heavy dye load already used for cardiac
angiography), and viewing the dye run off into the proximal main renal
or iliac arteries under fluoroscopy. We determined work values for
these procedures by using the work values for CPT codes 75625,
Aortography, abdominal, by serialography, radiological supervision and
interpretation (1.14 work RVUs with 22 minutes of physician time) and
93544, Injection procedure during cardiac catheterization; for
aortography (0.25 work RVUs and 5 minutes of physician time) and
adjusting for a procedure time of approximately two and one half
minutes. This process yields a value of 0.25 work RVUs, which is what
we are assigning to these two add-on procedures.
Malpractice
We are crosswalking the 0.01 malpractice RVUs for CPT code 93544 to
these procedures.
Practice Expense
We are not assigning any practice expense inputs to these
procedures because the incremental increase in staff and room time to
perform these procedures is negligible.
GO279 Extracorporeal shock wave therapy; involving elbow
epicondylitis.
GO280 Extracorporeal shock wave therapy; involving other than elbow
epicondylitis or plantar fascitis.
CPT code 0020T Extracorporeal Shock Wave Therapy; involving plantar
fascia
We are creating and establishing a national payment amount for two
G-codes describing extracorporeal shock wave therapy for the
musculoskeletal system and establishing a national payment amount for
CPT code 0020T. We are doing this in response to multiple requests from
our contractors to establish a national payment amount, though creation
of these codes does not imply that services will be covered by
Medicare. We also note that this form of therapy was recently approved
by the Food and Drug Administration for treatment of lateral
epicondylitis. Our staff has reviewed the method of treatment and we
are establishing work, practice expense, and malpractice RVUs for these
codes.
We believe these services are similar to other physical therapy
modalities and are designating it to be paid on the therapy fee
schedule. Based on the information we reviewed, these services are
typically performed by a technician similar to a physical therapy aide
and take about 20 minutes to perform.
Physician Work
We compared these services to other physical therapy services and
believe they are most similar to unattended physical therapy modalities
such as diathermy. We are assigning a work RVU of 0.06 for these
procedures in order to place them in proper rank order with other
unattended physical therapy services.
Malpractice
We are crosswalking the malpractice RVUs (0.01) from CPT code
97024, Application of a modality to one or more areas; diathermy, to
these procedures.
Practice Expense
We are assigning the following practice expense inputs:
[sbull] Staff/Time: Physical therapy aide; 30 minutes.
[sbull] Supplies: Ultrasound Gel.
[sbull] Equipment: Shock wave machine.
We note that, for lateral epicondylitis, the typical treatment
regimen is up to 3 total treatments at weekly intervals.
Electrical Stimulation for Wound Care
GO281 Electrical stimulation, (unattended), to one or more areas,
for chronic stage III and stage IV pressure ulcers, arterial ulcers,
diabetic ulcers, and venous stasis ulcers not demonstrating measurable
signs of healing after 30 days of conventional care, as part of a
therapy plan of care; and
GO282 Electrical stimulation, (unattended), to one or more areas,
for wound care other than described in G0281 and
GO283 Electrical stimulation, (unattended), to one or more areas,
for indication(s) other than wound care, as part of a therapy plan of
care.
[[Page 80014]]
These three new G codes have been created to implement the coverage
determination on use of electrical stimulation for wound care.
The work, practice expense, and malpractice values for CPT code
97014 Application of a modality to one or more areas; electrical
stimulation (unattended) will be crosswalked to these new G codes, but
G0282 will not be covered by Medicare. In addition, CPT code 97032,
Application of a modality to one or more areas: electrical stimulation
(manual), each 15 minutes, should not be utilized for any wound care.
The coverage determination that allowed coverage for the use of
electrical stimulation for certain types of wound care also stated that
another similar modality, electromagnetic stimulation, would not be
covered. A G code, ``G0295: Electromagnetic stimulation, to one or more
areas'' will be created to describe this service, since this service
would otherwise have been coded using CPT code 97039 and would have
required manual claims review. The new code, G0295, will be listed as
non-covered by Medicare.
GO288 Reconstruction, computed tomographic angiography of aorta for
surgical planning for vascular surgery.
We are creating this code to assure accurate reporting of this
service by independent diagnostic testing facilities (IDTFs) that
perform this service. Facilities that perform this service (either at
the facility or under arrangement) report this service through the use
of a ``C'' code specific to hospital reporting.
This code is a technical component code only since the service
provided by the IDTF includes receipt of a Computed Tomographic
Angiogram (CTA), post CTA processing using specialized software, and
burning the 3D model onto a CD and returning it to the operating
surgeon. This 3D model is used to assist vascular surgeons in planning
for, or monitoring the results of, endovascular aneurysm repair. The
service is a technical service provided under the general supervision
of a physician according to the supervision requirements for IDTFs. We
compared this procedure to CPT codes 74175, Computed tomagraphic
angiography, abdomen, without contrast material(s), followed by
contrast material(s) and further sections, including image post-
processing and 76375, Coronal, sagital, multiplanar, oblique, 3-
dimensional and/or holographic reconstruction of computerized axial
tomography, magnetic resonance imaging, or other tomographic modality.
Based on this review, we developed practice expense RVUs using the
nonphysician workpool methodolgy. The malpractice RVUs will be
crosswalked from CPT code 76375 directly and will be set at 0.15 RVUs.
GO289 Arthroscopy, knee, surgical, for removal of loose body,
foreign body, debridement/shaving of articular cartilage
(chrondroplasty) at the time of other surgical knee arthroscopy in a
different compartment of the same knee.
We are creating this code to permit appropriate reporting of
arthroscopic procedures performed in different compartments of the same
knee during the same operative session. This is an add-on code and
should be added to the knee arthroscopy code for the major procedure
being performed. This code is only to be reported once per extra
compartment, even if both chondroplasty, loose body removal, and
foreign body removal are performed. The code may be reported twice (or
with a unit of two) if the physician performs these procedures in two
compartments in addition to the compartment where the main procedure
was performed.
This code should only be reported if the physician spends at least
15 minutes in the additional compartment performing the procedure. It
should not be reported if the reason for performing the procedure is
due to a problem caused by the arthroscopic procedure itself. This code
is to be used when a procedure is performed in the lateral, medial, or
patellar compartments in addition to the main procedure. However, CPT
codes 29874, Arthroscopy, knee, surgical; for removal of loose body or
foreign body (e.g., osteochrondritis dissecans fragmentation, chondral
fragmentation) and 29877 Arthroscopy, knee, surgical; debridement/
shaving of articular cartilage (chrondroplasty) may not be billed with
other arthroscopic procedures on the same knee.
Physician Work
We examined the work RVUs, the intra-operative work intensity, and
the intra-operative times for CPT codes 29874 and 29877. We also
compared these intensities and times to those for CPT code 29870, the
base procedure for this family. We determined a work value using the
intra-operative intensity for CPT code 29874 (which is higher than for
CPT code 29877) and the mean intra-operative times (for CPT codes 29874
and 29877) beyond the time required for CPT code 29870 (14 minutes for
CPT code 29874 and 27 minutes for CPT code 29877). This code represents
approximately 20 minutes of extra work at a high level of intensity.
Therefore, the work value we are assigning to this code is 1.48 RVUs.
Malpractice
We are assigning 0.27 malpractice RVUs to this procedure. This is
the sum of the malpractice RVUs for CPT codes 29874 and 29877 beyond
the malpractice RVUs for CPT code 29870, divided by two.
Practice Expense
We are not assigning any practice expense inputs to this code
because it is an add-on code that will only be performed in the
facility setting.
Revisions to G Codes
We are also revising the descriptors for the following existing G
codes as follows:
G0179 Physician recertification services for Medicare-covered
services provided by a participating home health agency (patient not
present) including review of subsequent reports of patient status,
review of patient's responses to the OASIS assessment instrument,
contact with the home health agency to ascertain the follow-up
implementation plan of care, and documentation in the patient's office
record, per certification period and
G0180 Physician certification services for Medicare-covered
services provided by a participating home health agency (patient not
present), including review of initial or subsequent reports of patient
status, review of patient's responses to the OASIS assessment
instrument, contact with the home health agency to ascertain the
initial implementation plan of care, and documentation in the patient's
office record, per certification period
Comment: Individuals have requested clarification as to whether a
review of OASIS data is required when a physician bills for the
certification and re-certification of home health plans of care.
Response: The review of OASIS data, although not required for the
performance of either a certification or re-certification of a home
health plan of care, is considered a valuable tool to be utilized in
the performance of both a certification or re-certification of a home
health plan of care. We agree that the current HCPCS code(s)
descriptors are unclear and will revise the descriptors to identify the
review of OASIS as an option as opposed to a requirement. The
descriptors are being revised as follows:
G0179 Physician re-certification for Medicare-covered home health
services under a home health plan of care (patient not present),
including contacts with home health agency and review of reports of
patient status required by physicians to affirm the initial
[[Continued on page 80015]]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
]
[[pp. 80015-80064]] Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule for Calendar Year 2003 and Inclusion of
Registered Nurses in the Personnel Provision of the Critical Access
Hospital Emergency Services Requirement for Frontier Areas and Remote
L[[Page 80015]]
[[Continued from page 80014]]
[[Page 80015]]
implementation of the plan of care that meets patient's needs, per re-
certification period.
G0180: Physician certification for Medicare-covered home health
services under a home health plan of care (patient not present),
including contacts with home health agency and review of reports of
patient status required by physicians to affirm the initial
implementation of the plan of care that meets patient's needs, per
certification period.
G0236 Digitization of film radiographic images with computer
analysis for lesion detection and further physician review for
interpretation, diagnostic mammography (list separately in addition to
code for primary procedure)
Comment: Individuals have requested that we establish additional G-
codes that would specify the use of computer-aided detection with
direct digital image mammograms. Currently, the descriptors associated
with HCPCS code G0236 (diagnostic) and CPT code 76085 (screening) refer
not only to the application of computer-aided detection but also to the
conversion of film images to digital images.
Response: When the computer-aided detection codes were originally
assigned, we intended that they would be used for the application of
computer-aided detection to both direct digital images and to standard
film images that were converted to digital images. The current
descriptors of both HCPCS code G0236 and CPT code 76085 do not
explicitly state that the code can be billed in conjunction with either
direct digital images or standard film images converted to digital
images. We have revised the descriptor associated with the application
of computer-aided detection to diagnostic images (HCPCS code G0236) to
incorporate both direct digital images and standard film images
converted to digital images. Additionally, we will request that the CPT
editorial panel review the current definition associated with the
screening computer-aided detection code (CPT code 76085) for future
revision. Until such time as a revision is made to CPT code 76085,
physicians should use CPT code 76085 for both direct digital screening
images as well as for standard film screening images that are converted
to digital images.
G0236 is revised to read as follows: Digitization of film
radiographic images with computer analysis for lesion detection, or
computer analysis of digital mammogram for lesion detection, and
further physician review for interpretation, diagnostic mammography
(List separately in addition to code for primary procedure).
G0239 Therapeutic procedures to improve respiratory function, other
than services described by G0237, two or more (includes monitoring).
For clarity, and to address concerns expressed by individuals about
how to code group treatment of patients with procedures described in
G0237, we are revising the descriptor for G0239 to read as follows:
G0239 Therapeutic procedures to improve respiratory function or
increase strength or endurance of respiratory muscles, two or more
(includes monitoring).
Deletion of G Codes
We will be deleting the following G codes for CY 2003: G0002 Office
procedure, insertion of temporary indwelling catheter, foley type
(separate procedure)
Services formerly billed under G0002 will be billed under CPT codes
51702 Insertion of temporary indwelling bladder catheter; simple (e.g.,
Foley) or 51703 Insertion of temporary indwelling bladder catheter;
complicated (e.g., altered anatomy, fractured catheter/balloon).
G0004 Patient demand single or multiple event recording with pre-
symptom memory loop and 24 hour attended monitoring, per 30 day period;
includes transmission, physician review and interpretation; G0005
Patient demand single or multiple event recording with pre-symptom
memory loop and 24 hour attended monitoring, per 30 day period;
recording (includes hook-up, recording and disconnection); G0006
Patient demand single or multiple event recording with pre-symptom
memory loop and 24 hour attended monitoring, per 30 day period; 24 hour
attended monitoring, receipt of transmissions, and analysis; and G0007
Patient demand single or multiple event recording with pre-symptom
memory loop and 24 hour attended monitoring, per 30 day period;
physician review and interpretation only.
Services formerly billed under G0004 will be billed using CPT code
93268, Patient demand single or multiple event recording with
presymptom memory loop, 24-hour attended monitoring, per 30 day period
of time; includes transmission, physician review and interpretation;
services billed using G0005 will be billed using CPT code 93270,
Patient demand single or multiple event recording with presymptom
memory loop, 24-hour attended monitoring, per 30 day period of time;
recording (includes hook-up, recording and disconnection); services
billed using G0006 will be billed using CPT code 93271, Patient demand
single or multiple event recording with presymptom memory loop, 24-hour
attended monitoring, per 30 day period of time; monitoring, receipt of
transmissions and analysis; services billed using G0007 will be billed
using CPT code 93272 Patient demand single or multiple event recording
with presymptom memory loop, 24-hour attended monitoring, per 30 day
period of time; physician review and interpretation only, and services
billed using G0015 will be billed using CPT code 93012 Telephonic
transmission of post-symptom electrocardiogram rhythm strip(s), per 30
day period of time, tracing only. Unattended monitoring of patient
demand single or multiple event recording with presymptom memory loop,
per 30 day period of time and unattended telephonic transmission of
post symptom electrocardiogram rhythm strip(s), per 30 day period of
time should be billed using CPT code 93799, Unlisted cardiovascular
service or procedure.
