[Federal Register: November 7, 2003 (Volume 68, Number 216)]
[Rules and Regulations]
[Page 63195-63395]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07no03-11]
[[Page 63195]]
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Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 410 and 414
Medicare Program; Revisions to Payment Policies Under the Physician Fee
Schedule for Calendar Year 2004; Final Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 410 and 414
[CMS-1476-FC]
RIN 0938-AL96
Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule for Calendar Year 2004
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
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SUMMARY: This final rule will refine the resource-based practice
expense relative value units (RVUs) and make other changes to Medicare
Part B payment policy. The policy changes concern: Medicare Economic
Index, practice expense for professional component services, definition
of diabetes for diabetes self-management training, supplemental survey
data for practice expense, geographic practice cost indices, and
several coding issues. In addition, this rule updates the codes subject
to the physician self-referral prohibition. We also make revisions to
the sustainable growth rate and the anesthesia conversion factor.
These changes will ensure that our payment systems are updated to
reflect changes in medical practice and the relative value of services.
We are also finalizing the calendar year (CY) 2003 interim RVUs and
are issuing interim RVUs for new and revised procedure codes for CY
2004.
As required by the statute, we are announcing that the physician
fee schedule update for CY 2004 is -4.5 percent, the initial estimate
of the sustainable growth rate for CY 2004 is 7.4 percent, and the
conversion factor for CY 2004 is $35.1339.
We published a proposed rule (68 FR 50428) in the Federal Register
on Part B drug payment reform on August 20, 2003. This proposed rule
would also make changes to Medicare payment for furnishing or
administering certain drugs and biologicals. We have not finalized
these proposals to take into account that the Congress is considering
legislation that would address these issues. We will continue to
monitor legislative activity that would reform the Medicare Part B drug
payment system. If legislation is not enacted soon on this issue, we
remain committed to completing the regulatory process.
DATES: Effective date: These regulations are effective on January 1,
2004.
Comment date: We will consider comments on the physician self-
referral designated health services additions and deletions identified
in Tables 8 and 9, and the interim work RVUs for selected procedure
codes identified in Addendum C if we receive them at the appropriate
address, as provided in the addresses section, no later than 5 p.m. on
January 6, 2004.
ADDRESSES: In commenting, please refer to file code CMS-1476-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-1476-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 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:
Pam West (410) 786-2302 (for issues related to practice expense.)
Jim Menas (410) 786-4507 (for issues related to anesthesia.)
Rick Ensor (410) 786-5617 (for issues related to Geographic Cost
Price Index (GPCI).)
Mary Stojak (410) 786-6939 (for issues related to the definition of
diabetes for diabetes self-management training (DSMT).)
Shannon Martin (410) 786-7939 (for issues related to rebasing of
the Medicare Economic Index (MEI).)
Craig Dobyski, (410) 786-4584 (for issues related to telehealth).
Joanne Sinsheimer, (410) 786-4620 (for issues related to updates to
the list of certain services subject to the physician self-referral
prohibitions).
Diane Milstead (410) 786-3355, Latesha Walker (410) 786-1101, or
Gaysha Brooks (410) 786-3355 (for all other issues.)
SUPPLEMENTARY INFORMATION:
Copies: To order copies of the Federal Register containing this
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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
.
Accessing Physician Fee Schedule Web Site and Pricing Information
Information on the physician fee schedule and pricing files can be
found on our homepage. You can access this data by typing the
following: http://cms.hhs.gov/physicians/pfs or you can access this
data by using the following directions:
1. Go to the CMS homepage (http://www.cms.hhs.gov).
2. Place your cursor over the word ``Professionals'' in the blue
area near the top of the page. Select ``Physicians'' from the drop-down
menu.
3. Scroll down and under ``Payment/Billing'' select ``Physician Fee
Schedule'.
The Physician Fee Schedule pricing information is contained in two
public use files.
(1) National Physician Fee Schedule Relative Value File--This file
contains all CPT/HCPCS (excluding codes beginning with B, E, L, K, and
O), their short descriptions and a status indicator, which denotes
whether or not the service is priced under the physician fee schedule.
The file also contains the components used in the calculation of the
annual pricing amount (that is., the RVUs, GPCIs, and
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conversion factor), anesthesia conversion factors, and the payment
policy indicators used to price the claims with surgical modifiers.
This file does not contain the calculated pricing amounts.
(2) Physician Fee Schedule Payment Amount File National/Carrier--
This file contains the CPT code and the Medicare price for all services
priced under the Physician Fee Schedule. These data can be downloaded
for (a) the entire country, or (b) for a selected carrier (in most
cases carriers correlate with states). There is no option of requesting
data for selected HCPCS codes. The zip file, which is downloaded,
contains a file named PF04pc.doc, which explains the data contained in
each column. This file also contains a description of pricing
localities used in the Physician Fee Schedule. Due to the size of the
national file (as well as many of the carrier-specific files), these
data are provided in a comma-delimited format, which can be used to
populate database applications. Generally speaking, these data are too
large for Excel, however if a carrier specific file has 3 or fewer
localities, Excel can be used.
Another file that providers may find useful is the Zipcode to
Carrier Locality File. This file will map ZIP Codes to CMS carriers and
localities and map Zip Codes to their State and determine whether the
ZIP Code has a rural designation as determined by CMS. You can access
this file by typing the following: http://cms.hhs.gov/providers/pufdownload/default.asp#alphanu
or you can access this data by using
the following directions:
1. Go to the CMS homepage (http://www.cms.hhs.gov).
2. Place your cursor over the word ``Professionals'' in the blue
area near the top of the page. Select ``Physicians'' from the drop-down
menu.
3. Scroll down and under ``Payment/Billing'' select ``Medicare
Payment Systems.''
4. Scroll down and under Coding Files select ``Zipcode to Carrier
Locality File.''
Table of Contents
I. Background
A. Legislative History
B. Published Changes to the Fee Schedule
II. Specific Provisions for Calendar Year 2004
A. Resource-Based Practice Expense Relative Value Units
1. Resource-Based Practice Expense Legislation
2. Current Methodology
3. Practice Expense Proposals for Calendar Year 2004
B. Geographic Practice Cost Indices (GPCIs)
C. Coding Issues
III. Other Issues
A. Definition of Diabetes for Diabetes Self-Management Training
(DSMT)
B. Outpatient Therapy Services Performed ``Incident To''
Physicians Services
C. Status of Anesthesia Work and 5-Year Review
D. Payment Policies for Anesthesia Services
E. Technical Correction
F. Publication Issues
IV. Refinement of Relative Value Units for Calendar Year 2004 and
Response to Public Comments on Interim Relative Value Units for 2003
V. Update to the Codes for Physician Self-Referral Prohibition
VI. Physician Fee Schedule Update for Calendar Year 2004
VII. Allowed Expenditures for Physicians' Services and the
Sustainable Growth Rate
VIII. Anesthesia and Physician Fee Schedule Conversion Factors for
CY 2004
IX. Telehealth Originating Site Facility Fee Payment Amount Update
X. Provisions of the Final Rule
XI. Collection of Information Requirements
XII. Response to Comments
XIII. Regulatory Impact Analysis
Addendum A--Explanation and Use of Addendum B
Addendum B--2004 Relative Value Units and Related Information Used
in Determining Medicare Payments for 2004 Addendum C--Codes with
Interim RVUs
Addendum D--2004 Geographic Practice Cost Indices by Medicare
Carrier and Locality
Addendum E--2005 Geographic Practice Cost Indices by Medicare
Carrier and Locality
Addendum F--Updated List of CPT/HCPCS Codes Used to Describe Certain
Designated Health Services Under the Physician Self-Referral
Provision
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
APC Ambulatory Payment Classification
BBA Balanced Budget Act of 1997
BBRA Balanced Budget Refinement Act of 1999
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and Protection
Act of 2000
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
DHHS Department of Health and Human Services
E/M Evaluation and management
ESRD End-Stage Renal Disease
GAF Geographic adjustment factor
GPCI Geographic practice cost index
HCPCS Healthcare Common Procedure Coding System
HHA Home health agency
IDTFs Independent Diagnostic Testing Facilities
MCM Medicare Carrier Manual
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MGMA Medical Group Management Association
MPFS Medicare Physician Fee Schedule
MSA Metropolitan Statistical Area
OMB Office of Management and Budget
PC Professional component
PEAC Practice Expense Advisory Committee
PPO Preferred Provider Organization
PPS Prospective payment system
PRA Paperwork Reduction Act of 1995
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 (SGR) 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) that are 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
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$20 million, we must make adjustments to ensure that they do not
increase or decrease by more than $20 million.
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 made revisions to resource-based practice expense RVUs; services and
supplies incident to a physician's professional service; anesthesia
base unit variations; recognition of Physicians' Current Procedural
Terminology (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. All these revisions ensure that our payment systems
are updated to reflect changes in medical practice and the relative
value of services. This final rule also conformed our regulations to
reflect statutory provisions of Medicare, Medicaid, and State Child
Health Insurance Program (SCHIP) Benefits Improvement and Protection
Act of 2000 (Pub. L. 106-554) (BIPA) concerning: the mammography
screening benefit; biennial screening pelvic examinations for certain
beneficiaries; expanded coverage for screening colonoscopies to all
beneficiaries; annual glaucoma screenings for high-risk beneficiaries;
coverage for medical nutrition therapy services for certain
beneficiaries; expanded payment for telehealth services; payment for
certain Indian Health Service for some services under the physician fee
schedule; and revision of the payment for certain physician pathology
services.
In the December 31, 2002 final rule with comment period (67 FR
79966), we refined resource-based practice expense RVUs and made other
changes to Medicare Part B policy. These included: 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
application of endoscopic reduction rules for certain codes. In
addition, this rule: Updated the codes subject to physician self-
referral prohibitions, expanded the definition of a screening fecal-
occult blood test, and modified our regulations to expand coverage for
additional colorectal cancer screening tests through our national
coverage determination process. We also made revisions to the SGR, the
anesthesia conversion factor (CF), and the work values for some
gastroenterologic services. We finalized the calendar year (CY) 2002
interim RVUs and assigned interim RVUs for new and revised procedure
codes for CY 2003, clarified the enrollment of therapists in private
practice and the policy regarding services and supplies incident to a
physician's professional services, and made technical changes to the
definition of outpatient rehabilitation services.
This final rule also revised the regulations at Sec. 485.618 to
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).
As required by statute this final rule also announced that the
physician fee schedule update for CY 2003 was -4.4 percent, the initial
estimate of the SGR for CY 2003 was 7.6 percent, and the CF for CY 2003
was $34.5920, effective March 1, 2003. However, on February 28, 2003
(68 FR 9567), after enactment of the Consolidated Appropriations
Resolution of 2003 (Pub. L. 108-7), we published a final rule that
revised the estimates used to establish the SGRs for fiscal years 1998
and 1999 and announced a 1.6 percent increase in the CY 2003 physician
fee schedule CF for March 1 to December 31, 2003. The CF from March 1
to December 31, 2003 is $36.7856 and the anesthesia CF for this period
is $17.05. All other provisions of the December 31, 2002 final rule
were unchanged by the rule published February 28, 2003.
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 CY 2004 appears in section IX. The RVUs for CY 2004 are
in Addendum B. The GPCIs for CY 2004 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, 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 (RVUs)
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,
[[Page 63199]]
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.
II. Specific Provisions for Calendar Year 2004
In response to the publication of the August 15, 2003 proposed
rule, (68 FR 49030), and the December 2002 interim final rule, (67 FR
79966), we received approximately 2,433 comments. We received comments
from individual physicians, health care workers, and professional
associations and societies. The majority of comments addressed the
physician fee schedule proposals related to the dialysis G codes,
``incident to'' therapy services, and the geographic practice cost
indices locality payment discussion issue.
The proposed rule discussed policies that affected the 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 2004. 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 August 15, 2003 proposed
rule. More detailed background information for each issue can be found
in the December 2002 interim final rule with comment period and the
August 2003 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)(B)(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)(B)(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, can be seen as a ``top-down'' approach.
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.)
[sbull] 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.
[sbull] 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.
[sbull] Step 3--Allocate the specialty specific practice expense
pool to the specific services performed by each specialty. For each
specialty, we
[[Page 63200]]
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).
[sbull] 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) Nonphysician Work Pool
For services with physician work RVUs equal to zero (including the
technical components of radiology services and other diagnostic tests),
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. We have removed services from the
nonphysician work pool if the requesting specialty predominates
utilization of the 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 specialties to the
most appropriate SMS specialty.
(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.
(iii) Physical Therapy Services
Because we believe that most physical therapy services furnished in
physicians' offices are performed by physical therapists, we
crosswalked all utilization for therapy services in the CPT 97000
series to the physical and occupational therapy practice expense pool.
3. Practice Expense Proposals for Calendar Year 2004
a. Nonphysician Workpool
The nonphysician work pool is a special methodology that we used to
determine practice expense RVUs for many services that do not have
physician work RVUs. While the nonphysician 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 from the pool.
Because the nonphysician work pool includes a variety of services
performed by many different specialties, we use the ``all physician''
average practice expense per hour in place of a specialty-specific
practice expense per hour.
As discussed in the August 15, 2003 proposed rule, we are
continuing to study the alternatives that are available and any
modifications to the nonphysician workpool would be published in
proposed rulemaking.
Comment: Several specialty societies expressed support for the
ongoing study of this complex issue and appreciate that any
modifications to the nonphysician workpool would be published as
proposed rulemaking for review and comment prior to implementation. A
biopharmaceutical company commented that we should move forward to
develop a new methodology that better recognizes actual resource
consumption so that we can develop a preferable alternative.
Response: We are appreciative of the support and will continue to
study this issue.
b. Supplemental Practice Expense Survey Data
i. Survey Criteria and Submission Dates
As required by the BBRA, we established criteria to evaluate data
collected by organizations to supplement the data normally used in
determining the practice expense component of the physician fee
schedule. We have required supplementary survey data to be submitted by
August 1 to be considered for computing practice expense RVUs for the
following year. We proposed to change the required submission date to
March 1, which would allow us to publish our decisions regarding survey
data in the proposed rule and provide an opportunity for public comment
on survey results. We also proposed to extend for an additional 2 years
the period for accepting survey data that meets the criteria set forth
in the November 2000 final rule (as modified in the December 31, 2002
final rule). The deadline for submission of the supplemental data to be
considered in CY 2005 and CY 2006 would be March 1, 2004 and March 1,
2005, respectively.
Comment: Specialty societies expressed appreciation for our
proposal to extend the deadline for submission of surveys. Commenters
also approved of our proposal to change the due date for submission of
supplemental practice expense survey data to March 1, so that the
implications of the use of the survey data could be discussed in the
proposed rule.
Response: We will implement the change in the submission dates for
supplementary surveys as proposed. The deadline for submission of the
supplemental data to be considered in CY 2005 and CY 2006 would be
March 1, 2004 and March 1, 2005, respectively. We will revise Sec.
414.22(b)(6)(ii) to reflect this change.
ii. Submission of Supplemental Surveys
The College of American Pathologists (CAP) submitted supplemental
survey data for independent laboratories for consideration for CY 2004.
Our contractor, The Lewin Group, evaluated the data and has recommended
acceptance.
Comment: Based on our proposal to revise the date for submission of
supplemental survey data, CAP requested that we delay incorporation of
this survey data until next year's proposed rule. CAP also expressed an
interest in being able to evaluate the combined effects of the use of
the new survey data along with the technical change for pathology
services before the changes are implemented. Therefore, CAP requested
that we also extend the moratorium on calculating the technical
component as the difference between the global and professional
component practice expense RVUs by one additional year, as discussed in
the August 15, 2003 proposed rule. This request for a delay in
incorporating the new survey data, as well as extending the moratorium
was supported by the AMA and several specialty societies.
Response: We agree with the comments that suggest extending by one
year the moratorium on calculating the technical component practice
expense RVU as the difference between the global and professional
component RVUs for pathology services. We also agree with comments
suggesting that we not incorporate the CAP survey into the practice
expense methodology until next year. We will evaluate the CAP
[[Page 63201]]
survey in next year's proposed rule at the same time we show the effect
of the above described change for pathology services.
c. Practice Expense for a professional component service
While we typically assign all staff, equipment and supply costs for
services with professional and technical components (PC and TC) to the
technical portion of the service, in the proposed rule we discussed
limited instances where it is appropriate to assign direct inputs to a
PC service. We proposed to modify the practice expense methodology to
allow direct inputs to be added to PC services when these inputs are
clearly associated with the professional service, including when the
PEAC makes such recommendations. Specifically we proposed to add the
PEAC recommended staff times to the PC of the following cardiac
services: CPT codes 93508, 93510, 93511, 93514, 93524, 93526, 93527,
93528, 93529, 93530, 93531, 93532, 93533 and 93624.
Comment: The RUC, the AMA, the American College of Physicians and
societies representing cardiologists, cardiac rhythm specialists,
interventional radiologists, nuclear medicine, chest physicians,
radiation oncologists, radiologists, endocrinologists and
dermatologists expressed support for this change in methodology.
Commenters were also in agreement with the specific CPT codes mentioned
in the proposed rule, but requested that direct inputs also be added to
the PC of CPT codes 93619, 93620 and 93642, which were reviewed at the
January PEAC meeting. The RUC comment indicated that additional codes
might be identified at future PEAC/RUC meetings.
Response: We will finalize the proposed assignment of direct
practice expense to the proposed 14 cardiac services and will add the
PEAC recommended inputs to the PC of CPT codes 93619, 93620 and 93642,
as requested by the commenters.
d. Utilization Data
We use Medicare utilization data in the development of specialty-
specific practice expense RVUs that are then weight averaged to
determine a single practice expense RVU per code. Prior to 2003, we
used the most recent complete year of utilization data to determine the
practice expense RVUs. In the December 31, 2002 final rule (67 FR
79982), we adopted a policy of using the 1997 through 2000 Medicare
utilization in the practice expense methodology. For new codes created
since 2000, there are no Medicare utilization data. In the August 15,
2003 rule we proposed to follow a similar practice to the one described
above and use specialty-specific Medicare utilization data for codes
created after 2000 at the first opportunity they become available to
us. Since we will not have any utilization data at the time we first
establish practice expense RVUs for a new code, we proposed that we
continue, whenever possible, to make an assumption about the specialty
that will likely provide the service or to use the ``all physician''
average when we do not have sufficient information to assign any given
specialty.
Comment: The specialty societies representing internal medicine,
rheumatology and pulmonary medicine supported our proposal to use 1997
through 2000 Medicare utilization data for all codes that were in
existence at that time and to use specialty-specific Medicare
utilization data for codes created after 2000 when utilization data
first become available, using the ``all physician'' average when we do
not have sufficient information to assign a given specialty. These
commenters, as well as several others, suggested that the RUC and the
specialty societies could provide information on the specialties that
will likely perform a new service to minimize the potential changes to
the practice expense RVUs that will occur when we substitute actual for
estimated utilization. However, a specialty society representing
gastroenterology expressed concern that we are moving forward with
plans to shift the basis of our methodology for compiling data to a
five-year basis. The commenter urged us to not make changes until
extensive impact comparisons are conducted that can be evaluated by
physician community.
Response: We will implement our proposal to use specialty-specific
Medicare utilization data for codes created after 2000 at the first
opportunity they become available to us. We will also continue,
whenever possible, to make an assumption about the specialty that will
likely provide the service or to use the ``all physician'' average when
we do not have sufficient information to assign any given specialty.
Information about the specialty we assign to a code that has no
utilization data can be found in the utilization data files we make
available on the CMS web site following final rule publication. With
respect to the comment about shifting to a 5-year basis of utilization
data for the practice expense methodology, we are making no change in
policy for codes that existed in the 1997 to 2000 period. We are using
only the later year utilization data for codes that have been created
since that time. Any information from the RUC that could assist us in
this process would be welcomed.
Comment: A specialty society representing colon and rectal surgeons
agreed with our general utilization methodology, but disagreed that
averaged 1997-2000 utilization data should be used for all codes that
were not in existence for the entire period. The commenter argued that
the frequency for these codes might be artificially low because the
coding was new and that this may impact the relativity between new and
old codes in the same family with similar inputs. The society suggested
that any code that did not exist during the entire 1997-2000 period
default to 2002 or most recent data.
Response: As we have explained, the Medicare utilization is
important to the practice expense methodology because it determines
which specialty scaling factors will be applied to the estimated
practice expense input values in determining the practice expense RVUs
for each service. The proportion of the volume billed by each specialty
is more important to determining the practice expense RVU for a given
service than the total volume. If the code is low in volume but the
proportion of the code's volume billed by each specialty is generally
consistent over time, there will be little or no difference in a code's
practice expense RVUs, whether we use its initial year of utilization
or a later year to determine its value.
Comment: Commenters representing dermatology as well as a
pharmaceutical company expressed concern regarding the decrease in
payment for photodynamic therapy, CPT code 95657. The commenters noted
our discussion in the proposed rule indicating that this reduction in
the practice expense RVUs is occurring because of updates to the
Medicare utilization data used in the practice expense methodology. As
a result of the updated utilization data, the practice expense
methodology now uses the dermatology scaling factor (0.54) for supplies
instead of the all physician average (1.29), and this change leads to
the reduction in payment for the code. The commenters urged us to
reconsider the proposal and at least to reinstate physicians' ability
to bill separately in 2004 for the light-activating agent under the
appropriate J code and also to remove the drug from the practice
expense portion of the procedure.
Response: One of the functions of the utilization data in our
practice expense methodology is to assign all procedures to the
specialty-specific cost pools of the
[[Page 63202]]
specialty or specialties performing them. Each cost pool has its own
scaling factor. This scaling factor is used to scale the aggregate CPEP
procedure-level costs for a specialty to the aggregate costs for the
same specialty as determined by the SMS practice expense data. As we
indicated in the proposed rule, we do not have utilization data upon
which to determine the practice expense RVUs for a new code at the time
it is created. As a default, we have assigned many new codes the ``all
physician'' scaling factor until we have the data to move these codes
into the appropriate specialty cost pools. Because it allows us to
apply the appropriate specialty scaling factor, the use of the updated
utilization data in the practice expense methodology can lead to
increases or decreases in the value of a code, even though its practice
expenses remain unchanged. In this case, the supplies scaling factor
for dermatology is lower than that for ``all physicians,'' leading to a
decrease in practice expense RVUs when the dermatology scaling factor
was applied to the CPEP data of the photodynamic therapy service.
We believe the initial practice RVUs for photodynamic therapy were
too high, because the later information on Medicare utilization
indicates that we should have used the dermatology scaling factor which
would have produced a lower practice expense value. As we indicate
above, we are working to minimize changes that will occur in the
practice expense RVUs for a service by making an initial assumption
about which specialty will likely bill us for a service. However, we
believe our policy for new codes should be consistent with how we
determine the practice expense RVUs for existing codes, even if updates
to the Medicare utilization data lead to increases or decreases in the
practice expense RVUs.
Though we believe that it is appropriate to use the updated
utilization that results in a reduction in payment for CPT code 96567,
we will pay separately for the light activating agent beginning January
1, 2004. However, we are also further considering whether Medicare
should pay separately for certain topical drugs in certain
circumstances. Any change in policy would be discussed in future
rulemaking.
Comment: Specialty societies representing radiation oncology, as
well as individual commenters, expressed concern about the decrease in
payment for the intensity modulated radiation therapy (IMRT) treatment
service, CPT code 77418. The commenters stated that this was due to a
``quirk'' in the utilization data relating to new codes and requested
that this code be priced by the non-physician work pool methodology.
Response: We will calculate the practice expense RVUs for the IMRT
treatment service, CPT code 77418, using the nonphysician workpool
methodology. This will be consistent with the way we currently
calculate the practice expense for all other radiation therapy services
with no physician work RVUs.
Comment: The specialty society representing radiation oncology also
noted that there was a reduction in the practice expense RVUs for the
intensity modulated radiation therapy planning procedure, CPT code
77301. A remote cardiac monitoring service questioned why the use of
new utilization data could decrease the value of a code such as HCPCS
code G0249 for the provision of test material and equipment for home
INR monitoring.
Response: Both CPT code 77301 and HCPCS code G0249 were new codes
for which we did not have utilization data and which were initially
assigned the ``all physician'' scaling factor. As described above, now
that we have the utilization data, the services have been placed in the
specialty-specific cost pools based on how the service is billed to
Medicare, which have lower scaling factors than the ``all physician.''
This shift has led to the reduced practice expense RVUs for CPT code
77301. If we had placed this code in the radiation oncology cost pool
to begin with, it would have had the reduced practice expense payments
for the past two years as well. HCPCS code G0249 will actually have
increased practice expense RVUs in 2004 due to the effect of the
repricing of supplies.
Comment: We received one comment that questioned how updated
utilization data could have such a huge and direct effect on specific
codes. The commenter requested clarification from us on the workings of
the utilization data within the practice expense methodology so that
the public will understand how utilization data will affect new
technologies in the future.
Response: As explained above, one of the functions of the
utilization data in our practice expense methodology is to assign all
procedures to the specialty-specific cost pools of the specialty or
specialties performing them. If we do not know the specialty, we have
used ``all physician'' scaling factors. The ``all physician'' scaling
factors could be higher or lower than the specialty-specific scaling
factor and produce different RVUs for the code. For instance, CPT code
77301-26 is a PC service that has no direct cost inputs. Thus, its
practice expense RVUs are affected only by the indirect cost scaling
factor. To develop the 2003 practice expense RVUs for this code, we
adjusted indirect costs allocated to this code by the ``all physician''
indirect cost scaling factor of 0.57. However, for 2004, we have
Medicare utilization data from 2002 for this procedure code. Radiation
oncologists and radiologists respectively billed Medicare for 67
percent and 30 percent of the total volume of services provided to
Medicare patients in 2002. The weighted average scaling factor for all
the specialties that bill Medicare for this procedure code is 0.48.
Since we are adjusting indirect costs by 0.48 instead of 0.57, the
final practice expense value is lower.
e. Practice Expense Advisory Committee (PEAC)
The PEAC, a subcommittee of the RUC, has, since 1999, been
providing us with recommendations for refining the direct practice
expense inputs (clinical staff, supplies, and equipment) for existing
CPT codes.
1. Recommendations on CPEP Inputs for 2003
In the December 31, 2002 proposed rule, we responded to the PEAC
recommendations for the refinement to the CPEP direct practice expense
inputs for over 1200 codes, including refinements to codes from almost
every major specialty. In addition, the recommendations included
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 times for
323 neurosurgery procedures. We reviewed and accepted all of the
recommendations. We received the following comments on these revisions.
Comment: We received comments from specialty societies representing
dermatology, dermatolgic surgery and Mohs surgery expressing concern
regarding the decrease in practice expense RVUs for skin biopsy
procedures, CPT codes 11100 and 11101 and the destruction of benign or
premalignant lesion services, CPT codes 17000 and 17003. The commenters
questioned whether the reductions reflect errors in the validated
practice expense inputs used in the practice expense calculations.
Response: We have checked the practice expense inputs and found
that these match the clinical staff, supply and equipment inputs as
recommended by the RUC. The reduction in practice expense RVUs was
caused by the
[[Page 63203]]
refinement of these inputs, which, in turn, was based on the
presentation made to the PEAC by the dermatology specialty society. We
will, therefore, not make any further revisions to the practice expense
inputs for these services in this final rule.
2. Recommendations on CPEP Inputs for 2004
In the August 15, 2003 proposed rule we included the PEAC
recommendations from meetings held in September of 2002 and January
2003 as well as recommendations on the refinements to the clinical
staff time for all 90-day global services. In addition, the PEAC
convened a workgroup to make recommendations on the refinement of all
the 116 remaining evaluation and management codes. We reviewed the
submitted PEAC recommendations and proposed to accept them.
Comment: The American Osteopathic Association expressed
appreciation that we supported the recommended changes for the
osteopathic manipulative treatment codes and commended us for accepting
the PEAC recommendations for the clinical staff times for 90-day global
codes. The American College of Obstetricians and Gynecologists stated
that our acceptance of the PEAC recommendations is an example of
exceptional cooperation and collaboration in meeting the healthcare
needs of Americans served by the Medicare program. The American Academy
of Dermatology applauded our acceptance of the year's PEAC
recommendations. The AMA and the American College of Radiology stated
that they appreciate our recognition of the significant resources
specialty societies have devoted to the practice expense refinement
process and is thankful that our practice expense staff avail
themselves of specialty society input. The American College of Surgeons
also supported our acceptance of the PEAC recommendations, including
the decision to permit exceptions to the standard pre-service times for
some surgical procedures. The College other specialty societies also
expressed appreciation for our commitment to the refinement process.
Response: We, in turn, are appreciative of these positive comments.
We believe that it is only because of the cooperative working
relationship between the specialty societies, the AMA and CMS that
there has been such a high level of success in tackling practice
expense refinement.
Comment: The American College of Physicians as well as other
specialty societies representing surgeons, otolaryngologists,
podiatrists, geriatric psychiatrists, obstetricians and gynecologists,
cataract and refractive surgeons, neurosurgeons, dermatologists,
rheumatologists, radiologists and radiation oncologists supported our
inclusion of the PEAC recommendations in the proposed rule because this
would better enable specialty societies to address their impact and
make comments prior to publication of the final rule.
However, specialty societies representing chest physicians and
thoracic physicians disagreed with our decision to change our previous
practice of including the PEAC recommendations in the final, rather
than the proposed rule, because this meant that the recommendations
from the March PEAC meeting were not included for this year. The
society argued that changing this long-standing policy without
announcing it in the Federal Register is inappropriate. The comment
also contended that the specialty societies agreed to the inputs at the
PEAC meeting; therefore, negative comments would not be forthcoming.
Response: We discussed this issue at the January PEAC meeting and
indicated that we were considering including the PEAC recommendations
in the proposed rule and that the March recommendations would most
likely not be included. We made this decision because, now that the
PEAC is refining such a large number of codes, the revisions to the
inputs were not only changing the practice expense RVUs of the refined
codes, but also the values of services that were not refined.
Therefore, we believed it was prudent that revisions be subject to
comment before the revisions were implemented.
Comment: The specialty society representing podiatry identified
some discrepancies between the PEAC recommendations and the inputs in
the CPEP database for CPT codes 10060, 11000, 11055, 11056, 11057 and
11752 and requested that these be corrected.
Response: We have made the corrections as requested.
Comment: The American Society of Transplant Surgeons (ASTS)
commented that it is not appropriate to apply either the PEAC-approved
standard clinical staff times or RN/LPN/MTA staff blend for 90-day
global procedures to the transplant recipient or living donor services.
ASTS stated that it had been unaware that the PEAC was applying the
standard to all 90-day services unless a case was made to the PEAC that
the times should be increased. ASTS argued that there are substantial
atypical staff times required for transplant recipients due, in large
part, to the intensive education required for the transplant patient.
The commenter noted that the three new CPT codes for living donor
hepatectomies, CPT codes 47140-47142, were given increased pre-service
clinical staff time by the RUC and have an RN as the staff type. ASTS
requested that the current clinical staff times be retained and that an
RN be assigned rather than the blended staff type to the following
transplant services: CPT codes 32851, 32852, 32853, 32854, 33935,
33945, 47135, 47136, 48554, 48556, 50320, 50360, 50365, 50380, 50547.
Response: It does seem reasonable that at least some of these
services would have increased pre-times as do the living donor
hepatectomies recently reviewed by the RUC. Therefore, we will restore
the original CPEP clinical staff pre-times and use the RN staff type
for the above services on an interim basis for the coming year. We
anticipate that the society will bring all of these codes to the PEAC
for review for either the January or March meeting to ensure that the
times for the codes receive the same scrutiny as did the new transplant
codes. It should be noted that a few of the codes have lower original
CPEP pre-time than the PEAC standard of 60 minutes; for those codes we
did not change the PEAC standard time. We also are not revising the
post-procedure clinical staff times for these codes, because the
current times are in line with the post-service times assigned to the
new living donor hepatectomy codes recently reviewed by the RUC.
Comment: A commenter noted that high dose rate (HDR) brachytherapy
CPT codes 77781, 77782, 77783 and 77784 were not listed in Addendum C
of the proposed rule. Since these codes were approved by the PEAC and
forwarded to CMS, ACR questioned why these codes were not listed.