G0050 Measurement of post-voiding residual urine and/or bladder
capacity by ultrasound
Services formerly billed under G0050 will be billed using CPT code
51798.
G0131 Computerized tomography bone mineral density study, one or
more sites; axial skeleton (e.g., hips, pelvis, spine) and G0132
Computerized tomography bone mineral density study, one or more sites;
appendicular skeleton (peripheral) (e.g., radius, wrist, heel).
Services formerly billed under G0131 will be billed using CPT code
76070, and those billed under G0132 will be billed using CPT code
76071.
G0185 Destruction of localized lesion of choroids for example,
choroidal neovascularization; transpupillary thermotherapy (one or more
sessions) and G0186 Destruction of localized lesion of choroids for
example, choroidal neovascularization; photocoagulation, feeder vessel
technique (one or more sessions).
Services formerly billed under G0185 will be billed using CPT code
0016T, Destruction of localized lesion of choroids (e.g., choroidal
revascularization), transpupillary thermotherapy, and G0186 will be
billed using CPT code 0017T, Destruction of macular drusen,
photocoagulation.
G0193 Endoscopic study of swallowing function (also fiberoptic
endoscopic evaluation of swallowing (FEEST)), G0194 Sensory testing
during endoscopic study of (add-on code) referred to as fiberoptic
endoscopic evaluation of swallowing
[[Page 80016]]
with sensory (FEEST), G0195 Clinical evaluation of swallowing function
(not involving interpretation of dynamic radiological studies or
endoscopic study of swallowing), and G0196 Evaluation of swallowing
involving swallowing of radio-opaque materials.
Services formerly billed under G0193 will be billed using new CPT
code 92612; services billed using G0194 will be billed using new CPT
code 92614; services billed using G0195 will be billed using new CPT
code 92610; and G0196 should be billed using new CPT code 92611.
G0197 Evaluation of patient for prescription of speech generating
devices, G0198 Patient adaptation and training for use of speech
generating devices, G0199 Re-evaluation of patient using speech
generating devices, G0200 Evaluation of patient for prescription of
voice prosthetic, and G0201 Modification or training in use of voice
prosthetic.
Services formerly billed under G0197 will be billed using CPT code
92607 Evaluation for prescription for speech-generating augmentative
and alternative communication device, face-to-face with the patient;
first hour, and, if appropriate, CPT code 92608, Evaluation for
prescription for speech-generating augmentative and alternative
communication device, face-to-face with the patient; each additional 30
minutes; services billed using G0198 will be billed using CPT code
92609 Therapeutic services for the use of speech-generating device,
including programming and modification; services billed using G0199
will be billed using CPT code 92607, using the -52 modifier if the
service is less than 1 hour; services billed using G0200 will be billed
using revised CPT code 92597 Evaluation for use and/or fitting of voice
prosthetic device to supplement oral speech; and services billed using
G0201 will be billed using CPT code 92507.
G0240 Critical Care Service delivered by a physician; face-to-face,
during inter-facility transport of a critically ill or critically
injured patient: first 30-74 minutes of active transport, and G0241--
each additional 30 minutes (list separately in addition to G0240)
Services formerly billed under G0240 and G0241 will be billed using
CPT codes 99289 and 99290.
V. Update to the Codes for Physician Self-Referral Prohibition
A. Background
On January 4, 2001 we published in the Federal Register a final
rule with comment period, ``Medicare and Medicaid Programs; Physicians'
Referrals to Health Care Entities With Which They Have Financial
Relationships'' (66 FR 856). That final rule incorporated into
regulations the provisions in paragraphs (a), (b) and (h) of section
1877 of the Act. Section 1877 of the Act prohibits a physician from
referring a Medicare beneficiary for certain ``designated health
services'' to a health care entity with which the physician (or a
member of the physician's immediate family) has a financial
relationship, unless an exception applies. In the final rule, we
published an attachment listing all of the CPT and HCPCS codes that
defined the entire scope of the following designated health services
for purposes of section 1877 of the Act: clinical laboratory services;
physical therapy services (including speech-language pathology
services); occupational therapy services; radiology and certain other
imaging services; and radiation therapy services and supplies.
In the January 2001 final rule, we stated that we would update the
list of codes used to define these designated health services in an
addendum to the annual physician fee schedule final rule. The purpose
of the update is to conform the code list to the most recent
publications of CPT and HCPCS codes. An updated all-inclusive list of
codes was included in the November 1, 2001 physician fee schedule final
rule in Addendum E and was subsequently corrected in a notice that was
published in the Federal Register (66 FR 20681) on April 26, 2002.
The updated all-inclusive list of codes effective for January 1,
2003 is presented in Addendum E in this final rule. It is our intent to
always use Addendum E of the annual physician fee schedule final rule
for the physician self-referral update. The updated all-inclusive list
of codes will also be available on our Web site at http://cms.hhs.gov/medlearn/refphys.asp
.
B. Response to Comments
We received three comments regarding the code list. The comments
and our responses are stated below.
Comment: One commenter agreed with the additions and deletions to
the list of designated health services as published in the November 1,
2001 physician fee schedule final rule (66 FR 55312). The commenter
expressed the understanding that we would address the comments
regarding the original list of designated health services (published in
the January 4, 2001 final rule) in a second final rule on the physician
self-referral prohibition. A second commenter raised concerns about our
decision (announced in the January 4, 2001 final rule) to exclude
nuclear medicine from the definition of ``radiology and certain other
imaging services.''
Response: The first commenter is correct in understanding that we
intend to address substantive comments on the designated health
services that are defined by reference to HCPCS and CPT codes in a
second final rule concerning the physician self-referral prohibition.
We will also address the second commenter's concerns regarding nuclear
medicine in that final rule. As noted above, this update to the code
list merely reflects changes to the most recent publications of HCPCS
and CPT codes.
Comment: One commenter noted that we post on our Web site (http://www.hcfa.gov/stats/cpt/rvudown.htm
) an Excel spreadsheet file
containing all of the CPT/HCPCS codes with accompanying RVUs. The
commenter suggested that we add a column indicating whether a code is
considered a designated health service for purposes of the physician
self-referral law, as well as in which category of designated health
services it would be included. The commenter stated that, as changes
are made, they would be scattered throughout several physician fee
schedules.
Response: We believe that the commenter was concerned that updates
to the list of designated health services under the physician self-
referral law would be published in various fee schedules throughout the
course of a year. This is not the case. We publish the annual update
and the entire list of CPT/HCPCS codes in the physician fee schedule
final rule. (Addendum E contains the updated all-inclusive list of
codes.) We have no plans to publish an updated list of codes for
physician self-referral purposes in any other fee schedule. We chose
the physician fee schedule, as opposed to one of the other fee
schedules, because we believe that physicians would be more likely to
see it. We maintain a current list of codes used to define certain
designated health services for purposes of the physician self-referral
law on our Web site at http://cms.hhs.gov/medlearn/refphys.asp. We have
decided not to make any changes to the RVU website at this time because
we believe the updated all-inclusive list of codes used for purposes of
physician self-referral is readily available to all physicians.
C. Revisions Effective for 2003
Table 9, below, identifies the additions and deletions to the
comprehensive list of physician self-referral codes published in
Addendum
[[Page 80017]]
E of the November 2001 physician fee schedule final rule and
subsequently corrected in the April 26, 2002 correction notice (66 FR
20681). Table 9 also identifies the additions, deletions and revisions
to the lists of codes used to identify the items and services that may
qualify for the exceptions in Sec. 411.355(g) (regarding EPO and other
dialysis-related outpatient prescription drugs furnished in or by an
end-stage renal dialysis (ESRD) facility) and in Sec. 411.355(h)
(regarding preventive screening tests, immunizations and vaccines).
We will consider comments with respect to the codes listed in Table
9 below, if we receive them by the date specified in the DATES section
of this final rule.
Table 9.--Additions and Deletions to the Physician Self-Referral Codes
------------------------------------------------------------------------
HCPCS CPT \1\/Descriptor
------------------------------------------------------------------------
Additions:
51798........................ Us urine capacity measure
76070........................ Ct bone density, axial
76071........................ Ct bone density, peripheral
76801........................ Ob us < 14 wks, single fetus
76802........................ Ob us < 14 wks, addl fetus
76811........................ Ob us, detailed, sngl fetus
76812........................ Ob us, detailed, addl fetus
92601........................ Cochlear implt f/up exam < 7
92602........................ Reprogram cochlear implt < 7
92603........................ Cochlear implt f/up exam 7
92604........................ Reprogram cochlear implt 7
92607........................ Ex for speech device rx, 1hr
92608........................ Ex for speech device rx addl
92609........................ Use of speech device service
92610........................ Evaluate swallowing function
92611........................ Motion fluoroscopy/swallow
92612........................ Endoscopy swallow tst (fees)
92614........................ Laryngoscopic sensory test
92616........................ Fees w/laryngeal sense test
0010T........................ TB test, gamma interferon
0019T........................ Extracorp shock wave tx, ms
0020T........................ Extracorp shock wave tx, ft
0023T........................ Phenotype drug test, HIV 1
0026T........................ Measure remnant lipoproteins
0028T........................ Dexa body composition study
0029T........................ Magnetic tx for incontinence
0030T........................ Anitprothrombotin antibody
0041T........................ Detect UR infect agnt w/cpas
0042T........................ Ct perfusion w/contrast, cbf
0043T........................ Co expired gas analysis
G0256........................ Prostate brachy w palladium
G0261........................ Prostate brachytherapy w/rad
G0262........................ Sm intestinal image capsule
G0274........................ Radiopharm tx, non-Hodgkins
G0279........................ Excorp shock tx, elbow epi
G0280........................ Excorp shock tx other than
G0281........................ Elec stim unattend for press
G0283........................ Elec stim other than wound
G0288........................ Recon, CTA for surg plan
J0636........................ Inj calcitriol per 0.1 mcg
J1756........................ Iron sucrose injection
J2501........................ Paricalcitol
J2916........................ Na ferric gluconate complex
Q3021........................ Ped hepatitis b vaccine inj
Q3022........................ Hepatitis b vaccine adult ds
Q3023........................ Injection hepatitis Bvaccine
Deletions:
76830........................ Us, exam transvaginal
76872........................ Echo exam, transrectal
76873........................ Echograp trans r, pros study
86915........................ Bone marrow/stem cell prep
90744........................ Hepb vacc ped/adol 3 dose im
90746........................ Hep b vaccine, adult, im
90747........................ Hepb vacc, ill pat 4 dose im
92510........................ Rehab for ear implant
97014........................ Electric stimulation therapy
G0026........................ Fecal leukocyte examination
G0027........................ Semen analysis
G0050........................ Residual urine by ultrasound
G0131........................ CT scan, bone density study
G0132........................ CT scan, bone density study
G0193........................ Endoscopicstudyswallowfunctn
[[Page 80018]]
G0194........................ Sensorytestingendoscopicstud
G0195........................ Clinicalevalswallowingfunct
G0196........................ Evalofswallowingwithradioopa
G0197........................ Evalofptforprescipspeechdevi
G0198........................ Patientadapation&trainforspe
G0199........................ Reevaluationofpatientusespec
G0200........................ Evalofpatientprescipofvoicep
G0201........................ Modifortraininginusevoicepro
J0635........................ Calcitriol injection
J1755........................ Iron sucrose injection
J2915........................ NA Ferric Gluconate Complex
Revisions:
76085........................ Computer mammogram add-on [when used in
conjunction with 76092]
------------------------------------------------------------------------
\1\ CPT codes and descriptions only are copyrighted in the 2002 American
Medical Association. All rights are reserved and applicable FARS/DFARS
clauses apply.
The ``Additions'' section of Table 9 generally reflects new CPT and
HCPCS codes that become effective January 1, 2003. The one exception is
the addition of the following emerging technology codes, referred to as
Category III codes, which the AMA first included in the CPT effective
January 1, 2002: 0010T, 0019T, 0020T, 0023T, and 0026T. CPT codes
0010T, 0023T, and 0026T represent clinical laboratory services while
CPT codes 0019T and 0020T are therapy codes. These codes were addressed
in the November 2001 physician fee schedule final rule with the
clarification that coverage and payment of these services is generally
at the discretion of the carrier. However, the portion of the November
2001 final rule that concerned the list of codes for physician self-
referral purposes failed to address these new codes. Thus, we are
adding the Category III codes that should have been included in last
year's update. We also are adding the following new Category III codes
issued for 2003 to which the physician self-referral prohibition
applies: 0028T, 0029T, 0030T, 0041T, 0042T, and 0043T. CPT codes 0028T
and 0042T are radiology services; CPT code 0029T is a physical therapy
service; and, CPT codes 0030T, 0041T and 0043T are clinical laboratory
services.
Table 9 also reflects the addition of 4 new codes (J0636, J1756,
J2501 and J2916) to the list of dialysis-related outpatient
prescription drugs that may qualify for the exception described in
Sec. 411.355(g) regarding those items. The physician self-referral
prohibition will not apply to these drugs if they meet the conditions
set forth in Sec. 411.355(g). Table 9 also reflects the addition of 3
vaccine codes (Q3021, Q3022 and Q3023) to the list that identifies
preventive screening tests, immunizations and vaccines that may qualify
for the exception described in Sec. 411.355(h) for such items and
services. The physician self-referral prohibition will not apply to
these vaccines if they meet the conditions set forth in Sec.
411.355(h) concerning the exception for preventive screening tests,
immunizations, and vaccines.
With the exception of CPT codes 76830, 76872 and 76873 for
ultrasounds, the ``Deletions'' section of Table 9 reflects changes
necessary to conform the code list to the most recent publications of
CPT and HCPCS codes. We are deleting CPT code 76830 for transvaginal
ultrasound and CPT codes 76872 and 76873 for transrectal ultrasounds
because these codes should never have appeared on the list of
designated health services. Our definition of ``radiology and certain
other imaging services'' published in the January 2001 final rule (66
FR 956) specifically excludes any ultrasonic procedure that requires
``the insertion of a needle, catheter, tube, or probe''. Thus, although
the deletion of these codes is not a change to conform to an annual
change in CPT or HCPCS codes, we are making the change at this time so
that the list of codes will accurately reflect the regulatory
definition for ``radiology and certain other imaging services.''
Table 9 includes one revised CPT code. That is CPT code 76085,
``Computer mammogram add-on.'' In the CPT publication effective January
1, 2003, the CPT long descriptor was changed to delete the word
``screening'' so that the digitization no longer refers only to
screening mammography. Because our exception under Sec. 411.355(h)
applies to preventive screening tests, we have revised the list of
codes that may qualify for that exception to indicate that CPT code
76085 may qualify for the exception only when it is used in conjunction
with CPT code 76092, ``Mammogram screening.''
VI. Physician Fee Schedule Update for Calendar Year 2003
A. Physician Fee Schedule Update
The physician fee schedule update is determined under a calculation
methodology that is specified by statute. Under section 1848(d)(4) of
the Act, the update is equal to the product of 1 plus the percentage
increase in the Medicare Economic Index (MEI) (divided by 100) and 1
plus the update adjustment factor. For CY 2002, the MEI is equal to 3.0
percent (1.030). The update adjustment factor is equal to -7.0 percent
(0.930). Section 1848(d)(4)(F) of the Act requires an additional -0.2
percent (0.998) reduction to the update for 2003. Thus, the product of
the MEI (1.030), the update adjustment factor (0.930), and the
statutory adjustment factor (0.998) equals the CY 2003 update of -4.4
percent (0.956).
The Department believes that the negative update is inappropriate
because the current update system does not reflect actual, after the
fact, data from earlier years. Instead, the Act requires the Department
to rely upon estimates made in past years, even though the Department
now has actual data for these particular years. Even though after-the-
fact data show that for certain years actual increases differed to some
degree from earlier estimates, the Department is unable to revise
estimates without congressional action. We have exhaustively searched
for a different interpretation of law that would allow us to revise
estimates for earlier years administratively, but unfortunately, we had
to conclude that current law does not permit such an interpretation.
Without congressional action to address the current legal
framework, the Department is compelled to announce a
[[Page 80019]]
physician fee schedule update for CY 2003 of -4.4 percent. The
Department's calculations are explained below.
We have, however, also identified reasonable adjustments that could
result in a positive update in physician fee schedule rates if the
Department were permitted by law to make those adjustments. Revisions
of estimates used to establish the sustainable growth rates (SGR) for
fiscal years (FY) 1998 and 1999 and Medicare volume performance
standards (MVPS) for 1990 through 1996 could, under present
estimations, result in an increase in the update.
The Department intends to work closely with the Congress to develop
legislation that could permit a positive update, and hopes that such
legislation can be passed before the negative update takes effect.
Because the Department wishes to take action immediately in the event
that Congress provides the Department legal authority to make the
corrections, we are requesting comments regarding how physician fee
schedule rates could and should be recalculated prospectively in the
event that Congress provides the Department with legal authority to
revise estimates used to establish the sustainable growth rates (SGR)
for FYs 1998 and 1999 and the MVPS for 1990-1996.
B. The Percentage Change in the Medicare Economic Index
1. Medicare Economic Index (MEI) Productivity Adjustment
In the June 28, 2002 proposed rule, we reviewed the history of the
MEI productivity adjustment, described the current MEI productivity
adjustment, identified and evaluated possible alternative MEI
productivity adjustments based on the individual contributions we
solicited from experts on this topic, and proposed changing the MEI
productivity adjustment to reflect an economy-wide multifactor
productivity adjustment. In this final rule, we repeat this research
information, respond to public comments on the MEI, and determine the
CY 2003 MEI using the proposed methodological change.
a. History of MEI Productivity Adjustment
The MEI is required by section 1842(b)(3)(L) of the Act which
states that prevailing charge levels beginning after June 30, 1973 may
not exceed the level from the previous year except to the extent that
the Secretary finds, on the basis of appropriate economic index data,
that such higher level is justified by year-to-year economic changes.
S. Rep. No. 92-1230, at 191 (1972) provides slightly more detail on
that index, stating that:
Initially, the Secretary would be expected to base the proposed
economic indexes on presently available information on changes in
expenses of practice and general earnings levels combined in a manner
consistent with available data on the ratio of the expenses of practice
to income from practice occurring among self-employed physicians as a
group.
Consistent with section 1842(b)(3)(L) and legislative intent, in
1975, we determined that the MEI would be based on a broad wage measure
reflecting overall earnings growth, rather than direct inclusion of
physicians' net income. We used average weekly earnings of
nonagricultural production (non-supervisory) workers, net of worker's
productivity, as the wage proxy in the initial MEI. We included the
productivity adjustment because it avoided double counting of gains in
earnings resulting from growth in productivity and produced an MEI that
approximated an economy-wide output price index similar to the Consumer
Price Index (CPI). The productivity adjustment we used was the annual
change in economy-wide private non-farm business labor productivity,
applied only to the physicians' earnings portion of the MEI (then 60
percent).
As noted, the productivity adjustment in the MEI serves to avoid
the double counting of productivity gains. Absent the adjustment,
productivity gains from producing additional outputs (procedures) with
a given amount of inputs would be included in both the earnings
component of the MEI (reflecting growth in overall economy-wide wages)
and in the additional procedures that are billed (reflecting
physicians' own productivity gains). Therefore, general economic labor
productivity growth is removed from the labor portion of the MEI.
Although the basic structure of the MEI remained relatively
unchanged from its effective date (July 1, 1975) until 1992, its
weights were updated periodically and a component was added for
professional liability insurance. Section 9331 of the Omnibus Budget
Reconciliation Act of 1986 (Pub. L. 99-509) (OBRA 86) mandated that we
conduct a study of the structure of the MEI and prepare a notice and
offer the public an opportunity to comment before we revise the
methodology for calculating the MEI. Based on this requirement, we held
a workshop with experts on the MEI in March 1987 to discuss topics
ranging from the specific type of index to use (Laspeyres versus
Paasche) to revising the method of reflecting productivity changes.
Participants included the Federal government, the Physician Payment
Review Commission (PPRC), the Congressional Budget Office, the AMA, and
several private consulting firms. The meeting participants concluded
that a productivity adjustment in the MEI was appropriate and that an
acceptable measure of physician-specific productivity did not currently
exist. Many alternative approaches were discussed, including the use of
a policy-based ``target'' measure and several existing economic
productivity measures.
Using recommendations from the meeting participants, we revised the
MEI and the productivity adjustment with the implementation of the
physician fee schedule as discussed in the November 1992 final rule (57
FR 55896). While we retained an adjustment for economy-wide labor
productivity, this adjustment was applied to all of the direct labor
categories of the MEI (70.448 percent), not just physicians' earnings,
and was based on the 10-year moving average percent change (instead of
annual percent changes). This form of the index has been used since
that time, and was most recently discussed in the November 1998 final
rule (63 FR 58845) when the MEI weights were rebased to a 1996 base
year.
The BBA replaced the Medicare Volume Performance Standard (MVPS)
with a Sustainable Growth Rate (SGR). The SGR is an annual growth rate
that applies to physicians' services paid for by Medicare. The use of
the SGR is intended to control growth in aggregate Medicare
expenditures for physicians' services. Payments for services are not
withheld if the percentage increase in actual expenditures exceeds the
SGR. Rather, the physician fee schedule update, as specified in section
1848(d)(4) of the Act, is adjusted based on a comparison of allowed
expenditures (determined using the SGR) and actual expenditures. If
actual expenditures exceed allowed expenditures, the update is reduced.
If actual expenditures are less than allowed expenditures, the update
is increased. Specifically, the SGR is calculated on the basis of the
weighted average percentage increase in fees for physicians' services,
growth in fee-for-service Medicare enrollment, growth in real per
capita Gross Domestic Product (GDP), and the change in expenditures on
physicians' services resulting from changes in law or regulations.
[[Page 80020]]
When the SGR was enacted, the Congress specified continued use of
the MEI. By 1997, the MEI, including its productivity adjustment, had
been used in updating Medicare payments to physicians for over twenty
years. We did not propose any changes to the productivity adjustment
used in the MEI when the SGR system was enacted because its continued
use was consistent with the newly mandated formula. If we did not make
a productivity adjustment in the MEI, general economic productivity
gains would be reflected in two of the SGR factors, the MEI and real
per-capita GDP (which reflects real GDP per hour worked, or labor
productivity, and hours worked per person). We believe it is reasonable
to remove the effect of general economic productivity from one of these
factors (the MEI) to avoid double counting.
As noted previously, since its original development, the MEI
productivity adjustment has been based on economy-wide productivity
changes. This practice arose from the fact that the physicians'
compensation portion of the MEI is proxied to grow at the same rate as
general earnings in the overall economy, which reflect growth in
overall economy-wide productivity. Removing labor productivity growth
reflected in general earnings from the labor portion of the MEI
produces an index that is consistent with other economy-wide output
price indexes, like the CPI.
b. Research on Alternative MEI Productivity Adjustments
In the June 2002 proposed rule we presented the research we
completed on evaluating the most appropriate productivity adjustment
for the MEI. This research included evaluating the currently available
productivity estimates produced by the BLS to develop a better
understanding of the strengths and weaknesses of these measures and
reviewing the theoretical foundation of the MEI to understand how labor
and multifactor productivity relate to the current physician payment
system. We also studied the limited publicly available data to begin to
develop preliminary estimates of trends in physician-specific
productivity to better understand the current market conditions facing
physicians. Finally, we solicited the individual contributions of
academic and other professional economic experts on prices and
productivity. These experts included individuals from the MedPAC, the
AMA, the Office of Management and Budget (OMB), Dr. Uwe Reinhardt from
Princeton University, Dr. Joe Newhouse from Harvard University, Dr.
Ernst Berndt from MIT, and Dr. Joel Popkin from Joel Popkin and
Company. Below we repeat the findings on each of the six options we
investigated and detailed in the proposed rule:
[sbull] Option 1--Using a physician-specific productivity
adjustment.
This option would entail using an estimate of physician-specific
productivity to adjust the MEI. This option may have some theoretical
attractiveness, but there are major problems in obtaining accurate
measures of physician-specific productivity. First, no published
measure of physician-specific productivity is available. The Federal
agency that produces the official government statistics on
productivity, BLS, does not calculate or publish productivity measures
for any health sector. Nor are there alternative measures of physician-
specific productivity that would conform to the BLS methodology for
measuring productivity. Second, it is not clear that using physician-
specific productivity within the current structure of the MEI would be
appropriate. Because we believe the MEI appropriately uses an economy-
wide wage measure as the proxy for physician wages, using physician
specific productivity could overstate or understate the appropriate
wage increases in the MEI.
We do believe, however, that it is important to understand the rate
of change in physician-specific productivity. Toward this end, we have
performed our own preliminary analysis of physician-specific
productivity, using the limited available data on physician outputs and
inputs. Our analysis attempted to simulate the methodology the BLS
would use to measure productivity. To help achieve this we have been in
contact with experts at the BLS to obtain their feedback on our
methodology. While this information cannot be interpreted as an
official measure of physician productivity, we do believe it provides a
rough indication of the current market conditions facing physicians. We
used this information to aid in forming our determination of the most
appropriate productivity adjustment to incorporate in the MEI, fully
recognizing its preliminary nature and other limitations of our
analysis. The results of our preliminary analysis suggest that long-run
physician-specific productivity growth is currently near the level of
economy-wide multifactor productivity growth. Prior to the recent
period, however, our preliminary estimates suggested that physician
productivity gains were generally significantly greater than general
economy-wide multifactor productivity gains and more in line with
economy-wide labor productivity.
As we have emphasized, our rough estimates are inadequate for
establishing a formal basis for the productivity adjustment to the MEI.
In addition, the underlying economic theory is not sufficiently
compelling, at this time, to adopt a physician-specific productivity
measure, even if a suitable one were available. We conclude, however,
that economy-wide multifactor productivity growth appears to be roughly
comparable to our estimates of current physician-specific productivity
growth.
Comment: A few commenters urged us to develop a measure of
productivity that more accurately reflects the conditions facing
physicians. The commenters suggested that we consider issues like
increased regulatory burden on physicians and the service-oriented
nature of physician services.
Response: As we stated in the June 2002 proposed rule and repeated
above, no publicly available measure of physician productivity exists.
In addition, no publicly available measure of service-sector
productivity exists. Because of this it is not possible at this time to
incorporate a productivity adjustment in the MEI that explicitly
reflects physician marketplace characteristics.