Response: The CPEP data base files had been revised to reflect the
PEAC recommendations for these codes. It was an oversight that they
were not included in Addendum C.
Comment: The American College of Surgeons listed several possible
errors in the CPEP database:
CPT code 11450--missing 1 minute of staff time
CPT codes 10080, 10081, 11770, 12032, 12035, 12046, 12047, 21550,
21920, 37609, 38300, 45300-45327, and 46600-46615--missing correct
number of gloves.
CPT codes 45900, 45905, 45910, 47382, 49320, 49321, 49322, 49422,
49429--supplies listed incorrectly--have nonfacility inputs when PEAC
recommended none in office setting.
[[Page 63204]]
Response: We thank the College for checking the database so
carefully. We have made the suggested corrections, with the following
notes: For CPT codes 10080, 10081 and 11770, the PEAC recommendation
listed 5 gloves, not 6. For CPT codes 45300-45327 and 46600-46615, we
adjusted the quantity of unsterile gloves to reflect that there are 2
pair in the minimum visit supply package; in addition, CPT codes 45321
and 45327 were not priced in the nonfacility setting.
Comment: The American Society of Colon and Rectal Surgeons noted a
few errors in the CPEP supply database. The supply inputs had not been
changed to match the accepted new recommendations for CPT codes 45900,
45905, 45910, 47382, 49320, 49321, 49322, 49422 and 49429.
Response: We have made the corrections to the supply database and
thank the specialty for bringing this to our attention.
Comment: The American Speech-Language-Hearing Association (ASHA)
questioned the proposed 28 percent reduction in the practice expense
for CPT code 92507, Treatment of speech, language, voice,
communication, auditory processing and/or aural rehabilitation status.
The reduction is attributable to a decrease in clinical staff time.
ASHA contended that the PEAC recommendation was based on a vignette for
a child receiving such therapy, but that the time involved with a
typical adult patient receiving this treatment is much longer. ASHA
stated that a more reasonable time for clinical staff for this service
is 69 minutes compared to the proposed 46 minutes.
Response: We understand that the scenario for performing this
service for a child might be very different than for an adult because
an adult can participate in a more protracted therapy session. Because
it is not clear to us at this time what would be the typical scenario,
we will, on an interim basis, average the clinical staff time needed
during a speech therapy session for a child with that suggested by ASHA
for an adult. We will, therefore, assign 58 minutes of clinical staff
time to this service, with the expectation that ASHA will present CPT
code 92507 for further discussion and review at the PEAC.
Comment: We received several comments in response to our acceptance
of PEAC recommendations for evaluation and management (E/M) codes that
reduced payment rates for six nursing home services (CPT codes 99301-
99303 and 99311-99313) and two home visit codes (CPT codes 99348 and
99350). This payment reduction is primarily due to a decrease in the
clinical staff time assigned to these services.
The American Academy of Family Physicians (AAFP) supported our
acceptance of the PEAC recommendations for the E/M nursing facility
services. The commenter noted that current practice expenses are higher
for services provided in the non-SNF nursing facility than those
provided in the SNF facility. The commenter contended that the direct
practice expense inputs should not vary based on the type of nursing
facility setting and supported the elimination of the current
differential in the practice expense RVUs between the SNF and non-SNF
facility setting.
However, the American Medical Directors Association (AMDA)
representing long term care physicians, the American Geriatrics Society
(AGS) and a health care management company, Health Essentials, all
disagreed with our decision to accept the E/M nursing facility PEAC
recommendations and asked us to reconsider our decision to implement
them in 2004. The request to delay implementation was echoed by the
American Academy of Home Care Physicians and AGS relating to the two E/
M home visit codes.
The home care physicians argued that the PEAC recommendations for
the two home visit codes are flawed because these codes have not yet
been surveyed by the specialty performing this service. The commenters
also contended that their views were not represented when the PEAC
considered the refinements of the E/M home visit codes. Similarly, the
AMDA noted that the PEAC workgroup responsible for formulating the
recommendations for the nursing facility codes did not include long
term care physicians. The AMA also commented on this issue and
expressed concern that the PEAC recommendations did not include the
views of all the relevant medical specialties and requested that we
delay implementation of these E/M code recommendations to allow
impacted medical specialties an opportunity to present new information
to the PEAC.
In addition, the AMDA expressed concern regarding the current work
RVUs for nursing home visit services.
Response: At the time the PEAC recommendations were forwarded to
CMS, we agreed with the views expressed by the AFPP as to the
reasonableness of the practice expense recommendations for the E/M
codes for the nursing facility and home visits. However, we are also of
the opinion that the relevant medical specialties should be given the
opportunity to have their views considered by the PEAC. Consequently,
we will not go forward with these E/M recommendations in 2004. This
will allow time for the PEAC to reconsider the eight E/M codes with
input from representatives from the nursing home and home visit
specialties. We will use current CPEP practice expense inputs to price
these codes for 2004.
With regard to the concern expressed about the work RVUs for the
nursing home visits, in the 2004 final rule we will solicit
recommendations on codes to be reviewed during the next 5-year review
of work and we suggest that the society recommend review of these
codes.
Comment: A specialty society representing gastroenterologists
commented that the increased clinical staff pre-time added to certain
colorectal procedures needs to be applied equally to
gastroenterologists who provide those services.
Response: We have a single payment for each procedure regardless of
the specialty performing the service. Therefore, gastroenterologists
will be paid the same as colorectal surgeons when performing those
services for which we allowed increased pre-service clinical staff
time.
Comment: The American College of Radiology submitted several
corrections to the CPEP database for those instances where the database
differed from the PEAC recommendations that we accepted. The College
stated its appreciation for the opportunity to review the practice
expense data file for completeness and accuracy and applauded our
efforts to ensure that the database captures correct and complete
practice expense data.
Response: We thank the College for the time and effort expended in
checking this detailed data. We have made revisions to 19 codes: We
changed the quantity of sodium chloride injection for CPT codes 78306,
78315, 78460, 78461, 78464, and 78465; adjusted the quantity of films
for CPT code 76812; added missing supplies to CPT codes 77408, 77409,
77411, 77412, 77414, 77416, 76830 and 77290; removed equipment that had
been deleted from CPT codes 78478 and 78480; and corrected a
typographical error in the pre-service clinical staff time for CPT
codes 73218 and 75555.
g. Repricing of Clinical Practice Expense Inputs--Supplies
We use the practice expense inputs (the clinical staff, supplies,
and equipment assigned to each procedure) to allocate the specialty-
specific practice expense cost pools to the procedures
[[Page 63205]]
performed by each specialty. The costs of the original inputs assigned
by the Clinical Practice Expert Panels (CPEP) were determined by our
contractor, Abt Associates, based primarily on 1994 and 1995 pricing
data from supply catalogs. In addition, for many items on the equipment
and supply list, the associated costs were based on the recommendations
of a CPEP panel member, rather than on actual catalog prices.
Subsequent to the CPEP panels, equipment and supply items have also
been added to the CPEP data, with the costs of the inputs provided by
the relevant specialty society.
We contracted with a consultant to assist in obtaining current
pricing information and also to recommend revisions to improve the
uniformity and consistency of the CPEP supply database. On the basis of
these recommendations, in the August 15, 2003 proposed rule, we
proposed updates to the cost information for supplies in the database.
In addition, we proposed the following database revisions:
--Assignment of supply categories.
We proposed that supplies be assigned to one of 14 categories.
--Consolidation/standardization of item descriptions.
We proposed combining items which appeared to be duplicative and
modifiying descriptions using a key first word when possible for easier
identification of items. For example, ``mayo stand cover'' and ``drape,
sterile Mayo'' have both been changed to ``drape, sterile, for Mayo
stand.''
--Standardization of unit descriptions.
The current CPEP database contains over 72 unit descriptions
associated with supplies (for example, item, gram, and cup). To provide
consistency and ensure that inputs in the database accurately reflect
the quantity of an item used, we proposed to standardize the unit
description of items. We also proposed to specifically identify items
intended for single use through the use of ``uou'' (unit of use)
following the unit. These changes were reflected in Addendum D of the
proposed rule.
There were also items that had not been identified or for which
pricing information was not found that were included in Table 1 in the
August 15 proposed rule. Items that we proposed to delete from the
database were also identified in this table. We requested that
commenters, particularly the relevant specialty groups, provide us with
the needed pricing information with appropriate documentation. We also
stated if we did not obtain verified pricing information for an item,
it would be eliminated from the database.
Comment: The RUC expressed appreciation for the enormity of the
repricing project and stated that the proposed approach was well
organized and comprehensive. The American Association of Orthopedic
Surgeons also agreed that the assignment of supply categories would be
helpful in future refinement activities. The American College of
Physicians, the American College of Surgeons, and the American
Urological Association expressed support for our proposal to create a
numbering system and to standardize the descriptions of supply items to
increase accuracy of use. The American Academy of Dermatology also
supported this standardization of proposed ``unit of use'' as long as
its application does not assume that ``one size fits all'' as some
supplies may go from milliliter to liter in usage. The American Society
of Cataract and Refractive Surgery and the Outpatient Ophthalmic
Surgery Society thanked us for the repricing proposal because this will
ensure that we are using the more accurate and up-to-date supply costs,
thus reimbursing physicians more fairly. The American College of
Radiology recognized the need to update supply and pricing information
in the practice expense database and commended us for committing to
this extensive project. The American College of Surgeons also agreed
that the update of prices for supplies will improve the accuracy of the
direct practice expense data. The Society of Nuclear Medicine commended
us for committing to this extensive project. The American Urological
Association also appreciated this effort and acknowledged it as a huge
undertaking.
Response: We appreciate the positive feedback and would like to
thank all the staff of the specialty societies who worked with our
contractor to obtain the most representative prices for all of the
supplies in the CPEP input database.
Comment: A specialty society representing podiatrists agreed with
removal of hallux implant and the broach kit from the list of supplies
to be included under practice expense as both are separately billable
and the broach kit is also reusable. The commenter did not agree with
removal of the sterile ankle tourniquet since this is packaged as a
single use item. The comment included pricing information at $42.87
each (with documentation) for this supply.
Response: We will delete the hallux implant and the broach kit from
the CPEP supply data. We will retain the ankle tourniquet using the
pricing information supplied by the society.
Comment: Several commenters expressed concern about the reduction
in nonfacility practice expense for the interstitial laser coagulation
of the prostate procedure, CPT code 52647. A manufacturer of endo-
surgery equipment stated that the main reason for this decrease was the
decrease in the price assigned to the laser fiber used in this
procedure. We had proposed a price of $290 for this item, but the
commenter submitted documentation that indicated that the laser fiber
should be priced at $850 for CPT code 52647. In addition, the commenter
noted that we had proposed in Table 1 to delete the laser fiber because
it was reusable; however, this was incorrect as the laser fiber used in
this procedure could not be reused and should not be deleted from our
supply list.
Response: When the laser fiber was repriced, we believed the item
included in the supply list for CPT code 52647 was the same as a
``laser tip,'' which was priced at $290. We thank the commenters for
clarifying the issue. We agree that the laser fiber used in this
procedure is a disposable supply that we will retain in our CPEP supply
data at the $850 price documented by the commenter.
Comment: Commenters representing cardiac arrhythmia specialists and
a remote cardiac monitoring system recommend that we not delete the
transtelephonic monitor as a supply even though we are correct that the
patient and physician re-use this supply during the course of the
pacemaker's life. The specialty society commenter requested that the
expense of this supply, which costs $190, should be spread out over
approximately 5 years.
Response: The transtelephonic monitor as described would be
considered a piece of equipment, rather than a reusable supply.
However, unless the equipment costs over $500, we consider it as an
indirect cost and it is not included as a direct input. Therefore, we
will delete the item from our list of direct practice expense inputs as
proposed.
Comment: A specialty society representing chest physicians agreed
that the oximetry sensory probe, CPAP nasal pillow and flow sensor are
reusable and should be deleted from the list of CPEP supply inputs. The
society also agreed that albuterol is separately billable and should
also be deleted. Another commenter, representing sleep medicine, agreed
that the nasal pillow should be deleted. However, the commenter
representing chest physicians and a commenter representing thoracic
physicians disagreed with the proposal to delete
[[Page 63206]]
methacholine chloride because there is no ``J'' code to use when
billing, thus forcing physicians to used an unlisted service code. The
commenters also contended that the aerochamber should not be deleted
because, although reusable, it has a life of only about six months and
should be costed out accordingly. In addition, the commenters disagreed
that the inhaler is separately billable because a multi-use canister is
utilized for this test; therefore, the amount used from the canister
for each test should be included in the practice expense.
Response: We will delete the oximetry sensory probe, CPAP nasal
pillow and flow sensor and albuterol from the list of CPEP supply
inputs. We will also delete the aerochamber, because an item that is
reusable over a six-month period cannot be classified as a disposable
supply. The commenter is correct that there is not a HCPCS ``J'' code
for methacholine chloride. Therefore, we will keep this in the supply
database as requested so that physicians can avoid the burden of
submitting paper claims. We also will keep the inhalant in the database
using the quantity of 1 gram per procedure at $0.788.
Comment: Specialty societies representing radiologists and
interventional radiologists disagreed with the classification of the
Arrow mechanical thrombectomy device as reusable. The commenter
contended that this device is single-use because the difficulty in
cleaning the intra-luminary surface areas could lead to a risk of
contamination if the device is reused. Moreover, reprocessing the
thrombectomy device may result in fatigue-related failure.
The societies also disagreed with our contention that a Seldinger
needle is reusable; rather a Seldinger needle is single-use and should
not be removed as a supply item. It is the commenter's understanding
that hospitals are not in the practice of resterilizing Seldinger
needles.
While generally favoring reorganization of CMS' supply listing for
ease of use and not directly opposed to supply categories, one of the
commenters was concerned over the potential loss of granularity of cost
data associated with the use of supply categories and would oppose the
averaging of costs for the supply categories unless it is appropriate
to average from a cost and clinical standpoint. A similar comment was
sent by the radiology specialty society.
Response: We will retain the thrombectomy device and the Seldinger
needle as disposable supplies in our CPEP input database. With regard
to the classification of supplies, the commenter misunderstands the
purpose of assigning a classification to each supply. This will not be
used for pricing purposes in any way. Rather, the classifications can
be useful as a way to sort the long list of supplies in the database to
make it easier to find a particular item.
Comment: The contractor responsible for helping us with the
repricing of supplies informed us that a supply assigned to the
endometrial ablation procedure, CPT code 58353, was listed as a
catheter tray when it should be described as a thermal ablation balloon
catheter at a price of $727. In addition, our contractor supplied us
with prices for several new supply and equipment items mainly for
otolaryngology, that were not priced in the proposed rule but were
included in the PEAC recommendations.
Response: We will make the appropriate changes in the CPEP supply
and equipment databases.
Comment: Commenters representing pediatricians, pulmonary
physicians and family physicians pointed out that the new price we had
assigned to the safety syringe and needle did not cover the actual cost
of purchasing the entire needle stick device that is required by the
Occupational Safety and Health Administration.
Response: Our repricing contractor researched this issue for us and
agreed that the price we were proposing was too low for the appropriate
item. Based on documentation for a 10 ml Syringe with SafetyGlide
Needle, the safety syringe and needle will be priced at $.435 each,
instead of the $.28 that was proposed.
Comment: A surgical society commenter pointed out that we listed an
achalasia balloon in Table 1 in the proposed rule and indicated that it
was a supply used with CPT codes 45905 and 45910. The commenter stated
that both of these codes were refined in January and that they were not
priced in the office setting; therefore the balloon should no longer be
listed as a supply used with these services.
Response: Our CPEP database currently has these codes priced only
in the facility setting. However, these services had previously been
priced in the office and Table 1 was apparently developed before the
last of the PEAC recommendations were entered. The achalasia balloon no
longer appears on the CPEP supply database.
Comment: We received comments from the American College of
Physicians and another medical society representing allergy and
immunology with concerns about reductions in reimbursement for the five
venom immunology CPT Codes (95145-95149). The commenters believe the
reductions are due, in part, to the use of incorrect supply costs for
venom extracts that we priced at $5.18 per ml. The commenters provided
documentation of current prices of five different venoms from two of
the largest manufacturers of venom extracts. They proposed a price-
averaging methodology utilizing the small and large quantities of
venoms that are available from the two suppliers. A price of $12.22 per
milliliter of venom antigen results from using this methodology, and
the commenters suggest that this price be used in valuing four of the
five CPT Codes for venom immunology, with the exception of CPT Code
95147. When a patient requires three stinging insect venoms, as for CPT
95147, the commenters believe the 3-Vespid mix is typically used.
Again, the commenters suggested the same price-averaging method noted
above using cost information from the two vendors, which results in a
price of $23.49 per ml. This 3-vespid mix price could also be used to
value CPT Codes 95148 (four venoms) and 96149 (five venoms) with the
single venom, priced at $12.22, added once to CPT code 97148 and twice
to CPT Code 97149.
Response: We were pleased to receive the comments, as well as the
requested documentation, on the price for various venom extracts,
because the venom pricing information was not included in the PEAC
recommendations forwarded after the September 2002 meeting for these
CPT Codes. This lack of data necessitated the use of a generic stinging
insect venom price of $5.18 per ml. We accept the pricing information
supplied by these specialty societies, although we do not agree with
their proposed averaging of prices from both the small (5ml and 6ml)
and larger (10ml and 12ml) quantities of venoms. We believe it is more
appropriate to average the venom prices using the larger (10ml and
12ml) quantities because of the volume that is used in an accepted
venom immunotherapy program, which consists of a build up period of
about four months followed by monthly maintenance therapy. The
following prices result from this approach: $10.70 per ml of venom and
$21.26 for the 3-Vespid Mix. Venom pricing for the five CPT codes would
be as follows: CPT Code 95145 (one venom) at $10.70, CPT Code 95146
(two venoms) at $21.40, 95147 (three venoms using 3-vespid mix), would
be $21.26; CPT Code 97148 (four venoms), $21.26 + $10.70 = $31.96; and
the venom antigen price for
[[Page 63207]]
CPT Code 97149 (five venoms) would be $42.66 ($21.26 + $10.70 +
$10.70).
Comment: JCAAI also supplied pricing information for the multi-tine
device that was requested in Table 1 of our proposed rule. As was
suggested above, the commenters again proposed we average costs for
high and low volume purchases, excluding bulk pricing, to obtain the
price for each test.
Response: We appreciate the pricing information forwarded by JCAAI
and selected a purchase quantity that is in the middle of the suggested
range. For percutaneous allergy testing, CPT code 95004. This purchase
quantity represents testing 200 typical patients, each receiving 40
tests. We have added this Multi-tine per test price, $0.233,to the CPEP
database for CPT codes 95004 and 95010.
Comment: The American Speech-Language-Hearing Association (ASHA)
provided pricing information for the following items accompanied by the
requested documentation: Aphasia assessment treatment forms--$2.84 (for
a diagnostic aphasia examination form and aphasia diagnostic profile),
communication books/treatment notebook--$1.50 and eartip insert--$0.65
each or $0.39 each (two sources). The American Academy of
Otolaryngology--Head and Neck Surgery (AAO-HNS) submitted a price for
the eartip insert of $0.23 each and suggested that the communication
books/treatment notebook be deleted. The (AAO-HNS)also submitted a
price for cottonoids at $0.875 each and for the phenol applicator kit
at $15.95 each.
Response: We will use the submitted price for the aphasia forms and
will price the eartip insert at $0.423, which is the average of the
three prices submitted. The notebook, which is assigned to the speech-
language therapy code, would be used over a course of treatment, and is
not a disposable supply that is used or priced for a single service.
Therefore, we will delete this item from our CPEP supply data. For the
phenol applicator kit, we will use the price of $15.152 per kit that
represents an average price for a 6-kit and a 24-kit quantity purchase.
Because these kits contain the phenol that is used in the procedures,
phenol has been deleted as a separate supply from the 11 CPT codes that
are assigned the kit. AAO-HNS used a 10-pack quantity to assign a price
to each cottonoid, but we are using a 200-pack quantity that reflects
the high usage of this item. Therefore, we are using $0.773 as the
price for each cottonoid.
Comment: Specialty societies representing radiation oncology and
radiology disagreed that the fiducial screws used with the intensity
modulated radiation therapy procedure should be deleted from the CPEP
input supply list. The society argued that the screws are typically
used for this procedure and that they are not separately billable.
Response: We will retain the fiducial screws in the list of
supplies assigned to the intensity modulated radiation therapy
procedure.
Comment: The American Society of Colon and Rectal Surgeons offered
description changes for two services, CPT codes 46917 and 46924. The
society recommended that the descriptor for the laser tip for both
codes be changed to ``laser tip, bare (single use)'' at $150. The
commenter also requested that an ablation laser generator at $59,890 be
added to both codes and the existing laser, diode laser, and laser
generator be deleted.
Response: A note from our contractor who is working on our
repricing effort verified the above changes and we have revised our
supply and equipment databases to reflect them.
Comment: The American Association of Orthopaedic Surgeons agreed
with the proposed supply deletions listed in Table 1 of the proposed
rule that are used in orthopaedic surgery. In addition, the association
agreed with the concept of standardization of unit descriptions.
However, the comment contends that the term ``unit of use (uou)'' is
unclear and that we should consider alternative terms and abbreviations
that would be more intuitive.
Response: The supply items in Table 1 that were listed for
orthopaedic surgery are broach kit, hallux implant, sterile hand table
drape, sterile cuff tourniquet, cephalosporin and sterile ankle
tourniquet. As stated above, we will be deleting the broach kit and
hallux implant and will also delete the hand table drape, cuff
tourniquet and cephalosporin. As also noted above, we will retain the
sterile ankle tourniquet in the supply database because the comment
from the podiatry society argued that this item was not typically
reused.
With regard to the comment on the use of ``unit of use,'' we
selected the ``unit of use'' (uou) term to indicate any item that is
packaged for single use, even if the item is not completely used up.
This most often occurs with items that are packaged sterile. For
example, ``bacitracin (0.9gm uou)'' refers to one 0.9gm foil package.
The quantity entered would be 1 and not a smaller amount such as 0.3.
Once this foil package is broken, it is considered ``used up'' and
therefore the unit of use is 0.9gm. Specifically, any item with a
``unit of use'' designation is meant to be indicated in whole number
``unit of use'' quantities, not partials (e.g., entered as 1, 2, 3,
etc, and not 0.5, 1.5, etc.).
Comment: A commenter representing sleep medicine stated that our
proposed price of $25 is significantly below prices for standard CPAP
masks used in the polysomnography service, CPT code 95811. The
commenter submitted prices from two manufacturers that average to $88.
Response: It appears that the commenter has submitted prices for a
reusable CPAP mask that would not be included in our CPEP data as a
disposable supply. Therefore, we will price the disposable mask at
$25.135, as proposed.
Comment: We received a comment from the American Physical Therapy
Association (APTA) that contended there is a rank order anomaly caused
by the increased price for the electrode used for CPT code 97033,
iontophoresis. APTA noted that the price of a ``pair'' of electrodes
was $16 in 2001 but has increased to $23.98 under our current supply
repricing initiative. APTA has asked that we review the proposed cost
of this item as a means to moderate the rank order anomaly.
Response: We appreciate the comments offered by APTA and have
reviewed the cost of the supplies assigned to the iontophoresis
service. We determined that the electrodes for this service are
packaged and priced as ``kits'' that contain the complete set of
electrodes needed to provide one iontophoresis treatment. Therefore,
only one electrode ``kit'' is needed for this code, as opposed to the
two electrode ``pairs'' currently in our supply database. Consequently,
we have changed the supply list for iontophoresis in our database to
reflect that there is one kit, not two electrodes, at the proposed
price of $11.99. We believe that this should correct the rank order
anomaly.
The following table, ``Table 1 Items Needing Specialty Input,''
lists those items on which we had requested specialty input, comments
we received and the actions we are taking.
[[Page 63208]]
Table 1.--Items Needing Specialty Input
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003 PE Prior status of
2003 PE supply description 2003 PE unit price Primary specialties supply item Commenter response CMS action taken
--------------------------------------------------------------------------------------------------------------------------------------------------------
Acetylcholine 10%................ 1 gram.............. $0.40 Nurse practitioner, See Note C. Need None............... See Note D.
neurology. patient-use item,
not R&D item.
Aerochamber...................... 1 item.............. ........... Cardiology, Item may be Agree--reusable. Disagree--Deleted.
internal medicine. deleted. May not Requests item be
be typical and may retained.
be separately
billable.
Albuterol........................ 1 ampule............ ........... Family practice, See Note B......... Agree--separately Deleted
internal medicine. billable.
Anthralin ointment............... 1 g................. 2.75 Dermatology........ See Note C......... None............... See Note D.
Aphasia assessment--forms average 1 item.............. 0.95 Psychiatry, See Note C......... Pricing information Retained at
neurology. submitted at $2.84. submitted price.
Balloon, achalasia............... 1 item.............. 255.00 General surgery, See Note C. (Codes NA in non-facility. Deleted.
colon and rectal utilizing this
surgery. item being
reviewed by CPT).
Blood dress package.............. 1 item.............. ........... Neurosurgery....... Item may be None............... Deleted.
deleted. Gowning
items listed
separately.
Broach kit....................... 1 item.............. ........... Podiatry, See Note A......... Agree--separately Deleted.
orthopaedic billable and
surgery. reusable.
Cable for EMG needle electrode... 1 item.............. 1.20 Neurology, PM&R.... See Note A......... None............... Deleted.
Centimeter ruler................. 1 each.............. 2.39 Radiation oncology, See Note A......... None............... Deleted.
dermatology.
Cephalosporin.................... 1 gm................ ........... Podiatry, See Note B......... Agree--separately Deleted
orthopedic surgery. billable.
Chordae Villae sampling kit...... 1 item.............. ........... Obstetrics, Item may be None............... Deleted.
gynecology. deleted.
Duplicated item
with catheter-
stylet kit.
Collagen kit..................... 1 each.............. 1383.00 Urology............ Need kit contents. NA in non-facility. Deleted.
Collagen sold as
individual
syringe. No
commercial kit
available.
Communication book/Treatment 1 each.............. ........... Otolaryngology, See Note C......... Audiology priced at Deleted--reusable.
notebooks. audiology. $1.50 or $3.50.
ENT proposed to
delete.
Cottonoids....................... 1 item.............. ........... Otolaryngology..... See Note C......... Submitted price of Retained at $0.73.
$0.875.
CPAP nasal pillow................ 1 each.............. ........... Pulmonary medicine. Item may be Agree--not typical. Deleted.
deleted.
Disposable CPAP
face mask also
included in code
95811. Nasal
pillows used with
reusable mask.
Cysto-catheter kit............... 1 item.............. 9.04 Urology, general Need kit contents None............... Deleted.
practice. and source/pricing
information.
Detection kit.................... 1 slide............. 8.50 Pathology, See Note C......... None............... See Note D.
neurology.
Developmental testing--forms 1 item.............. 2.64 Clinical See Note C. Submitted price of Retained at
average. psychologist, (Original item $0.40 for 96110 submitted prices.
multiple other price estimated by and $2.44 for
specialties. CPEP member.). 96111.
Eartip insert with sound tube.... 1 item.............. ........... Otolaryngology, See Note C......... Pricing information Retained at $0.423.
audiology. submitted by two
specialties.
EEG electrode, gold DIN.......... 1 item.............. 0.07 Neurology.......... See Note A......... None............... See Note E.
Electrode, ring.................. 1 item.............. 475.00 Obstetrics, See Note A......... None............... Deleted.
gynecology,
urology.
[[Page 63209]]
Electrodes, pickup, black tin, 1 item.............. 0.42 Podiatry, neurology See Note A......... None............... See Note E.
9mm.
Electrodes, pickup, red tin, 9mm. 1 item.............. 0.42 Podiatry, neurology See Note A......... None............... See Note E.
Fiducial screws, set of 4........ 1 set............... 558.00 Radiation oncology. Item may be Disagree--not Agree--Retained.
deleted. May not separately
be typical and may billable.
be separately Specialty requests
billable. (Screws item be retained.
used for IMRT head
fixation device,
but typical
patient vignette
is prostate
cancer.).
Film, fluoroscopic............... 1 sheet............. 3.51 Diagnostic See Note C......... None............... See Note D.
radiology,
anesthesia.
Flow sensors..................... 1 item.............. 1.51 Pulmonary medicine, See Note A......... Agree--reusable.... Deleted.
internal medicine.
Gold-palladium target............ 1 item.............. 0.59 Pathology.......... See Note A......... None............... Deleted.
Hallux implant................... 1 item.............. ........... Podiatry, See Note B......... Agree--separately Deleted.
orthopaedic billable.
surgery.
Headcover for MRI................ 1 item.............. 0.05 Diagnostic See Note C......... None............... See Note D.
radiology.
Inhalant......................... 1 ml................ 0.75 Cardiology, Item may be deleted Use is typical..... Retained at $0.788.
internal medicine. (May not be
``typical'' for
service.).
Laryngeal mirror................. 1 item.............. ........... Diagnostic See Note A......... None............... Deleted.
radiology,
otolaryngology.
Laser fiber...................... 1 item.............. 595.00 Urology............ See Note A......... Disagree--not Agree--retained at
reusable. submitted price.
Submitted price of
$850.
Laser fiber cleaving tool........ 1 item.............. 200.00 Urology............ See Note A......... None............... Deleted.
Methylcholine chloride........... 1 dose.............. 48.50 Pulmonary medicine, See Note B......... Disagree--not Agree--Retained at
internal medicine. separately $39.95.
billable. Requests
item be retained.
Mounting tray.................... 1 each.............. 40.00 Radiation oncology, See Note A......... None............... Deleted.
diagnostic
radiology.
Multi-tine device................ 1 item.............. ........... Allergy/immunology. See Note C......... Submitted pricing Retained at $0.23.
information.
Needle, 4 inch................... 1 item.............. ........... Obstetrics, See Note C......... None............... Deleted.
gynecology.
Needle, 4-6 inch................. 1 item.............. ........... Obstetrics, See Note C......... None............... Deleted.
gynecology.
Needle, seldinger................ 1 item.............. 72.90 Diagnostic See Note A......... Disagree--not Agree--Retained.
radiology, reusable.
multiple other
specialties.
Neurobehavioral status--forms 1 item.............. 5.77 Clinical See Note C. None............... See Note D.
average. psychologist, (Original item
multiple other price estimated by
specialites. CPEP member.).
Oximetry sensor probe............ 1 item.............. 15.00 Multiple See Note A......... Agree--resuable.... Deleted.
specialties.
Penile clamp..................... 1 item.............. 40.70 Urology............ See Note A......... None............... Deleted.
Phenol applicator kit............ 1 unit.............. ........... Otolaryngology..... See Note C......... Pricing information Retained at
submitted. $15.152.
Primary antibodies............... 1 slide............. 3.52 Pathology, See Note C......... None............... See Note D.
neurology.
Psych testing--forms average..... 1 item.............. 2.30 Clinical See Note C......... None............... See Note D.
psychologist.
Receive coil..................... .................... ........... Diagnostic See Note A......... None............... Deleted.
radiology.
Ruler............................ 1 each.............. 2.67 Radiation oncology, See Note A......... None............... Deleted.
diagnostic
radiology.
Scissors and clamp, disposable... 1 each.............. 0.62 Radiation oncology, Need clamp None............... See Note D.
diagnostic description and
radiology. source/pricing.
[[Page 63210]]
Sealant spray.................... .................... ........... Radiation oncology, See Note C......... None............... See Note D.
diagnostic.
Silverman needle................. 1 item.............. 66.35 Urology............ See Note A......... None............... Deleted.
Skin prep, one step.............. 1 item.............. 26.00 Cardiology......... Need inches used None............... See Note D.
per procedure
(196in per roll).
Smoke evacuation cartridge....... 1 item.............. 146.50 Obstetrics, See Note A......... None............... Deleted.
gynecology.
Sterile, hand table drape (24x43) .................... ........... Orthopaedic Item Deleted. Agree.............. Deleted.
surgery, hand Integral part of
surgery. hand/upper
extremity drape
supply item.
Sterilizing tray................. 1 each.............. 64.00 Radiation oncology, See Note A......... None............... Deleted.
diagnostic
radiology.
Steroid.......................... 1 cc................ 1.29 Urology............ See Note B......... None............... Deleted.
Sweat cells, 4 in a set.......... 1 set............... 260.00 Neurology.......... See Note A......... None............... Deleted.
Thrombectomy device.............. 1 item.............. 600.00 Diagnostic Additional Disagree--device is Agree--Retained.
radiology. information not reusable.
required. Device
is reusable. Need
to identify
specific PTD
single-use
accessories (e.g.
sheath rotator
drive basket).
Tourniquet, ankle, sterile....... 1 item.............. ........... Podiatry, See Note A......... Disagree--packaged Agree--retained at
orthopaedic for single use. submitted price.
surgery. Price submitted at
$42.87.
Tourniquet, cuff sterile......... .................... ........... Orthopaedic See Note A......... Agree.............. Deleted.
surgery, hand
surgery.
Traction straps.................. 1 item.............. 60.00 Radiation oncology, See Note A......... None............... Deleted.
diagnostic
radiology.
Transtelephonic monitor.......... .................... 10.56 Cardiology......... See Note A......... Agree--resuable, Disagree--Deleted.
but requests item
be retained.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CPT codes/descriptions only are copyright 2003 American Medical Assn. All Rights Reserved. Applicable FARS/DFARS apply.
Notes:
A. Item deleted. Reusable
B. Item deleted. Separately Billable
C. Additional information required.
D. Issue is pending. Still under review.
E. Issue is pending. Reuse discussion needed.
h. Miscellaneous Practice Expense Issues
Hyperbaric Oxygen Services
We proposed to assign, on an interim basis, the following practice
expense inputs to CPT code 99183, Physician attendance and supervision
of hyperbaric oxygen therapy, per session, when performed in the office
setting:
Staff: Respiratory Therapist for 135 minutes (for a 2 hour
treatment); Supplies: Minimum Visit Supply Package, 180 liters of
oxygen, 187 cubic feet of air; Equipment: Hyperbaric chamber.
Comment: A freestanding hyperbaric oxygen center expressed
appreciation that we priced this procedure in the non-facility setting.
The commenter also requested that we add certain staff time and some
supplies to the practice expense inputs assigned to this service.
The additional supplies requested include disinfectant for cleaning
the hyperbaric chamber after each patient, two otoscope covers to check
patients' ears pre and post treatment, and a denture cup and urinal. An
additional 24 minutes of clinical staff time (using the standard staff
blend) was also requested for preparing the room, greeting and gowning
the patient, patient education, taking vital signs before and after
treatment, positioning the patient and cleaning the room.
Response: We believe that the request for the above additional
practice expense inputs is reasonable. Currently, we have assigned
clinical staff time only for assisting during the procedure itself;
additional time was calculated using the times used by the PEAC for the
tasks listed. Therefore, we are adding these inputs to those already
assigned to the hyperbaric oxygen service. We have also requesting that
the PEAC review these inputs at a future meeting and the RUC has stated
that the PEAC will be reviewing this CPT code at the January or March
2004 meeting.
Comment: A commenter from another freestanding hyperbaric center
expressed concern that the proposed physician fee schedule payment for
CPT 99183 is approximately 25 percent of the payment in the hospital
setting. The commenter lists additional costs that
[[Page 63211]]
should be considered such as special cleaners and solvents for cleaning
the chamber, the costs of adherence to quality standards and costs for
laundering patients' clothing, sheets and blankets. The commenter also
stated that the hyperbaric chamber costs more than the $125,000 we have
assigned the item.
Response: As mentioned above, we have added disinfectant solution
for cleaning the chamber. We will be proposing the repricing of all
equipment in our CPEP database next year, which should ensure that the
price for the hyperbaric chamber reflects the typical cost. The cost of
laundering and much of the quality assurance costs are considered
indirect and are not reflected in our direct cost database. However, if
the PEAC does refine this code as planned, we will review any
recommendation submitted.
Maxillofacial Prosthetics PE/hour
We proposed to eliminate the special practice expense pool for
maxillofacial prosthetic services and to use otolaryngology as the
crosswalk for oral surgeons and maxillofacial surgeons as a more
appropriate approximation of the specialties' practice expense per
hour.
Comment: The American Association of Oral and Maxillofacial
Surgeons expressed appreciation for our work on this issue over the
past three years and heartily concurred with the decision to crosswalk
maxillofacial prosthetics to otolaryngology. The American Academy of
Otolaryngology-Head and Neck Surgery also supported our proposed
crosswalk.
Response: We will implement the crosswalk of maxillofacial
prosthetics to otolaryngology as proposed.
Holter Monitoring Codes
We proposed revising the practice expense inputs for holter
monitoring codes to remove items that were not needed to perform the
services. Specifically, we proposed deleting the ECG electrodes and
laser paper, as well as the electric bed, computer and holter monitor
from CPT codes 93225 and 93231 and deleting the razor, nonsterile
gloves, alcohol swab and tape, as well as the electric bed and exam
table from CPT codes 93226 and 93232.
Comment: A commenter representing an independent diagnostic testing
facility and another representing cardiologists expressed support for
the proposed revisions to the holter monitor codes.
We also received a comment from the RUC stating that the direct
practice expense inputs for these above holter monitoring services will
be reviewed by the PEAC at the January 2004 meeting.
Response: We will make the proposed changes to the holter
monitoring codes on an interim basis and will be glad to review the
recommendations from the PEAC when we receive them next year.
Other Practice Expense Issues
Comment: We have received requests from several commenters that we
value certain procedures currently priced only in the facility setting
in the non-facility setting as well. A manufacturer commented that
there is a need to price the hysteroscopic endometrial ablation
procedure, CPT code 58563, in the office to ensure Medicare patient
access to this alternative to hysterectomy in the least intrusive and
least costly setting. Several individual gynecologists have expressed
concern about the absence of a nonfacility rate for this service
because the facility payment does not cover the costs of performing
this procedure in the office.
A manufacturer of endoscopic and surgical supplies and equipment
expressed concern that several urology services which had previously
been priced in the non-facility setting, are no longer priced in that
setting. The commenter contended that the procedures can be performed
safely in the office and that patients will be forced to go to a
hospital or ambulatory surgical center for these procedures if the
office payment does not reflect the direct costs incurred by the
physician. The services in question are three cystourethroscopy
procedures, CPT codes 52224, 52275, 52276, and two destruction of
penile lesion procedures, CPT codes 54057 and 54065.
A consultant representing non-hospital based providers of LDL
apheresis, CPT code 36516, requested that we price this procedure in
the nonfacility setting and provided some cost data for this code. The
commenter stated that this procedure is commonly provided outside of
hospitals. A medical technology company requested that we price the
percutaneous implantation of neurostimulator electrodes procedure, CPT
code 64561, in the nonfacility setting. This service had previously
been priced in the office.
Response: We are aware that technological advances make it now
possible for more procedures to be safely performed in a physician's
office. However, CPT code 58563 has recently been reviewed by the PEAC,
and neither the gynecology specialty society nor the PEAC recommended
pricing this code in the office setting. Likewise, the urology
procedures and the neurostimulator service were reviewed this year by
the PEAC and the apheresis services last year by the RUC, and the PEAC
and the RUC recommended that these services not be priced in the office
setting based on the presentation made by the specialty societies. We
would not rule out working further with the commenters on these
requests, but we believe that it would not be appropriate to take such
an action in this final rule. We will be willing to discuss this issue
further to determine whether any action should be proposed in the
future.
Comment: The RUC comment identified the following anomalies in the
CPEP database for the clinical staff time for a few codes with 000 day
global periods:
B. (1) Percutaneous Abscess Drainage Codes
In 1997, CPT created new codes to differentiate between open and
percutaneous abscess drainage. Unlike their open procedure
counterparts, all of the percutaneous codes were assigned a global
period of 000 days with no follow-up visits assigned. However, CMS
crosswalked the direct inputs from the open codes, which have a
different global period, to the percutaneous codes, including the time
assigned for post-procedure office visits. The percutaneous abscess
drainage codes identified are CPT codes 32201, 44901, 47011, 48511,
49021, 49041, 49061, 50021, 58823. The comment stated that each of
these codes is currently priced in the facility setting only. Because
these procedures are predominately performed in the inpatient setting,
the comment further recommended that we assign zero direct practice
expense inputs for these codes.
(2) Closure of Eyelid by Suture
The commenter also pointed out that CPT code 67875, Closure of
eyelid by suture, has an assigned global period of 000 and includes no
post-procedure visits in the work relative value. However, the original
CPEP process appears to have assigned the code clinical staff time,
supplies, and equipment related to a follow up visit.
Response: We agree with the RUC that these 0-day global codes
should not have any direct costs assigned for post-procedure follow up
visits. Therefore, we are deleting from the database all the inputs
related to such visits.
Comment: Several commenters have expressed concern with the
unexplained reduction in nonfacility practice expense RVUs for HCPCS
code G0166, External counterpulsation.
Response: We have examined the practice expense data files and have
[[Page 63212]]
discovered an error in the database. This has now been corrected.
Comment: A specialty society representing dermatology commented
that the practice expense RVUS for laser treatment of psoriasis
procedures, CPT codes 96920-96922, appear overvalued.
Response: The practice expense has increased for these codes
because we did not have a price for the laser tip used in these
procedures until this year. The laser tip is now priced at $240. We
have made adjustments to ensure the practice expense RVUs reflect the
correct pricing of supplies as well as the specialty performing the
service.
Comment: One specialty society that represents gastroenterologists
commented that we cut the payment rate for the colonoscopy procedure,
CPT 45385, by 10 percent in the nonfacility setting without explanation
or justification.
Response: The decrease in payment for this code is due to the
decreased practice expense inputs now assigned to the service. The PEAC
submitted recommendations for the direct practice expense inputs for
this service that were based on a presentation made by two other
gastroenterological specialty societies, and we have accepted these
recommendations because we believe them to be reasonable. The code was
included on Addendum C, ``Codes for Which We Received PEAC
Recommendation on Practice Expense Direct Cost Inputs,'' in the
proposed rule.
Comment: Several commenters representing pediatricians, family
physicians and chest physicians stated their concern with the proposed
decrease in the practice expense RVUs for immunization services, CPT
codes 90471 and 90472, which were removed from the non-physician work
pool and priced under the top-down methodology starting in 2003.
Response: We will return the two immunization services to the
nonphysician work pool. As discussed above, we are increasing the price
assigned to the needle stick prevention device that is in the supply
list for the immunization codes. However, the practice expense RVUs for
these codes would still be less than the current values. As discussed
above, the price for the needle stick prevention device is still
fluctuating as new manufacturers enter the market. In addition, it is
still not clear exactly which device is optimal for the protection of
medical staff. Therefore, until these issues are settled, we will price
these immunization services in the nonphysician work pool. This will
prevent any sharp decrease in payment for these codes, as well as for
payments for the HCPCS G-codes for administration of influenza,
hepatitis and pneumococcal vaccines, which are crosswalked to the
payment for CPT code 90471.
Comment: We received a comment from Venable, a diathermy
manufacturer, who voiced concerns about previous decreases in both the
work and the practice expense RVUs for the diathermy procedure, CPT
code 97024. According to the commenter, the PEAC recommendations we
accepted for 2002 included a substantial reduction in clinical labor
time, the elimination of supplies, and the undervaluing of the
diathermy equipment, including the assignment of inadequate time for
equipment use. Citing our current CPEP price of $3,120 as too low, the
commenter noted the cost of the diathermy machines they manufacture
range from $19,000 to $30,000 and noted the actual time of a typical
treatment is 20 minutes, and not 15, as currently listed. A previous
comment from the electrophysiology specialty section of the American
Physical Therapy Association (APTA) stated that the average cost of
diathermy ranges between $10,000 and $15,000.
Response: We believe the practice expense recommendation we
accepted from the PEAC in 2001 for the clinical labor and supplies is
appropriate. We would note here that the resultant PEAC recommendation
for clinical labor was just one minute less than that proposed by the
American Physical Therapy Association at the 2001 PEAC meeting. We
continue to support the PEAC's decision to eliminate the supplies for
some of the modality procedures, including diathermy, since these
services are typically performed with other therapy procedures where
the supply costs are captured. However, we agree with the commenter
that the current pricing of the diathermy equipment in our CPEP
database appears too low, and we will price the diathermy, on an
interim basis, at $10,000 for the 2004 fee schedule. In addition, we
will assign the requested 20 minutes as the typical time the diathermy
equipment is in use for each service. We are planning to propose a
repricing of all of the equipment included in our database next year
and will revisit the pricing of the diathermy equipment at that time.
In response to the commenter's work RVU concern, next year's final
rule will solicit recommendations of codes to be considered for review
under the five-year review of work that is to occur in 2005.
Comment: A commenter representing prosthetic urology focused on
reductions in payment for several 90-day global prosthetic urology
procedures. The commenter contended that these procedures were affected
by the adoption of the standard clinical staff times for 90-day global
procedures that did not reflect the extra staff time required for
patient training during post-procedure visits. In addition, almost half
of the prosthetic urology services were established in 2002 and this
appeared to have a negative effect on these codes. The commenter
strongly recommended that the standard clinical staff times not be
applied to the prosthetic urology codes and that we reinstate the
``benchmark'' clinical staff times.
Response: The commenter is correct that the major cause of the
decrease in practice expense RVUs for these services is the use of the
standard clinical staff time for 90-day global services. We do not have
``benchmark'' clinical staff times to reinstate for any of these
services. Rather, the current staff times are from the original CPEP
panel estimates that have not been reviewed by any multi-specialty
panel, such as the PEAC. We accepted the PEAC recommendation to apply
the standard clinical staff time to all 90-day global services that had
not been reviewed by the PEAC as having exceptions to the standard
times. All specialties, including urology, had ample opportunity to
present any codes for which they believed the standards did not apply;
these urology codes were not brought to the PEAC for review. We do not
believe we have a sufficient factual basis for changing the clinical
staff times for these services in this final rule. However, we would
consider any recommendations for revising the pre- and post-service
clinical staff times in the future. As to the effect of using the most
recent utilization data in calculating the practice expense RVUs for
the new prosthetic urology services, please see the discussion on
``Utilization Data'' earlier in this section.
Comment: A specialty society representing emergency medicine, an
emergency medicine practice management association and an emergency
medicine physician practice management organization all commented that
the adjustment made in the November 2, 1998 final rule (63 FR 58821) to
use the ``all physician'' practice expense per hour to calculate two
indirect cost pools does not make up for the uncompensated care costs
of emergency medicine physicians. The practice management association
questioned our previous claim that this
[[Page 63213]]
adjustment was made as a proxy for uncompensated care and asserted it
was rather a generic measure to address the low practice expense per
hour for emergency medicine. The specialty society commented that it
would be difficult to design a supplementary survey to capture the
needed data on the levels of uncompensated care.
Response: It is amply clear from reading our entire response in the
November 2, 1998 final rule that we considered the adjustment to the
indirect costs to serve as a proxy for the uncompensated care
experienced by emergency medicine physicians. We believe that, if this
adjustment is seen by the specialty as insufficient, the best recourse
is for the specialty to undertake a supplementary practice expense
survey. By working with our contractor, the Lewin Group, the specialty
society should be able to modify the survey in such a way that more
accurate data on uncompensated care could be obtained. The data from
such a survey could then take the place of the current adjustment to
the practice expense per hour for emergency medicine because a proxy
for uncompensated care would no longer be needed.
Comment: We received comments from a provider of extracorporeal
photopheresis therapy, CPT code 36522, requesting a refinement of the
practice expenses of this service in the office setting. Believing this
service to be undervalued, the commenter supplied a comprehensive
listing of the direct inputs, for the labor, equipment and supplies
deemed necessary for the provision of this in-office service. Of
particular note among the various suggested supply items was the
inclusion of a photopheresis procedural kit.
Response: We want to thank the photopheresis provider for the
practice expense suggestions. At this time, we do not have sufficient
information regarding the typical resources needed to proceed with a
comprehensive refinement of the practice expenses for the in-office
provision of photopheresis. However, in reviewing the commenter's
various practice expense proposals, we were struck by the obvious
absence of the photopheresis procedural kit in our supply database.
Consequently, this kit has been added to our CPEP database on an
interim basis. We note that there are general similarities between the
commenter's proposed inputs for clinical labor and equipment and our
current data. We would anticipate a future discussion regarding this
service in order to fully refine the practice expense direct cost
inputs for photopheresis.
B. Geographic Practice Cost Index Changes
1. Background
The Act requires that payments vary among Medicare physician fee
schedule (MPFS) areas according to the extent that resource costs vary,
as measured by the Geographic Practice Cost Indices (GPCIs). Section
1848(e)(1)(C) of the Act requires us to review, and, if necessary,
adjust the GPCIs at least every 3 years. This section of the Act also
requires us to phase in the adjustment and implement only \1/2\ of any
adjustment if more than 1 year has elapsed since the last GPCI
revision. The GPCIs were first implemented in 1992. The first review
and revision was implemented in 1995, the second review was implemented
in 1998, and the third review was implemented in 2001. As explained in
the August 15, 2003 proposed rule, the fourth GPCI review and revision
was scheduled for implementation in 2004. However, because the work and
practice expense GPCIs rely primarily on special tabulations of U.S.
Census data not yet available, review and revision of only the
malpractice GPCI component would occur for implementation in January
2004.
2. Malpractice GPCI Proposal
The malpractice GPCI is the most volatile of the three indices with
relatively large variations existing between geographic payment
localities. We proposed using actual 1999 through 2002 malpractice
premium data and forecasting the malpractice premium rates for 2003. We
were unable to include proposed malpractice GPCIs based upon this
revised malpractice premium data in the August 15, 2003 proposed rule
because we were still in the process of collecting the data. We stated
that the revised malpractice GPCIs published in this year's final
physician fee schedule regulation would be considered interim and
subject to public comment.
3. Collection and Review of Malpractice Premium Data
For purposes of the 2004 update to the malpractice GPCIs we
collected actual malpractice premium data for years 1999 through 2001.
For 2002 we were able to obtain actual malpractice premium data for 32
states plus Puerto Rico. Where actual malpractice premium data were
obtained, premiums were collected from the 20 physician specialties
with the largest share of total Medicare RVUs for 2002. Premiums were
collected from those insurers with the largest market share and those
insurers that when summed with other large insurers comprised at least
50 percent of the state market share for claims-made policies with a $1
million individual case limit and $3 million aggregate case limit.
For those 18 states plus the District of Columbia for which we were
unable to obtain actual 2002 premium data, we estimated the 2002
premium based upon an examination of growth rates from 1999 to 2001.
Malpractice premium data were not available for 2003. Two
statistical approaches were examined to forecast 2003 malpractice
premiums, simple extrapolation and projections based upon the average
of historical year-to-year changes (mean rate of change). In most
instances, the forecast 2003 premiums were similar using either
approach. There was a tendency for the linear extrapolation method to
yield slightly more extreme values (positive and negative) so the more
conservative, mean rate of change approach was chosen.
Comment: Several commenters expressed concern about the continued
use of proxy data, especially HUD residential rent data and
nonphysician professional wage data, in the GPCI methodology.
Response: This final rule does not update the work or practice
expense GPCIs. Any questions related to the use of proxy data in the
calculation of the work and practice expense GPCIs will be responded to
as part of future rulemaking.
Comment: One commenter stated that there should be no geographic
differences under the physician fee schedule. This commenter felt that
the data sources utilized for the construction of the locality specific
GPCI indices do not accurately reflect legitimate differences in
physician practice costs and that the current methodology did not
appropriately reflect the variation that might be caused by case mix,
availability of health care resources, and individual practice styles.
Response: Section 1848(e)(1)(A) of the Act requires that payments
vary among areas as resources costs vary as reflected by the GPCIs. We
agree that there will be some variation in case mix and practice styles
between different specialties and individual practitioners. The
physician fee schedule was established in 1992 to eliminate the large
unjustifiable payment differences that existed among services,
specialties, and geographic areas by establishing a national uniform
payment system that can vary only as area resource costs vary as
measured by the GPCIs. The GPCI component weights represent the
[[Page 63214]]
average physician expense weights across all physician specialties and
are intended to reflect the average costs across all services and
specialties in a geographic area and not to reflect exactly the costs
of each individual practitioner.
Comment: One commenter stated that there should be no geographic
payment differentials because these payment differentials operate as a
disincentive for practitioners to practice medicine in rural areas.
Response: Section 1848(e)(1)(A) of the Act requires that payments
vary among areas as resources costs vary as reflected by the GPCIs. It
should be recognized that the current methodology associated with the
calculation of GPCIs partially benefits practitioners in rural areas.
This is because the law requires that only one-quarter of area cost
differences in physician work, the largest of the three fee schedule
components, be recognized. Thus, about 40 percent of fee schedule
payments are by statute not adjusted for area cost differences. When
combined with the index of 1.000 for medical equipment, supplies, and
miscellaneous (which represents about 13 percent of total physician
resource costs) this means that there is a national fee schedule for
about 53 percent of the average physician payment. That is, only about
47 percent of overall physician payments are adjusted for area resource
cost differences. In addition, 34 states have a single statewide GPCI
wherein all physicians, whether urban or rural, are paid the same. All
of these factors shift payments from higher cost, usually urban, areas
to lower cost, usually rural, areas.
Comment: One commenter felt that we should not use projected 2003
premium data and instead should actually collect 2003 premium data.
Response: Currently, 2003 premium data is not available. This is
why we will utilize projected 2003 premium data in this update. We plan
to utilize more current premium data as it becomes available.
Comment: Although several commenters expressed their support for
the use of more current malpractice premium data, a few commenters had
concerns about the use of 2001 through projected 2003 premium data and
felt that we should use only projected 2004 premium data in place of
the three year average.
Response: Since the malpractice index has proven to be the most
volatile of the indices in past updates, with significant changes from
year-to-year, we will not base the malpractice GPCI upon just one year
of projected data. In order to protect against aberrant premiums for
any given year, we will utilize a three-year average. We will use 2001
through projected 2003 premium data for the three-year average.
The current methodology projects 2003 malpractice premiums based
upon actual malpractice premiums for 1999 through 2002. Since we will
continue to collect updated malpractice premium data, we do not think
it is appropriate to project through 2004 absent actual 2003
malpractice premium data.
Comment: One commenter suggested that due to the volatility
associated with malpractice insurance premium data, we should collect
premium data and re-scale the Malpractice GPCI annually.
Response: We agree that, because malpractice insurance premiums are
volatile, the Malpractice GPCI is also the most volatile of the three
indices. We also agree with the commenter's suggestion regarding annual
collection of malpractice premium data. We plan to undertake this
collection for 2003 premium data in early 2004. If premium data suggest
a re-scaling is warranted, we may revise the GPCIs more frequently than
every three years.
Comment: Several commenters requested that we make available to the
public the malpractice premium data that was utilized in the
calculation of the revised malpractice GPCIs.
Response: Since some of the data upon which the GPCIs were
constructed is based upon the reporting of individual malpractice
insurance companies, there are some confidentiality issues associated
with making the malpractice premium data public. We will attempt to
make available any information that is appropriate on our Web site at
http://www.cms.hhs.gov.
Comment: The American Medical Association's Relative Value Update
Committee (RUC) has requested that CMS work with the RUC's Professional
Liability Insurance Workgroup to explore the utilization of premium
data that might be collected by the RUC.
Response: We agree with the RUC request and look forward to working
with the RUC to obtain more current professional liability premium
data.
4. Interim 2004 Malpractice GPCIs
Acquiring data on malpractice insurance rates and using that data
to adjust Medicare payments for future malpractice insurance prices is
a difficult task. Malpractice insurance rates are quite volatile due to
a variety of factors. Some of these factors are changes in State
insurance laws, business decisions of malpractice insurance carriers,
and changes in how medicine is practiced.
The volatility of malpractice premium data was quite evident in the
data we collected in conducting our review of malpractice GPCIs. Based
on these data and the comments received on the August 15, 2003 proposed
rule, we have modified some of our GPCI calculations and assumptions.
We are very concerned about implementing sharp changes in
malpractice GPCIs for 2004, which directly impact physician fee
schedule payment amounts. At the same time, we recognize the importance
of updating malpractice GPCIs to ensure local differences in physician
costs are included in payment amounts. To be sensitive to both of these
considerations, we decided to apply a modulating factor of .5 to the
changes in the malpractice GPCIs. In other words, as part of our review
and analysis of the malpractice GPCIs, we reduced the difference
between the new and previous malpractice GPCIs by 50 percent.
As directed by the statute, we will implement \1/2\ of this change
in the first year (CY 2004) and \1/2\ of this change in the second year
(CY 2005). During this two-year phase-in, we will continue to monitor
local malpractice markets, work with the State Departments of
Insurance, and collaborate with the RUC to obtain the most current and
best malpractice premium data available. As better data are obtained,
we will review, propose changes, and revise the malpractice GPCIs as
appropriate. The transitional 2004 and full 2005 GPCIs can be found at
Addendum D and Addendum E, respectively. These malpractice GPCI
revisions necessitate a budget neutrality adjustment, as required by
law. Therefore, we adjusted the 2004 through 2006 malpractice GPCIs by
1.0021.
5. Payment Localities
In the August 15, 2003 proposed rule we requested comments on the
composition of the current 89 Medicare physician payment localities to
which the GPCIs are applied.
Comment: We received numerous comments from professional medical
associations, beneficiaries, and practitioners requesting that the
specific counties in which they practice medicine or receive medical
care be removed from their current locality assignment.
Response: We will continue to examine alternatives for
reconfiguring the current locality structure. We expect to further
consider this issue as part of future rulemaking.
[[Page 63215]]
C. Coding Issues
1. Payment Policy for CPT Tracking Codes
The November 1, 2001 final rule (66 FR 55269) included a discussion
of CPT Category III codes (also known as CPT tracking codes) and stated
that carriers have discretion for coverage and payment of services
described by these CPT tracking codes unless we have made a national
coverage determination (NCD). We have received requests to create
national payment amounts for some CPT tracking codes even if there has
been no NCD. Based on these requests, we proposed to change our policy
regarding payment for CPT tracking codes and create national payment
policy and determine national payment amounts for CPT tracking codes
when there is a significant programmatic need for us to do so. This
policy change would not change the contractor's discretion over
coverage for the CPT tracking codes, but could establish a payment
level to be used if the contractor finds that coverage is warranted. In
addition, carriers would not be required to establish a payment amount
for a tracking code until they receive a claim for the code.
Comment: Several commenters expressed concerns about this proposal.
They believe that establishing a national payment rate for these codes
risks premature creation of payment levels of reimbursement and creates
an expectation for the future value of the code. The commenters also
stated that establishment of a national price could also subvert the
RUC process because such pricing could influence subsequent RUC
valuation or our acceptance of the RUC's recommendations. Other
commenters were supportive of the proposal, with some suggesting that
we work with the specialty societies and the RUC in determining
appropriate payment rates. One commenter suggested that an alternative
to the proposal would be to use the existing refinement panel process
because these refinement panels are multispecialty and feature the
relevant specialty expertise. One commenter also requested we establish
RVUs for specific tracking codes in the final rule.
Response: We understand the reservations and concerns of the
commenters. As we indicated in the proposed rule, we would determine
national payment amounts for CPT tracking codes only when there is a
significant programmatic need for us to do so. If there is a need to
establish payment amounts for a tracking code, we would appreciate the
assistance of the relevant specialty societies and the RUC and such
pricing would be subject to public comment. However, in some instances,
interim values might need to be established if timing does not permit
us to obtain prior input from the medical community.
Final Decision
We will finalize our proposal to create national payment policies
and determine national payment amounts for CPT tracking codes when
there is a significant programmatic need for us to do so. We note that,
as discussed in the August 15, 2003 proposed rule, this policy change
would not change the contractor's discretion over coverage for CPT
tracking codes, but would establish a payment level if the contractor
finds that coverage is warranted.
2. Excision of Benign and Malignant Lesions
The definitions for excision of benign lesions (CPT codes 11400
through 11446 inclusive) and excision of malignant lesions (CPT codes
11600 through 11646 inclusive) were substantively changed for 2003.
These codes are now reported based on the excised diameter (actual skin
removed) rather than on the size of the lesion. Based on these changes
to the code descriptors, we proposed to make the work RVUs the same for
removal of all skin lesions with the same excised diameters that are
from the same area of the body, whether the lesions are benign or
malignant. For example, the work RVUs for the removal of benign skin
lesions from the trunk, arms or legs with excised diameter 1.1-2.0 cm,
CPT code 11402, would be the same as the work RVUs for CPT code 11602,
which is the removal of malignant skin lesions from trunk, arms or legs
with excised diameter of 1.1-2.0 cm.
Comment: The specialty society representing dermatology objected to
this proposal and contended that the excision of malignant lesions
generally goes deeper and is more time-consuming than the excision of
benign lesions and that malignant lesion excision also requires greater
skill and embodies greater risk. The society stated that this proposal
ignores a multi-specialty effort by a CPT Integumentary Workgroup, the
CPT Editorial Panel and the RUC to revise the code descriptors and to
assign work RVUs to these services. This view was supported by a joint
comment from the heads of several surgical specialties. The RUC also
urged us to delay finalizing this proposal until the RUC has the
opportunity to provide further recommendations related to these
services. In addition, the specialty societies representing podiatry,
general surgery, colon and rectal surgery, osteopathy, ophthalmology,
plastic surgery, otolaryngology as well as the AMA, the Mayo Foundation
and individual physicians also urged us to withdraw this proposal.
Medical Group Management Association requested the policy rationale for
equating the work RVUs for the benign and malignant code pairs. The
specialty society representing family physicians agreed with and
supported our position that there is no difference in physician work
involved in excising a benign or malignant lesion. However, the
commenter did not support our proposal to implement such RVU changes
unilaterally and stated that we should utilize the CPT and RUC process.
Response and Final Decision: We still believe that the physician
work for these services is sufficiently similar not to warrant
differences in the work RVUs. However, we will maintain the 2003 work
RVUs as interim values for 2004 to allow opportunity for the specialty
to resurvey these services. Note: That due to the adjustments to work
RVUs to match the MEI weights, the work RVUs in Addendum B may differ
from the values in 2003.
3. Create G Codes for Monitoring Heart Rhythms
As explained in the August 15, 2003 proposed rule, technological
advances have made cardiac telemetry equipment, typically used in
hospitals, available in the home setting. Coverage of this technology
is currently at the discretion of the local Medicare contractors
because there is no national coverage determination for this service.
We proposed to establish new HCPCS codes to specifically describe this
service along with proposed RVUs and PE inputs for payment as follows:
GXXX1--Electrocardiographic monitoring for diagnosis of
arrhythmias, utilizing a home computerized telemetry station and trans-
telephonic transmission, with automatic activation and real time
notification of monitoring station, 24-hour attended monitoring, per
30-day period of time; includes recording, monitoring, receipt of
transmissions, analysis, and physician review and interpretation.
(global)
We proposed 0.52 physician work RVUs and 0.24 malpractice RVUs for
this service and proposed crosswalking the practice expense inputs from
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.
[[Page 63216]]
GXXX2--Electrocardiographic monitoring for diagnosis of
arrhythmias, utilizing a home computerized telemetry station and trans-
telephonic transmission, with automatic activation and real time
notification of monitoring station, 24-hour attended monitoring, per
30-day period of time; recording (includes hook-up, recording and
disconnection).
We proposed 0.07 malpractice RVUs and crosswalked the practice
expense inputs from 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).
GXXX3--Electrocardiographic monitoring for diagnosis of
arrhythmias, utilizing a home computerized telemetry station and trans-
telephonic transmission, with automatic activation and real time
notification of monitoring station, 24-hour attended monitoring, per
30-day period of time; monitoring, receipt of transmissions, and
analysis
We proposed 0.15 malpractice RVUs and crosswalked the practice
expense inputs from 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
transmission, and analysis.
GXXX4--Electrocardiographic monitoring for diagnosis of
arrhythmias, utilizing a home computerized telemetry station and trans-
telephonic transmission, with automatic activation and real time
notification of monitoring station, 24-hour attended monitoring, per
30-day period of time; physician review and interpretation.
We proposed 0.52 physician work RVUs and 0.02 malpractice RVUs and
also crosswalked the practice expense inputs, from 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.