However, we do believe that it is important that the productivity
adjustment included in the MEI be consistent with the market conditions
facing physicians. As we have discussed in this final rule, we
attempted to understand the trends in physician productivity by
researching and making the most optimal use of the sparse data
available. We will continue to refine this research, including
soliciting contributions both from experts at BLS and outside experts
on measuring productivity. In addition, we encourage the commenters to
work with BLS to pursue the development of official measures of
physician and health sector productivity.
[sbull] Option 2--Using economy-wide labor productivity applied to
the labor portion of the MEI.
We have applied economy-wide labor productivity growth to a portion
of the MEI in some form since the inception of the index in 1975. For
the 2002 update, we applied the 10-year moving average percent change
in economy-wide labor productivity to the labor portion of the MEI.
This adjustment was developed based on the contributions of a 1987
expert panel. That panel concluded that applying labor productivity
data to the labor portion of the index was a technically sound way to
account for
[[Page 80021]]
productivity in the physician update. This method made optimal use of
the available data because labor productivity data were, and are,
available on a more-timely basis than economy-wide multifactor
productivity. By applying this measure to the labor portion of the
index, the mix of physician-specific labor and non-labor inputs is
reflected. Also, the use of a 10-year moving average percentage change
reduces the volatility of annual labor productivity changes.
Our research, however, has indicated that using multifactor
productivity applied to the entire index is a superior method to using
an economy-wide labor productivity measure applied only to the labor
portion of the index. The experts with whom we consulted believed it
was more appropriate to reflect the explicit contribution to output
from all inputs. The current measure explicitly reflects the changes in
economy-wide labor inputs but does not reflect the actual change in
non-labor inputs. Instead, it implicitly assumes that non-labor inputs
would grow at a rate necessary to produce an economy-wide multifactor
measure that is equivalent to the current MEI productivity adjustment.
That implicit assumption is less precise than a direct, explicit
calculation.
In addition, while the implicit approach produced an MEI
productivity adjustment in most years that was reasonably consistent
with overall multifactor productivity growth, it now appears less
consistent with the actual change in non-labor inputs in the economy.
In recent years, economy-wide labor productivity has grown very
rapidly. This acceleration is partly the result of major investments in
non-labor inputs that have helped to create a more productive work
force. Also, the Bureau of Economic Analysis (BEA) adopted
methodological changes in accounting for computer software purchases in
measuring GDP. These changes have significantly increased the measured
historical growth rates in real GDP and labor productivity. As a result
of these developments, the current MEI productivity adjustment,
applying labor productivity only to the labor portion of the MEI, has
increased very rapidly. Because the multifactor definition is an
explicit calculation of the change in economic output relative to the
change in both labor and non-labor inputs, it better reflects the
overall productivity trend changes.
Finally, as noted previously, our preliminary estimates of
physician-specific productivity suggest a current growth pattern that
is similar to growth in multifactor productivity in the economy
overall. In consideration of the economic theory underlying
productivity measurement, especially in view of the recent developments
in labor versus non-labor economic input growth trends, we concluded
that using a multifactor productivity adjustment is superior to the
current methodology for adjusting for productivity in the MEI.
[sbull] Option 3--Change to using economy-wide multifactor
productivity.
The option we proposed in the June 2002 proposed rule was to adjust
for productivity gains in the MEI using economy-wide multifactor
productivity applied to the entire index, instead of labor productivity
applied to the labor portion of the MEI. This option would better
satisfy the theoretical requirements of an output price, in this case
the MEI, by explicitly reflecting the productivity gains from all
inputs. In addition, the use of economy-wide multifactor productivity
would still be consistent with the MEI's use of economy-wide wages as a
proxy for physician earnings. While annual multifactor productivity can
fluctuate considerably, though usually less than labor productivity,
using a moving-average would produce a relatively stable and
predictable adjustment.
Each expert with whom we consulted believed that using a
multifactor productivity measure was theoretically superior to the
previous methods used to adjust the MEI because it reflects the actual
changes in non-labor inputs instead of reflecting an implicit
assumption about those changes. These experts also believed that the
lack of timely data on multifactor productivity was not as important as
would have appeared initially. Instead, they believed it was more
appropriate that the adjustment be based on a long-run average that was
stable and predictable rather than on annual changes in productivity.
Thus, if a long-run average were used, the increased lag time
associated with the availability of published data on multifactor
productivity becomes less significant. Finally, one expert believed
that changing to economy-wide multifactor productivity applied to the
entire MEI would make it easier to understand the magnitude of the
productivity adjustment.
However, use of multifactor productivity to adjust the MEI poses
two concerns. First, multifactor productivity is much harder to measure
than labor productivity. Economic inputs other than labor hours can be
very difficult to identify and calculate properly. The experts at BLS,
however, have adequately overcome these difficulties, and we are
satisfied that their official published measurements are sound for the
purpose at hand. Moreover, use of a 10-year moving average increase
helps to mitigate any remaining measurement variation from year to
year.
The second concern relates to the timeliness of the data. BLS
publishes multifactor productivity levels and changes annually (as
opposed to the quarterly release of labor productivity data) and with
an extended time lag (about 1\1/2\ years). These timeframes arise
unavoidably from the difficulties of measuring non-labor input as
mentioned above, but would result in a misalignment of the data periods
for the data used to adjust the MEI and of the historical data on wages
and prices underlying the MEI. For the CY 2003 physician payment
update, for example, we would use data on wages and prices through the
second quarter of CY 2002, but would have to use multifactor
productivity data through CY 2000. Although the misalignment of data
periods is a concern, we believe it is a reasonable trade-off in view
of the improvement offered by an explicit measurement of non-labor
inputs. Also, because use of a 10-year moving average is intended to
reduce fluctuations and provide a more stable level of the productivity
adjustment, availability of the most recent data is of less importance.
The 10-year moving average percent change in economy-wide
multifactor productivity that would be used for the CY 2003 update
(historical data through CY 2000) is estimated at 0.8 percent. Our
preliminary internal analysis of physician-specific productivity gains
suggests that these economy-wide multifactor measures are consistent
with those trends. Thus, using economy-wide multifactor productivity
for MEI productivity adjustment theoretically would be superior to
using labor productivity growth applied to the labor portion of the
MEI.
[sbull] Option 4--Change to using economy-wide multifactor
productivity with physician-specific input weights
Another option we explored was using economy-wide labor and capital
productivity measures (which, when weighted together, produce
multifactor productivity), but with physician-specific input weights.
This method would better reflect the proportion of labor and capital
inputs used by physicians, and reflect the explicit contribution to
productivity of labor and non-labor inputs. The experts with whom we
discussed this option thought it was theoretically consistent with a
measure of multifactor productivity, even though different productivity
[[Page 80022]]
measures would be applied to different components of the MEI.
A weakness of this method is that the BLS capital productivity
series is not widely used or cited; therefore, we are unsure of the
accuracy and reliability of this measure. This method also adds another
layer of complexity to the formula, making it more difficult to
understand the adjustment. We would prefer that any method we choose be
straightforward so that it can be readily understood. Moreover, the
labor and capital shares for the overall economy do not appear to vary
enough from the physician-specific shares in the MEI to result in a
significantly different measure. Overall, we believe that this method
does not provide enough of a technical improvement to justify the added
complexity that would be required to implement it.
[sbull] Option 5--Adjusting productivity using a ``Policy
Standard''.
In its March 2002 Report to the Congress, MedPAC suggested
establishing a policy target for the productivity adjustment. Under
this methodology, the level of the policy target would be based on the
productivity gains that physicians could reasonably be expected to
attain. This level would be set through policy and would likely be
based on a long-run average of either economy-wide labor or multifactor
productivity (but could reflect other, possibly judgmental, factors).
Generally, the level of the policy standard would remain constant for
several years, and periodically would be reviewed and adjusted as
needed.
Some of the experts we consulted believed that a policy target
would lessen the volatility of the adjustment because the target would
not be changed often. Conversely, others noted the large, abrupt
changes that could result if actual economic performance deviated from
the policy standard requiring subsequent adjustments to the standard.
Some believed that this method adjusts for the problem of precisely
measuring productivity. If we used a policy standard we could avoid
having to develop an exact measure. Using a policy target, however, may
appear arbitrary without a theoretical basis to support its use.
The policy target recommended by the MedPAC was 0.5 percentage
points per year. The MedPAC's justification for this number was that
the long-run average of economy-wide multifactor productivity was close
to 0.5 percent (the most recent 10-year average is now 0.8 percent). We
do not believe this is a preferred option for adjusting the MEI for
productivity improvements. Our preference is to use a data based
approach that automatically reflects changes in actual economic
performance over time, and not through abrupt periodic, possibly large
adjustments. Thus, we conclude that a policy target does not provide an
improvement over any of the data based methodologies.
Comment: One commenter recommended the productivity adjustment be
removed from the MEI to make the index more consistent with our other
market baskets.
Response: Since its inception in 1975 the MEI has included a
productivity adjustment. By including the productivity adjustment in
the MEI and using a general earnings proxy for physician wages, the
index approximated an economy-wide output price index like the CPI.
This original intent was different from that for the other market
baskets, which are defined to reflect pure price changes in inputs
associated with providing care. Thus, the MEI appropriately includes an
adjustment for productivity changes.
As we described earlier, practically it makes no difference whether
productivity is adjusted for within or outside the MEI, as long as an
adjustment is present. However, given the historical precedent
regarding the definition of the MEI, the apparent legislative intent
behind recent legislation that did not prescribe a change to the MEI
definition, and the specific update formula that must be used under the
SGR, we do not believe it would be appropriate for the productivity
adjustment to be made outside the MEI.
[sbull] Option 6--Eliminate Productivity Adjustment from the MEI.
Questions are raised occasionally as to the possibility of
eliminating the productivity adjustment from the MEI. We did not
consider this to be a viable option. Our research concluded that
adjusting for productivity in the MEI is necessary in order to have a
technically correct measure of an output price increase, free from
double-counting of the impact of productivity. Every expert with whom
we consulted agreed that a productivity adjustment is appropriate. They
believed that the important question is which measure is the most
appropriate for the adjustment.
c. Use of a Forecasted MEI and Productivity Adjustment
In a March 2002 Report to the Congress, the MedPAC recommended the
use of a forecasted MEI value, rather than the current historical
increase. However, implementation of this option raises several legal
as well as practical issues. The 1972 Senate Finance Committee report
language reflects the intent of the Congress that the MEI should
``follow rather than lead'' overall inflation. As a result, updates to
the physician fee schedule have always been based on historical, rather
than forecasted, MEI data. In this way, increases in the MEI do not
lead the current measures of inflation but follow them based on
historical trends. Furthermore, at the time of implementation of the
SGR system, the Congress specified that the SGR system should use the
MEI that existed at the time, which was based on historical data
measures. The law did not recommend or specify a change in the MEI
methodology. Thus, the assumption is that the Congress was satisfied
that the MEI was functioning as designed. If we were to use a
forecasted MEI and productivity adjustment, there are several practical
issues that would need to be addressed. One issue is that a change from
a historical-based MEI to a projected MEI would cause transitional
problems because there would be a period of data that would not be
accounted for in the year of implementation. For example, the CY 2002
MEI update was based on historical data through the second quarter of
2001. If we were to use a forecasted MEI in the update for CY 2003, any
changes between the second quarter of 2001 and the first quarter of
2003 would not be accounted for in the update. Additionally, changing
to a forecasted MEI and productivity adjustment raises additional
questions about correcting for forecast errors. Based on these
problems, we will continue to use historical data to make updates under
the physician fee schedule.
Comment: One commenter urged us to use a forecast of the MEI change
for the update in the upcoming year. The commenter believed that we had
the legal authority to make such a change and that the transition
issues cited in the proposed rule were not relevant.
Response: We do not believe that it would be appropriate to use a
forecast of the MEI for the 2003 update. Since the inception of the
MEI, and more recently the implementation of the physician fee
schedule, the MEI increase for the upcoming year's update has been
based on as much historical data as is available when the update is
determined. For the 2003 update this means using data that is available
through June 2002.
Our interpretation of the legislative intent is for the MEI update
to be based on historical data, and does not contemplate a MEI based on
projections.
[[Page 80023]]
As we stated above, the MEI update has always been based on historical
data and we believe that the legislative intent when the SGR system was
implemented was to continue using this methodology. In addition, we
believe that the transition and forecast error issues described above
are legitimate concerns that, at this time, would outweigh the benefits
of making such a change. Therefore, we will continue to use historical
data in developing the MEI used for the 2003 fee schedule update.
d. Productivity Adjustment to the MEI
Based on the research we conducted on this issue, we are changing
the methodology for adjusting for productivity in the MEI. The MEI used
for the CY 2003 physician payment update will reflect changes in the
10-year moving average of private non-farm business (economy-wide)
multifactor productivity applied to the entire index. Several
commenters agreed with this methodological change.
We made this change because--(1) It is theoretically more
appropriate to explicitly reflect the productivity gains associated
with all inputs (both labor and nonlabor); (2) the recent growth rate
in economy-wide multifactor productivity appears more consistent with
the current market conditions facing physicians, and (3) the MEI still
uses economy-wide wage changes as a proxy for physician wage changes.
We believe that using a 10-year moving average change in economy-wide
multifactor productivity produces a stable and predictable adjustment
and is consistent with the moving-average methodology used in the
existing MEI. Thus, the productivity adjustment will be based on the
latest available actual historical economy-wide multifactor
productivity data, as measured by the BLS.
We currently estimate the MEI to increase 3.0 percent for CY 2003.