Comment: Commenters representing cardiac arrhythmia specialists and
cardiologists recommended that we withdraw the proposal to create new G
codes for monitoring heart rhythms. The commenters stated that this
request was not made by the medical community nor from the
manufacturers of these heart rhythm monitoring systems. The commenters
contended that the proposal appears to address specifically one
manufacturer and specifies a particular mode of transmission and
patient location, even though there are other new systems of this type
that are not captured by this proposal.
The commenters recommended that we allow this technology to be
utilized on a local level before implementing a national coding
solution. The commenters further supported that when this new
technology warrants a national coding solution, a CPT coding
application should be initiated and then the code should be sent to the
RUC for review. The commenting specialties stated their willingness to
provide medical input into the evaluation, coding and reimbursement for
this new technology. Two commenters also stated that the descriptors
and the proposed reimbursement do not reflect the monitoring systems
that have been developed. Other commenters also requested that we
withdraw or reconsider our proposal, as it did not follow the
established process for creating and valuing new codes. One specialty
society representing clinical endocrinologists supported the
establishment of these HCPCS codes, while another commenter, a cardiac
monitoring company, provided a general outline of how the various
cardiac monitoring technologies can best be used for maximum quality
and value. Another commenter suggested that until efficiency of the new
technology is demonstrated this proposal should be postponed.
Response: Our intention in proposing these G codes was to recognize
and nationally price all currently available real time cardiac
telemetry monitoring technology. It was not intended to address only
one system currently in use. Based on the concerns raised by
commenters, we will not proceed with these proposed HCPCS codes because
we want to ensure that any HCPCS codes developed encompass the various
technologies that are being utilized for such monitoring.
4. CPT Code 88180 (Flow Cytometry; Each Cell Surface, Cytoplasmic or
Nuclear Marker)
Flow cytometry is a technique to analyze single cell suspensions
from blood, bone marrow, body fluids, lymph nodes, and other tissues.
The technique, currently coded as CPT code 88180, Flow cytometry, each
cell surface, cytoplasmic or nuclear marker, quantifies cell surface,
cytoplasmic, and nuclear antigens. The August 15, 2003 proposed rule
discussed our concerns that the current coding scheme (payment on a per
marker basis) may encourage the performance of more markers than may be
medically necessary because the pathologist determines what markers to
perform and when to perform them. We indicated that we understood the
laboratory community would be reviewing this issue and considering
whether to recommend changes to the current coding for the procedure.
We also requested recommendations on appropriate values for the
procedure should we wish to develop a future proposal.
Comments: Commenters, both individuals and organizations, asked
that we not put forth a proposal for payment of flow cytometry. The
College of American Pathologists (CAP) has proposed coding revisions to
both the immunology and anatomic pathology section of CPT and is
working with other groups to establish practice guidelines for flow
cytometry. CAP asked that we not establish new ``G'' codes for 2004,
but work with CAP and allow the CPT and RUC evaluation process to be
used to determine appropriate coding and relative value units for flow
cytometry.
Decision: We agree with the commenters. We will work with CAP, the
CPT and the RUC to develop appropriate coding and payment policies for
flow cytometry.
5. Change in Payments to Physicians Managing Patients on Dialysis
In the August 15, 2003 rule, we proposed to make CPT codes 90918,
90919, 90920, and 90921 for the monthly capitation payments (MCP)
invalid for Medicare. We also proposed to create 3 new G codes in place
of each CPT code with payments varying with the number of visits
provided within each month to an end stage renal disease (ESRD)
patient. Under our proposal, there would be separate codes when the
physician provides 1 visit per month, 2-3 visits per month and 4 or
more visits per month. The code for 1 visit per month would have the
lowest payment while a higher payment will be provided for 2 to 3
visits per month and the highest payment for 4 or more visits per
month. These new codes would be reported once per month for services
performed in an outpatient setting that are related to the patient's
ESRD. These physician services would continue to include the
establishment of a dialyzing cycle, outpatient evaluation and
management of the dialysis visits, telephone calls, and patient
management provided during a full month. These codes would not be used
if a hospitalization occurred during the month.
The proposed codes are as follows:
GXXX5--End Stage Renal Disease (ESRD) related services per full
month, for patients under 2 years of age to
[[Page 63217]]
include monitoring for the adequacy of nutrition, assessment of growth
and development, and counseling of parents; with 4 or more face-to-face
physician visits per month.
GXXX6--End Stage Renal Disease (ESRD) related services per full
month, for patients under 2 years of age to include monitoring for the
adequacy of nutrition, assessment of growth and development, and
counseling of parents; with 2 or 3 face-to-face physician visits per
month.
GXXX7--End Stage Renal Disease (ESRD) related services per full
month, for patients under 2 years of age to include monitoring for the
adequacy of nutrition, assessment of growth and development, and
counseling of parents; with 1 face-to-face physician visit per month.
GXXX8--End Stage Renal Disease (ESRD) related services per full
month, for patients between 2 and 11 years of age to include monitoring
for the adequacy of nutrition, assessment of growth and development,
and counseling of parents; with 4 or more face-to-face physician visits
per month.
GXXX9--End Stage Renal Disease (ESRD) related services per full
month, for patients between 2 and 11 years of age to include monitoring
for the adequacy of nutrition, assessment of growth and development,
and counseling of parents; with 2 or 3 face-to-face physician visits
per month.
GXX10--End Stage Renal Disease (ESRD) related services per full
month, for patients between 2 and 11 years of age to include monitoring
for the adequacy of nutrition, assessment of growth and development,
and counseling of parents; with 1 face-to-face physician visit per
month.
GXX11--End Stage Renal Disease (ESRD) related services per full
month, for patients between 12 and 19 years of age to include
monitoring for the adequacy of nutrition, assessment of growth and
development, and counseling of parents; with 4 or more face-to-face
physician visits per month.
GXX12--End Stage Renal Disease (ESRD) related services per full
month, for patients between 12 and 19 years of age to include
monitoring for the adequacy of nutrition, assessment of growth and
development, and counseling of parents; with 2 or 3 face-to-face
physician visits per month.
GXX13--End Stage Renal Disease (ESRD) related services per full
month, for patients between 12 and 19 years of age to include
monitoring for the adequacy of nutrition, assessment of growth and
development, and counseling of parents; with 1 face-to-face physician
visit per month.
GXX14--End Stage Renal Disease (ESRD) related services per full
month, for patients 20 years of age and over; with 4 or more face-to-
face physician visits per month.
GXX15--End Stage Renal Disease (ESRD) related services per full
month, for patients 20 years of age and over; with 2 or 3 face-to-face
physician visits per month.
GXX16--End Stage Renal Disease (ESRD) related services per full
month, for patients 20 years of age and over; with 1 face-to-face
physician visit per month.
We based the proposed payments on the assumption that many
physicians would provide 4 or more visits to their ESRD patients and a
smaller proportion would provide 2-3 visits or only 1 visit per month.
Using Medicare utilization data from 2002, we proposed the following
relative value units for the new G codes that would make Medicare's
aggregate payments for ESRD related services under the physician fee
schedule approximately equal to current payments for procedure codes
90918 to 90921:
Table 2
----------------------------------------------------------------------------------------------------------------
Practice
Code Physician work expense Malpractice
----------------------------------------------------------------------------------------------------------------
GXXX5........................................................... 12.92 8.70 0.60
GXXX6........................................................... 5.19 3.49 0.24
GXXX7........................................................... 3.39 2.29 0.16
GXXX8........................................................... 9.91 4.86 0.43
GXXX9........................................................... 3.55 1.74 0.15
GXX10........................................................... 2.32 1.14 0.10
GXX11........................................................... 8.47 4.54 0.35
GXX12........................................................... 3.14 1.68 0.13
GXX13........................................................... 2.05 1.10 0.08
GXX14........................................................... 5.16 2.94 0.22
GXX15........................................................... 1.94 1.10 0.08
GXX16........................................................... 1.27 0.73 0.06
----------------------------------------------------------------------------------------------------------------
As part of the proposed rule we also solicited comments on how to
further revise our payment methodology to improve quality of care and
outcomes. We requested information that could help us design future
demonstrations that would study both dimensions of care (quality and
utilization) and help ensure that payment is based on appropriate
patient-specific care that has been shown to lead to improved outcomes
for this complex patient population.
Comment: We received many comments from physicians, the RUC,
specialty societies, dialysis centers and nephrologists, as well as
other individuals and organizations who expressed concerns with our
proposal to alter the way physicians are reimbursed for services
provided to End Stage Renal Disease (ESRD) patients and who urged us to
withdraw the proposal. The RUC and the AMA, as well as other specialty
organizations, expressed disappointment that we developed this proposal
without consultation from the medical community and outside the usual
CPT and RUC process. The Renal Physicians Association (RPA), the
American Society for Nephrology (ASN), the American Association for
Kidney Patients (AAKP), and the National Kidney Foundation (NKF) all
supported the principle of optimizing nephrologist-dialysis patient
interaction, which is included in the proposal. However, the RPA
contended that the proposal as currently constituted is unworkable, may
negatively impact some dialysis patients and is being put on an
unreasonably precipitous implementation schedule. The AAKP outlined
similar concerns but believed that increased nephrologist-dialysis
patient interaction will lead to improved outcomes and also urged that
an advisory committee be established to assist in the effort to further
improve quality and coordination of care for dialysis
[[Page 63218]]
patients. The Medicare Payment Advisory Commission (MedPAC) agreed that
the current payment method lacks accountability and quality incentives,
and thus encouraged CMS to address these issues. However, MedPAC also
expressed concern that without baseline data it was unclear how we
could determine and measure the impact of the proposed changes on
quality and access. MedPAC further stated that the adjustments to
payment should be made subsequent to the collection of information on
resource costs and clinical guidelines. Together with these
adjustments, further incentives should be added to the monthly payment
to reward and improve the quality and access of dialysis-related
physician care, which is consistent with MedPAC's June 2003
recommendations. Below are the specific issues raised by commenters:
Disproportionate Payment Differences
Many comments concerned the large variation in proposed payments to
physicians who see a patient only once a month, compared to the
proposed payment for seeing a patient either two or three times during
the month or four or more times during the month. In addition,
commenters stated there is more work involved in managing care of the
ESRD patients between visits.
Response: Based on our review of the comments, we agree that a
significant amount of physician work for patients with ESRD occurs
outside of the face-to-face visit with the patients. Since there may be
significant physician work associated with providing physician services
to ESRD patients between visits, we agree that there should be less
difference in the payment levels than we proposed. By raising the
minimum payment level, we are accounting for the extensive patient care
coordination and other non-face-to-face management required by ESRD
patients. However, we continue to believe that more physician work is
associated with more frequent face-to-face visits with the patient, and
any variation in the payment amounts should reflect this difference.
First, we determined the appropriate relative relationship among
different codes. For instance, we believe that approximately 25 percent
more physician work is involved with providing two to three visits than
with a single visit, and 50 percent more physician work is associated
with providing four or more visits. By paying a single amount
regardless of how often the patient is seen, we believe our current
policy pays too much if the patient is seen fewer than four times per
month. Thus, we revised our payment to be consistent with different
levels of physician work associated with providing monthly management
of dialysis patients. We are setting our aggregate revised payments
equal to aggregate current payments. Consistent with these assumptions,
we determined the following RVUs:
Table 3.--Relative Values for New Monthly Capitation Codes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Practice
Age of patient HCPCS Number of visits Work expense Malpractice Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patients Other Than Home Dialysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
<2.................................. G0308 4+...................... 12.69 8.58 0.42 21.69
G0309 2 to 3.................. 10.57 7.13 0.36 18.06
G0310 One Visit............... 8.45 5.72 0.28 14.45
2 to 11............................. G0311 4+...................... 9.68 4.74 0.34 14.76
G0312 2 to 3.................. 8.07 3.94 0.29 12.30
G0313 One visit............... 6.46 3.16 0.22 9.84
12 to 19............................ G0314 4+...................... 8.24 4.45 0.26 12.95
G0315 2 to 3.................. 6.87 3.69 0.23 10.79
G0316 One visit............... 5.50 2.96 0.17 8.63
20 +................................ G0317 4+...................... 5.07 2.88 0.17 8.12
G0318 2 to 3.................. 4.23 2.39 0.14 6.76
G0319 One Visit............... 3.38 1.92 0.11 5.41
-------------------------------------
Home dialysis patients (entire month)
--------------------------------------------------------------------------------------------------------------------------------------------------------
<2.................................. G0320 ........................ 10.57 7.13 0.36 18.06
12 to 19............................ G0321 ........................ 6.87 3.69 0.23 10.79
2 to 11............................. G0322 ........................ 8.07 3.94 0.29 12.30
20 +................................ G0323 ........................ 4.23 2.39 0.14 6.76
-------------------------------------
Home dialysis patients (partial month only--per day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
<2.................................. G0324 ........................ 0.35 0.24 0.01 0.60
12 to 19............................ G0325 ........................ 0.23 0.12 0.01 0.36
2 to 11............................. G0326 ........................ 0.27 0.13 0.01 0.41
20 +................................ G0327 ........................ 0.14 0.08 0.01 0.23
--------------------------------------------------------------------------------------------------------------------------------------------------------
We used the above principles to establish our monthly capitation
payments (MCP) for patients 20 or older. For patients younger than 20,
we are using the same relationship that exists among the current MCP
codes for different age groups for the new codes that we are creating.
For example, the current MCP code for a patient under 2 (CPT code
90918) has work RVUs that are approximately 2.5 times the work RVU for
a patient 20 or older (CPT code 90921). Thus, Medicare's work RVU for
each code for a patient 2 years or younger will be 2.5 times the amount
of the corresponding service provided to a patient 20 or older. These
values can be considered as interim and we plan to seek the advice of
the RUC in evaluating these codes once the policy has been implemented.
There are efforts underway (for example, in their 2004 workplan, the
OIG has indicated they will conduct a review of ESRD monthly capitation
payments and physician services) which will provide data on the type
frequency and content of physician
[[Page 63219]]
encounters as suggested by MedPAC. However, we believe a change should
be made in the interim to improve care and accountability. The use of
these new codes will also enable us to collect data about the frequency
of physician visits.
Regulatory Impact of Proposal on SGR and Conversion Factor
We received comments regarding the impact of these proposed changes
on the sustainable growth rate (SGR) calculations. Commenters expressed
concern that, if physician behavior changes and physicians increase the
number of visits provided per month, actual expenditures would surpass
the target projection, resulting in a future payment reduction for all
of medicine.
Response: 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. As
indicated above, we have established RVUs for the new monthly
capitation codes so that Medicare's aggregate payments for these
services are equal to what we would have paid in the absence of these
changes. We are not expecting any impact on payment for other physician
fee schedule services. However, we will continue to review this issue
as we work with the medical community to further refine Medicare policy
for treating patients needing dialysis services.
Home Dialysis
Many comments were received regarding home dialysis because
patients who dialyze at home typically see their physicians less
frequently than other ESRD patients. One commenter suggested that home
dialysis patients be excluded from the proposed change and that we
continue to pay the current MCP rate for services to these patients.
Response: We have created four G codes for the management of home
dialysis patients in each of the age groups and will pay for the home
dialysis patients at the same rate as codes G0309, G0312, G0315, and
G0318 respectively. Although the codes for home dialysis patients will
pay physicians slightly less than the former MCP, physicians will still
have a relative incentive to increase the use of home dialysis. We
believe this is consistent with Section 1881(b)(3)(B) of the Social
Security Act which states ``With respect to payments for physicians'
services furnished to individuals determined to have end stage renal
disease, the Secretary shall pay 80 percent of the amounts calculated
for such services on a comprehensive monthly fee or other basis (which
effectively encourages the efficient delivery of dialysis services and
provides incentives for the increased use of home dialysis) for an
aggregate of services provided over a period of time (as defined in
regulations).''
The new G codes for the monthly management of home dialysis
patients will be as follows:
G0320--End stage renal disease (ESRD) related services for home
dialysis patients per full month; for patients under two years of age
to include monitoring for adequacy of nutrition, assessment of growth
and development, and counseling of parents.
G0321--End stage renal disease (ESRD) related services for home
dialysis patients per full month; for patients two to eleven years of
age to include monitoring for adequacy of nutrition, assessment of
growth and development, and counseling of parents.
G0322--End stage renal disease (ESRD) related services for home
dialysis patients per full month; for patients twelve to nineteen years
of age to include monitoring for adequacy of nutrition, assessment of
growth and development, and counseling of parents.
G0323--End stage renal disease (ESRD) related services for home
dialysis patients per full month; for patients twenty years of age and
older.
The American Society of Nephrology also commented that
``reimbursement should be constructed so that home dialysis patients
should see their nephrologist at least monthly, with further visits on
an as needed basis.'' We will not specify the frequency of required
visits at this time but expect physicians to provide clinically
appropriate care to manage the home dialysis patient.
If home dialysis patients are hospitalized during the month, four
new G codes have been created: G0324, G0325, G0326, and G0327. These
codes will be used to report daily management of home dialysis patients
for the days the patient is not in the hospital. CPT codes 90922,
90923, 90924, and 90925 will be considered inactive for Medicare
because they are now redundant as other codes are to be used by
physicians billing for services to ESRD patients.
The new G codes are as follows:
G0324--End stage renal disease (ESRD) related services for home
dialysis (less than full month), per day; for patients under two years
of age.
G0325--End stage renal disease (ESRD) related services for home
dialysis (less than full month), per day; for patients between two and
eleven years of age.
G0326--End stage renal disease (ESRD) related services for home
dialysis (less than full month), per day; for patients between twelve
and nineteen years of age.
G0327--End stage renal disease (ESRD) related services for home
dialysis (less than full month), per day; for patients twenty years of
age and over.
For example, if a home dialysis patient is in the hospital for 10
days (counting the calendar day of admission and the calendar day of
discharge) and is cared for 20 days in his or her home, then 20 units
of the code for the appropriate aged patient is billed.
If a home dialysis patient receives dialysis in a dialysis center
or other facility during the month, the physician is still paid the
management fee for the home dialysis patient and cannot bill the codes
in the range of G0308 through G0319 or CPT codes 90935 or 90937, even
though the physician may see the patient during his/her center
dialysis.
Role of Non-Physician Practitioners or Physicians Other Than the MCP
Physician
We received comments about the role of nonphysician practitioners.
It was not clear to the commenters whether visits by these
practitioners could count as face-to-face encounters by the MCP
physician. The commenters also asked about billing by physicians (for
example, a ``rounding'' physician or fellow) other than the physician
who is billing the monthly capitation rate.
Response: Physicians may utilize nonphysician practitioners: nurse
practitioners, physician assistants, and clinical nurse specialists,
who are able under the Medicare statute to furnish services that would
be physician services if furnished by a physician and who are eligible
to enroll in the Medicare program, to deliver some of the visits during
the month. The rules for the use of these physician extenders would be
consistent with the rules for split/shared evaluation and management
visits: The nonphysician practitioners and physician must be in the
same group practice or employed by the same employer/entity; and the
physician must perform some portion of the service in a face-to-face
encounter, in this case one or more visits during the month with the
patient. In this situation, to bill the service under the physician's
UPIN/PIN, the physician and not the physician extender should be the
practitioner to perform the visit with the complete assessment of the
patient and to establish the patient's
[[Page 63220]]
plan of care. If the nonphysician practitioner is the practitioner who
performs the complete assessment and establishes the plan of care, then
the MCP service should be billed under the UPIN/PIN of the nurse
practitioner, physician assistant, or clinical nurse specialist.
It is also possible for the physician to use another physician to
provide some of the visits during the month, but the physician who
provides the complete assessment, establishes the patient's plan of
care and provides the ongoing management should be the physician who
submits the bill for the monthly service. The non-MCP physician must
have a relationship with the billing physician such as a partner,
employees of the same practice, or supervising physician and fellow
doing sub-specialty training.
Each practitioner should document in a shared medical record
services he/she personally performed. Only one practitioner can bill
for the management of the ESRD patient in any month. In addition, when
a nonphysician practitioner or a ``rounding physician'' sees a dialysis
patient for management of ESRD, they cannot bill an evaluation and
management service for the same patient unless there is a separate,
substantial and documented service evaluating the patient for care
unrelated to the patient's dialysis.
Geographic Issues
Commenters indicated that the lack of geographic considerations
would negatively impact physicians and patients in rural and some urban
settings where physician visits require significant travel time.
Extended travel time can make it difficult for physicians to see
patients as often as patients can be seen when the physician's office
is near the dialysis facility.
Response: We believe that the policy to allow nurse practitioners,
physician's assistants, clinical nurse specialists, and other
physicians to deliver some of the visits to patients as well as changes
in the payment to more accurately reflect non-visit services and the
relative value of additional visits will ameliorate these access
issues.
Lack of Clarity Regarding Hospitalization
Commenters noted that the proposed rule did not provide enough
detail regarding alternative billing procedures if hospitalization
occurs during the month.
Response: For ESRD patients (other than home dialysis patients) who
are hospitalized during the month, the physician may bill the code that
reflects the number of face-to-face visits during the month on days
when the patient was not in the hospital (either admitted as an
inpatient or in observation status).
Documentation Requirements
Comment: Many commenters asked for clarification regarding the
documentation requirements, if any, associated with the new codes.
Response: We have chosen not to include specific documentation
guidelines in this rule. Instead, physicians should document what is
clinically relevant, including but not limited to the patient's current
status and complaints, a clinically appropriate physical examination,
assessment of the patient's treatment for ESRD that includes assessment
of the adequacy of the dialysis treatment, the status of the patient's
vascular access, assessment and treatment of the other conditions
associated with ESRD, such as anemia, electrolyte management, and bone
density, as well as changes to the patient's management.
HIPAA Compliance
Comment: A comment was received that HIPAA transaction and code set
rules may not be met if these new codes were implemented.
Response: G codes are part of the HCPCS coding system and are in
compliance with the HIPAA transaction and code set rules.
Outpatient Settings
Comment: Commenters asked for additional clarification on whether
visits counted toward the MCP can be provided in settings other than
the dialysis facility.
Response: The visits for management of ESRD patients may occur in
the physician's office, in an outpatient hospital or other outpatient
setting or even in the patient's home as well as in the dialysis
facility.
Transient Patients
Comment: Commenters inquired how physicians would deal with visits
and related billing for traveling patients who receive their treatment
away from their usual site of treatment.
Response: If the physician manages the care of a patient who is
receiving treatment away from the patient's usual site of treatment,
the physician who bills for managing the care of the patient is still
paid according to the number of times the physician has a face-to-face
visit with the patient. If the patient is to be away for an extended
period of time, the patient would be managed by the physician who has
face-to-face visits with the patient, and that physician would be the
one billing for the patient's care management.
Quality of Care and Outcomes
Comment: Commenters representing the American Osteopathic
Association, the American Academy of Family Physicians, the National
Coalition for Quality Diagnostic Imaging Services, the American Society
for Echocardiography and Focus on Therapeutic Outcomes, Inc., provided
information on quality initiatives their respective organizations have
undertaken or suggestions for relating quality to payment. The National
Kidney Foundation recommended the use of technology and other forms of
communication to care for ESRD patients and to support constant
attention to quality. In addition, the Society for Interventional
Radiology commended our efforts to increase the use of arteriovenous
fistulae for vascular access in dialysis patients as part of its
National Vascular Access Improvement Initiative, but indicated there
might be a need to clarify certain policies. The American Association
of Kidney Patients (AAKP) also recommended the establishment of a
commission or advisory group with representation of the kidney
community that could be charged with recommending proposals to tie
reimbursement to outcomes. AAKP stated that although the proposed
changes are important, these changes remain a change in process of
delivery of care that may improve actual outcomes, rather than a change
in actual outcomes, that is, in rehabilitation, morbidity, mortality,
and quality of life. MedPAC agreed with CMS that the proposed change to
provide incentives for additional nephrologist-dialysis patient
interactions may not be the ideal method to improve patient outcomes
and to achieve this goal, CMS should partner with the ESRD community
and work toward a long-term solution. MedPAC suggested that we
investigate and incorporate physician clinical practice guidelines into
our payment approach, and measure physician quality directly. MedPAC
also suggested that we examine whether physician resources vary based
on patient complexity, stating that to the extent that resources do
vary, a case-mix adjustment--similar to the one MEDPAC recommended for
payment to dialysis facilities in its June 2003 report--would be
desirable.
Response: We appreciate the information and suggestions provided by
the commenters and will take these into consideration. We plan to
investigate the use of new technology to improve the management of ESRD
[[Page 63221]]
patients as part of our overall focus on quality.
Final Decision--We will create the following G Codes to be used for
ESRD patients other than home dialysis, based on the age of the patient
and number of visits:
G0308--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients under 2 years of age to include
monitoring for the adequacy of nutrition, assessment of growth and
development, and counseling of parents; with 4 or more face-to-face
physician visits per month.
G0309--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients under 2 years of age to include
monitoring for the adequacy of nutrition, assessment of growth and
development, and counseling of parents; with 2 or 3 face-to-face
physician visits per month.
G0310--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients under 2 years of age to include
monitoring for the adequacy of nutrition, assessment of growth and
development, and counseling of parents; with 1 face-to-face physician
visit per month.
G0311--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients between 2 and 11 years of age to
include monitoring for the adequacy of nutrition, assessment of growth
and development, and counseling of parents; with 4 or more face-to-face
physician visits per month.
G0312--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients between 2 and 11 years of age to
include monitoring for the adequacy of nutrition, assessment of growth
and development, and counseling of parents; with 2 or 3 face-to-face
physician visits per month.
G0313--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients between 2 and 11 years of age to
include monitoring for the adequacy of nutrition, assessment of growth
and development, and counseling of parents; with 1 face-to-face
physician visit per month.
G0314--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients between 12 and 19 years of age to
include monitoring for the adequacy of nutrition, assessment of growth
and development, and counseling of parents; with 4 or more face-to-face
physician visits per month.
G0315--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients between 12 and 19 years of age to
include monitoring for the adequacy of nutrition, assessment of growth
and development, and counseling of parents; with 2 or 3 face-to-face
physician visits per month.
G0316--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients between 12 and 19 years of age to
include monitoring for the adequacy of nutrition, assessment of growth
and development, and counseling of parents; with 1 face-to-face
physician visit per month.
G0317--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients 20 years of age and over; with 4 or
more face-to-face physician visits per month.
G0318--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients 20 years of age and over; with 2 or 3
face-to-face physician visits per month.
G0319--End Stage Renal Disease (ESRD) related services during the
course of treatment, for patients 20 years of age and over; with 1
face-to-face physician visit per month.
In addition we have created the following G codes for home dialysis
patients:
G0320--End stage renal disease (ESRD) related services for home
dialysis patients per full month; for patients under two years of age
to include monitoring for adequacy of nutrition, assessment of growth
and development, and counseling of parents.
G0321--End stage renal disease (ESRD) related services for home
dialysis patients per full month; for patients two to eleven years of
age to include monitoring for adequacy of nutrition, assessment of
growth and development, and counseling of parents.
G0322--End stage renal disease (ESRD) related services for home
dialysis patients per full month; for patients twelve to nineteen years
of age to include monitoring for adequacy of nutrition, assessment of
growth and development, and counseling of parents.
G0323--End stage renal disease (ESRD) related services for home
dialysis patients per full month; for patients twenty years of age and
older.
G0324--End stage renal disease (ESRD) related services for home
dialysis (less than full month), per day; for patients under two years
of age.
G0325--End stage renal disease (ESRD) related services for home
dialysis (less than full month), per day; for patients between two and
eleven years of age.
G0326--End stage renal disease (ESRD) related services for home
dialysis (less than full month), per day; for patients between twelve
and nineteen years of age.
G0327--End stage renal disease (ESRD) related services for home
dialysis (less than full month), per day; for patients twenty years of
age and over.
6. Miscellaneous Coding Issues
Bioimpedance
Comment: We received several comments concerning the pricing of CPT
code 93701, electrical bioimpedance. One commenter, a carrier medical
director, requested that this service be considered a technical
component service as there is no physician work (professional
component) required to produce the results. The commenter referenced
the RUC recommendation of 0.00 work that was not accepted by CMS in
November 2001. Other commenters stated that pricing of this service
should be revisited and the American College of Cardiology recommended
work component of 0.25 RVUs be accepted. Commenters also questioned the
valuation of the practice expense component, particularly in light of
the escalating costs associated with this service.
Response: In next year's final rule we will be accepting
recommendations for codes to be considered under the five-year review
of work that will occur in 2005. The commenters will be able to respond
to that solicitation, and submit this CPT code, as well as any other
services they believe need to be reviewed to ensure they are
appropriately valued. We are currently in the process of reviewing and
obtaining updated pricing for equipment contained in the practice
expense data files and proposed changes to pricing for equipment will
be included in next year's proposed rule. We would suggest that the
commenters review this information when published to ensure that the
cost of the equipment is accurately reflected in the database.
Ablation Procedures
Comment: One commenter, a manufacturer, suggested that the work
RVUs of certain codes for the ablation of liver tumors (CPT codes
47380, 47370 and 47382) appeared to be undervalued.
Response: As discussed in the previous response, in next year's
final rule we will be accepting recommendations for codes to be
considered under the five-year review of work that will occur in 2005.
The
[[Page 63222]]
commenter will be able to respond to that solicitation and submit these
codes, as well as any additional services they believe need to be
reviewed to ensure they are appropriately valued.
Stereotactic Radiosurgery and Stereotactic Radiotherapy
Comment: Two commenters requested that HCPCS codes G0173 and G0251,
which are used for reporting stereotactic radiotherapy and stereotactic
radiosurgery under the hospital outpatient prospective payment system,
be activated for payment under the physician fee schedule.
Response: We are reluctant to establish payment for these services
under the physician fee schedule at this time absent specific
information on freestanding centers providing this service. We would
welcome information and data from these commenters, and other
individuals and providers, on the provision of these services in
freestanding centers so that we can fully evaluate this issue.
Creation of G Codes
Comment: The AMA and several specialty organizations expressed
concern about the establishment of the numerous G codes that were
contained in the proposed rule. The commenters state that continual
development of G codes, without consultation with the CPT Editorial
Panel, the RUC or the physician community undermines the annual review
process that CMS has established in the final rule. Further, the
commenters argue that the establishment of G Codes undermines the
requirements of the Health Insurance Portability and Accountability Act
(HIPAA) for coding standardization and an open process for establishing
codes.
Response: As we have stated in previous rulemaking, it is sometimes
necessary to develop G codes to accommodate changes in legislation,
regulation, coverage, and payment policy. We appreciate the input of
the medical community and to the extent possible, will work with the
CPT Editorial Panel, the RUC and the physician community prior to
establishment of these codes.
Pain Management
Comment: The American Society of Interventional Pain Management
commented on the differences in payment allowances for various pain
management services and other non-pain management services furnished in
conjunction with pain management services in various settings,
including the physician's office, the OPD and the ASC.
Response: In accordance with the law, we have established payment
rates for office-based procedures, using the non-facility practice
expense relative value units. However, the office does not represent a
practice site where these services are usually performed.
Medicare payment under the physician fee schedule for the physician
work is the same in all practice settings. However, the practice
expenses are reimbursed differently depending on the practice site.
Practice expenses associated with procedures performed in the
outpatient departments (OPDs) or ambulatory surgical centers (ASCs) are
paid under the OPD or ASC payment system respectively. Practice
expenses associated with procedures performed in the physician's office
are paid through the physician fee schedule payment system.
III. Other Issues
A. Definition of Diabetes for Diabetes Self-Management Training
In the August 15, 2003 rule we proposed to adopt the definition of
diabetes used to determine beneficiary eligibility for Medical
Nutrition Therapy (MNT) for purposes of coverage for outpatient
diabetes self-management training when the beneficiary has a diagnosis
of diabetes. Specifically, we stated that the criteria currently set
forth at Sec. 410.141(d), would be replaced with definition of
diabetes used for medical nutrition therapy at Sec. 410.130 which
reads as follows:
Diabetes means diabetes mellitus consisting of two types. Type 1 is
an autoimmune disease that destroys the beta cells of the pancreas,
leading to insulin deficiency. Type 2 is familial hyperglycemia that
occurs primarily in adults but can also occur in children and
adolescents. It is caused by an insulin resistance whose etiology is
multiple and not totally understood. Gestational diabetes is any degree
of glucose intolerance with onset or first recognition during
pregnancy. The diagnostic criterion for a diagnosis of diabetes for a
fasting glucose intolerance test is greater than or equal to 126 mg/dL.