This is the result of a 3.8 percent increase in the price portion of
the MEI, adjusted downward by a 0.8 percent increase in the 10-year
moving average change in economy-wide multifactor productivity. Table
10 shows the detailed cost categories of the MEI update for CY 2003.
Table 10.--Increase in the Medicare Economic Index Update for Calendar
Year 2003 \1\
------------------------------------------------------------------------
CY 2003
Cost categories and price measures 1996 Weights percent
\2\ changes
------------------------------------------------------------------------
Medicare Economic Index Total, n/a 3.0
productivity adjusted..................
Productivity: 10-year moving average n/a 0.8
of multifactor productivity,
private nonfarm business sector....
Medicare Economic Index Total, without 100.0 3.8
productivity adjustment................
1. Physician's own time \3\......... 54.5 3.9
a. Wages and Salaries: Average 44.2 3.7
hourly earnings private nonfarm
b. Fringe Benefits: Employment 10.3 5.0
Cost Index, benefits, private
nonfarm........................
2. Physician's practice expense \3\. 45.5 3.6
a. Nonphysician employee 16.8 4.2
compensation...................
1. Wages and Salaries: 12.4 3.7
Employment Cost--Index,
wages and salaries,
weighted by occupation.....
2. Fringe Benefits: 4.4 5.5
Employment Cost--Index,
fringe benefits, white
collar.....................
b. Office Expense: Consumer 11.6 2.8
Price Index for urban consumers
(CPI-U), housing...............
c. Medical Materials and 4.5 2.0
Supplies: Producer Price Index
(PPI), ethical drugs/PPI,
surgical appliances and
supplies/CPI-U, medical
equipment and supplies (equally
weighted)......................
d. Professional Liability 3.2 11.3
Insurance: CMS professional
liability insurance survey \4\.
e. Medical Equipment: PPI, 1.9 1.5
medical instruments and
equipment......................
f. Other professional expense... 7.6 1.8
1. Professional Car: CPI-U, 1.3 2.3
private transportation.....
2. Other: CPI-U, all items 6.3 2.6
less food and energy.......
------------------------------------------------------------------------
\1\ The rates of historical change are estimated for the 12-month period
ending June 30, 2002, which is the period used for computing the
calendar year 2003 update. The price proxy values are based upon the
latest available Bureau of Labor Statistics data as of September 19,
2002.
\2\ The weights shown for the MEI components are the 1996 base-year
weights, which may not sum to subtotals or totals because of rounding.
The MEI is a fixed-weight, Laspeyres-type input price index whose
category weights indicate the distribution of expenditures among the
inputs to physicians' services for calendar year 1996. To determine
the MEI level for a given year, the price proxy level for each
component is multiplied by its 1996 weight. The sum of these products
(weights multiplied by the price index levels) over all cost
categories yields the composite MEI level for a given year. The annual
percent change in the MEI levels is an estimate of price change over
time for a fixed market basket of inputs to physicians' services.
\3\ The measures of productivity, average hourly earnings, Employment
Cost Indexes, as well as the various Producer and Consumer Price
Indexes can be found on the Bureau of Labor Statistics Web site http://stats.bls.gov
.
\4\ Derived from a CMS survey of several major insurers (the latest
available historical percent change data are for the period ending
second quarter of 2002).
n/a Productivity is factored into the MEI compensation categories as an
adjustment to the price variables; therefore, no explicit weight
exists for productivity in the MEI.
Comment: Several commenters requested that we ensure that the costs
of medical liability insurance are adequately reflected in the MEI by
making available all information that is the basis for measuring
medical liability costs in the MEI.
Response: We agree with the commenters that it is vital that the
MEI accurately reflect the price changes associated with professional
liability costs. Accordingly, we continue to incorporate into the MEI a
price proxy that accomplishes this goal by making the maximum use of
available data on professional liability premiums. Below we describe in
more detail the annual CMS data collection from commercial insurance
carriers, which are designed to maximize the use of publicly available
data.
Each year, we solicit professional liability premium data for
physicians from a small sample of commercial carriers. This information
is not collected through a survey form, but instead is requested from a
few national commercial carriers via letter. The carriers provide
information on a voluntary basis, and generally between 5 and 8
carriers volunteer this information.
As we require for our other price proxies, the professional
liability price proxy must reflect the pure price change associated
with this particular cost category. Thus, it should not capture changes
in the mix or level of liability coverage. To accomplish this result,
we
[[Page 80024]]
obtain premium information from commercial carriers for a fixed level
of coverage, currently $1 million per occurrence and a $3 million
annual limit. This information is collected for every state by
physician specialty and risk class. Finally, the state-level,
physician-specialty data is aggregated by effective premium date to
compute a national total using counts of physicians by state and
specialty as provided in the AMA publication ``Physician
Characteristics and Distribution in the U.S.''
The resulting data provides a quarterly time series, indexed to a
base year consistent with the MEI, which reflects the national trend in
the average professional liability premium for a given level of
coverage. From this series, quarterly and annual percent changes in
professional liability insurance are estimated for inclusion in the
MEI. This data produced an 11.3 percent increase for professional
liability insurance in the MEI for the 2003 update. We believe that,
given the limited timely data available on professional liability
premiums, this methodology adequately reflects the price trends facing
physicians.
Comment: One commenter urged CMS to use the most current
professional liability insurance data available when developing the MEI
update.
Response: The professional liability data used to develop the 2003
MEI update was based on premium rates effective as of June 2002. We
believe our methodology ensures that the MEI update includes the most
recent data available. In the spring of 2002 we collected professional
liability insurance premiums from commercial insurers as described in
the previous comment. These data included both the premium amount and
effective date, which we use to create a quarterly time series. Thus,
the professional liability insurance component of the 2003 MEI update
includes effective premium rates through the 2nd quarter of 2002, which
is consistent with the timeliness of other data used in determining
this update.
The most comprehensive data on professional liability costs exist
with the state insurance commissioners. However, these data are
available only with a substantial lag. For instance, when we developed
this final rule the most recent professional liability data available
from the state insurance commissioners were for 2000. Hence, the data
currently incorporated into the MEI are much more timely.
Comment: Several commenters requested that we make an ad hoc
adjustment to the MEI to account for recent increases in medical
liability insurance.
Response: We disagree with the commenters that an ad hoc adjustment
should be made to the MEI to account for recent increases in
professional liability insurance. As detailed above, the current
methodology reflects recent data collected directly from commercial
insurance carriers and specifically reflects the conditions facing
physicians. Thus, the MEI adequately accounts for the recent increases
in professional liability insurance prices, much the same way it
reflects the price changes associated with other inputs, such as office
expenses, wages or benefits. Thus, we believe the MEI appropriately
reflects the price changes as measured by reliable and relevant data
sources, and should not be adjusted through an ad hoc mechanism.
Comment: Several commenters suggested that physicians' earnings
more closely follow the wage changes faced by professional and
technical occupations. The commenters suggested that we use the
employment cost index (ECI) for professional and technical workers as
the physicians' wage proxy in the MEI.
Response: As we stated in the November 2, 1998 final rule (63 FR
58848), we believe that the current price proxy for physicians'
earnings, average hourly earnings (AHE) in the non-farm business
economy, is the most appropriate proxy to use in the MEI. The AHE for
the non-farm business economy reflects the impacts of supply, demand
and economy-wide productivity for the average worker in the economy.
Using the AHE as the proxy for physician earnings captures the parity
in the rate of change in wages for the average worker and for
physicians. In addition, use of this proxy is consistent with the
original legislative intent that the change in the physicians' earnings
portion of the MEI parallel the change in general earnings for the
economy.
The suggestion to use the ECI for professional and technical
workers has a major shortcoming in that, in many instances,
occupations, such as engineers, computer scientists, nurses, etc., have
unique characteristics that are not reflective of the overall economy
or the physician market. Specifically, wage changes for these types of
occupations can be influenced by excess supply or demand for these
types of workers. We do not believe it would be appropriate to proxy
the physician earnings portion of the MEI with a wage proxy that
reflects these unique characteristics.
C. The Update Adjustment Factor
Section 1848(d) of the Act provides that the physician fee schedule
update is equal to the product of the MEI and an ``update adjustment
factor.'' The update adjustment factor is applied to make actual and
target expenditures (referred to in the law as ``allowed
expenditures'') equal. Allowed expenditures are equal to actual
expenditures in a base period updated each year by the SGR. The SGR
sets the annual rate of growth in allowed expenditures and is
determined by a formula specified in section 1848(f) of the Act.
Since the inception of the physician fee schedule in 1992,
physician payment rates have been updated using two different systems.
From 1992 to 1998, physician fee schedule rates were updated using the
Medicare Volume Performance Standard (MVPS). From 1999 to the present,
physician fee schedule rates have been updated using the sustainable
growth rate (SGR). While there are significant and important
differences between the MVPS and SGR, both use the same general concept
that expenditures for physicians' services should grow by a limited
percentage amount of allowed expenditures each year. If expenditures
exceed the amount in a year, the physician fee schedule update is
reduced. If expenditures are less than the amount of allowed
expenditures in a year, the physician fee schedule update is increased.
We determined the annual percentage increase in expenditures using
the formulas specified in the statute. One important feature of both
the MVPS and the SGRs for fiscal years (FYs) 1998 and 1999 was that the
percentage increase was based on estimates of the four factors
specified in the law, made before the beginning of the year. Under the
MVPS and the SGRs for FYs 1998 and 1999, the statute did not permit us
to revise the estimates used to set the annual percentage increase.
Beginning with the FY 2000 SGR, the statute specifically requires us to
use actual, after the fact, data to revise the estimates used to set
the SGR.
For some of the component factors of both the MVPS and the SGR,
there have been differences between the estimates used to set the
annual MVPS and SGR and the actual increase based on actual, after the
fact, data. For instance, under both the MVPS and the SGR, we are
required to account for increases in Medicare beneficiary fee-for-
service enrollment. There have been differences between our estimates
of the increase in fee-for-service enrollment and the actual, after the
fact increase because it
[[Page 80025]]
is difficult to predict, before the beginning of the year, beneficiary
enrollment in Medicare + Choice plans (or Medicare managed care plans
as they were known under the MVPS). Under the MVPS, we generally
estimated higher growth in beneficiary fee-for-service enrollment than
actually occurred. For the FY 1998 and FY 1999 SGRs, we estimated lower
growth in beneficiary fee-for-service enrollment than actually
occurred. (For subsequent years, the statute has required us to revise
our estimates.)
Under the SGR, the statute also requires us to account for the
increase in real per capita gross domestic product (GDP) to determine
the annual percentage increase in expenditures for physicians'
services. In both FY 1998 and FY 1999, we estimated lower real per
capita GDP growth than actually occurred. Because the statute did not
permit us to revise estimates for these years, the SGRs for FYs 1998
and 1999 are lower than if we were authorized to revise estimates as
required under current law for the FY 2000 SGR and all subsequent SGRs.
Because the physician fee schedule CF has been affected by a
comparison of the actual increase in expenditures to the level of
allowed expenditures calculated using the MVPS and the SGRs for FYs
1998-1999, revision of our estimates would have resulted in different
CFs than those we actually determined. Revision of the estimates used
to set the MVPS would have made the physician fee schedule CFs
established under the MVPS lower than those we have actually
determined. As a result, higher expenditures in 1997 were higher than
if we had revised estimates with actual after the fact data. The actual
amount of expenditures in 1997 forms the basis for the calculation of
allowed expenditures under the SGR.
In contrast, revision of the estimates used to set the SGRs for FYs
1998 and 1999 would have resulted in higher physician fee schedule CFs
for CY 2000 and all subsequent years than those we have actually
determined. If the statute authorized revisions of the estimates used
to establish both the MVPS and the SGRs for FYs 1998 and 1999, the
physician fee schedule CF would be higher than it is currently.
We have analyzed the effect that revision of the estimates used to
set the MVPS from FY 1990 through 1996 and the SGRs for FYs 1998 and
1999 would have on the physician fee schedule update for CY 2003 and
subsequent years. The Department believes that a positive update could
result if the statute authorized revisions of the estimates used to
establish both the SGR for FYs 1998 and 1999 and MVPS for 1990 to 1996.
As noted above, however, current law does not permit the Department
to adopt the positive update for 2003. In the event that Congress
enacts legislation permitting the Department to make such an
adjustment, the Department wishes to make the adjustment as promptly as
possible. We therefore are soliciting public comments regarding the
proper adjustments in the event that Congress authorizes the Department
to make such an adjustment.
1. Calculation Under Current Law
Under section 1848(d)(4)(A) of the Act, the physician fee schedule
update for a year is equal to the product of-- (1) 1 plus the
Secretary's estimate of the percentage increase in the MEI for the
year, divided by 100 and (2) 1 plus the Secretary's estimate of the
update adjustment factor for the year. Under section 1848(d)(4)(B) of
the Act, the update adjustment factor for a year beginning with 2001 is
equal to the sum of the following--
[sbull] Prior Year Adjustment Component. An amount determined by--
--Computing the difference (which may be positive or negative) between
the amount of the allowed expenditures for physicians' services for the
prior year (the year prior to the year for which the update is being
determined) and the amount of the actual expenditures for such services
for that year;
--Dividing that difference by the amount of the actual expenditures for
such services for that year; and
--Multiplying that quotient by 0.75.