A technical error in the proposed rule on page 49070, placed the
revised eligibility requirements in Sec. 410.141(f). The eligibility
requirements will replace those currently in Sec. 410.141(d).
Comment: We received comment noting that the language for the
actual regulatory language had the wrong section letter.
Response: As noted above, this was a technical error.
Final Decision: The following language will replace what was in the
proposed rule. ``Section 410.141 is amended by replacing paragraph (d)
to read as follows: Sec. 410.141 Outpatient diabetes self-management
training. (d) Beneficiaries who may be covered. Medicare Part B covers
outpatient diabetes self-management training for a beneficiary who has
been diagnosed with diabetes.''
Comment: The comments were very supportive of our efforts to
streamline this requirement. Several commenters recommended that the
definition of diabetes be revised to include patients who might not be
classified as Type 1, Type 2, or gestational diabetes in the
definition. Most commenters recommended the use of a fasting glucose
test of greater than or equal to 126 mg/dL. One commenter suggested the
measurement be taken on two occasions. Most commenters also recommended
the addition of a random glucose test of greater than 200 mg/dL, with
one commenter adding with symptoms of uncontrolled diabetes. Several
commenters suggested use of an abnormal glucose tolerance test (GTT).
One commenter also suggested the use of a 2 hour post-glucose challenge
of greater than or equal to 200 mg/dL test on two different occasions.
The American Association of Clinical Endocrinologists (AACE) also
suggested that coverage of medical nutrition therapy be expanded to
those with impaired fasting glucose.
Response: The definition of diabetes used in the MNT regulation was
based on language found in the 2000 Institute of Medicine report
entitled, ``The Role of Nutrition in Maintaining Health in the Nation's
Elderly. We did not have any other generally recognized definition of
diabetes at that time and did not intend to limit our definition of
diabetes. Regarding the laboratory tests, the characteristics of the
commenters' suggestions are generally the same. The base measurement
that is already in our MNT regulation, a fasting glucose of 126 mg/dL,
is a common measure. Three commenters also noted the use of 200 mg/dL
for a random glucose test. The major variation between the commenters
was that one suggested multiple measurements. Also, we note that
patients with an impaired fasting glucose level do not necessarily meet
any of the popular definitions of diabetes.
Final Decision: We agree that in some ways our proposed definition
may not include some patients diagnosed with diabetes. We also agree
that our clinical
[[Page 63223]]
laboratory measurements used to determine the presence of diabetes
should be expanded. The definition provided by AACE appears to meet the
clinical concerns of the medical community and our concerns that no
individuals have their treatments delayed unduly if they have obvious
symptoms of uncontrolled diabetes. Therefore, we are adopting their
clinical definition. We will also broaden our general language to
include diabetes of other types. Our final language will be, ``Diabetes
is diabetes mellitus, a condition of abnormal glucose metabolism
diagnosed using the following criteria: A fasting blood sugar greater
than or equal to 126 mg/dL on two different occasions; a 2 hour post-
glucose challenge greater than or equal to 200 mg/dL on 2 different
occasions; or a random glucose test over 200 mg/dL for a person with
symptoms of uncontrolled diabetes.'' We will also make a conforming
amendment to 410.130 for MNT. However, we are constrained from covering
MNT for anyone who is not diagnosed with diabetes by the section
1861(s)(2)(V) of the Act that limits coverage of MNT to beneficiaries
with diabetes or renal disease.
Outpatient Therapy Services Performed ``Incident To'' Physicians''
Services--Discussion Only
In almost all settings, our regulations specify that outpatient
therapy services can be delivered only by qualified physical
therapists, occupational therapists, physical therapy assistants,
occupational therapy assistants, and speech-language pathologists as
defined by Sec. 484.4. Section 1862(a)(20) of the Act requires that
any therapy services furnished incident to a physician's professional
services must meet the standards and conditions that would apply to
such therapy services if they were furnished by a therapist, with the
exception of the licensing requirement. While there are currently no
national standards for qualifications of individuals providing
outpatient therapy services incident to physicians' services, we
believe that standards similar to those in Sec. 484.4 are appropriate.
In the proposed rule, we stated that we are considering adopting the
existing qualification and training standards (with the exception of
licensure) in Sec. 484.4 for individuals providing therapy services
independently and incident to physicians' services. While we did not
propose a change at this time, we requested comments from the public,
particularly physicians and staff who would be affected, on adoption of
the existing standards in Sec. 484.4, for services of independent
therapists and ``incident to'' services, as well as comments regarding
alternatives that we might use to ensure that qualified staff are
providing ``incident to'' therapy services.
We received comments from major therapy organizations and
individual therapists representing therapy services, physician
organizations and individual physicians and associations and
individuals representing other health care professionals, such as
athletic trainers, kinesiotherapists and exercise physiologists. A wide
spectrum of views was expressed by these commenters. Commenters
representing therapists were supportive of establishing consistent
training standards in all settings, while physicians favored reliance
on the individual physician for quality control. The non-therapist
health care providers were concerned about their role in providing
therapy services and cardiac rehabilitation and pulmonary service
providers were concerned that their services might be affected.
We will review and consider these comments as we determine whether
to make a future proposal. Meanwhile, contractors may continue to
develop local medical review policies that are consistent with the
statute, applying to physical therapy, occupational therapy and speech-
language pathology services the same standards and conditions that
would apply to such therapy services if they were furnished by an
independent therapist, with the exception of the licensing requirement.
D. Status of Anesthesia Work and Five-Year Review
In the December 2002 final rule, we modestly increased the work of
anesthesia services. These changes were based on the analysis submitted
by the RUC of its review of the work of 19 high volume anesthesia
codes. The RUC had provided us with its analysis but did not furnish us
with a definitive recommendation. The increase in anesthesia work
resulted in an increase in the national anesthesia conversion factor.
(We increased the physician work component of the anesthesia conversion
factor by 2.10 percent to reflect a 9.13 percent increase in anesthesia
work applied to 23 percent of anesthesia allowed charges represented by
the 19 codes. As a result of this increase, we applied a 1.6 percent
increase to the anesthesia CF.) The American Society of
Anesthesiologists expressed concern about the completeness of the
review of anesthesia codes under the five-year review. Therefore, in
February 2003 we asked the RUC to continue its review of anesthesia
work values so that we could develop a final recommendation for a
change in the anesthesia CF involving all anesthesia codes. In the
proposed rule we stated we were waiting on the RUC's response to our
request.
The RUC has spent a considerable amount of effort of studying this
issue. The RUC's anesthesia workgroups consisted of a range of
physician specialists, including various surgical specialists, who have
knowledge about the anesthesia services studied. As a result of their
review, the RUC approved and presented the following recommendations to
CMS:
1. The RUC position is that the 5-year review has been completed.
2. The RUC anesthesia workgroup analysis only applies to the 19
anesthesia codes and associated 19 surgical codes.
3. The Workgroup recommendations to the RUC stated that there are
structural differences between the anesthesia coding system and the
remainder of the physician coding system, which contributes to the
difficulties in making extrapolations to the entire set of anesthesia
services. Among other things, the workgroups and the RUC were concerned
that the anesthesia codes cover too large a number of surgical codes
making it necessary to examine surgical codes within the anesthesia
code, and the 19 selected anesthesia codes may not be the most
representative codes.
The ASA disagrees with the RUC's recommendations and asked that we
extrapolate from the 19 surveyed procedures to all anesthesia codes.
Decision
When we developed the 2002 final physician fee schedule rule on the
second five-year review, one of our concerns was that the RUC's initial
findings were not presented as specific recommendations. We wanted to
pursue approaches consistent with RUC recommendations. Therefore, in
early 2003, we asked the RUC to more clearly present their
recommendations.
Based on our review of the history and analysis of this issue and
the final recommendation of the RUC, we have decided not to extrapolate
from the surveyed procedures to the entire universe of anesthesia
procedures; we will make no further adjustments to anesthesia work
under the second five-year review.
[[Page 63224]]
Payment Policies for Anesthesia Services
There are differences in Medicare payment policies between a
teaching anesthesiologist involved with two concurrent cases with
residents and a teaching CRNA involved with two concurrent cases with
student nurse anesthetists.
Currently, if a teaching anesthesiologist is involved with two
concurrent cases with anesthesia residents, the medical direction rules
apply. Payment for the physician's medical direction is based on 50
percent of the allowance otherwise allowed if the anesthesiologist
performed the anesthesia case alone.
For anesthesia services furnished prior to July 1, 2002, we allowed
full payment if a non-medically directed certified registered nurse
anesthetist (CRNA) supervised a single case involving a student nurse
anesthetist. No payment was made if the teaching CRNA supervised two
cases involving student nurse anesthetists. In August 2002, we released
the Medicare Carriers Manual Transmittal 1766 relating to the
involvement of a non-medically directed teaching CRNA with two student
nurse anesthetists. The American Association of Nurse Anesthetists
(AANA) noted that their standards for approved nurse anesthesia
training programs allow the teaching CRNA to supervise two concurrent
cases involving student nurse anesthetists. The new policy allows the
teaching CRNA to be paid, for his/her involvement with two concurrent
cases with student nurse anesthetists, but not at the full fee level.
If a teaching CRNA is involved with two concurrent cases with student
nurse anesthetists, payment may be based on the base unit plus the time
that the teaching CRNA is present with the student nurse anesthetist.
To bill the base unit, the teaching CRNA must be present with the
student nurse anesthetist throughout the pre- and post-anesthesia care.
This payment per case is usually higher than the 50 percent paid to the
teaching anesthesiologist for medically directing resident cases.
In the proposed rule, we asked for comments on the appropriateness
of applying the CRNA teaching/resident policy to teaching
anesthesiologists.
Comment: The American Association of Nurse Anesthetists commented
that it was unclear how the new rule for teaching anesthesiologists
would operate with the medical direction rules, particularly if there
were more than two concurrent anesthesia cases.
Response: The new policy for teaching anesthesiologists would apply
only when there are two concurrent cases, and the cases involve
residents. The medical direction payment policy would continue to
apply, as it has previously, for three or four concurrent anesthesia
cases regardless of the qualified individual (for example, CRNA,
resident, or anesthesiologist assistant) who is administering and
monitoring anesthesia under the physician's medical direction.
Comment: The ASA requested that the teaching anesthesiology payment
regulations be revised so that the teaching anesthesiologists be paid
in a similar manner to teaching surgeons. Under the teaching physician
rules, the teaching surgeon can be paid the full fee for each of two
overlapping surgeries involving residents. The ASA understands that
such a proposal would require a revision to Medicare regulations and
would require rulemaking.
The ASA requested that, at least, in the interim, we allow teaching
anesthesiologists to be paid similarly to teaching CRNAs for two
concurrent cases. However, ASA specifically requested that this policy
be used in addition to the current medical direction payment policy. In
other words, the ASA wants the teaching anesthesiologist to be able to
choose case-by-case, whether to seek payment similar to the teaching
CRNA (that is, full base units and time units based only on actual
presence with the resident) or based on the medical direction rules
(that is, 50 percent of the full base and time units).
According to the ASA, a number of anesthesiology department heads
believe the nurse anesthesia payment rule is not appropriate to the
teaching of already-licensed physicians. They question the need for the
teaching physician to participate in the pre- and post-op anesthesia
care (to obtain full base units), they think that participation of the
teaching anesthesiologist in the key portions of the procedure is far
more important than the number of minutes present with the resident
(which is the relevant consideration under the teaching physician
policy for a single case with a resident).
Response and Final Decision
We have decided to allow teaching anesthesiologists to bill,
similarly to teaching CRNAs, for their involvement in two concurrent
cases involving residents. This will apply to anesthesia services
furnished on or after January 1, 2004.
The anesthesiologist can bill base units and actual time, based on
the amount of time the physician is present with the resident during
each of two concurrent cases. To bill base units, the physician must be
present with the resident during the pre- and post-anesthesia care
included in the base units. If the physician is not present with the
resident during the pre- and post-anesthesia care, the physician may
bill the case as a medically directed case.
The anesthesiologist must document his/her involvement in cases
with anesthesia residents. The documentation must be sufficient to
support the payment of the fee and available for review upon request.
We have revised Sec. 414.46 to incorporate this change.
F. Technical Correction
CPT Code 96155 (Health and behavior intervention, each 15
minutes,face-to-face; family (without the patient present))
This code describes a visit with a patient's family without the
patient being present and was first included in the November 1, 2001
final rule. It was incorrectly listed as an active code for which
payment could be made under the physician fee schedule. Our
longstanding payment policy is that we do not pay for visits with
family where the patient is not present. Payment for such visits is
included in the pre- and post-service work of a visit where the patient
is present. Consistent with this policy, this code is not payable under
the physician fee schedule.
Comment: A few commenters urged us to continue to list this code as
an active code under the fee schedule as they do not agree with our
policy. The commenters do not agree with our assertion that payment for
such visits is included in the pre- and post-service work of a visit
when the patient is present and believe that not covering the service
could result in diminished quality of care. One commenter disagreed
that this was a technical correction since this code is currently being
paid for under the fee schedule.
Response: As we indicated in the proposed rule, this was
erroneously listed as an active code, contrary to longstanding Medicare
policy. To be consistent with our policy, no payment may be made for
this service under Medicare, and the code will be assigned a status
indicator of ``N''.
G. Incomplete Screening Colonoscopy
Section 1834(d)(3) of the Act requires that the payment amount for
a screening colonoscopy be set at the level for a
[[Page 63225]]
diagnostic colonoscopy. We have established RVUs for an incomplete
diagnostic colonoscopy (CPT code 45378-53) However, an incomplete
screening colonoscopy (HCPCS G0105 with modifier `53' or HCPCS G0121
with modifier `53') is currently carrier priced. To make payment for
screening colonoscopy consistent with payment for a diagnostic
colonoscopy, effective January 1, 2004, Medicare will make payment for
an incomplete screening colonoscopy, HCPCS G0105 with modifier `53' and
HCPCS G0121 with modifier `53', at the same rate as an incomplete
diagnostic colonoscopy (CPT 45378-53). The Medicare carriers will no
longer manually price the practitioner payment for an incomplete
screening colonoscopy.
H. Publication Issues
Comment: Several commenters noted that section 1871 of the Act
requires a 60-day public comment period. Such period traditionally
starts with the date the proposed rule is published in the Federal
Register. However, for the Physician Fee Schedule Proposed rule, CMS
began the start of the 60-day comment period on August 8, the date the
proposal was put on display at the Federal Register, rather than August
15, the date the proposal was published in the Federal Register. The
commenters request that CMS revert to the traditional start of the
comment period, that is, the date of publication in the Federal
Register. One commenter suggested that CMS should accept electronically
submitted comments when the comment period begins earlier than the
publication date.
In addition, several commenters urged CMS to resolve the process
issues associated with publishing the proposed and final rule. They
indicated that the delayed publication of the proposed rule, combined
with missing information from addendums and impact tables, makes review
and analysis problematic. The commenters also expressed concern that
CMS has insufficient time to evaluate public comments and this is
contrary to the spirit of the Administrative Procedures Act.
Response: CMS is keenly aware of the tight time frame between
publication of the proposed and final rules. We make every effort to
respond to requests from physician specialty groups and providers to
include items in the proposed rule that affect payment levels, such as
assigning RVUs to new CPT codes and revising RVUs for existing codes.
It is difficult to both address numerous concerns and publish the
proposed rule in a timely fashion. We will continue to make every
effort to publish the proposed rule as early as possible. However,
despite the short time frame for issuing the final rule, we take the
review and analysis of comments very seriously. CMS devotes the
necessary staff resources to ensure that every comment is properly
considered.
Furthermore, the statute does not provide that the comment period
commences with publication in the Federal Register. Section 1871(b)(1)
of the Act states that before issuing a regulation in final form, ``the
Secretary shall provide for notice of the proposed regulation in the
Federal Register and a period of not less than 60 days for public
comment thereon.'' While the proposed rule did not actually appear in
the Federal Register until August 15, 2003, it was filed and went on
public display at the Federal Register several days earlier on August
8, 2003. Accordingly, the contents of the proposed rule were, in fact,
publicly available for the full 60-day comment period.
IV. Refinement of Relative Value Units for Calendar Year 2004 and
Response to Public Comments on Interim Relative Value Units for 2003
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, 2004. The tables
and discussions in this section concerning the work RVUs do not reflect
the effect of the adjustment to work RVUs to match the MEI weights as
discussed in section VI. The referenced work RVUs may differ from the
work RVUs in Addenda B and C that reflect this adjustment.
B. Process for Establishing Work Relative Value Units for the 2004
Physician Fee Schedule
Our December 31, 2002 final rule (67 FR 79966) 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 March 1, 2003. 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 December 2002
final rule and our establishment of the work RVUs for new and revised
codes for the 2004 physician fee schedule.
C. Work Relative Value Unit Refinements of Interim Relative Value Units
1. Methodology (Includes Table titled ``Work Relative Value Unit
Refinements of the 2003 Interim and Related Relative Value Units'')
Although the RVUs in the December 2002 final rule were used to
calculate 2003 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 10 CPT codes with
interim work RVUs. Only comments on codes listed in Addendum C of the
December 2002 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] One primary care clinician nominated by 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 300 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
[[Page 63226]]
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 intent of the panel process was to capture each
participant's independent judgment 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 addition, 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 December 2002
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 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 2003, but
for which we did not submit the RVUs to the panel for review for a
variety of reasons. These comments and our decisions on those RVUs
commented upon are discussed in further detail below.
The table below lists those interim codes reviewed under the
refinement panel 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] 2003 Work RVU. The work RVUs that appeared in the December
2002 rule are shown for each reviewed code.
[sbull] Requested Work RVU. This column identifies the work RVUs
requested by commenters.
[sbull] 2004 Work RVU. This column contains the final RVUs for
physician work. (These work RVUs may differ from the work RVUs in
Addenda B that reflect the adjustment to work RVUs to match the MEI
weights.)
Table 4.--Codes Reviewed Under the Refinement Panel Process
----------------------------------------------------------------------------------------------------------------
2003 work Requested 2004 work
CPT code \1\ Mod Descriptor RVU work RVU RVU
----------------------------------------------------------------------------------------------------------------
17310............................... ........... Mohs any stage 5spec each.
43219 *............................. ........... Esophagus endoscopy... 2.80 ........... 2.80
43256 *............................. ........... Uppr gi endoscopy w 4.35 ........... 4.35
stent.
44383 *............................. ........... Ileoscopy w/stent..... 2.94 ........... 2.94
45340............................... ........... Sig w/balloon dilation 1.66 1.96 1.89
51798............................... ........... Us urine capacity 0.00 0.38 0.00
measure.
75954............................... ........... Illiac aneurysm 1.36 2.93 2.25
endovas rpr.
92613............................... ........... Endoscopy swallow tst 0.00 0.99 0.71
(fees).
92615............................... ........... Eval laryngoscopy 0.00 0.88 0.63
sense test.
92617............................... ........... Interprt fees/ 0.00 1.10 0.79
laryngeal test.
----------------------------------------------------------------------------------------------------------------
\1\ All CPT codes and descriptions copyright 2003 American Medical Association. All rights are reserved and
applicable FARS/DFARS clauses apply.
* The work RVUs for these codes were revised for 2003 by CMS to finalize outstanding issues related to the five-
year review of the gastroenterology codes.
2. Interim 2003 Codes
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).
Prior to 2003, this code was reported once for all specimens over
five generated during a particular stage of Mohs surgery. Beginning in
2003, the code is 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 disagreed and assigned
a work value of 0.62 work RVUs to this code pending further
recommendations from the RUC. We believed this value was appropriate
for the new descriptor since it allows reporting of CPT code 17310 for
each specimen rather than reporting once for all specimens. It also
places this code in the correct rank with the other Mohs surgery
services, CPT codes 17304-17307, and with the codes for pathology
consultation during surgery, CPT codes 88331 and 88332.
Commenters disagreed with the rationale we had used to arrive at
the interim work value and indicated that we used inappropriate time/
intensity data and failed to include surgery work, focusing only on
pathology work. Commenters also stated that the intent of this code has
not changed and that CMS had ignored past policy which recognizes CPT
code 17310 as an add-on service and thus allows the separate billing of
services for each additional specimen beyond the first five. Based on
these comments, we referred this code to the multispecialty validation
panel for review.
[[Page 63227]]
Final decision: As a result of the statistical analysis of the 2003
multispecialty validation panel ratings, we have assigned 0.95 work
RVUs to CPT code 17310.
CPT Code 38204 Management of recipient hematopoietic progenitor
cell donor search and cell acquisition.
We disagreed with the RUC recommendation of 2.00 work RVUs for CPT
code 38204. We believed 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) and have significant concerns about how this code would be
used in actual practice. Therefore, we assigned CPT code 38204 a status
indicator of ``B,'' meaning that we will not make separate payment for
this service.
Comments: Some commenters urged us to reconsider the RUC
recommendation. In addition, the RUC submitted a comment disagreeing
with our contention that the physician work associated with this code
is included in other transplant codes. The RUC also asserted that
discussions of this issue at the RUC meetings provided substantive
information on how this code would be used.
Response: We continue to believe that the work of this service is
contained in other transplant codes and are maintaining the status
indicator of ``B.'' Therefore, we will not make separate payment for
this service.
CPT Codes 43219 Esophagoscopy, rigid or flexible; with insertion of
plastic tube or stent, 43256 Upper gastrointestinal endoscopy including
esophagus, stomach, and either the duodenum and/or jejunum as
appropriate; with transendoscopic stent placement (includes
predilation), and 44383 Ileoscopy, through stoma; with transendoscopic
stent placement (includes predilation).
As explained in the December 31, 2002 final rule, the work RVUs for
these codes were revised by CMS to finalize outstanding issues related
to the five-year review of the gastroenterology codes. For CPT code
43219, we maintained the work RVU of 2.80. Review of information
supplied by specialty societies did not provide compelling evidence
that the work RVUs should be changed. Based on a review of the
physician time data and a comparison to other stent placement codes, we
assigned 4.35 work RVUs to CPT code 43256 and 2.94 work RVUs to CPT
code 44383, in order to place these services in proper rank order to
the other stent placement codes.
Comment: Some commenters felt that we improperly intervened in
assigning work RVUs to these services albeit to correct rank order
anomalies. Based on these comments we referred these codes to the
multispecialty validation panel for review.
Response: As a result of the statistical analysis of the 2003
multispecialty validation panel ratings, we are retaining work RVUs of
2.80 for CPT code 43219, 4.35 for CPT code 43256 and 2.94 for CPT code
44383.
CPT code 45335 Sigmoidoscopy, flexible; with directed submucosal
injections any substance.
The RUC recommended work RVUs of 1.46 for CPT code 45335 based on a
comparison to CPT code 45330, with incremental work RVUs added to
reflect increased pre-, intra-, and post-service work. We disagreed
with the RUC recommendation and compared this service to the analysis
and recommendation provided by the RUC for CPT code 43201, which is
also a new submucosal injection code. Based on the increased risk of
complications (resulting in higher intra-service intensities) and the
fact that several sites are being injected instead of one, we assigned
a work RVU of 1.36 to CPT code 45335.
Comment: Some commenters expressed concern about the rejection of
the RUC recommendation for this service and believed that we had
misinterpreted the RUC findings.
Response: Upon further review and consideration of the RUC
recommendation we will accept the RUC recommended work RVU of 1.46 for
this service.
CPT Code 45340 Sigmoidoscopy, flexible; with dilation by balloon,
each stricture.
The RUC recommended a work RVU of 1.96 for this code, which
includes 1.00 RVU for the incremental work based on the need for
conscious sedation to perform this procedure. (Other flexible
sigmoidoscopies do not require conscious sedation.) In the December 31,
2002 rule we stated that we did 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 the provision of conscious sedation.
Rather, we compared the RUC recommendations for work and physician time
for other endoscopic dilation codes to the incremental times for CPT
code 45340 and assigned a work RVU of 1.66 to CPT code 45340.
Comment: Some commenters urged us to accept the RUC recommendation,
noting that our characterization of RUC recommendations on conscious
sedation was inaccurate. The commenters stated that the RUC has
concluded that there is an increase in the amount of physician work
relating to conscious sedation, but has been unable to identify a
specific numerical value for that additional increment. The RUC is in
the process of determining the universe of codes that include conscious
sedation as an inherent part of the service provided by the operating
physician to ensure these services are appropriately valued. Based on
these comments we referred this code to the multispecialty validation
panel for review.
Response: As a result of the statistical analysis of the 2003
multispecialty validation panel ratings, we have assigned 1.89 work
RVUs to CPT code 45340.
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 urology survey that
reported that this procedure is performed 75 percent of the time by the
physician and also 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 disagreed. This code is replacing a
HCPCS level two code that was assigned 0.00 work RVUs because it is
typically performed by a nurse or other clinical staff. We believed
that CPT code 51798 is, therefore, also a nonphysician service and
assigned 0.00 work RVUs to this service.
Comment: Some commenters requested that we reconsider our decision
to assign 0.00 work RVUS to this service. The commenters argued that
our reason for disagreeing with the RUC recommendation is based on a
stated belief that there is no physician work involved, not on actual
survey data as presented by the American Urological Association (AUA)
and accepted by the RUC. Commenters urged that CMS work with AUA to
review this decision or include this code as part of the multi-
specialty validation panel for refinement of work RVUs. Based on these
comments, we referred this code to the multispecialty validation panel
for review.
Response: As a result of the statistical analysis of the 2003
multispecialty validation panel ratings, we will retain 0.00 work RVUs
for CPT code 51798.
CPT Codes 58545-58554 Laproscopic hysterectomy/myonectomy
procedures.
[[Page 63228]]
We accepted the RUC recommendations for work RVUs for these
services.
Comment: Some commenters stated that new values have been
established for these services based on new survey data and that the
RUC has new recommendations for these services. In their comments on
the December 31, 2002 rule, the RUC included these new work RVU
recommendations and urged us to review these during the refinement
process.
Response: We are in agreement with the RUC recommended values for
these services. However, to provide an opportunity for public comment
we are including these in the RUC Recommendations for New and Revised
codes for 2004 (table xx) and will consider the RVUs interim for 2004.
CPT code 75954 Endovascular graft placement for repair of iliac
artery (e.g. 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 codes 75952,
Endovascular repair of infrarenal abdominal aortic anuerysm or
dissection, radiological supervision and interpretation, (work RVU of
4.5) and 75953, Placement of proximal or distal extension prosthesis
for endovascular repair of infra renal abdominal aortic aneurysm,
radiological supervision and interpretation, (work RVU of 1.36). The
recommended RVU was midway between the RVUs of the reference
procedures. We did not agree with the RUC recommendation. Based on 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) and in order to maintain correct rank order in this family of
codes, we assigned a work RVU of 1.36 to CPT code 75954.
Comment: Some commenters expressed concern about the rejection of
the RUC recommendation, particularly since the recommendation was based
on data presented by several specialty societies. The commenters stated
that the data reflected the proper rank order of this service and
indicated that physicians in those specialties that perform ileac
aneurysm endorepair may be in a better position to judge the
relationship of this code to other imaging services. Based on these
comments, we referred this code to the multispecialty validation panel
for review.
Response: As a result of the statistical analysis of the 2003
multispecialty validation panel ratings, we have assigned 2.25 work
RVUs to CPT code 75954.
CPT code 92610 Clinical Evaluation of swallowing function.
In the December 2002 final rule, this CPT code replaced HCPCS code
G0195, which had a work RVU of 1.50 in 2002. The Healthcare
Professionals Advisory Committee (HCPAC) recommendation of a work RVU
of 0.00 for CPT code 92610 was accepted by CMS.
Comment: Some commenters representing the long term care industry
expressed concern with the reduction in work for this service. The rule
provided no explanation of the HCPAC recommendation of 0.00 work RVUs
for this service and the commenters requested that this issue be
addressed.
Response: As requested by the commenters, a discussion of the HCPAC
recommendation of 0.00 work RVUS was provided as part of the
multispecialty validation panel, which was attended by the commenters.
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.
We did not accept the RUC recommendations for work RVUs for these
services (0.99 for 92613, 0.88 for 92615 and 1.10 for 92617) and
assigned each of these CPT codes a work RVU of 0.00. We stated that
these three services refer only to a separately identified physician
review and interpretation of the fiberoptic endoscopic evaluation and
that we consider this physician interpretation and report bundled into
an E/M service. We stated that the physician who does not perform the
testing should only bill for the patient when performing an E/M
service, not as the supervisor of another professional performing and
reviewing the initial fiberoptic endoscopic evaluation. The
interpretation is an integral part of the testing itself and, if a
nonphysician professional has the credentials and experience to perform
this testing, then that professional should also provide the
interpretation of the findings.
Comment: Some commenters urged us to reconsider the RVUs and
payment policies related to these services and to accept the RUC
recommendations for these codes. The commenters asserted that the
physician's detailed frame-by-frame analysis of the video recorded
procedure needed to develop the diagnosis and report following this
testing is not related to an E/M service. Rather, this is similar to
other services where there is a report and interpretation by the
physician that is separate from an E/M service. The commenters further
stated that the RUC valued each procedure code and physician
interpretation and report code separately, based on the coding
structure created by CPT. As a result, the interpretation and reporting
is separated from each test, and the RUC recommendations do not combine
the interpretation with the testing. If the code were to combine the
work of interpretation and the testing then the code descriptor would
need to be modified and work RVUs revalued. As a final point,
commenters disputed our assertion that a nonphysician professional with
the credentials and experience to perform this testing should also
provide the interpretation of the findings. Based on these comments we
referred this code to the multispecialty validation panel for review.
Response: As a result of the statistical analysis of the 2003
multispecialty validation panel ratings, we have assigned 0.71 work
RVUs to CPT code 92613; 0.63 work RVUs to CPT code 92615; 0.79 work
RVUs to CPT code 92617.
In the December 31, 2002 final rule (67 FR 79966), we also
responded to the RUC recommendations on the practice expense inputs for
the new and revised CPT codes for CY 2003. There were no comments
received on these and therefore we are finalizing our proposals.
Late RUC Recommendations
As we indicated in the August 15, 2003 proposed rule, RUC
recommendations for RVUs for 23 new CPT codes for 2003 were received
too late for incorporation in the December 31, 2002 final rule. We
proposed interim RVUs for these codes and, as with all interim values,
these were subject to comment. In their comments on the December 2002
final rule, the AMA-RUC requested that we consider their late
recommendations for these codes during refinement. Several specialties
also requested that we consider the late RUC recommendations. We had
considered addressing these as part of the refinement process, but
determined that we should follow the process used for all RUC
recommendations and solicit public comment on the valuation
[[Page 63229]]
of these services. Therefore, we are including the RVUs for codes
listed in the table below, along with the codes that are new and
revised for 2004, as interim for 2004. Following is a discussion of
those codes for which did not accept the RUC recommendation.
Table 5.--2003 Late RUC Recommendations
--------------------------------------------------------------------------------------------------------------------------------------------------------
CMS assigned RUC
CPT code \1\ Short descriptor 2003 work RVU recommendation CMS decision 2004 work RVU
--------------------------------------------------------------------------------------------------------------------------------------------------------
21030............................... Excise max/zygoma b9 3.89 4.50 Agree............................... 4.50
tumor.
21040............................... Removal of jaw bone 3.89 4.50 Agree............................... 4.50
lesion.
21742............................... Repair sternum/nuss w/o (2) (2) Agree............................... (2)
scope.
21743............................... Repair sternum/nuss w/o (2) (2) Agree............................... (2)
scope.
36511............................... Apheresis wbc............ 1.74 1.74 Agree............................... 1.74
36512............................... Apheresis rbc............ 1.74 1.74 Agree............................... 1.74
36513............................... Apheresis platelets...... 1.74 1.74 Agree............................... 1.74
36514............................... Apheresis plasma......... 1.74 1.74 Agree............................... 1.74
36515............................... Apheresis, adsorp/ 1.74 1.74 Agree............................... 1.74
reinfuse.
36516............................... Apheresis, selective..... 1.74 1.22 Agree............................... 1.22
38207 (Lab Codes)................... Cryopreserve stem cells.. (3) 0.47 Disagree............................ (4)
38210 (Lab Codes)................... T-cell depletion of (3) 0.94 Disagree............................ (4)
harvest.
38211 (Lab Codes)................... Tumor cell deplete of (3) 0.71 Disagree............................ (4)
harvest.
38212 (Lab Codes)................... Rbc depletion of harvest. (3) 0.47 Disagree............................ (4)
38213 (Lab Codes)................... Platelet deplete of (3) 0.24 Disagree............................ (4)
harvest.
38214 (Lab Codes)................... Volume deplete of harvest (3) 0.24 Disagree............................ (4)
38215 (Lab Codes)................... Harvest Stem cell (3) 0.55 Disagree............................ (4)
concentrate.
93784............................... Ambulatory BP monitoring. 0.17 0.38 Agree............................... 0.38
93786............................... Ambulatory BP recording.. 0.00 0.00 Agree............................... 0.00
93788............................... Ambulatory BP analysis... (5) 0.00 Agree............................... 0.00
93790............................... Review/report BP 0.17 0.38 Agree............................... 0.38
recording.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ All CPT codes and descriptions copyright 2003 American Medical Association. All rights are reserved and applicable FARS/DFARS clauses apply.
\2\ Carrier Priced.
\3\ Assigned Status Indicator of ``I''.
\4\ Maintain Status Indicator of ``I''.
\5\ Assigned Status Indicator of ``N''
[[Page 63230]]
Note : CPT codes 38208, 38209 and 95990 are addressed later in
this section (new and revised codes for 2004)and are also included
in table 4. Also these work RVUs may differ from the work RVUs in
Addenda B and C that reflect the adjustment to match the MEI
weights.
CPT codes 38207 Transplant preparation of hematopoietic progenitor
cells; cryopreservation and storage, 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.
We continue to have the same concerns as outlined in the December
31, 2002 final rule (67 FR 80007) with respect to moving these codes
off of the laboratory fee schedule. We are maintaining a status
indicator ``I'' for these services making them not valid for Medicare
purposes.
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.
The RUC recommendations for these codes were received too late for
inclusion in the 2003 final rule. We had established the following work
RVUs for these services during 2002 in response to a national coverage
determination: CPT code 93784-0.17 work RVUs; 93786-0.00 work RVUs;
93790-0.17 work RVUs and had indicated that CPT code 93788 was not
covered. We stated we would maintain these work RVUs until we receive a
RUC recommendation.
Comment: Some commenters urged us to consider the RUC
recommendations during the refinement process and also questioned the
noncovered status of CPT code 93788. CPT codes 93786 and 93788 are two
separate codes for the technical component and the coding format is
identical to the coding used for Holter monitoring, which also has two
codes for the TC of the service. Commenters also requested that CPT
code 93788 be listed as a covered service.
Response: We are accepting the RUC recommendation of 0.38 work RVUs
for CPT codes 93784 and 93790 and 0.00 work RVUs for CPT code 93786. We
have reviewed the issue of noncoverage of CPT code 93788 and based upon
the information provided by the commenters will recognize CPT code
93788 for coverage and payment under the physician fee schedule. We are
also accepting the RUC recommendation of 0.00 for CPT code 93788.
We received the following comments on HCPCS codes established in
the December 31, 2002 final rule.
GO262 Small intestinal imaging; intraluminal, from ligament of
Treitz to the ileocecal valve, includes physician interpretation and
report.
We created this code to describe a new diagnostic test for which we
will make separate payment under the physician fee schedule. We
assigned a work RVU of 2.12 to the code based on a comparison to the
work of other diagnostic tests and procedures that require review of
significant amounts of data.
Comment: Some commenters stated that that the time we used to
establish the work RVU was greatly underestimated and may have been
based on a misunderstanding of some of the time data contained in
published literature. Based on limited survey data of physicians
performing this procedure and comparison to the intensity of other
services, commenters recommended a work RVU of 7.80.
Response: We are deleting HCPCS code G0262 since there is a new CPT
code 91110, Gastrointestinal tract imaging, intraluminal (e.g., capsule
endoscopy), esophagus through ileum, with physician interpretation and
report, which will be used to report this service in 2004. We note that
we accepted the RUC recommendation of 3.65 work RVUs for CPT 91110. If
the commenters do not agree with the valuation of this service they may
submit comments on this issue.
GO268 Removal of impacted cerumen (one or both ears) by physician on
same date of service as audiologic function testing.
This code was created 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 noted that routine removal of
cerumen is not paid separately, because it is considered to be part of
the procedure with which it is billed (for example, audiologic function
testing). This code is to be used only in those unusual circumstances
when an employed audiologist who bills under a physician uniform
provider identifier number (UPIN) 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.
Comment: Commenters stated that creation of this G code was
problematic because there could be many other ``incident to'' services
in which a physician performs a separate medically necessary procedure,
that, if less extensive, would be considered to be included in a
nonphysician provider service. The commenters suggested that a modifier
could be used to describe this situation, avoiding the creation of a G
code.
Response: We disagree and believe that this is a unique situation
that is most appropriately handled through the use of a G code.
GO269 Placement of occlusive device into either a venous or arterial
access site, post surgical or interventional procedure (e.g., angioseal
plug, vascular plug.)
We created this code due to the inappropriate reporting of this
service with codes for such procedures as ``blood vessel repair'' and
``repair of arterial pseudoaneurysm'', and indicated that there would
be no separate payment for this service as the work, practice expense,
and malpractice risk is included in the main invasive procedure.
Comment: Commenters disagreed with the creation of this G code
because it is intended to report a service that is a required component
of another service and believed that the creation of this code may lead
to the creation of many codes for reporting inclusive procedures
separately. Some commenters suggested that the creation of
parenthetical
[[Page 63231]]
instructions in CPT to instruct that ``referenced procedures (i.e.,
blood vessel repair, repair of arterial pseudoaneurysm) would not be
appropriately reported in addition to the interventional vascular
procedure'' would address our concerns. Other commenters disagreed with
our assertion that closure devices are included in the practice expense
payment, as such devices are not typically used in every interventional
or surgical case. Commenters suggested this code be a technical
component service only and have RVUs commensurate with the cost of the
device.
Response: As we indicated in the December 31, 2002, final rule,
this code was created to address a specific concern about inappropriate
reporting of this service using such procedures as ``blood vessel
repair'' and ``repair of arterial pseudoaneurysm.'' Since this service
is considered part of the main invasive procedure, to the extent this
is typically part of the invasive procedure, it is accounted for under
the practice expense methodology. We will continue to consider this
code bundled for Medicare purposes, that is, no separate payment will
be made under the physician fee schedule.
GO272 Naso/oro gastric tube placement, requiring physician's skill and
fluoroscopic guidance (includes fluoroscopy, image documentation and
report)
We indicated we were creating this code for use until an identical
CPT code can become effective. We assigned this code a work RVU of
0.32.
Comment: Commenters disagreed with the 0.32 value assigned to this
service and recommended that we replace the work RVUs with the RUC
recommended work value for CPT code 43752.
Response: We are deleting HCPCS code G0272 and CPT code 43752,
Naso-or oro-gastric tube placement, requiring physician's skill and
fluoroscopic guidance (includes fluoroscopy, image documentation and
report), will be used to report this service.
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) and GO274
Radiopharmaceutical therapy, non-Hodgkin's lymphoma, includes
administration of radiopharmaceutical (e.g., radiolabeled antibodies)
We created G0273 to describe radionuclide scanning to determine the
biodistribution of Zevulin. We assigned 0.86 work RVUs to this code
based on a comparison to CPT code 78802, Radiopharmaceutical
localization of tumor; whole body. We established G0274 to allow
appropriate reporting of this new service and assigned a work RVU of
2.07 to this code.
Comment: Commenters urged us to reevaluate the RVUs assigned to
these codes and expressed concern that a lack of understanding about
this service has led to its inappropriate valuation. Additionally,
commenters requested that we present these codes to the AMA for
consideration by the CPT Editorial Panel and RUC.
Response: We are deleting HCPCS codes G0273 and G0274. CPT codes
79403, Radiopharmaceutical therapy, radiolabeled monoclonal antibody by
intravenous infusion, and 78802, Radiopharmaceutical localization of
tumor or distribution of radiopharmaceutical agent(s); whole body
single day imaging, will be used to report these services.
GO275 Renal artery 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, injection of dye, radiologic supervision
and interpretation and production of images (List separately in
addition to primary procedure)
We created these add-on codes to assure proper reporting of and
payment for renal and iliac angiography performed at the time of
cardiac angiography. We determined the work value of 0.25 for these two
add-on procedures by using the work values for CPT codes 75625,
Aortography, abdominal, by serialography, radiological supervision and
interpretation and 93544 Injection procedure during cardiac
catherization; for aortography and adjusting for the procedure time.
Comment: Commenters suggested that, if the true intention for the
creation of G0275 was to assure correct coding of selective renal
angiography performed in conjunction with cardiac catheterization, the
RVUs are too low and not commensurate with the work associated with
selective unilateral and/or bilateral renal angiography. However, if
CMS'' intention for G0275 is non-selective renal angiography, then this
should be stated clearly in the code descriptor. Commenters also
considered the work RVUs assigned to G0278 to be too low. If G0278 is
meant to be a selective procedure, then the work RVU should take into
consideration the selective catheterization codes (CPT codes 36425 and
36425) and associated imaging codes (CPT codes 75710 and 75716).
Response: As announced in Program Memorandum, Transmittal AB-03-
119, Change Request 2853) issued August 8, 2003, the descriptors for
these two services specify that they apply to non-selective angiography
and have been revised as follows:
GO275 Renal artery angiography, non-selective, one or both kidneys,
performed at the time of cardiac catheterization and/or coronary
angiography, includes positioning or placement of any catheter in the
abdominal aorta at or near the origins (ostia) of the renal arteries,
injection of dye, flush aortogram, production of permanent images, and
radiologic supervision and interpretation (List separately in addition
to primary procedure). and
GO278 Iliac and/or femoral artery angiography, non-selective, bilateral
or ipsilateral to catheter insertion, performed at the same time as
cardiac catheterization and/or coronary angiography, includes
positioning or placement of the catheter in the distal aorta or
ipsilateral femoral or iliac artery, inkjecton of dye, production of
permanent images, and radioogic supervision and interpretation (List
separately in addition to primary procedure). We will be retaining the
work RVU of 0.25 for these two codes.
GO279 Extracorporeal shock wave therapy; involving elbow epicondylitis
GO280 Extracorporeal shock wave therapy; involving other than elbow
epicondylitis or plantar fascitis
In the December 31, 2002 final rule we incorrectly established RVUs
for CPT code 0020T, Extracorporeal shock
[[Page 63232]]
wave therapy; involving musculoskeletal system, which is an emerging
technology code and also created two new HCPCS codes (G0279 and G0280)
with payments based on our valuation of this CPT code. In the August
15, 2003 proposed rule we also requested additional information on
these services.
Comment: Commenters on the December 2002 rule indicated that
assignment of RVUs for CPT code 0020T is contrary to national policy
established in the November 1, 2001 (66 FR 55269) final rule. They also
indicated that the assumptions used to assign RVUs to these services
were incorrect and undervalued these services.
Response: In a correction notice published May 30, 2003 (68 FR
32400) we indicated that we had incorrectly assigned RVUs to these
services and they would be carrier priced.
Comment: Commenters on the December 2002 rule expressed concern
that the G codes were not reflective of the changes in technology and
FDA approval of ESWT. Commenters also disagreed with our categorization
and portrayal of CPT 0020T as a procedure similar to other physical
therapy modalities. Commenters urged us to correct and clarify that CPT
0020T is not physical therapy service but a physician procedure and
thus should be removed from the list of codes identifying certain
designated health services.
Response: We understand that this is a changing technology and
believe the current descriptors accommodate these changes. We are
removing CPT 0020T from the list of designated health services in
Addendum F since we agree that, at this time, this service is
predominantly performed by medical specialties such as orthopedists and
podiatrists.
Comment: Commenters on the August 15, 2003 proposed rule urged us
to continue to have these services priced by the carrier and expressed
concern that our request for additional information indicated we would
be establishing national payment amounts for these services. In
addition, several physicians provided information on how this service
is used in their offices, including cost information as well as a
description of the procedure. Some commenters recommended that separate
G codes be established to differentiate between the high and low energy
levels that are currently used, as this impacts the treatment protocols
as well as the resources used in these procedures.
Response: The purpose for soliciting information in the proposed
rule was to gain a better understanding of the use of the various
systems as well as the resources involved with this procedure. We
appreciate the information the commenters provided and will continue to
review this issue to determine if coding changes are warranted. We are
retaining the current codes, G0279, G0280 and CPT code 0020T under the
fee schedule and these will continue to be carrier priced. We believe
this will enable the carriers to make appropriate payment for these
services based on resources used. In addition, as previously discussed,
we are removing CPT code 0020T from the list of designated health
services in Addendum F.
GO288 Reconstruction, computed tomographic angiography of aorta for
surgical planning for vascular surgery.
We created this code, which is a technical component code, to
assure accurate reporting of this service by independent diagnostic
testing facilities (IDTFs) that perform this service. This service
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 only 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.
Comment: Commenters requested clarification on whether this code
could be used for the treatment planning both prior to surgery as well
as for post-surgical monitoring. They also indicated that it should be
expanded to include the use of enhanced computed tomography scans or
magnetic resonance images and not just those generated by CTA. In
addition, one commenter suggested that CMS ensure that this HCPCS code
is used only for those technologies that meet the following criteria:
(1) The ability to perform precise modeling of multiple clinically-
relevant objects; (2) the ability to generate specific measurements
essential for surgical planning and follow-up; (3) built-in quality
control and self-validation capabilities; (4) FDA marketing clearance
for use in surgical planning and follow-up treatment; and (5)
conformance to standards adopted by the International Standards of
Organization (ISO).
Commenters also suggested that the payment for this code be revised
so that it is more in line with the payment for these services when
administered in the outpatient setting.
Response: We agree that this service can be used for treatment
planning prior to surgery as well as for post-surgical monitoring and
have revised the code descriptor to clarify this point. The descriptor
for this code is revised as follows:
G0288 Reconstruction, computed tomographic angiography of aorta for
preoperative planning and evaluation post vascular surgery.
However, we are not expanding this service to include the use of
enhanced computed tomography scans or magnetic resonance, as we have
not been presented with information to support its use with these other
data sources. We assume that physicians providing this service will
abide by the FDA labeling requirements for the specific equipment used.
Payment for services under the outpatient prospective payment system is
based on a different methodology than services paid under the physician
fee schedule. As required by section 1848 of the Act, payment under the
physician fee schedule is based on national relative value units based
on resources used in furnishing the service. We believe the RVUs
established for this service are reflective of the resources used, and
therefore do not believe this should be carrier priced.
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 created this add-on code to permit appropriate reporting of
arthroscopic procedures performed in different compartments of the same
knee during the same operative session. We stated that this code should
be reported only when 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. We noted that this code is
to be used when a procedure is performed in the lateral, medial, or
patellar compartments in addition to the main procedure. We assigned a
work RVU of 1.48 to this code RVUs based on a comparison to CPT codes
29874, 29877 and 29870, the base procedure for this family of codes.
Comment: Commenters appreciated our efforts to address the issue of
reimbursement for this procedure. However, they expressed concern about
the specific reference to a 15 minute time requirement. The commenters
believed that this was inappropriate because using time in this manner
[[Page 63233]]
rewards and encourages inefficient work and penalizes efficient
physicians, which ultimately has an impact on the quality of care
delivered to Medicare beneficiaries.
Response: We understand the concerns expressed by the commenters
and regret any confusion that the time reference may have created. This
reference to time was intended as a guideline to ensure that this add-
on code is used only when the procedure performed is a substantive
procedure needed to produce a significant improvement in the patient's
condition. Documentation supporting this should be reflected in the
operative note.
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 2004
(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 2004 CPT Codes)
One aspect of establishing RVUs for 2004 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
132 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). We reviewed all the RUC recommendations. We accepted
approximately 95 percent and we disagreed with approximately 5 percent
of 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.
We received 2 recommendations from the HCPAC. We agreed with both
of the HCPAC recommendations.
Table 5, titled ``AMA RUC and HCPAC Recommendations and CMS
Decisions for New and Revised 2004 CPT Codes'', lists the new or
revised CPT codes, and their associated work RVUs, that will be interim
in 2004. This table includes the following information:
[sbull] A ``'' identifies a new code for 2004.
[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] 2004 Work RVUs. This column establishes the 2004 work RVUs
for physician work. These work RVUs may differ from the work RVUs in
Addenda B and C that reflect the adjustments to work RVUs to match the
MEI weights.
Table 6.--AMA RUC and HCPAC Recommendations and CMS Decisions for New and Revised 2004 CPT Codes
----------------------------------------------------------------------------------------------------------------
RUC HCPAC 2004 work
* CPT code Mod Description recommendation recommendation CMS decision RVU
----------------------------------------------------------------------------------------------------------------
20982.... ........... Ablate, bone 7.27 .............. Agree........... 7.27
tumor(s) perq.
21685.... ........... Hyoid myotomy & 13.00 .............. Agree........... 13.00
suspension.
22532.... ........... Lat thorax spine 24.00 .............. Agree........... 24.00
fusion.
22533.... ........... Lat lumbar spine 23.12 .............. Agree........... 23.12
fusion.
22534.... ........... Lat thor/lumb, 6.00 .............. Agree........... 6.00
add'l seg.
31622............. ........... Dx bronchoscope/ 2.78 .............. Agree........... 2.78
wash.
31623............. ........... Dx bronchoscope/ 2.88 .............. Agree........... 2.88
brush.
31624............. ........... Dx bronchoscope/ 2.88 .............. Agree........... 2.88
lavage.
31625............. ........... Bronchoscopy w/ 3.37 .............. Agree........... 3.37
biopsy (s).
31628............. ........... Bronchoscopy/ 3.81 .............. Agree........... 3.81
lung bx, each.
31629............. ........... Bronchoscopy/ 4.10 .............. Agree........... 4.10
needle bx, each.
31630............. ........... Bronchoscopy 3.82 .............. Agree........... 3.82
dilate/fx repr.
31631............. ........... Bronchoscopy, 4.37 .............. Agree........... 4.37
dilate w/stent.
31632.... ........... Bronchoscopy/ 1.03 .............. Agree........... 1.03
lung bx, add'l.
31633.... ........... Bronchoscopy/ 1.32 .............. Agree........... 1.32
needle bx add'l.
31635............. ........... Bronchoscopy w/ 3.68 .............. Agree........... 3.68
fb removal.
31640............. ........... Bronchoscopy w/ 4.94 .............. Agree........... 4.94
tumor excise.
33310............. ........... Exploratory 18.51 .............. Agree........... 18.51
heart surgery.
33315............. ........... Exploratory 22.37 .............. Agree.......... 22.37
heart surgery.
34805.... ........... Endovasc abdo 21.88 .............. Agree........... 21.88
repair w/pros.
35510.... ........... Artery bypass 23.00 .............. Agree........... 23.00
graft.
35512.... ........... Artery bypass 22.50 .............. Agree........... 22.50
graft.
35522.... ........... Artery bypass 21.76 .............. Agree........... 21.76
graft.
35525.... ........... Artery bypass 20.63 .............. Agree........... 20.63
graft.
35697.... ........... Reimplant artery 3.00 .............. Agree........... 3.00
each.
[[Page 63234]]
36555.... ........... Insert non- 2.68 .............. Agree........... 2.68
tunnel cv cath.
36556.... ........... Insert non- 2.50 .............. Agree........... 2.50
tunnel cv cath.
36557.... ........... Insert tunneled 5.10 .............. Agree........... 5.10
cv cath.
36558.... ........... Insert tunneled 4.80 .............. Agree........... 4.80
cv cath.
36560.... ........... Insert tunneled 6.25 .............. Agree........... 6.25
cv cath.
36561.... ........... Insert tunneled 6.00 .............. Agree........... 6.00
cv cath.
36563.... ........... Insert tunneled 6.20 .............. Agree........... 6.20
cv cath.
36565.... ........... Insert tunneled 6.00 .............. Agree........... 6.00
cv cath.
36566.... ........... Insert tunneled 6.50 .............. Agree........... 6.50
cv cath.
36568.... ........... Insert tunneled 1.92 .............. Agree........... 1.92
cv cath.
36569.... ........... Insert tunneled 1.82 .............. Agree........... 1.82
cv cath.
36570.... ........... Insert tunneled 5.32 .............. Agree........... 5.32
cv cath.
36571.... ........... Insert tunneled 5.30 .............. Agree........... 5.30
cv cath.
36575.... ........... Repair tunneled 0.67 .............. Agree........... 0.67
cv cath.
36576.... ........... Repair tunneled 3.19 .............. Agree........... 3.19
cv cath.
36578.... ........... Repair tunneled 3.50 .............. Agree........... 3.50
cv cath.
36580.... ........... Replace tunneled 1.31 .............. Agree........... 1.31
cv cath.
36581.... ........... Replace tunneled 3.44 .............. Agree........... 3.44
cv cath.
36582.... ........... Replace tunneled 5.20 .............. Agree........... 5.20
cv cath.
36583.... ........... Replace tunneled 5.25 .............. Agree........... 5.25
cv cath.
36584.... ........... Replace tunneled 1.20 .............. Agree........... 1.20
cv cath.
36585.... ........... Replace tunneled 4.80 .............. Agree........... 4.80
cv cath.
36589.... ........... Removal tunneled 2.27 .............. Agree........... 2.27
cv cath.
36590.... ........... Removal tunneled 3.30 .............. Agree........... 3.30
cv cath.
36595.... ........... Mech remov 3.60 .............. Agree........... 3.60
tunneled cv
cath.
36596.... ........... Mech remov 0.75 .............. Agree........... 0.75
tunneled cv
cath.
36597.... ........... Repositoin 1.21 .............. Agree........... 1.21
venous catheter.
36838.... ........... Dist revas 20.63 .............. Agree........... 20.63
ligation, hemo.
37765.... ........... Phleb veins-- 7.35 .............. Agree........... 7.35
extrem--to 20.
37766.... ........... Phleb veins-- 9.30 .............. Agree........... 9.30
extrem 20 +.
37785............. ........... Ligate/divide/ 3.84 .............. Agree........... 3.84
excise vein.
38208............. ........... Thaw preserved 0.56 .............. Disagree........ 0.00
stem cells.
38209............. ........... Wash harvest 0.24 .............. Disagree........ 0.00
stem cells.
43235............. ........... Uppr gi 2.39 .............. Agree........... 2.39
endoscopy,
diagnosis.
43237.... ........... Endoscopic us 3.99 .............. Agree........... 3.99
exam, esoph.
43238.... ........... Uppr gi 5.03 .............. Agree........... 5.03
endoscopy w/us
fn bx.
43242............. ........... Uppr gi 7.31 .............. Agree........... 7.31
endoscopy w/us
fn bx.
43259............. ........... Endoscopic 5.20 .............. Agree........... 5.20
ultrasound exam.
43752............. ........... Nasal/orogastric 0.82 .............. Disagree........ 0.68
w/stent.
47133............. ........... Removal of donor [dagger] .............. Agree........... [dagger]
liver.
47140.... ........... Partial removal, 55.00 .............. Agree........... 55.00
donor liver.
47141.... ........... Partial removal, 67.50 .............. Agree........... 67.50
donor liver.
47142.... ........... Partial removal, 75.00 .............. Agree........... 75.00
donor liver.
53500.... ........... Urethrlys, 12.21 .............. Agree........... 12.21
transvag w/
scope.
57425.... ........... Laparoscopy, 15.75 .............. Agree........... 15.75
surg, colpopexy.
58545............. ........... Laparoscopic 14.21 .............. Agree........... 14.21
myomectomy.
58546............. ........... Laparo- 19.00 .............. Agree........... 19.00
myomectomy,
complex.
58550............. ........... Laparo-asst vag 14.19 .............. Agree........... 14.19
hysterectomy.
58552............. ........... Laparo-vag hyst 16.00 .............. Agree........... 16.00
incl t/o.
58553............. ........... Laparo-vag hyst, 20.00 .............. Agree........... 20.00
complex.
58554............. ........... Laparo-vag hyst 22.00 .............. Agree........... 22.00
w/t/o, compl.
59070.... ........... Transabdom 5.25 .............. Agree........... 5.25
amnioinfus w/us.
59072.... ........... Umbilical cord 9.00 .............. Agree........... 9.00
occlud w/us.
59074.... ........... Fetal fluid 5.25 .............. Agree........... 5.25
drainage w/us.
59076.... ........... Fetal shunt 9.00 .............. Agree........... 9.00
placement, w/us.
59897.... [dagger] Fetal invas px w/ [dagger] .............. Agree........... [dagger]
us.
61537.... ........... Removal of brain 25.00 .............. Agree........... 25.00
tissue.
61538............. ........... Removal of brain 26.81 .............. Agree........... 26.81
tissue.
61539............. ........... Removal of brain 32.08 .............. Agree........... 32.08
tissue.
61540.... ........... Removal of brain 30.00 .............. Agree........... 30.00
tissue.
61543............. ........... Removal of brain 29.22 .............. Agree........... 29.22
tissue.
61566.... ........... Removal of brain 31.00 .............. Agree........... 31.00
tissue.
61567.... ........... Incision of 35.50 .............. Agree........... 35.50
brain tissue.
61863.... ........... Implant 19.00 .............. Disagree........ 13.92
neuroelectrode.
61864.... ........... Implant 4.50 .............. Agree........... 4.50
neuroelectrode,
add'l.
61867.... ........... Implant 31.34 .............. Disagree........ 22.96
neuroelectrode.
61868.... ........... Implant 7.92 .............. Agree........... 7.92
neuroelectrde,
add'l.
63101.... ........... Removal of 32.00 .............. Agree........... 32.00
vertebral boby.
63102.... ........... Removal of 32.00 .............. Agree........... 32.00
vertebral body.
[[Page 63235]]
63103.... ........... Removal 5.00 .............. Disagree........ 3.90
vertebral body
add-on.
64449.... ........... N block inj, 3.00 .............. Agree........... 3.00
lumbar plexus.
64517.... ........... N block inj, 2.20 .............. Agree........... 2.20
hypogas plxs.
64680............. ........... Injection 2.62 .............. Agree........... 2.62
treatment of
nerve.
64681.... ........... Injection 3.55 .............. Agree........... 3.55
treatment of
nerve.
65780.... ........... Ocular reconst, 10.25 .............. Agree........... 10.25
transplant.
65781.... ........... Ocular reconst, 17.67 .............. Agree........... 17.67
transplant.
65782.... ........... Ocular reconst, 15.00 .............. Agree........... 15.00
transplant.
67912.... ........... Correction 5.68 .............. Agree........... 5.68
eyelid w/
implant.
68371.... ........... Harvest eye 4.90 .............. Agree........... 4.90
tissue,
alograft.
70557.... ........... Mri brain w/o 2.90 .............. Agree........... 2.90
dye.
70558.... ........... Mri brain w/dye. 3.20 .............. Agree........... 3.20
70559.... ........... Mri brain w/o & 3.20 .............. Agree........... 3.20
w/dye.
75901............. ........... Remove cva 0.49 .............. Agree........... 0.49
device obstruct.
75902............. ........... Remove cva lumen 0.39 .............. Agree........... 0.39
obstruct.
75998.... ........... Fluoroguide for 0.38 .............. Agree........... 0.38
vein device.
76082.... ........... Computer 0.06 .............. Agree........... 0.06
mammogram add-
on.
76083.... ........... Computer 0.06 .............. Agree........... 0.06
mammogram add-
on.
76514.... ........... Echo exam of 0.17 .............. Agree........... 0.17
eye, thickness.
76937.... ........... Us guide, 0.30 .............. Agree........... 0.30
vascular access.
78800............. ........... Tumor imaging, 0.66 .............. Agree........... 0.66
limited area.
78801............. ........... Tumor imaging, 0.79 .............. Agree........... 0.79
mult areas.
78802............. ........... Tumor imaging, 0.86 .............. Agree........... 0.86
whole body.
78803............. ........... Tumor imaging 1.09 .............. Agree........... 1.09
(3D).
78804.... ........... Tumor imaging, 1.07 .............. Agree........... 1.07
whole body.
79100............. ........... Repeat 1.32 .............. Agree........... 1.32
hyperthyroid
therapy.
79400............. ........... Nonhemato 1.96 .............. Agree........... 1.96
nuclear therapy.
79403.... ........... Hematopoetic 2.25 .............. Agree........... 2.25
nuclear therapy.
85396.... ........... Clotting assay, 0.37 .............. Agree........... 0.37
whole blood.
88112.... ........... Cytopath, cell 1.18 .............. Agree........... 1.18
enhance blood.
88342............. ........... Immunohistochemi 0.85 .............. Agree........... 0.85
stry.
88358............. ........... Analysis, tumor. 0.95 .............. Agree........... 0.95
88361.... ........... Immunohistochemi 0.94 .............. Agree........... 0.94
stry, tumor.
91110.... ........... Gi tract capsule 3.65 .............. Agree........... 3.65
endoscopy.
95990............. ........... Spin/brain pump 0.00 .............. Agree........... 0.00
refil & main.
95991.... ........... Spin/brain pump 0.77 .............. Agree........... 0.77
refil & main.
96110............. ........... Developmental 0.00 .............. Agree........... 0.00
test, lim.
96111............. ........... Developmental 2.60 .............. Agree........... 2.60
test, extend.
97537............. ........... Community/Work .............. 0.45 Agree........... 0.45
reintegration.
97755.... ........... Assistive .............. 0.62 Agree........... 0.62
technology
assess.
----------------------------------------------------------------------------------------------------------------
(a) No Final RUC recommendation provided.
New CPT codes.
* All CPT codes copyright 2004 American Medical Association.
[dagger] Carrier.
Table 6, which is titled ``AMA RUC ANESTHESIA RECOMMENDATIONS AND
CMS DECISIONS FOR NEW AND REVISED 2004 CPT CODES'', lists the new or
revised CPT codes for anesthesia and their base units that will be
interim in 2004. 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] 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] 2004 Base Units. This column establishes the 2004 base
units for these services.
Table 7.--AMA RUC ANESTHSIA RECOMMENDATIONS AND CMS DECISIONS FOR NEW AND REVISED CPT CODES
----------------------------------------------------------------------------------------------------------------
RUC 2003 base
* CPT code Description recommendation CMS decision units
----------------------------------------------------------------------------------------------------------------
00529.................... ANESTH, CHEST 11 Agree.................... 11
PARTITION VIEW.
01173.................... ANESTH, FX REPAIR, 12 Agree.................... 12
PELVIS.
[[Page 63236]]
01958.................... ANESTH, ANTEPARTUM 5 Agree.................... 5
MANIPUL.
----------------------------------------------------------------------------------------------------------------
*All CPT codes copyright 2004 American Medical Association.
New CPT code.
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.
CPT code 43752 Naso- or oro-gastric tube placement, requiring
physician's skill and fluoroscopic guidance (includes fluoroscopy,
image documentation and report)
The RUC recommended a work RVU of 0.82 for this service based on a
comparison of this procedure to CPT code 44500. While we agree that CPT
code 43752 is similar in work intensity to CPT code 44500, we feel the
intra-service time is more appropriately valued at the 25th percentile
(15 minutes of intra-service time vs. 20 minutes of intra-service
time). This reduces the total time associated with CPT code 43752 from
30 minutes to 25 minutes. We applied the ratio of the RUC recommended
value of 0.82 work RVU over 30 minutes to the revised intra-service
time of 25 minutes to assign 0.68 interim work RVUs for CPT code 43752.