[sbull] Cumulative Adjustment Component. An amount determined by--
--Computing the difference (which may be positive or negative) between
the amount of the allowed expenditures for physicians' services from
April 1, 1996, through the end of the prior year and the amount of the
actual expenditures for such services during that period;
--Dividing that difference by actual expenditures for such services for
the prior year as increased by the sustainable growth rate for the year
for which the update adjustment factor is to be determined; and
--Multiplying that quotient by 0.33.
Section 1848(d)(4)(E) of the Act requires the Secretary to
recalculate allowed expenditures consistent with section 1848(f)(3) of
the Act. Section 1848(f)(3) specifies that the SGR (and, in turn,
allowed expenditures) for the upcoming calendar year (2003 in this
case), the current calendar year (2002) and the preceding calendar year
(2001) are to be determined on the basis of the best data available as
of September 1 of the current year. Allowed expenditures are initially
estimated and subsequently revised twice. The second revision occurs
after the calendar year has ended (that is, we are making the final
revision to 2001 allowed expenditures in this final rule). Once the SGR
and allowed expenditures for a year have been revised twice, they are
final.
Table 11 shows annual and cumulative allowed expenditures for
physicians' services from April 1, 1996 through the end of the current
calendar year, including the transition period to a calendar year
system that occurred in 1999.
Table 11
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative allowed expenditures
Period Annual allowed expenditures (Dollars) (Dollars) FY or CY SGR
--------------------------------------------------------------------------------------------------------------------------------------------------------
4/1/96-3/31/97................... 48.9 billion 48.9 billion N/A
4/1/97-3/31/98................... 49.6 billion 98.5 billion FY 1998=1.5%
4/1/98-3/31/99................... 49.4 billion 147.9 billion FY 1999=-0.3%
1/1/99-3/31/99................... 12.5 billion Included in 147.9 above FY 1999=-0.3%
4/1/99-12/31/99.................. 39.6 billion Included in 187.6 below FY 2000=6.9%
1/1/99-12/31/99.................. 52.1 billion 187.6 billion FY 1999/FY 2000 (see note)
1/1/00-12/31/00.................. 55.9 billion 243.5 billion CY 2000=7.3%
1/1/01-12/31/01.................. 58.4 billion 301.9 billion CY 2001=4.5%
1/1/02-12/31/02.................. 63.5 billion 365.4 billion CY 2002=8.8%
1/1/03-12/31/03.................. 68.3 billion 433.8 billion CY 2003=7.6%
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 80026]]
*Note: Allowed expenditures for the first quarter of 1999 are
based on the FY 1999 SGR and allowed expenditures for the last three
quarters of 1999 are based on the FY 2000 SGR. Allowed expenditures
in the first year (April 1, 1996-March 31, 1997) are equal to actual
expenditures. All subsequent figures are equal to quarterly allowed
expenditure figures increased by the applicable SGR. Cumulative
allowed expenditures are equal to the sum of annual allowed
expenditures. We provide more detailed quarterly allowed and actual
expenditure data on our Web site under the Medicare Actuary's
publications at the following address: http://www.cms.hhs.gov/statistics/actuary/.
We expect to update the web site with the most
current information later this month.
Consistent with section 1848(d)(4)(E) of the Act, table 12 includes
our final revision of allowed expenditures for 2001, a recalculation of
allowed expenditures for 2002, and our initial estimate of allowed
expenditures for 2003. To determine the update adjustment factor for
2003, the statute requires that we use cumulative allowed expenditures
from April 1, 1996 through December 31, 2002, actual expenditures
through December 31, 2002, and the SGR for 2003, as well as annual
allowed and actual expenditures for 2002. We are using estimates of
allowed expenditures for 2002 and 2003 that will subsequently be
revised consistent with section 1848(d)(4)(E) of the Act. Because we
have incomplete expenditure data for 2002, we are using an estimate for
this period. Any difference between current estimates and final figures
will be taken into account in determining the update adjustment factor
for future years.
We are using figures from table 12 in the statutory formula
illustrated below:
[GRAPHIC] [TIFF OMITTED] TR31DE02.000
UAF = Update Adjustment Factor.
Target02 = Allowed Expenditures for 2002 or $63.5 billion.
Actual02 = Estimated Actual Expenditures for 2002 = $69.1
billion.
Target 4/96-12/02 = Allowed Expenditures from 4/1/1996-12/
31/2002 = $365.4 billion.
Actual 4/96-12/02 = Estimated Actual Expenditures from 4/1/
1996-12/31/2002 = $381.9 billion.
SGR03 = 7.6 percent (1.076).
[GRAPHIC] [TIFF OMITTED] TR31DE02.001
Section 1848(d)(4)(D) of the Act indicates that the update
adjustment factor determined under section 1848(d)(4)(B) of the Act for
a year may not be less than -0.07 or greater than 0.03. Because the
calculated update adjustment factor of -0.134 is less than the
statutory limit of -0.07, the update adjustment factor for 2003 will be
-0.07.
Section 1848(d)(4)(A)(ii) of the Act indicates that 1 should be
added to the update adjustment factor determined under section
1848(d)(4)(B) of the Act. Thus, adding 1 to -0.070 makes the update
adjustment factor equal to 0.930.
VII. Allowed Expenditures for Physicians' Services and the Sustainable
Growth Rate
A. Medicare Sustainable Growth Rate
The SGR is an annual growth rate that applies to physicians'
services paid for by Medicare. The use of the SGR is intended to
control growth in aggregate Medicare expenditures for physicians'
services. Payments for services are not withheld if the percentage
increase in actual expenditures exceeds the SGR. Rather, the physician
fee schedule update, as specified in section 1848(d)(4) of the Act, is
adjusted based on a comparison of allowed expenditures (determined
using the SGR) and actual expenditures. If actual expenditures exceed
allowed expenditures, the update is reduced. If actual expenditures are
less than allowed expenditures, the update is increased.
Section 1848(f)(2) of the Act specifies that the SGR for a year
(beginning with 2001) is equal to the product of the following four
factors:
(1) The estimated change in fees for physicians' services.
(2) The estimated change in the average number of Medicare fee-for-
service beneficiaries.
(3) The estimated projected growth in real GDP per capita.
(4) The estimated change in expenditures due to changes in law or
regulations.
In general, section 1848(f)(3) of the Act requires us to publish
SGRs for 3 different time periods, no later than November 1 of each
year, using the best data available as of September 1 of each year.
Under section 1848(f)(3)(C)(i) of the Act, the SGR is estimated and
subsequently revised twice (beginning with the FY and CY 2000 SGRs)
based on later data. Under section 1848(f)(3)(C)(ii) of the Act, there
are no further revisions to the SGR once it has been estimated and
subsequently revised in each of the 2 years following the preliminary
estimate. In this final rule, we are making our preliminary estimate of
the 2003 SGR, a revision to the 2002 SGR, and our final revision to the
2001 SGR.
B. Physicians' Services
Section 1848(f)(4)(A) of the Act defines the scope of physicians'
services covered by the SGR. The statute indicates that the term
``physicians' services'' includes other items and services (such as
clinical diagnostic laboratory tests and radiology services), specified
by the Secretary, that are commonly performed or furnished by a
physician or in a physician's office, but does not include services
furnished to a Medicare+Choice plan enrollee. We published a definition
of physicians' services for use in the SGR in the Federal Register (66
FR 55316) on November 1, 2001. We defined ``physicians' services'' to
include many of the medical and other health services listed in section
1861(s) of the Act. For purposes of determining allowed expenditures,
actual expenditures, and SGRs through December 31, 2002, we have
specified that ``physicians' services'' include the following medical
and other health services if bills for the items and services are
processed and paid by Medicare carriers:
[sbull] Physicians' services.
[[Page 80027]]
[sbull] Services and supplies furnished incident to physicians'
services.
[sbull] Outpatient physical therapy services and outpatient
occupational therapy services.
[sbull] Antigens prepared by or under the direct supervision of a
physician.
[sbull] Services of physician assistants, certified registered
nurse anesthetists, certified nurse midwives, clinical psychologists,
clinical social workers, nurse practitioners, and clinical nurse
specialists.
[sbull] Screening tests for prostate cancer, colorectal cancer, and
glaucoma.
[sbull] Screening mammography, screening pap smears, and screening
pelvic exams.
[sbull] Diabetes outpatient self-management training services.
[sbull] Medical nutrition therapy services.
[sbull] Diagnostic x-ray tests, diagnostic laboratory tests, and
other diagnostic tests.
[sbull] X-ray, radium, and radioactive isotope therapy.
[sbull] Surgical dressings, splints, casts, and other devices used
for the reduction of fractures and dislocations.
[sbull] Bone mass measurements.
In the June 2002 proposed rule (67 FR 43861), we announced a change
to our methodology for determining the ``weighted average percentage
increase in fees for all physicians' services'' for the 2001 and
subsequent year SGRs. We use a weighted average of the price indices
that are used to increase payment for services included in the SGR to
determine the percentage increase in fees for physicians' services.
Physicians' services are updated using the MEI. Clinical diagnostic
laboratory services are updated using the CPI. Drugs furnished
``incident to'' a physician's service under section 1861(s)(2)(A) of
the Act, are also included in the calculation of the SGR. Under section
1842(o) of the Act, payments for drugs are based on 95 percent of
average wholesale prices. We are currently using the MEI as a proxy for
growth in drug prices. In the proposed rule, we indicated that, rather
than using the MEI as proxy for growth in drug prices, we would use
growth in actual drug prices to determine the weighted average
percentage increase in fees for all physicians' services. In response,
we received many comments suggesting that ``incident to'' drugs should
not be included in the definition of physicians' services.
Comment: Comments indicated that the administration of a drug is a
physician's service that, by statute, must be included in the
definition of physicians' services. The drug itself, however, argued
the comments, is not a physician service and should not be included in
the SGR. A number of comments indicated that rising Medicare
expenditures for drugs are due in large part to the introduction of
costly new cancer drugs and not to the failure of physicians to control
their use. Many of these comments stated that the increase in drug
spending is due to government policies that encourage the rapid
development of new drugs, as well as government efforts to urge
Americans to be tested and seek early treatment for cancer and other
diseases. Some comments indicated that physicians should not be forced
to pay for the rising cost of drugs covered by Medicare through reduced
fees. Other comments stated that including drugs in the SGR has not led
to controls on drug spending and, as a result, removing them would not
lead to increased spending. Other comments indicated that the SGR has
not been increased to reflect the growing cost of drugs. These comments
indicated that the SGR should either account for the growing cost of
drugs or exclude them completely. One comment indicated that the SGR
should account for the cost of new drugs approved by the FDA and
covered by Medicare during the prior year and the cost of covered drugs
that have the same biologic effect as non-covered drugs. Several
comments indicated that the Secretary does not have the legal authority
to include ``incident to'' drugs in the SGR because the section 1848(f)
of the Act refers to physicians' services and not ``medical and other
health services.'' Others provided copies of a detailed legal opinion
arguing that drugs may be included in the SGR under section 1848(f) of
the Act but cannot be included in the definition of physicians'
services for purposes of determining the update adjustment factor under
section 1848(d) of the Act.
Response: The statute provides the Secretary with clear authority
to specify the services that are included in the SGR. Section
1848(f)(4)(A) of the Act indicates ``the term `physicians' services'
includes other items and services (such as clinical diagnostic
laboratory tests and radiology services) specified by the Secretary,
that are commonly performed or furnished by a physician or in a
physician's office''. We disagree with the comments suggesting that the
Secretary does not have the authority to include drugs in the
definition of physicians' services for purposes of determining allowed
expenditures, actual expenditures and the SGR. In reviewing section
1861(s) of the Act, we decided to include items and services in the SGR
that are commonly furnished by physicians or in physicians' offices.
Since ``incident to'' drugs covered under section 1861(s) of the Act
are commonly furnished in physicians' offices, we are including these
items in the SGR.
C. Provisions Related to the Sustainable Growth Rate
Section 211(b)(1) of the BBRA amended section 1848(f)(1) of the Act
to require that three SGR estimates be published in the Federal
Register not later than November 1 of every year. In this final rule,
we are publishing our preliminary estimate of the SGR for 2003, a
revised estimate of the SGR for 2002, and our final determination of
the SGR for 2001. Consistent with section 1848(f)(3)(C) of the Act, we
are using the best data available to us as of September 1, 2002 for all
of the figures.
D. Preliminary Estimate of the Sustainable Growth Rate for 2003
Our preliminary estimate of the 2003 SGR is 7.6 percent. We first
estimated the 2003 SGR in March and made the estimate available to the
Medicare Payment Advisory Commission and on our website. Table 12 shows
our March estimates and our current estimates of the factors included
in the SGR:
Table 12
------------------------------------------------------------------------
Statutory factors March estimate Current estimate
------------------------------------------------------------------------
Fees............................ 1.7% (1.017) 2.9% (1.029)
Enrollment...................... 1.3% (1.013) 1.2% (1.012)
Real per capita GDP............. 2.9% (1.029) 3.3% (1.033)
Law and regulation.............. 0.0% (1.000) 0.0% (1.000)
---------------------
Total....................... 6.0% (1.060) 7.6% (1.076)
------------------------------------------------------------------------
[[Page 80028]]
Note: Consistent with section 1848(f)(2) of the Act, the
statutory factors are multiplied, not added, to produce the total
(that is, 1.029 x 1.012 x 1.033 x 1.000 = 1.076.) A more detailed
explanation of each figure is provided below in section H.1.