CPT code 63103 Vertebral corpectomy (vertebral body resection),
partial or complete, lateral extracavitary approach with decompression
of spinal cord and/or nerve root(s) (e.g., for tumor or retropulsed
bone fragments); thoracic or lumbar, each additional segment. (List
separately in addition to code for primary procedure)
The RUC recommended a work RVU of 5.00 for this service based on a
comparison of this procedure to CPT code 63088. It was unclear from the
clinical vignettes supplied by the specialty society whether the
additional corpectomy would more commonly involve the lumbar or the
thoracic region of the spine. There is a significant difference in work
intensity associated with the resection of an additional corpus in the
thoracic region as opposed to the lumbar region. For this reason we
applied the ratio of the reference service (CPT code 63088) to its
primary service (CPT code 63087) to CPT code 63101 (primary service
associated with CPT 63103) to assign 3.90 interim work RVUs for CPT
code 63103.
CPT code 61863 Twist drill, burr hole, craniotomy, or craniectomy
with stereotactic implantation of neurostimulator electrode array in
subcortical site (e.g., thalamus, globus pallidus, subthalamic nucleus,
periventricular, periaqueductal gray), without use of intraoperative
microelectrode recording; first array and CPT code 61867 Twist drill,
burr hole, craniotomy, or craniectomy with stereotactic implantation of
neurostimulator electrode array in subcortical site (e.g., thalamus,
globus pallidus, subthalamic nucleus, periventricular, periaqueductal
gray), with use of intraoperative microelectrode recording; first array
The RUC recommended a work RVU of 19.00 for CPT code 61863 and
31.34 work RVUs for CPT code 61867. These two new CPT codes replace
existing CPT code 61862 (work RVU=19.34). Although we agree with the
relative relationship established by the RUC for these services, in
order to retain budget neutrality, we adjusted the RUC recommended
values. Thus, the recommended values were adjusted in order that the
total relative values remain constant before and after the inclusion of
the new CPT codes.
We assigned 13.92 work RVUs to CPT code 61863 and 22.96 work RVUs
to CPT code 61867.
CPT code 38208 Transplant preparation of hematopoietic progenitor
cells; thawing of previously frozen harvest, without washing and CPT
code 38209 Transplant preparation of hematopoietic progenitor cells;
thawing of previously frozen harvest, with washing
We continue to have the same concerns as outlined in the December
31, 2002 final rule (67 FR 80007) with respect to moving these codes
from the laboratory fee schedule and thus establishing relative values
under the physician fee schedule. We are maintaining a status indicator
``I'' for these services, making them not valid for payment under the
Medicare Physician Fee Schedule.
CPT code 96111 Developmental testing extended (includes assessment
of motor, language, social, adaptive, and/or cognitive functioning by
standardized developmental instruments, eg Bayley Scales of Infant
Development) with interpretation and report, per hour
Although we agree with the RUC recommended work RVU of 2.60 for CPT
code 96111, we note that the tests under this code will no longer be
paid on a per hour basis. That is, total payment for the services under
CPT code 96111 is based on one hour of provision of the tests. It is
our understanding that these tests can be completed typically in one
hour. That is, some of the tests can be administered in less than one
hour and some may require a little more than one hour, so that the
average time for all of the tests works out to be one hour. Therefore,
regardless of the total number of hours it takes to complete the
services under CPT code 96111 or whether the services are split up and
spread over a number of days, payment will be made for 96111 based on
only one unit/hour at 2.6 RVUs.
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 2004.
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.
[[Page 63237]]
The RUC recommendations on the practice expense inputs for the new
and revised 2004 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, almost 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 2004 CPT Codes.''
We made the following minor changes to the inputs where relevant:
[sbull] We deleted the 3-minute phone calls in the post service
period to conform to our established standard for all codes with 10 and
90-day global periods.
[sbull] We also deleted equipment when individual items did not
meet the minimum $500 requirement.
[sbull] We deleted certain equipment items that represent indirect,
rather than direct costs, including lead shielding, lead lined
radioactive waste box and lead-lined sharps box.
[sbull] We deleted the L-Block table shield because it is included
in the price and description of the dose calibrator, another CPEP
equipment item.
[sbull] We made minor changes to clinical labor and supplies, for
several central venous access (CVA) codes in order to bring uniformity
to this new family of codes.
[sbull] We assigned, on an interim basis, the clinical labor RN
designation for CPT code 95991, physician administered refilling and
maintenance of spinal or brain implantable pump, until the PEAC has an
opportunity to review the necessity for this clinical assignment.
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 (the
``Code List'') 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. The last update of
the Code List was included in the December 31, 2002 physician fee
schedule final rule in Addendum E and was subsequently corrected in a
notice that was published in the Federal Register (68 FR 32400) on May
30, 2003.
The updated all-inclusive Code List effective January 1, 2004 is
presented in Addendum F in this final rule. We intend to publish
annually the all-inclusive Code List in an addendum to the physician
fee schedule final rule. The updated all-inclusive Code List will also
be available on our Web site at http://www.cms.hhs.gov/medlearn/refphys.asp
.
B. Response to Comments
We received public comments on three issues relating to the most
recent Code List. The comments and our responses are stated below.
Comment: One commenter noted that we added three new ``Q'' codes
(Q3021, Q3022, and Q3023) for hepatitis B vaccines. Program Memorandum
AB-02-185 issued on December 31, 2002 deleted these HCPCS codes.
However, the Program Memorandum also reactivated the following CPT
codes for hepatitis B vaccine: 90740, 90743, 90744, 90746 and 90747.
Response: The commenter is correct. We erred in adding the ``Q''
codes to the list of services that may qualify for an exception under
42 CFR 411.355(h) concerning exceptions for preventive screening tests,
immunizations, and vaccines. This was corrected in the correction
notice published on May 30, 2003 (68 FR 32400).
Comment: Some commenters objected to the addition of CPT code 0020T
(Extracorporeal shock wave therapy; involving plantar fascia) to the
list of physical therapy services for purposes of the physician self-
referral prohibition. The commenters stated that CPT 0020T is currently
a physician service involving anesthesia and therefore, should not be
characterized as a physical therapy service.
Response: We agree with the commenters and have removed CPT code
0020T from the list of designated health services. Further discussion
of this comment and response is included in section IV.C.2 of this
preamble concerning the HCPCS codes G0279 and G0280 relating to
extracorporeal shock wave therapy.
Comment: One commenter noted that the annual Code List update does
not include codes for the following designated health services: Durable
medical equipment and supplies; parenteral and enteral nutrients,
equipment and supplies; prosthetics, orthotics and prothestic devices
and supplies; home health services; outpatient prescription drugs; and
inpatient and outpatient hospital services. The commenter recommended
that we include the CPT and HCPCS codes for these designated health
services in the annual update and in the quarterly updated Microsoft
Excel spreadsheet of RVU values, global periods and supervision levels
for Medicare covered-services posted on the CMS Web site.
Alternatively, the commenter requested that we clarify that the Code
List is not exhaustive and indicate where providers can obtain more
information on the remaining categories.
Response: As explained in the January 4, 2001 final rule with
comment (66 FR 923), we believe that the regulatory definitions of the
designated health services at issue are sufficiently clear to permit
entities and physicians to identify them readily. Moreover, some of
these designated health services are not amenable to definition solely
through codes. Regardless, to define these services through codes or to
change the frequency of the Code List update would require a change in
the text of the regulatory definitions for the various designated
health services found in Sec. 411.351. The purpose of this Code List
is simply to make those ministerial changes necessary to conform the
Code List to the current CPT and HCPCS code publications. Making
substantive changes to the regulatory definitions is beyond the scope
of this update and cannot be accomplished without first proposing
[[Page 63238]]
the changes in a Notice of Proposed Rulemaking. Lastly, we cannot
accept the commenter's suggestion that we explain that the Code List is
not exhaustive because such a statement is false. The Code List is
exhaustive with respect to the specific designated health services that
it defines, and for the reasons noted above, we are not defining the
remaining designated health services through codes.
C. Revisions Effective for 2004
Tables 7 and 8, below, identify the additions and deletions,
respectively, to the comprehensive Code List last published in Addendum
E of the December 2002 physician fee schedule final rule and
subsequently corrected in the May 30, 2003 correction notice (68 FR
32400). Tables 7 and 8 also identify the additions and deletions 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
Tables 8 and 9 below, if we receive them by the date specified in the
DATES section of this final rule.
Table 8.--Additions to the Physician Self-Referral HCPCS/CPT \1\ Codes
------------------------------------------------------------------------
------------------------------------------------------------------------
Clinical Laboratory Services
0058T.................................. Cryopreservation, ovary tiss.
0059T.................................. Cryopreservation, oocyte.
G0027.................................. Semen analysis.
G0306.................................. CBC/diffwbc w/o platelet.
G0307.................................. CBC without platelet.
G0328.................................. Fecal blood scrn immunoassay.
----------------------------------------
Physical Therapy, Occupational Therapy, and Speech-Language Pathology
Services
------------------------------------------------------------------------
97755.................................. Assistive technology assess.
----------------------------------------
Radiology and Certain Other Imaging Services
------------------------------------------------------------------------
72198.................................. Mr angio pelvis w/o & w/dye.
76082.................................. Computer mammogram add-on.
76083.................................. Computer mammogram add-on.
76514.................................. Echo exam of eye, thickness.
91110.................................. Gi tract capsule endoscopy.
----------------------------------------
Radiation Therapy Services and Supplies
------------------------------------------------------------------------
G0173.................................. Stereo radiosurgery, complete.
G0251.................................. Linear acc based stero radio.
G0338.................................. Linear accelerator stero pln.
G0339.................................. Robot lin-radsurg com, first.
G0340.................................. Robt lin-radsurg fractx 2-5.
----------------------------------------
Drugs Used by Patients Undergoing Dialysis
------------------------------------------------------------------------
Q4054.................................. Darbepoetin alfa, esrd use.
----------------------------------------
Q4055.................................. Epoetin alfa, esrd use.
----------------------------------------
Preventive Screening Tests, Immunizations and Vaccines
------------------------------------------------------------------------
76083.................................. Computer mammogram add-on.
90655.................................. Flu vaccine, 6-35 mo, im.
------------------------------------------------------------------------
\1\ CPT codes and descriptions only are copyright 2003 American Medical
Association. All rights are reserved and applicable FARS/DFARS clauses
apply.
Table 9.--Deletions to the Physician Self-Referral HCPCS/CPT \1\ Codes
------------------------------------------------------------------------
------------------------------------------------------------------------
Physical Therapy, Occupational Therapy, and Speech-Language Pathology
Services
------------------------------------------------------------------------
0020T.................................. Extracorp shock wave tx, ft.
----------------------------------------
Q0086.................................. Physical therapy evaluation.
----------------------------------------
Radiology and Certain Other Imaging Services
------------------------------------------------------------------------
76085.................................. Computer mammogram add-on.
76831.................................. Echo exam, uterus.
G0236.................................. Digital film conv.
GO262.................................. Sm intestinal image capsule.
----------------------------------------
Radiation Therapy Services and Supplies
------------------------------------------------------------------------
G0274.................................. Radiopharm tx, non-Hodgkins.
----------------------------------------
Drugs Used by Patients Undergoing Dialysis
------------------------------------------------------------------------
Q9920.................................. Epoetin with hct < = 20.
Q9921.................................. Epoetin with hct = 21.
Q9922.................................. Epoetin with hct = 22.
Q9923.................................. Epoetin with hct = 23.
Q9924.................................. Epoetin with hct = 24.
Q9925.................................. Epoetin with hct = 25.
Q9926.................................. Epoetin with hct = 26.
Q9927.................................. Epoetin with hct = 27.
Q9928.................................. Epoetin with hct = 28.
Q9929.................................. Epoetin with hct = 29.
Q9930.................................. Epoetin with hct = 30.
Q9931.................................. Epoetin with hct = 31.
Q9932.................................. Epoetin with hct = 32.
Q9933.................................. Epoetin with hct = 33.
Q9934.................................. Epoetin with hct = 34.
Q9935.................................. Epoetin with hct = 35.
Q9936.................................. Epoetin with hct = 36.
Q9937.................................. Epoetin with hct = 37.
Q9938.................................. Epoetin with hct = 38.
Q9939.................................. Epoetin with hct = 39.
Q9940.................................. Epoetin with hct =
40.
----------------------------------------
Preventive Screening Tests, Immunizations and Vaccines
------------------------------------------------------------------------
76085.................................. Computer mammogram add-on.
90659.................................. Flu vacine, whole, im.
------------------------------------------------------------------------
\1\ CPT codes and descriptions only are copyright 2003 American Medical
Association. All rights are reserved and applicable FARS/DFARS clauses
apply.
The additions specified in Table 8 generally reflect new CPT and
HCPCS codes that become effective January 1, 2004 or that became
effective since our last update. It also reflects the addition of codes
recently recognized by Medicare for payment purposes.
Additionally, we are adding two G-codes (G0173, ``Stereo
radiosurgery, complete'' and G0251, ``Linear acc based stero radio'')
to the category of radiation therapy services and supplies. These codes
became effective for Medicare payment purposes in August 2000 and July
2002, respectively and should have been reflected in previous Code
Lists.
Table 8 also reflects the addition of 2 new HCPCS codes (Q4054 and
Q4055) 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 X also reflects the addition of a screening
mammography code (CPT 76083) and a flu vaccine code (CPT 90655) 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 services if they meet the
conditions set forth in Sec. 411.355(h) concerning the exception for
preventive screening tests, immunizations, and vaccines.
Table 8 reflects the deletions necessary to conform the Code List
to the most recent publications of CPT and HCPCS codes, as well as
additional deletions that we have determined are necessary as described
below.
Under the category of physical therapy, occupational therapy and
speech-language pathology services, we are removing CPT code 0020T,
extracorporeal shock wave therapy for plantar fascia consistent with
the response to the comment discussed in section IV.C.2 and VI.B of
this preamble.
Under the category of radiology and certain other imaging services,
we are deleting CPT code 76831 for an echo exam of the uterus. This
code should never have appeared on the Code List.
[[Page 63239]]
Our definition of ``radiology and certain other imaging services'' at
Sec. 411.351 specifically excludes any x-ray, fluoroscopy or
ultrasonic procedure that requires ``the insertion of a needle,
catheter, tube, or probe''. The type of procedure described by CPT code
76831 involves infusion tubing and should be removed from the Code
List.
Under the category of radiation therapy services and supplies, we
are removing HCPCS code G0274 for radiopharmaceutical therapy for non-
Hodgkin's lymphoma because it is a nuclear medicine service. Our
definition of ``radiation therapy services and supplies'' at Sec.
411.351 specifically excludes nuclear medicine procedures. Thus, HCPCS
code G0274 should never have appeared on the Code List.
VI. Physician Fee Schedule Update for Calendar Year 2004
A. Physician Fee Schedule Update
The physician fee schedule update is determined using a formula
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 (UAF). For CY 2004, the MEI is equal to 2.9 percent
(1.029). The UAF is -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 2004. Thus, the product of the MEI (1.029), the UAF (0.930), and
the statutory adjustment factor (0.998) equals the CY 2004 update of -
4.5 percent (0.9551).
The negative physician fee schedule update occurs under a mandatory
statutory formula. The law gives us no alternative to reducing the
physician fee schedule rates. Only Congress can change the law and
avert a reduction in 2004 physician fee schedule rates. Without a
congressional act to change the law, the Department is compelled to
announce a physician fee schedule update for CY 2004 of -4.5 percent.
The Department's calculations are explained below.
B. Rebasing and Revising of the Medicare Economic Index
1. Background
The Medicare Economic Index (MEI) is required by section 1842(b)(3)
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 a higher level is justified by year-to-year
economic changes.
Beginning July 1, 1975, and continuing through today, the MEI has
met this requirement by reflecting the weighted sum of the annual price
changes of the inputs used to produce physicians' services. As such,
the MEI attempts to be an equitable measure of price changes associated
with physician time and operating expenses.
The current form of the MEI was detailed in the November 25, 1992
Federal Register (57 FR 55896) and was based in part on the
recommendations of a Congressionally-mandated meeting of experts held
in March 1987. Since that time, the structure of the MEI has remained
essentially unchanged, with two exceptions. First, the MEI was rebased
in 1998 (63 FR 58845), which moved the cost structure of the index from
1992 data to 1996 data. Second, the methodology for adjusting for
productivity was revised in 2002 (67 FR 80019) to reflect the
percentage change in the 10-year moving average of economy-wide
multifactor productivity.
We are rebasing and revising the MEI for the 2004 physician fee
schedule update. The terms ``rebasing'' and ``revising'', while often
used interchangeably, actually denote different activities. Rebasing
means moving the base year for the structure of costs of an input price
index, while revising means changing data sources, cost categories, or
price proxies used in the input price index. As is always the case with
a rebasing and revising exercise, we have attempted to use the most
recently available, relevant, and appropriate information to develop
the MEI cost category weights and price proxies. We detail below the
updated cost weights for the MEI expense categories, our rationale for
selecting the price proxies in the MEI, and the results of rebasing and
revising the MEI.
2. Use of More Current Data
The MEI was last rebased and revised in 1998 for the 1999 physician
fee schedule update (63 FR 58845). The base year for that version of
the MEI was 1996, which means that the cost weights in the index
reflect physicians' expenses in 1996. However, we believe it is
desirable to periodically rebase and revise the index so that the
expense shares and price proxies reflect more current conditions. For
this reason, we are rebasing the MEI to reflect physicians' expenses in
2000. In addition, we are revising the cost categories in the MEI and
changing three of the proxies we currently use to ensure that the index
is appropriately reflecting price changes. We will continue to adjust
the MEI using economy-wide multifactor productivity.
The expense categories in the rebased and revised MEI were
primarily derived from the 2003 AMA Physician Socioeconomic
Characteristics publication (2003 Patient Care Physician Survey data),
which measures physicians' earnings and overall practice expenses for
2000. The AMA data were used to determine expenditure weights for total
expenses, physicians' earnings, and malpractice expenses, the only
information detailed in this survey. To further disaggregate the
weights into subcategories reflecting more detailed expenses, we used
data from previous AMA surveys, the 1997 Bureau of Economic Analysis
Benchmark Input-Output table (I/O), the 2003 Bureau of Labor Statistics
(BLS) Employment Cost Index (ECI), and the 2002 Bureau of the Census
Current Population Survey (CPS).
3. Rebasing and Revising Expense Categories in the MEI
a. Developing the Weights for Use in the MEI
Developing a rebased and revised MEI requires selecting a base year
and determining the number and composition of expense categories and
their associated price proxies. We are rebasing the MEI to CY 2000. CY
2000 was chosen as the base year for two main reasons: (1) CY 2000 was
the most recent year for which data were available from the AMA, and
(2) we believed that the CY 2000 data were representative of the
changing distribution of physicians' earnings and practice expenses
over time.
Comment: One commenter suggested that we update the weights in the
MEI to a more recent base year, possibly CY 2004. While the commenter
agreed with us that there is a lack of data to do so, the commenter
suggested using the price change in each of the proxies to estimate
weights for 2004 as an alternative to 2000 data.
Response: We selected CY 2000 as the base year for two reasons: (1)
CY 2000 data were the most recent data available from the AMA, and (2)
we felt the CY 2000 data were representative of the changing
distribution of physician earnings and practice expenses over time. We
do not expect that the experience of the past 3 or 4 years would have a
significant impact on the MEI for the CY 2004 update, particularly
since changing the weights from 1996 to 2000 had such a minimal effect.
In addition, the price proxies that we use capture the current price
changes in each of the categories that make up the MEI.
[[Page 63240]]
While we agree that it would be optimal to develop MEI weights
based on more recent data, we recognize the lack of data to do so. We
also recognize that an alternative would be to use price changes in
each of the proxies to update the weights to a more recent base year,
similar to the methodology we used to develop the distribution of
detailed practice expense categories in the current structure. In that
case, we used price changes from 1998 to 2000 to develop weights for
2000.
However, as we indicated in the proposed rule, this method has a
major drawback in that it assumes that the quantity of inputs would
increase at the same rate as the price of those inputs. This may not be
the case over longer time periods (for instance, 2000-2004) where there
is likely to be substitution away from more costly inputs toward those
which are less costly. Our experience with rebasing indexes has also
shown that the weights for major categories do not change very much
over time, even though the individual price changes for those
categories can differ significantly. In addition, because the MEI is a
Laspeyres-type index, the price changes between the base period and the
current period are reflected in the relative importance of each
category in determining the overall increase. Therefore, we feel that
basing the index on CY 2000 data and reflecting current price changes
likely represents a reasonable estimate of physicians' current
experience.
We determined the number and composition of expense categories
based on the criteria used to develop the current MEI and other CMS
input price index expenditure weights. These criteria are timeliness,
reliability, relevance, and public availability. For more information
on these criteria, see the May 9, 2002 Federal Register (67 FR 31444)
and the detail later in this preamble. Table 10 lists the set of
mutually exclusive and exhaustive cost categories that make up the
rebased and revised MEI.
Table 10.--Rebased and Revised Medicare Economic Index Expenditure Categories, Weights, and Price Proxies
----------------------------------------------------------------------------------------------------------------
2000--Expense
Expense category weights\1\ 1996--Expense Price proxy
\2\ weights
----------------------------------------------------------------------------------------------------------------
Total...................................... 100.000 100.000 .................................
------------------------------------------------
Physician Earnings \3\......................... 52.466 54.460 .................................
Wages and Salaries......................... 42.730 44.197 AHE--Private.
Benefits \4\............................... 9.735 10.263 ECI--Ben: Private.
Physician Practice Expenses.................... 47.534 45.540 .................................
Nonphysician Employee Compensation......... 18.653 16.812 .................................
Employee Wages and Salaries................ 13.808 12.424 .................................
Prof/Tech Wages........................ 5.887 5.662 ECI--W/S: Private P&T.
Managerial Wages....................... 3.333 2.410 ECI--W/S: Private Admin.
Clerical Wages......................... 3.892 3.830 ECI--W/S: Private Clerical.
Services Wages......................... 0.696 0.522 ECI--W/S: Private Service.
Employee Benefits \4\...................... 4.845 4.388 ECI--Ben: Priv. White Collar.
Other Practice Expenses.................... 18.129 ............. .................................
Office Expenses............................ 12.209 11.581 CPI(U)--Housing.
Professional Liability Insurance........... 3.865 3.152 CMS--Prof. Liab. Phys. Premiums.
Medical Equipment.......................... 2.055 1.878 PPI--Medical Instruments & Equip.
Pharmaceuticals and Medical Materials and 4.319 4.516 .................................
Supplies.
Medical Materials and Supplies............. 2.011 ............. PPI Surg. Appliances and Supplies/
CPI (U) Med Supplies.
Pharmaceuticals............................ 2.308 ............. PPI Pharmaceutical Preparations.
Other Expenses............................. 6.433 7.601 CPI-U All Items Less Food and
Energy.
----------------------------------------------------------------------------------------------------------------
\1\ Due to rounding, weights may not sum to 100.000 percent.
\2\ Sources: Physician Socioeconomic Statistics, 2000-2002 Edition (SMS Survey), Physician Socioeconomic
Statistics, 2003 Edition (PCPS Survey), Center for Health Policy Research, American Medical Association; 2003
Employment Cost Index, U.S. Department of Labor, Bureau of Labor Statistics; U.S. Department of Commerce,
Bureau of Economic Analysis 1997 Benchmark Input Output Tables, and U.S. Department of Commerce, Bureau of the
Census, 2002 Current Population Survey.
\3\ Includes employee physician payroll.
\4\ Includes paid leave.
To determine the expenditure weights for the rebased and revised
MEI, we used currently available and statistically valid data sources
on physician earnings and practice expenses. While we consulted
numerous data sources, we used five data sources to determine the MEI
expenditure weights: (1) The 2003 AMA Physician Socioeconomic
Statistics (2000 survey data) for self-employed physicians, (2) the
2000-2002 AMA Physician Socioeconomic Statistics (1998 data) for self-
employed physicians, (3) the March 2003 BLS Employment Cost Index, (4)
the 2002 Bureau of the Census Current Population Survey, and (5) the
Bureau of Economic Analysis (BEA) 1997 Benchmark Input-Output tables
(I/O). No one data source provided all of the information needed to
determine expenditure weights according to our criteria. The
development of each of the cost categories using these sources is
described in detail below.
b. Physician Earnings
The rebased and revised MEI uses AMA data on mean physician net
income (physician earnings) for self-employed physicians to develop a
weight for physician earnings. The weight for this expense category is
based on AMA data for 2000 and is calculated as a percentage of total
mean expenses (physician earnings and practice expenses, including
malpractice). The physician earnings expenditure category also includes
employee physician compensation.
[[Page 63241]]
Currently, physician earnings and overhead expenses generated by
employee physicians are included in the AMA practice expenses category.
However, we believe it is appropriate, for our purposes, to place
employee physician compensation in the MEI cost category of physician
earnings. Including employee physician payroll in physician earnings in
the MEI is consistent with the current payment methodologies in
accordance with the physician fee schedule, where the work RVU is
computed based on what service is provided and not on who provides the
service. Since employee physicians perform the same services as self-
employed physicians, employee physician time is reflected in the work
RVU. By including the compensation of employee physicians in the
physician earnings expense category, these expenses will be adjusted by
the appropriate price proxies for time spent by a physician.
To obtain further detail for both wages/salaries and benefits, the
ratio between these categories for 1996 (based on the 1996-based MEI)
was updated to 2000 using the growth in the overall Employment Cost
Index for private employees for wages/salaries and benefits.
Alternative data for determining this split were not readily available
from any other source. The main shortcoming of this method is that any
changes in quantity and intensity (mix of physicians) are not
reflected. However, faced with the lack of alternative data, we deemed
this approach to be the most feasible, and the results appear to be
consistent with anecdotal evidence on this ratio. Its application
resulted in a wage-fringe benefit split of 81.4 and 18.6 percent,
respectively, in the revised and rebased MEI compared with a wage-
fringe benefit split of 81.2 and 18.8 percent, respectively, in the
1996-based MEI.
c. Physician Practice Expenses
To determine the remaining individual practice expense weights
other than malpractice expense, we updated AMA expense data from 1998
to 2000 using the relative price change in an appropriate price index.
After the levels were updated to 2000 values, it was necessary to
normalize these levels to equal the 2000 mean total expense data
provided by the 2003 AMA survey. The detailed explanations for the
derivation of the individual weights are listed below.
(i) Nonphysician Employee Compensation
The cost share for nonphysician employee compensation was developed
by updating the 1998 AMA Socioeconomic Survey data on nonphysician
employee compensation costs for self-employed physicians to 2000, using
the current proxy for this category, and dividing the resulting amount
into total expenses (physician earnings plus practice expenses) for
2000 from the AMA survey. We further divided this cost share into
wages/salaries and benefits using BLS Employment Cost Index data. The
ECI survey contains data on the proportion of total compensation
accounted for by wages/salaries and benefits (including paid leave) by
private industry health services occupational category. These
proportions can be used to distribute the total nonphysician employee
compensation weight to wages/salaries and benefits for non-physician
employees. We used 2000 data from the March 2003 publication. Although
this survey does not contain data specifically for offices of
physicians, data are available on wage/fringe shares for private
industry health services, which include hospitals, nursing homes,
offices of physicians, and offices of dentists. We believe the data for
health services from the survey do provide a reasonable estimate of the
split between wages and fringe benefits for employees in physicians'
offices. Data for 2000 in the ECI survey for total health services
indicate that wages and fringe benefits are 74.02 percent and 25.98
percent of compensation, respectively. As in the 1996-based MEI, we
will use CPS data on earnings by occupation to develop cost shares for
wages for nonphysician occupational groups shown in Table 6. To arrive
at a distribution for these separate categories, we multiplied the
overall share for nonphysician employee wages/salaries by each of the
occupational proportions from the 2000 CPS. This distribution for the
1996-based and 2000-based MEI are presented in Table 10.
Table 11.--Percent Distribution of Nonphysician Payroll Expense by
Occupational Group: 2000 and 1996
------------------------------------------------------------------------
2000 1996
BLS occupational group expenditure expenditure
shares shares
------------------------------------------------------------------------
Total............................... 100.000 100.000
================
------------------------------------------------------------------------
\1\ Due to rounding, weights may not sum to 100.000 percent.
(ii) Professional Liability Expense
The weight for professional liability expense was derived from the
2003 AMA survey (2000 data) and was calculated as the mean professional
liability expense expressed as a percentage of total expenses
(physician earnings plus practice expenses). This calculation resulted
in a 3.865 percent share of total costs in 2000 compared to a 3.152
percent share in the 1996-based index. The increase in weight for
professional liability insurance represents the increases in both
premiums and the amount of coverage purchased by physicians in 2000
compared to 1996. While the weight does not reflect the cost experience
for 2001 and 2002, the proxy used in the rebased and revised index does
reflect the price increases associated with the recent rise in
malpractice costs.
Comment: Some commenters were concerned that the rebased and
revised MEI does not appropriately reflect the recent increase in
professional liability insurance (PLI) premiums that physicians are
experiencing.
Response: As we indicated in the proposed rule, the weights in the
rebased and revised MEI reflect the distribution of physicians' costs
in CY 2000 and do not reflect the more recent experience of physicians,
particularly as it pertains to PLI. While it would be optimal to base
the weights on more recent data, there is not a more recent,
comprehensive measure that would meet our criteria for determining
weights in the MEI.
We also indicated that while the weights do not reflect the more
recent
[[Page 63242]]
experience, the proxy we use to measure the price change in this
category does reflect more recent price changes in premiums and is the
most current data available through the second quarter of 2003. This
MEI PLI data, like that used in the development of the GPCIs, does not
reflect total expenditures on PLI, which would be needed to develop
more current weights for the MEI. In order to develop cost weights,
expenditure data for all costs facing physicians are needed.
(iii) Office, Medical Equipment, Pharmaceuticals and Medical Materials
and Supplies Expenses, and Other Expenses
The 2003 AMA survey provides less detail for expenses with respect
to prior years' publications. Therefore, we calculated the share of
each of the above categories by updating the AMA data for 1998 to 2000
using an appropriate price proxy. The primary reason for using the
price proxy was that we lacked other data to develop cost weights for
each of these categories. As stated previously, the main deficiency of
this method is that it does not directly account for changes in the
quantity or intensity associated with these expenses. Our belief,
however, was that it was important to continue using these detailed
breakouts so that each would be proxied by an appropriate price index
and that the quantity/intensity effects over a short period of time are
not likely to be large. In fact, we have found that even over longer
periods of time, the distribution of costs tends to be relatively
similar.
Office expenses and medical equipment levels were moved to 2000
using the growth from 1998 to 2000 in their respective MEI price
proxies. In the case of office expenses, we used the growth in the CPI-
U Housing; for medical equipment expenses, we used the growth in the
PPI for Medical Instruments and Equipment.
The share for pharmaceuticals (prescription drugs) and medical
materials and supplies was calculated by separating out pharmaceuticals
and other medical materials and supplies using 1997 BEA Benchmark
Input-Output data. First, the sum of all the pharmaceuticals and
medical supplies categories from the Benchmark Input-Output tables for
1997 was calculated. The share of pharmaceuticals and medical supplies
was then calculated as a percentage of this total and applied to the
1997 AMA medical supplies data. These calculated levels were then aged
to 2000 using the growth in an appropriate price proxy. We thought it
was important and appropriate to account for each of these categories
separately so that differences in relative price growth between
pharmaceuticals (prescription drugs) and other medical materials and
supplies would be more accurately represented. The resulting 2000 data
for the two separate categories were then aggregated (summed) together
to form the overall total for the share for the pharmaceuticals and
medical materials and supplies category in the rebased and revised MEI.
The pharmaceuticals category was aged using the Producer Price Index
(PPI) for Pharmaceutical preparations and the medical materials and
supplies category was updated using the PPI for surgical appliances and
supplies.
Finally, the Other Expenses category was calculated as a residual
(total expenses less the percentage of all categories currently
accounted for). The additional detail for transportation expenses found
in the 1996-based MEI was removed because the data were not readily
available for measurement of a cost share for 2000. The effect on the
MEI of removing the detail is negligible.
Comment: One commenter suggested for the purposes of future changes
to the MEI, that CMS consider inputs that are vastly different than
when the MEI was first developed, such as costs of complying with
government regulatory requirements and interpreter services for
patients.
Response: We thoroughly research many of the known data sources on
a regular basis to determine the appropriate number of detailed
categories that make up the MEI. If we determine that a different
combination of inputs is needed we will revise the MEI to reflect a
more current cost distribution. However, CMS does not have the detailed
expenditure and price data for the types of expenditures the commenter
indicated. CMS will continue to work with other outside entities in the
future to ensure the MEI is as accurate and representative as possible.