E. Revised Sustainable Growth Rate for 2002
Our current estimate of the 2002 SGR is 8.8 percent. Table 13 shows
our preliminary estimate of the 2002 SGR that was published in the
Federal Register on November 1, 2001 (66 FR 55317) and our current
estimate:
Table 13
------------------------------------------------------------------------
Statutory factors 11/1/01 estimate Current estimate
------------------------------------------------------------------------
Fees............................ 2.3 (1.023) 2.5% (1.025)
Enrollment...................... 0.7 (1.007) 2.8% (1.028)
Real per capita GDP............. 1.7 (1.017) 2.3% (1.023)
Law and regulation.............. 0.8 (1.008) 0.9% (1.009)
---------------------
Total....................... 5.6 (1.056) 8.8% (1.088)
------------------------------------------------------------------------
A more detailed explanation of each figure is provided below in
section H.2.
F. Final Sustainable Growth Rate for 2001
The SGR for 2001 is 4.5 percent. Table 14 shows our preliminary
estimate of the SGR published in the Federal Register on November 1,
2000 (65 FR 65433), our revised estimate published in the Federal
Register on November 1, 2001 (66 FR 55317) and the final figures
determined using the latest available data:
Table 14
----------------------------------------------------------------------------------------------------------------
Statutory factors 11/1/00 estimate 11/1/01 estimate Current estimate
----------------------------------------------------------------------------------------------------------------
Fees................................................ 1.9 (1.019) 1.9 (1.019) 2.1% (1.021)
Enrollment.......................................... 0.9 (1.009) 3.0 (1.030) 3.0% (1.030)
Real per capita GDP................................. 2.7 (1.027) 0.7 (1.007) -0.7% (0.993)
Law and regulation.................................. 0.0 (1.000) 0.4 (1.004) 0.1% (1.001)
---------------------
Total........................................... 5.6 (1.056) 6.1 (1.061) 4.5% (1.045)
----------------------------------------------------------------------------------------------------------------
A more detailed explanation of each figure is provided below in
section H.2.
G. Calculation of 2003, 2002, and 2001 Sustainable Growth Rates
1. Detail on the 2003 SGR
A more detailed discussion of our preliminary estimates of the four
elements of the 2003 SGR follows. We note that all of the figures used
to determine the 2003 SGR are estimates that will be revised based on
subsequent data. Any differences between these estimates and the actual
measurement of these figures will be included in future revisions of
the SGR and incorporated into subsequent physician fee schedule
updates.
Factor 1--Changes in Fees for Physicians' Services (Before Applying
Legislative Adjustments) for CY 2003
This factor was calculated as a weighted average of the 2002 fee
increases for the different types of services included in the
definition of physicians' services for the SGR. Medical and other
health services paid using the physician fee schedule account for
approximately 83.5 percent of total allowed charges included in the SGR
and are updated using the MEI. The MEI for 2003 is 3.0 percent.
Diagnostic laboratory tests represent approximately 8.0 percent of
Medicare allowed charges included in the SGR and the costs of these
tests are typically updated by the CPI-U. The CPI-U for 2003 that will
be used to update clinical diagnostic laboratory tests is 1.1 percent.
Drugs represent 8.5 percent of Medicare allowed charges included in the
SGR. Medicare pays for drugs based on 95 percent of AWP under section
1842(o) of the Act. We calculated the weighted average fee increase for
drugs to be included in the SGR, we estimate a weighted average fee
increase for drugs of 3.3 percent in 2002. Table 15 shows the weighted
average of the MEI, laboratory and drug price increases for 2003:
Table 15
------------------------------------------------------------------------
Weight Update
------------------------------------------------------------------------
Physician............................... 0.835 3.0
Laboratory.............................. 0.080 1.1
Drugs................................... 0.085 3.3
Weighted Average........................ 1.000 2.9
------------------------------------------------------------------------
After taking into account the elements described in table 16, we
estimate that the weighted-average increase in fees for physicians'
services in 2002 under the SGR (before applying any legislative
adjustments) will be 2.9 percent.
Factor 2--The Percentage Change in the Average Number of Part B
Enrollees From 2002 to 2003
This factor is our estimate of the percent change in the average
number of
[[Page 80029]]
fee-for-service enrollees from 2002 to 2003. Services provided to
Medicare+Choice (M+C) plan enrollees are outside the scope of the SGR
and are excluded from this estimate. Our actuaries estimate that the
average number of Medicare Part B fee-for-service enrollees will
increase by 1.2 percent from 2002 to 2003. Table 16 illustrates how
this figure was determined:
Table 16
------------------------------------------------------------------------
2002 2003
------------------------------------------------------------------------
Overall................................. 37.986 million 38.321 million
Medicare+Choice......................... 5.070 million 5.012 million
Net..................................... 32.916 million 33.309 million
Percent Increase........................ .............. 1.2 percent
------------------------------------------------------------------------
An important factor affecting fee-for-service enrollment is
beneficiary enrollment in Medicare+Choice plans. Because it is
difficult to estimate the size of the Medicare+Choice enrollee
population before the start of a calendar year, at this time, we do not
know how actual enrollment in Medicare+Choice plans will compare to
current estimates. For this reason, there may be substantial changes to
this estimate as actual Medicare fee-for-service enrollment for 2003
becomes known.
Factor 3--Estimated Real Gross Domestic Product Per Capita Growth in
2003
We estimate that the growth in real per capita GDP from 2002 to
2003 will be 3.3 percent. Our past experience indicates that there have
also been large changes in estimates of real per capita GDP growth made
before the year begins and the actual change in GDP computed after the
year is complete. Thus, it is likely that this figure will change as
actual information on economic performance becomes available to us in
2003.
Factor 4--Percentage Change in Expenditures for Physicians' Services
Resulting From Changes in Law or Regulations in CY 2003 Compared With
CY 2002
As indicated below, section 101-104 of the BIPA added Medicare
coverage for a variety of new services. We estimate no additional costs
for these services in 2003 relative to 2002. We will continue to
monitor utilization of all of the new benefits provided in BIPA and
modify our estimates (up or down) and the SGRs accordingly.
Comment: We received many comments indicating that we should adjust
the SGR to account for the addition of the psychiatric diagnostic
interview to the list of covered telehealth services.
Response: We agree that the addition of the psychiatric diagnostic
interview is a change in regulation that should be accounted for in the
SGR. However, since there is such low utilization of the telehealth
benefit, we believe the addition of the psychiatric diagnostic
interview to the list of covered telehealth services will have no
impact on the SGR.
Comment: Several comments noted that section 112 of BIPA changed
Medicare's drug payment policy. Prior to the enactment of the BIPA,
section 1861(s)(2) of the Act allowed Medicare to pay for ``drugs and
biologicals, which cannot, as determined in accordance with
regulations, be self-administered.'' The BIPA amended the Act to allow
Medicare to pay for drugs which ``are not usually administered by the
patient.'' The commenters believe that this new drug payment policy
will result in an increase in expenditures that should be accounted for
in the SGR.
Response: The amendments to Medicare's drug payment policy
contained in section 112 of the BIPA constitute a change in law or
regulation that is taken into account in determining the SGR. We
estimate a 2002 cost for this policy change that will be accounted for
in the 2002 SGR described below. At this time, we are not estimating
additional Medicare costs in 2003 relative to 2002 for drugs not
usually self-administered by patients.
Comment: We received many public comments that argued for adjusting
the SGR for changes in expenditures resulting from NCDs. According to
these comments, any changes in national Medicare coverage policy that
are adopted by us pursuant to a formal or informal rulemaking, such as
a Program Memorandum or a national Medicare coverage determination,
constitute a regulatory change for purposes of computing factor 4 of
the SGR. The comments indicate that our authority to make any
regulatory change is derived from law--whether it is a law specifically
authorizing Medicare coverage of a new service or a law that provides
general rulemaking authority. According to these comments, any new
coverage initiative is a direct implementation, by regulation, of a law
that should be taken into account in determining the SGR. One commenter
indicated that we effectively compare actual expenditure data that
include additional utilization resulting from NCDs with a spending
target that does not include this additional utilization, making it
more likely that the target will be exceeded.
Response: We carefully considered this comment. If the Congress
adds a new statutory benefit (for example, medical nutrition therapy),
we are required by law to increase the target. Medicare does not have
authority to pay for a service lacking a defined statutory benefit
listed in section 1861(s) of the Act (for example, prior to January 1,
2002, there was no authority for Medicare to pay for medical nutrition
therapy). However, we do have the authority to establish national
coverage policies for items and services that are included in a benefit
category listed in section 1861(s) of the Act. Further, we contract
with Medicare carriers who may establish local coverage policies for
items and services that have a statutory benefit category.
The statute requires that real GDP per capita be used in setting
the SGR target. We believe that use of real GDP per capita was intended
as a proxy for a number of factors that may increase the volume and
intensity of physicians' services (other than beneficiary enrollment
and statutory changes that increase expenditures, which are separately
accounted for by the statute), such as those associated with coverage
of new items or services and other miscellaneous factors that cannot be
specifically identified, such as any spending associated with NCDs.
The large majority of Medicare spending is for services that are
covered at local carrier discretion. While we may establish national
coverage (or non-coverage) for a new item or service with a defined
statutory benefit category, this NCD does not necessarily increase
Medicare spending to the extent that the service has or would have been
covered at local carrier discretion in the absence
[[Page 80030]]
of a NCD. For instance, there was widespread publicity in 2000 about
ocular photodynamic therapy (OPT), a new treatment for macular
degeneration, a common cause of blindness in the elderly. Prior to our
NCD, Medicare carriers had the authority to cover OPT at local carrier
discretion as a physician's service under section 1861(s)(1) of the
Act. Given the widespread publicity about the effectiveness of this new
treatment, it is likely that, in the absence of a NCD, OPT would have
been covered at local carrier discretion. That is, application of
existing Medicare law and regulations would have allowed Medicare
coverage for OPT at local carrier discretion. Because it seems likely
that Medicare would covered this procedure in any event, it is unclear
whether there are any additional costs associated with the NCD. Indeed
the NCD limited the coverage of OPT to a defined subpopulation of
Medicare beneficiaries. The local contractor determinations may not
have done so, and therefore, the NCD may actually have resulted in a
net savings to Medicare. Moreover, we did not change the law or
regulations by making a national coverage decision for OPT. Rather, we
applied existing law and regulations to a new service to make a
national statement about coverage where one did not previously exist.
We may also issue a NCD to clarify Medicare coverage for existing
items or services. Such a decision may establish national policy that
replaces differing local practices. In such a case, there may not have
been consistency among Medicare carriers as to whether an item or
service qualified for coverage based on existing law or regulation.
Thus, our NCD would not change law or regulation, but replaces
differing local practices with a national determination that, based on
existing law and regulations, clarifies Medicare coverage for an item
or service. Spending may increase or decrease depending upon the degree
to which the particular item or service is currently being covered by
Medicare carriers and whether the decision is to establish coverage or
non-coverage of the item or service.
For the reasons previously discussed, it would be very difficult to
estimate any costs or savings associated with specific coverage
decisions. Further, we believe any adjustment to the target would
likely be of such a small magnitude that it would have little effect on
future projected updates.
1. Detail on the 2002 SGR
A more detailed discussion of our revised estimates of the four
elements of the 2002 SGR follows.
Factor 1--Changes in Fees for Physicians' Services (Before Applying
Legislative Adjustments) for 2002
This factor was calculated as a weighted average of the 2002 fee
increases that apply for the different types of services included in
the definition of physicians' services for the SGR.
Services paid using the physician fee schedule account for
approximately 84.5 percent of total allowed charges included in the
SGR, and are updated using the MEI. The MEI for 2002 is 2.6 percent.
Diagnostic laboratory tests represent approximately 7.5, and the costs
of these tests are typically updated by the CPI-U. However, the BBA
required a 0.0 percent update in 2002 for laboratory services. Drugs
represent 8.0 percent of Medicare allowed charges included in the SGR.
Pursuant to section 1842(o) of the Act, Medicare pays for drugs based
on 95 percent of AWP. Using wholesale pricing information and Medicare
utilization for drugs included in the SGR, we estimate a weighted
average fee increase for drugs of 3.3 percent in 2002. Table 17 shows
the weighted average of the MEI, laboratory and drug price increases
for 2002:
Table 17
------------------------------------------------------------------------
Weight Update
------------------------------------------------------------------------
Physician............................... 0.845 2.6
Laboratory.............................. 0.075 0.0
Drugs................................... 0.080 3.3
Weighted Average........................ 1.000 2.5
------------------------------------------------------------------------
After taking into account the elements described in table 18, we
estimate that the weighted-average increase in fees for physicians'
services in 2002 under the SGR (before applying any legislative
adjustments) will be 2.5 percent.
Factor 2--The Percentage Change in the Average Number of Part B
Enrollees from 2001 to 2002
Our actuaries estimate that the average number of Medicare Part B
fee-for-service enrollees (excluding beneficiaries enrolled in M+C
plans) increased by 2.8 percent in 2002. Table 18 illustrates how we
determined this figure:
Table 18
------------------------------------------------------------------------
2001 2002
------------------------------------------------------------------------
Overall................................. 37.633 million 37.986 million
Medicare+Choice......................... 5.608 million 5.070 million
Net..................................... 32.025 million 32.916 million
Percent Increase........................ .............. 2.8 percent
------------------------------------------------------------------------
Our actuaries' estimate of the 2.8 percent change in the average
number of fee-for-service enrollees, net of Medicare+Choice enrollment
for 2002, compared to 2001 is different from our preliminary estimate
(0.7 percent for 2002 from the November 1, 2001 final rule (66 FR
55318)) because the historical base from which our actuarial estimate
is made has changed. We now have complete information on Medicare fee-
for-service enrollment for 2001 that is different than the figure we
used one year ago. Further, we now have information on actual fee-for-
service
[[Page 80031]]
enrollment for the first 8 months of 2002. We would caution that our
estimate of fee-for-service enrollment for 2002 may change again once
we have complete information for the entire year.
Factor 3--Estimated Real Gross Domestic Product Per Capita Growth in
2002
We estimate that the growth in real per capita GDP will be 2.3
percent in 2002. Our past experience indicates that there have also
been large differences between our preliminary estimates of real per
capita GDP growth and the actual change in this factor. Thus, it is
likely that this figure will change further as actual information on
economic performance becomes available to us in 2003.
Factor 4--Percentage Change in Expenditures for Physicians' Services
Resulting From Changes in Law or Regulations in 2002 Compared With 2001
As indicated earlier, sections 101 through 104 of the BIPA added
Medicare coverage for a variety of new services that will affect the
2002 SGR. We included an adjustment in the 2002 SGR based on previous
estimates of the costs of these new benefits, but are reducing our
estimate of the costs of the new telehealth and medical nutrition
therapy benefits based on lower utilization of these services than we
had originally anticipated. This change will have little effect on this
factor and we are not changing our estimate of the costs of any of the
other provisions described earlier. In addition, as explained above,
section 112 of BIPA made changes that will result in additional
Medicare coverage for certain drugs. Prior to the enactment of the
BIPA, Medicare only paid for drugs that cannot be self-administered by
the patient. BIPA allows Medicare to pay for drugs that can be but are
not usually self-administered. Accordingly, we are accounting for the
increased Medicare drug expenditures that will result from
implementation of section 112 of the BIPA. After taking these
provisions into account, the percentage change in expenditures for
physicians' services resulting from changes in law or regulations is
estimated to be 0.9 percent for 2002.
3. Detail on the 2001 SGR
A more detailed discussion of our current estimates of the four
elements of the 2001 SGR follows. Pursuant to section 1848(f)(3)(C) of
the Act, we will be making no further revisions to these figures.
Factor 1--Changes in Fees for Physicians' Services (Before Applying
Legislative Adjustments) for 2001
We are using a weighted average of the fee increases that apply to
the different services included in the SGR for 2001. Services that are
updated by the MEI represent 85.7 percent of allowed charges included
in the SGR. The 2001 MEI was 2.1 percent. Pursuant to the BBA,
laboratory services were updated by 0.0 percent in 2001 and represent
7.0 percent of allowed charges included in the SGR. The weighted
average percentage increase in average wholesale prices for drugs
included in the SGR in 2001 was 3.4 percent. Drugs represent 7.3
percent of allowed charges included in the SGR. Using these figures,
the weighted average percentage increase in fees for physicians'
services is illustrated in table 19:
Table 19
------------------------------------------------------------------------
Weight Update
------------------------------------------------------------------------
Physician............................... 0.857 2.1
Laboratory.............................. 0.070 0.0
Drugs................................... 0.073 3.4
Weighted Average........................ 1.000 2.1
------------------------------------------------------------------------
Factor 2--The Percentage Change in the Average Number of Fee-for-
Service Part B Enrollees From 2000 to 2001
We estimate the increase in the average number of fee-for-service
enrollees (excluding Medicare+Choice enrollees) from 2000 to 2001 was
3.0 percent. Table 20 illustrates the calculation of this factor:
Table 20
------------------------------------------------------------------------
2000 2001
------------------------------------------------------------------------
Overall................................. 37.330 million 37.633 million
Medicare+Choice......................... 6.233 million 5.608 million
Net..................................... 31.098 million 32.205 million
Percent Increase........................ .............. 3.0 percent
------------------------------------------------------------------------
Our calculation of this factor is based on complete data from 2001.
Factor 3--Estimated Real Gross Domestic Product Per Capita Growth in
2001
We estimate that the growth in real per capita GDP was -0.7 percent
in 2001. This is a final figure based on complete data for 2001.
Factor 4--Percentage Change in Expenditures for Physicians' Services
Resulting From Changes in Law or Regulations in CY 2001 Compared With
CY 2000
As described above, the BIPA makes changes to the Act that affect
Medicare expenditures for services included in the SGR. Some of these
provisions had no effect on Medicare expenditures in 2001 because they
did not go into effect until 2002. Other provisions became effective at
some time during 2001. These provisions relate to coverage of new
technology mammography, coverage changes for screening pap smears,
screening pelvic exams, screening colonoscopy, expanded access to
telehealth services, and Medicare payment for services provided in
Indian Health Service hospitals and clinics. After taking these
provisions into
[[Page 80032]]
account, the percentage change in expenditures for physicians' services
resulting from changes in law or regulations is estimated to be 0.1
percent for 2001.
VIII. Anesthesia and Physician Fee Schedule Conversion Factors
The 2003 physician fee schedule CF will be $34.5920. The 2003
national average anesthesia conversion factor is $16.0353.
The specific calculations to determine the physician fee schedule
and anesthesia CFs for 2003 are explained below.
Detail on Calculation of the 2003 Physician Fee Schedule Conversion
Factor
[sbull] Physician Fee Schedule Conversion Factor
Under section 1848(d)(1)(A) of the Act, the physician fee schedule
CF is equal to the CF for the previous year multiplied by the update
determined under section 1848(d)(4) of the Act. In addition, section
1848(c)(2)(B)(ii)(II) of the Act requires that changes to RVUs cannot
cause the amount of expenditures to increase or decrease by more than
$20 million from the amount of expenditures that would have been made
if such adjustments had not been made. We implement this requirement
through a uniform budget neutrality adjustment to the CF. There is one
change that will require us to make an adjustment to the conversion
factor to comply with the budget neutrality requirement in section
1848(c)(2)(B)(ii)(II) of the Act. We are making a 0.04 percent
reduction (0.9996) in the CF to account for the increase in anesthesia
work resulting from the 5-year review.
We are illustrating the calculation for the 2003 physician fee
schedule CF in table 21:
Table 21
------------------------------------------------------------------------
------------------------------------------------------------------------
2002 Conversion Factor.................................. $36.1992
2003 Update............................................. 0.9560
Budget-Neutrality Adjustment: Increase in Anesthesia 0.9996
Work...................................................
2003 Conversion Factor.................................. 34.5920
------------------------------------------------------------------------
[sbull] Anesthesia Fee Schedule Conversion Factor
Because anesthesia services do not have RVUs like other physician
fee schedule services, we are accounting for the increase in anesthesia
work through an adjustment to the anesthesia fee schedule conversion
factor. As indicated earlier, we are increasing the physician work
component of the anesthesia conversion factor by 2.10 percent to
reflect a 9.13 percent increase in payment applied to 23 percent of
anesthesia allowed charges. The 2002 anesthesia CF is $16.60. The
physician work portion of the anesthesia conversion factor is 78
percent. We applied a 1.6 percent (1.016) increase to this part of the
anesthesia conversion factor. Similarly, we also simulated the effect
of practice expense refinements on the practice expense portion of the
anesthesia conversion factor. The refinements reduced this portion of
the anesthesia conversion factor by 4.04 percent (0.9596). In addition,
we are also applying the physician fee schedule update and the budget
neutrality adjustment for the increase in anesthesia work that that
also apply to the physician fee schedule CF. To determine the
anesthesia fee schedule CF for 2003, we used the following figures:
Table 22
------------------------------------------------------------------------
------------------------------------------------------------------------
2002 Anesthesia Conversion Factor....................... $16.6055
Adjustments for work and practice expense............... 1.0106
2003 Update............................................. 0.9560
Budget-Neutrality Adjustment: Increase in Anesthesia 0.9996
Work...................................................
2003 Conversion Factor.................................. 16.0353
------------------------------------------------------------------------
IX. Provisions of the Final Rule
This final rule adopts the provisions of the June 2002 proposed
rule, except as noted elsewhere in the preamble. The following is a
highlight of the changes made from the proposed rule.
For immunization administration, we are developing practice expense
RVUs for influenza, pneumonia, and hepatitis B vaccine G codes. This
will increase the payment for these codes and make Medicare's payment
for vaccine administration more consistent with the rates paid for the
CPT codes.
For anesthesia, we are revising the regulations text at Sec.
414.46(g) to incorporate that the policy on multiple procedure codes as
well as add-on codes.
For enrollment of PTs and OTs as therapists in private practice, we
are revising our regulations text at Sec. 410.59 and Sec. 410.60 to
reflect that carriers and fiscal intermediaries can enroll therapists
as PTs or OTs in private practice when the therapist is employed by
physician groups or groups that are not professional corporations.
We are adopting the process to add or delete telehealth services
and adding the psychiatric diagnostic interview examination to the list
of telehealth services. In addition, we are referencing the process to
add or delete services at new Sec. 410.78(f).
For the definition of a ZZZ global period, we are revising the
definition to show that physician work is associated with intraservice
time and, in some instances, the pre- and postservice time.
For the definition of a screening fecal-occult blood test, we are
revising the definition at Sec. 410.37(a)(2) to permit coverage of
non-guaiac based tests.
For the critical access hospital emergency services requirement we
are modifying Sec. 485.618(d) to include RNs.
X. Waiver of Proposed Rulemaking for Definition of a Screening Fecal-
Occult Blood Test and Critical Access Hospital Emergency Services
Requirement
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment on proposed rules. The
notice of proposed rulemaking includes a reference to the legal
authority under which the rule is proposed and the terms and substances
of the proposed rule or a description of the subjects and issues
involved. This procedure can be waived, however, if an agency finds
good cause that notice-and-comment procedure is impracticable,
unnecessary, or contrary to the public interest and incorporates a
statement of the finding and its reasons in the rule issued.
In our proposed rule, we did not propose to modify Sec. 410.37.
Still, we received a comment seeking to modify coverage for one
particular type of colorectal cancer test, a fecal-occult blood test.
As explained earlier in this preamble, we have agreed to modify this
regulation in a manner that would permit broader Medicare coverage if
that is determined to be appropriate. Consistent with this change, we
are modifying Sec. 410.37(a)(1)(v) to announce that we will consider
approving new tests or procedures for use in the early detection of
colorectal cancer through our process for making national coverage
determinations.
The Congress has authorized the Secretary to cover additional tests
or procedures that can be used for the early detection of colorectal
cancer under the Colorectal Cancer Screening Test benefit in under part
B in section 1861(pp)(1)(D) of the Act. The Secretary may determine
that coverage of other tests or procedures are appropriate, in
consultation with appropriate organizations. We are aware that new
colorectal cancer screening tests are
[[Page 80033]]
being developed. To determine whether it is appropriate to expand
coverage to provide Medicare payment for additional tests or
procedures, it will be necessary to compare the new tests to tests that
are already covered. We are modifying Sec. 410.37(a)(1)(v) to permit
determinations on whether to cover (or not cover) additional tests or
procedures to be made through NCDs.
Expanding Medicare coverage of additional, effective, and
appropriate screening tests would be in the public interest because the
tests may discover patients with cancer at an earlier stage, increasing
the chances that the patient will obtain proper medical treatment. An
NCD, authorized by section 1869(a)(2) of the Act, can be used to
develop a national policy regarding the scope of benefits. Moreover,
the process for making an NCD will permit public participation, as well
as the participation of appropriate groups, as the agency determines
whether or not expanded coverage for additional tests or procedures is
appropriate. This process offers advantages to the public because it
could permit an expansion in the scope of the colorectal cancer
screening benefit more rapidly than the notice and comment procedures
of the Administrative Procedure Act would normally permit.
In addition, we did not propose to modify Sec. 485.618(d). A delay
in implementation of this provision would hinder the ability of small
CAHs (with no greater than 10 beds) in some frontier areas or remote
locations to provide the necessary critical access hospital emergency
services. It was brought to our attention that, in recent months, a
number of small CAHs in very remote frontier areas have been struggling
to comply with the CAH standard in Sec. 485.618(d) that requires CAHs
to have either a doctor of medicine or osteopathy, a physician's
assistant, or a nurse practitioner, with training or experience in
emergency care to ensure emergency coverage 24-hours-a-day, seven-days-
a-week. These CAHs have 10 or less beds. In order to provide additional
flexibility for other CAHs of virtually the same size, we believe 10
beds is an appropriate size limit for facilities that may be in the
same situation and require potential relief from the existing staffing
requirements. These facilities, located in isolated frontier
communities, have only one medical practitioner and see a low volume of
patients. For these providers the requirement referenced above results
in a significant personal hardship to the sole practitioner who must be
on call 24-hours-a-day, 52-weeks-a-year. In addition, it is a financial
hardship for the facility to find a replacement for the currently
required emergency services personnel because frequently the
replacement costs far exceed what is recovered through the services
provided. We believe that by allowing States to include RNs in the
current critical access hospital emergency services personnel
requirement, so that RNs may be on call for small CAHs in frontier
areas or remote locations, we will help ensure that frontier
communities will have continued access to CAH services. In addition, if
small CAHs in frontier areas or remote locations close their doors
there would be no access to care in these communities.
Accordingly, we find good cause for waiving the prior notice-and-
comment procedures as unnecessary and contrary to the public interest.
In addition, we note that rules of agency procedure are exempt from the
notice and comment requirements of 5 U.S.C. 553.
XI. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-days notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
[sbull] The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
[sbull