It should also be noted that these costs are already captured in the
MEI, as all costs are captured in the index, just not separately broken
out for the reasons previously stated.
4. Selection of Price Proxies for Use in the MEI
After the 2000 cost weights for the rebased and revised MEI were
developed, we reviewed the current set of price proxies to determine
whether they were still the most appropriate for each expenditure
category. As was the case in the development of the 1996-based MEI (57
FR 55901), most of the indicators we considered are based on BLS data
and are grouped into one of the following five categories:
Producer Price Indices (PPIs)
Producer price indices (PPIs) measure price changes for goods sold
in other than retail markets. They are the preferred proxies for
physician purchases at the wholesale level. These fixed-weight indices
are a measure of price change at the producer or at the intermediate
stage of production, a more likely mode of purchase for physicians.
Consumer Price Indices (CPIs)
Consumer price indices (CPIs) measure change in the prices of final
goods and services purchased by consumers. Like the PPIs, they are
fixed-weight. Since they may not represent the price changes faced by
producers, CPIs were used if there were no appropriate PPI or if the
expenditure category was similar to expenditure of retail consumers in
general.
Average Hourly Earnings (AHEs)
Average hourly earnings (AHEs) are available for production and
nonsupervisory workers for specific industries as well as for the
nonfarm business economy. They are calculated by dividing gross
payrolls for wages/salaries by total hours. The series reflects shifts
in employment mix and, thus, is representative of actual changes in
hourly earnings for industries or for the nonfarm business economy.
ECIs for Wages/Salaries
These ECIs measure the rate of change in employee wage rates per
hour worked. These fixed-weight indices are not affected by shifts in
industry or occupation employment levels and measure only the pure rate
of change in wages.
ECIs for Employee Benefits
These ECIs measure the rate of change in employer costs of employee
benefits, such as the employer's share of Social Security taxes,
pension and other retirement plans, insurance benefits (life, health,
disability, and accident), and paid leave. Like ECIs for wages/
salaries, the ECIs for employee benefits are not affected by changes in
industry output or occupational shifts.
When choosing wage and price proxies for each expense category, we
evaluate the strengths and weaknesses of each proxy variable using four
criteria. The first criterion is relevance. The price variable should
appropriately represent price changes for specific goods or services
within the expense category. Relevance may encompass judgments about
relative efficiency of
[[Page 63243]]
the market generating the price and wage increases.
The second criterion is reliability or low sampling variability. If
the proxy wage-price variable has a high sampling variability or
inexplicable erratic patterns over time, its value is greatly
diminished, since it is unlikely to accurately reflect price changes in
its associated expenditure category. Low sampling variability can
conflict with relevance, since the more specifically a price variable
is defined in terms of service, commodity, or geographic area, the
higher the possibility of sampling variability.
The third criterion is timeliness of actual published data. For
this reason, we prefer monthly and quarterly data to annual data. The
length of time the time series data have been published is also
important. A well-established time series is needed to assess the
reasonableness of the series and to provide a solid base from which to
forecast future price changes in the series. We need to forecast the
MEI to make Federal budget and Trustees Report estimates.
The fourth criterion is public availability. We prefer to use data
sources that are publicly available for our indices so that the public
may track each of the individual components in the MEI.
The BLS price proxy categories previously described meet the
criteria of relevance, reliability, timeliness, and public
availability. Below we discuss the price-wage proxies for the rebased
and revised MEI (shown in Table 5).
(a) Expense Categories in the MEI
Physician Time
In the rebased and revised MEI, we are using the AHE for the
private nonfarm economy as the proxy for the physician wages/salaries
component; this is the same price measure used in the 1996-based MEI.
In our judgment, this proxy still most closely comports with
Congressional intent as expressed in the Senate Finance Committee's
1972 report (S. Rept. No. 92-1230 at 191 (1972)). It should be noted
that AHEs change in accordance with changes in the type and mix of
workers.
As we discussed extensively in the November 2, 1998 final rule (63
FR 58848) and again in the December 31, 2002 final rule (67 FR 80019),
we believe that the current price proxy for physicians' earnings--AHE
in the nonfarm business economy--is the most appropriate proxy to use
in the MEI. The AHE for the nonfarm business economy reflects the
impacts of supply, demand, and economy-wide productivity for the
average worker in the economy. Using this measure as the proxy for
physicians' earnings ensures parity in the rate of change in wages for
the average worker and those 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. Since earnings are
expressed per hour, a constant quantity of labor input per unit of time
is reflected. The use of the AHE data is also consistent with our using
the BLS economy-wide multifactor productivity measures since economy-
wide wage increases reflect economy-wide productivity increases.
Using the ECI for professional and technical workers or other
occupational-specific wage proxies has a major shortcoming; in many
instances, occupations such as engineering, computer science, and
nursing have unique characteristics that are not representative of the
overall economy or the physician market. Specifically, wage changes for
such occupations can be influenced by excess supply or demand for these
types of workers. We believe it would not be appropriate to proxy the
physician earnings portion of the MEI with a wage proxy that reflects
these other occupation's unique characteristics. The 2000-based MEI
will use the ECI for fringe benefits for total private industry as the
price proxy for physician fringe benefits, the same proxy used for the
1996-based MEI. This means that both the wage and fringe benefit
proxies for physician earnings are derived from the nonfarm private
sector and are computed on a per-hour basis.
Nonphysician Employee Compensation
As in the 1996-based MEI, we used Current Population Survey data on
earnings and employment by occupation to develop labor cost shares for
the nonphysician occupational groups shown in Table 10. BLS maintains
an ECI for each occupational group, and we use these ECIs as price
proxies for nonphysician employee wages in the 2000-based MEI.
The skill mix shift in employees of physician offices in the last
few years has been towards managerial occupations. While these skill
mix shifts are captured in the expenditure weights, they are
appropriately held constant in a Laspeyres price index such as the MEI.
Skill mix shifts, which may reflect the changing intensity of services
provided in physicians' offices, are accounted for in the payment
system outside of the MEI. The 2000-based MEI will use the ECI for
fringe benefits for white collar employees in the private sector as a
proxy for nonphysician benefits since most nonphysician employees in
physicians' offices are white-collar employees. This is the same proxy
used for the 1996-based MEI.
Office Expense
Office expenses include rent or mortgage for office space,
furnishings, insurance, utilities, and telephone. We continue to use
the CPI-U for housing because it is a comprehensive measure of the cost
of housing, including rent, owner's equivalent rent, and the types of
goods and services associated with running an office. This proxy covers
about 80 percent of the population.
Pharmaceuticals and Medical Materials and Supplies
This cost category includes drugs, outside laboratory work, x-ray
films, and other related services. There is not one price proxy that
includes this complete mix of materials and supplies. In the absence of
one index, we separately accounted for pharmaceuticals and medical
materials and supplies in the 2000-based MEI.
[sbull] Medical Materials and Supplies
We equally weighted two proxies together (the PPI Surgical
Appliances and Supplies and the CPI-U for Medical Equipment and
Supplies) since one proxy does not accurately measure the price change
associated with these types of products used nor the mode of purchase
used in physicians' offices. While both indexes include such items as
bandages, dressings, catheters, I.V. equipment, syringes, and other
general disposable medical supplies and nonprescription equipment, the
indexes reflect significant differences in the mode of purchase. The
PPI measures actual transaction prices at the wholesale level, the mode
most likely used by physicians, while the CPI measures prices at the
retail level or the final stage of production. The price movements in
these two indexes can be different and we believe that it is
appropriate to combine these indexes into one proxy since physicians
likely use both purchasing methods when obtaining medical supplies.
[sbull] Pharmaceuticals
The PPI for pharmaceutical preparations is used to proxy
pharmaceutical prices in other CMS market baskets and reflects the
price change associated with the average mix of pharmaceuticals
purchased economy-wide. We use the PPI for pharmaceutical preparations,
rather than the CPI for prescription drugs, because physicians
generally purchase drugs directly from a
[[Page 63244]]
wholesaler. The PPIs we use measure price changes at the final stage of
production and not intermediate production, however.
Professional Liability Insurance
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.
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, on a
voluntary basis, from a few national commercial carriers via letter.
Generally between 5 and 8 carriers volunteer this information. For the
CY 2004 update we were able to obtain data from 7 carriers, all of
which were in the top 15 companies in 2001 in terms of market share.
While the sample size certainly does not cover the entire professional
liability insurance market, we have attempted to maximize the market
share in terms of both national coverage and coverage within States.
As we require for our other price proxies, the professional
liability price proxy should 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 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 are 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 provide a quarterly time series, indexed to a
base year consistent with the MEI and reflect 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.
Our research has indicated that the most comprehensive data on
professional liability costs are held by the State insurance
commissioners but these data are available only with a substantial time
lag and, therefore, the data currently incorporated into the MEI are
much more timely. We believe that, given the limited data available on
professional liability premiums, this methodology adequately reflects
the price trends facing physicians.
Comment: Several commenters were concerned about the 6.6 percent
increase in the PLI component of the MEI published in the proposed rule
and felt that this did not represent the actual increase in premiums
physicians are experiencing.
Response: We indicated in the proposed rule that the 6.6 percent
increase in the PLI component of the index was based on a forecast. For
this final rule we have incorporated actual data (through the second
quarter of 2003) that indicates that the increase in the proxy for the
PLI component of the MEI is 16.9 percent.
Medical Equipment
Medical equipment includes depreciation, leases, and rent on
medical equipment. We will use the PPI for medical instruments and
equipment as the price proxy for this category, consistent with the
price proxy used in the 1996-based MEI and other CMS input price
indexes.
Other Expenses
This category includes the residual subcategory of other expenses
such as accounting services, legal services, office management
services, continuing education, professional association memberships,
journals, professional car expenses, and other professional expenses.
In the absence of one price proxy or even a group of price proxies that
might reflect this heterogeneous mix of goods and services, we use the
CPI-U for all items less food and energy, consistent with the price
proxy used in the 1996-based MEI. We also condensed the structure
compared to that used in the 1996-based MEI because we lack the data to
develop a representative weight for transportation, as discussed above.
This change resulted in only a negligible effect on the overall MEI
over the past 8 years; the average annual increase differs by less than
a tenth of a percentage point over that time.
(b) Productivity Adjustment to the MEI
In the December 2002 final rule, we indicated that we were changing
the methodology for adjusting for productivity in the MEI. The MEI used
for the 2003 physician payment update reflected changes in the 10-year
moving average of private nonfarm business (economy-wide) multifactor
productivity applied to the entire index; we had previously used
economy-wide private nonfarm business labor productivity applied to the
labor portions of the index. We will continue to use the new method,
adjusting for multifactor productivity applied to the entire index, in
the rebased and revised MEI.
As described in the December 31, 2002 (68 FR 9568) final rule, we
use multifactor productivity 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 to be 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 also 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 1996-based MEI. The adjustment will be based on the latest
available actual historical economy-wide multifactor productivity data,
as measured by BLS. For the 2004 update, this means using the
multifactor productivity data through 2001, the latest available
information.
5. Results of Rebasing
Because the rebased and revised MEI is similar in structure to the
1996-based MEI, updating the MEI from a 1996 base year to a 2000 base
year resulted in small changes in expense category weights. Physicians'
earnings dropped slightly, from 54.5 percent of the index in 1996 to
52.5 percent in 2000. The expense shares for non-physician employee
compensation, office expenses, professional liability insurance, and
medical equipment all rose slightly, while expense shares for medical
materials and supplies and other expenses declined.
The update using the rebased and revised MEI for the 2004 Physician
Fee Schedule is an increase of 2.9 percent. This incorporates
historical data through the second quarter of 2003.
[[Continued on page 63245]]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
]
[[pp. 63245-63294]] Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule for Calendar Year 2004
[[Continued from page 63244]]
[[Page 63245]]
Table 12.--Annual Percent Change in the Revised and Rebased Medicare
Economic Index, 2004--All Categories
------------------------------------------------------------------------
Increase in the Medicare Economic Index Update for Calendar Year 2004
\1\
-------------------------------------------------------------------------
2000 weights 2004 percent
Cost categories and price measures \2\ changes
------------------------------------------------------------------------
Medicare Economic Index Total, n/a 2.9
productivity adjusted..................
Productivity: 10-year moving average n/a 0.9
of Multifactor productivity,
private nonfarm business sector....
Medicare Economic Index Total, without 100.000 3.8
productivity adjustment................
1. Physician's Own Time \3\......... 52.466 3.6
a. Wages and Salaries: Average 42.730 3.2
Hourly Earnings, private
Nonfarm........................
b. Fringe Benefits: Employment 9.735 5.4
Cost Index, benefits, private
nonfarm........................
2. Physician's Practice Expense \3\. 47.534 4.0
a. Nonphysician Employee 18.653 3.4
Compensation...................
1. Wages and Salaries: 13.808 2.8
Employment Cost Index,
wages and salaries,
weighted by occupation.....
2. Fringe Benefits: 4.845 5.0
Employment Cost Index,
fringe benefits, white
collar.....................
b. Office Expense: Consumer 12.209 2.5
Price Index (CPI-U), housing...
c. Drugs and Medical Materials 4.319 3.1
and Supplies...................
1. Medical Materials and 2.011 1.0
Supplies: Producer Price
Index, surgical appliances
and supplies/Consumer Price
Index (CPI-U), medical
equipment and supplies
(equally weighted).........
2. Pharmaceuticals: Producer 2.308 4.9
Price Index (PPI
pharmaceutical
preparations)..............
d. Professional Liability 3.865 16.9
Insurance: premiums \4\........
e. Medical Equipment: PPI, 2.055 2.3
medical instruments and
equipment......................
f. Other Expenses............... 6.433 1.9
------------------------------------------------------------------------
\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 2004 update. The price proxy values are based upon the
latest available Bureau of Labor Statistics data as of September 22,
2002.
\2\ The weights shown for the MEI components are the 2000 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 2000. To determine
the MEI level for a given year, the price proxy level for each
component is multiplied by its 2000 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. Due
to rounding, weights may not sum to 100.000 percent.
\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 data collected from several major insurers (the latest
available historical percent change data are for the period ending
second quarter of 2003).
n/a Productivity is factored into the MEI categories as an adjustment to
the price variables; therefore, no explicit weight exists for
productivity in the MEI.
As is the case with this index rebasing, our experience in previous
rebasing and revising indexes has been that there is usually a very
small effect on the overall percent change. The difference is typically
between zero and 0.3 percentage points per year on average. The rebased
and revised MEI overall percent increase for the CY 2004 update is only
0.1 percentage point higher compared to the 1996-based MEI. This is
also the case for this final rule. When the MEI was last rebased, there
was no difference in the average annual percentage change from 1985 to
1998. When the PPS hospital indices were rebased, the average
difference in the percentage change was less than one-tenth of a
percentage point from 1995 to 2002.
The first reason for this small difference between the 1996-based
and 2000-based MEI percent changes is that the weight of professional
liability insurance increased, giving it a higher relative importance
in the index in 2000. This category also increased at a faster pace
than other index categories during 2002 and projected for 2003,
resulting in an even greater relative importance for this index by 2004
and causing it to have a larger effect on the overall index compared to
the 1996-based MEI.
In addition, the pharmaceuticals from the medical materials and
supplies category grew faster than the overall medical materials and
supplies in the 1996-based MEI. In addition, the faster growth in the
aggregate medical materials and supplies category combined with a
higher weight in the 2000-based index gave the category a higher
relative importance. However, these increases were mostly offset by
declines in weight of some of the other categories, most notably
physician earnings.
6. Adjustments to RVUs To Match the New MEI Weights
As discussed in the August 15, 2003 proposed rule, section
1848(c)(2)(B)(ii)(II) of the Act requires that increases or decreases
in RVUs may not cause the amount of expenditures for the year to differ
by more than $20 million from what expenditures would have been in the
absence of these changes. If this threshold is exceeded, we make
across-the-board adjustments to preserve budget neutrality. Therefore,
if we adjust the work, practice expense and malpractice RVUs to match
the new MEI weights, we are required by statute to ensure that the
adjustments do not increase or decrease Medicare expenditures by more
than $20 million. To meet the requirements of the statute and ensure
that aggregate pools of RVUs match the proposed new MEI weights, we
considered two options. We considered either making no adjustments to
the physician work RVUs and adjusting only the practice expense and
malpractice RVUs or adjusting all 3 categories of RVUs. We proposed
adjusting all 3 categories of RVUs rather than adjusting only the
practice expense and malpractice RVUs, which would have resulted in a
reduction to the physician fee schedule conversion factor in addition
to the -4.2 percent reduction that was forecasted. Specifically, we
proposed to reduce the physician work RVUs by an estimated 0.35 percent
(0.9965) and the practice expense RVUs by an estimated 1.15 percent
(0.9885) and to increase the malpractice RVUs by an estimated 21.7
percent (1.217) to match the rebased MEI weights.
[[Page 63246]]
Comment: We received comments from a number of physician
organizations opposing any adjustment to the physician work RVUs.
Several of the comments appreciated our reluctance to reduce the
physician fee schedule conversion factor by an additional 0.3
percentage points when there will already be a large reduction in the
physician fee schedule update. One commenter stated that any additional
reduction to the physician fee schedule conversion factor would be
inappropriate. However, these comments also stated that that the
physician work RVUs should remain constant and stable. There were a
number of comments that stated that across-the-board adjustments should
never be applied to the work component of the Resource Based Relative
Value System. One comment indicated that we should not make any
adjustments to the work RVUs unless they are recommended by the RUC.
Several of the comments stated that the proposed adjustments to the
RVUs to match the MEI weights would not assist the physician community
in addressing the professional liability crisis since any increase in
physician fees for some services will be offset by reductions in other
services. Additional payments by Medicare to cover increased
professional liability costs, or congressional action, are necessary to
alleviate this problem. Some of the comments indicated that CMS did not
provide sufficient information to make a determination as to how the
two proposals would affect individual codes because the adjustments
were not applied to the RVUs shown in Addendum B of the proposed rule.
Several of the comments stated that the stability of work RVUs is
essential since they are used by private payors, physician compensation
systems, and in productivity analysis. The RUC commented that they
depend upon the stability in these values as they review new and
revised codes, both in magnitude estimation and in any calculations
regarding intra-work per unit of time (IWPUT). One comment suggested
CMS create a separate adjustment factor to adjust payments without
changing the conversion factor or the RVUs, as it did for the first
five-year review of the Medicare physician fee schedule in 1995. We
also received a comment urging us to review the Secretary's ``ancillary
policies'' authority under section 1848(c)(4) of Act to determine
whether CMS has statutory authority to increase PLI relative value
units without reducing the work and practice expense relative value
units.
We also received several comments that expressed support for
maintaining stability in the practice expense RVUs. The comment stated
``much like what is done with work relative values, any code-level
refinements due to annual coding changes that result in a non-budget
neutral impact should not result in a reduction of all practice expense
relative values. The comment requested that CMS present an analysis of
this issue in an upcoming proposed rule and recommended that
adjustments related to the MEI rebasing not be applied to the practice
expense relative values.
Response: We share the concern about establishing stability in the
practice expense RVUs. As we indicated in the June 28, 2002 proposed
rule (67 FR 43851), ``once the refinement process is complete, we
believe the physician community has a reasonable expectation that the
practice expense RVUs will not change from year to year unless further
refinement is undertaken.'' We plan to analyze in an upcoming proposed
rule whether there are any alternatives to our current practice of
rescaling the practice expense RVUs to apply budget neutrality.
However, we disagree with the comments that suggest we only increase
the malpractice expense RVUs and not apply any adjustments to the work
and practice expense RVUs to match the MEI weights. It is not possible
to match the aggregate RVUs to the new MEI weights if we make no
adjustments to both work and practice expense and adjust only the
malpractice RVUs and the conversion factor. While it would be possible
to maintain budget neutrality for the increase in malpractice RVUs by
reducing the conversion factor, the aggregate number of RVUs for work
and practice expense would not match the MEI weights unless we could
adjust at least two of the three RVUs in combination with applying a
compensating adjustment to the CF.
We have considered the comment suggesting that we use the
Secretary's section 1848(c) ``ancillary'' policies authority to adjust
the RVUs to match the MEI weights but not maintain budget neutrality.
Section 1848(c) states that the Secretary may establish ancillary
policies (with respect to the use of modifiers, local codes, and other
matters) as may be necessary to implement this section.'' We believe
that this section of the statute must, nonetheless, be read
consistently with the requirements of section 1848(c)(2)(B)(ii)(II) of
the Act requiring 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 believe the statute is clear and any increase in
the malpractice expense RVUs must be offset by decreases to the work
and practice expense RVUs or the conversion factor.
We also do not believe that the work RVUs should be maintained and
a separate ``work adjustor'' established. While such policy was adopted
following the 5-year review of physician work in 1997, we used this
procedure only because the effect of the work adjustor could be removed
once resource-based practice expense RVUs were adopted in 1999. We did
not find the work adjustor to be desirable. It added an extra element
to the physician fee schedule payment calculation and created confusion
and questions among the public who had difficulty using the RVUs
determine a payment amount that matched the amount actually paid by
Medicare.
We acknowledge the comments that indicate that the work RVUs are
used for many purposes other than Medicare payment. While our proposal
would slightly reduce the absolute value of the physician work RVUs, it
would not change their relative values since there would be a uniform
decrease to all of the RVUs. We believe the relative relationship among
the values for the services makes them useful for analysis for purposes
other than Medicare payment. Since the relative values will be left
unchanged, we do not believe the work RVUs will lose their utility for
these other uses.
We disagree that our proposed rule did not provide enough
information upon which to determine the impact on payment for a given
service. The proposed rule provided the specific level of the estimated
adjustments. While we did not actually apply the adjustments to the
RVUs shown in Addendum B, any interested party could determine the
effect of our proposal on any given service with the information we
provided. We further noted that the adjustments we provided were
estimated and would change once we made final determinations of the
work, practice expense and malpractice RVUs for 2004. For the final
rule, we will reduce the work RVUs by 0.57 percent (0.9943), the
practice expense by 0.77 (0.9923) percent and increase the malpractice
RVUs by 19.86 percent (1.1986). We have also modeled the impact of our
proposal by specialty in the impact section of this final rule.
With respect to the comments about our proposal and the large
increases in professional liability premiums, we
[[Page 63247]]
have not asserted that our policy to adjust the RVUs will resolve this
issue. While the comments that our policy will increase payments for
some service and decrease payments for payments for others are correct,
we note that payments for services with high malpractice RVUs will
increase the most in payment while there will be negligible impact on
payment for most other services. Such a policy will improve our payment
policies by giving more weight to the malpractice RVU in determining
Medicare total payment consistent with the proportion that professional
liability expenses represent of total physician expenses. As indicated
in the impact section, services provided by cardiac and thoracic
surgeons, neurosurgeons, orthopedic surgeons, vascular surgeons and
emergency physicians are increasing in payment as a result of this
proposal. There will be little impact of these adjustments on all other
specialties.
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'' or UAF. The UAF 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.
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 UAF
for the year. Under section 1848(d)(4)(B) of the Act, the UAF for a
year beginning with 2001 is equal to the sum of the following--
[sbull] Prior Year Adjustment Component. An amount determined by--
[sbull] 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;
[sbull] Dividing that difference by the amount of the actual
expenditures for such services for that year; and
[sbull] Multiplying that quotient by 0.75.
[sbull] Cumulative Adjustment Component. An amount determined by--
[sbull] 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;
[sbull] 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
[sbull] 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 (2004 in this
case), the current calendar year (2003) and the preceding calendar year
(2002) 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 2002 allowed expenditures in this final rule). Once the SGR
and allowed expenditures for a year have been revised twice, they are
final.
Table 13 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 13
----------------------------------------------------------------------------------------------------------------
Cumulative
Annual allowed allowed
Period expenditures expenditures FY/CY SGR
($ in ($ in
billions) billions)
----------------------------------------------------------------------------------------------------------------
4/1/96-3/31/97....................... 48.9 48.9 N/A
4/1/97-3/31/98....................... 50.5 99.4 FY 1998 = 3.2%
4/1/98-3/31/99....................... 52.6 152.0 FY 1999 = 4.2%
1/1/99-3/31/99....................... 13.3 (\1\) FY 1999 = 4.2%
4/1/99-12/31/99...................... 42.1 (\2\) FY 2000 = 6.9%
1/1/99-12/31/99...................... 55.3 194.1 FY 1999/2000\3\
1/1/00-12/31/00...................... 59.4 253.4 CY 2000 = 7.3%
1/1/01-12/31/01...................... 62.0 315.5 CY 2001 = 4.5%
1/1/02-12/31/02...................... 67.2 382.6 CY 2002 = 8.2%
1/1/03-12/31/03...................... 71.7 454.2 CY 2003 = 6.7%
1/1/04-12/31/04...................... 77.0 528.6 CY 2004 = 7.4%
----------------------------------------------------------------------------------------------------------------
\1\ Allowed expenditures for the first quarter of 1999 are based on the FY 1999 SGR.
\2\ Allowed expenditures for the last three quarters of 1999 are based on the FY 2000 SGR.
\3\ 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 13 includes
our final revision of allowed expenditures for 2002, a recalculation of
allowed expenditures for 2003, and our initial estimate of allowed
expenditures for 2004. To determine the update adjustment factor for
2004, the statute requires that we use allowed and actual expenditures
from April 1, 1996 through December 31, 2003 and the 2004 SGR.
Consistent with section 1848(d)(4)(E), we will be making further
revisions to 2003 and 2004 SGRs and 2003 allowed expenditures. Because
we have
[[Page 63248]]
incomplete actual expenditure data for 2003, 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 13 in the statutory formula
illustrated below:
[GRAPHIC] [TIFF OMITTED] TR07NO03.000
UAF = Update Adjustment Factor
Target03 = Allowed Expenditures for 2003 or $71.7 billion
Actual03 = Estimated Actual Expenditures for 2003 = $77.8
billion
Target4/96-12/03 = Allowed Expenditures from 4/1/1996-12/31/
2002 = $454.2 billion
Actual4/96-12/02 = Estimated Actual Expenditures from 4/1/
1996-12/31/2003 = $462.0 billion
SGR03 = 7.4 percent (1.074)
[GRAPHIC] [TIFF OMITTED] TR07NO03.001
Section 1848(d)(4)(D) of the Act indicates that the UAF determined
under section 1848(d)(4)(B) of the Act for a year may not be less than
-0.070 or greater than 0.03. The calculated UAF of -0.090 is less than
the statutory limit of -0.070. Therefore, the UAF for 2004 will be -
0.70.
Section 1848(d)(4)(A)(ii) of the Act indicates that 1 should be
added to the UAF 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. (The Consolidated Appropriations Reduction
Resolution of 2003 (P.L. 108-7) contained a provision permitting
revision of the FY 1998 and FY 1999 SGRs. See the February 28, 2003
Federal Register (68 FR 9567) for a discussion of these SGRs. 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 2004 SGR, a revision to the
2003 SGR, and our final revision to the 2002 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 (and those items and services
paid through intermediaries where specified):
[sbull] Physicians' services.
[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 (including outpatient diagnostic laboratory
tests paid through intermediaries).
[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.
[[Page 63249]]
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 2004, a
revised estimate of the SGR for 2003, and our final determination of
the SGR for 2002. Consistent with section 1848(f)(3)(C) of the Act, we
are using the best data available to us as of September 1, 2003 for all
of the figures.
D. Preliminary Estimate of the SGR for 2004
Our preliminary estimate of the 2004 SGR is 7.4 percent. We first
estimated the 2004 SGR in March and made the estimate available to the
Medicare Payment Advisory Commission and on our website. Table 13 shows
our March estimates and our current estimates of the factors included
in the SGR:
Table 14
------------------------------------------------------------------------
Current
Statutory factors March estimate estimate
------------------------------------------------------------------------
Fees.................................. 2.3% (1.023) 2.7% (1.027)
Enrollment............................ 1.3% (1.013) 1.7% (1.017)
Real Per Capita GDP................... 2.7% (1.027) 2.8% (1.028)
Law and Regulation.................... 0.0% (1.000) 0.0% (1.000)
------------------
Total............................. 6.4% (1.064) 7.4% (1.074)
------------------------------------------------------------------------
Note: Consistent with section 1848(f)(2) of the Act, the
statutory factors are multiplied, not added, to produce the total
(that is, 1.027 x 1.017 x 1.028 x 1.000 = 1.074.) A more detailed
explanation of each figure is provided below in section G.1.
E. Revised SGR for 2003
Our current estimate of the 2003 SGR is 6.7 percent. Table 14 shows
our preliminary estimate of the 2003 SGR that was published in the
Federal Register on December 1, 2002 (67 FR 80027) and our current
estimate:
Table 15
------------------------------------------------------------------------
12/31/02 Current
Statutory factors estimate estimate
------------------------------------------------------------------------
Fees.................................. 2.9% (1.029) 2.8% (1.028)
Enrollment............................ 1.2% (1.012) 2.4% (1.024)
Real Per Capita GDP................... 3.3% (1.033) 1.4% (1.014)
Law and Regulation.................... 0.0% (1.000) 0.0% (1.000)
------------------
Total............................. 7.6% (1.076) 6.7% (1.067)
------------------------------------------------------------------------
A more detailed explanation of each figure is provided below in
section G.2.
F. Final Sustainable Growth Rate for 2002
The SGR for 2002 is 8.3 percent. Table 16 shows our preliminary
estimate of the SGR published in the Federal Register on November 1,
2001 (66 FR 55317), our revised estimate published in the Federal
Register on December 31, 2001 (67 FR 80028) and the final figures
determined using the latest available data:
Table 16
----------------------------------------------------------------------------------------------------------------
11/1/01 12/31/02
Statutory factors estimate estimate (\1\) Final
----------------------------------------------------------------------------------------------------------------
Fees............................................................ 2.3% (1.023) 2.5% (1.025) 2.5% (1.025)
Enrollment...................................................... 0.7% (1.007) 2.8% (1.028) 3.2% (1.032)
Real Per Capita GDP............................................. 1.7% (1.027) 2.3% (1.023) 1.4% (1.014)
Law and Reg..................................................... 0.8% (1.008) 1.1% (1.011) 1.0% (1.010)
-----------------
----------------------------------------------------------------------------------------------------------------
\1\ The figures for fees, enrollment and real per capita GDP from the 12/31/02 final rule are shown here. We
made a subsequent change to the law and regulations factor and the total in the February 28, 2003 Federal
Register (68 FR 9572). We show the revised law and regulation factor and total in the above table.
[[Page 63250]]
A more detailed explanation of each figure is provided below in
section G.2.
G. Calculation of 2004, 2003, and 2002 Sustainable Growth Rates
1. Detail on the 2004 SGR
All of the figures used to determine the 2004 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 allowed expenditures and
incorporated into subsequent physician fee schedule updates.
Factor 1--Changes in Fees for Physicians' Services (Before Applying
Legislative Adjustments) for CY 2004
This factor is calculated as a weighted average of the 2004 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 are estimated to
account for approximately 80.3 percent of total allowed charges
included in the SGR in 2004 and are updated using the MEI. The MEI for
2004 is 2.9 percent. Diagnostic laboratory tests are estimated to
represent approximately 7.4 percent of Medicare allowed charges
included in the SGR in 2004 and the costs of these tests are updated by
the CPI-U. The CPI-U for 2004 that will be used to update clinical
diagnostic laboratory tests is 2.1 percent. Drugs represent 12.3
percent of Medicare allowed charges included in the SGR. We are
projecting a weighted average change in fees for drugs that are
included in the SGR of 2.0 percent. Table 16 shows the weighted average
of the MEI, laboratory and drug price increases for 2004:
Table 17
------------------------------------------------------------------------
Weight Update
------------------------------------------------------------------------
Physician..................................... 0.803 2.9
Laboratory.................................... 0.074 2.1
Drugs......................................... 0.123 2.0
Weighted Average.............................. 1.000 2.7
------------------------------------------------------------------------
After taking into account the elements described in table 16, we
estimate that the weighted-average increase in fees for physicians'
services in 2004 under the SGR (before applying any legislative
adjustments) will be 2.7 percent.
Factor 2--The Percentage Change in the Average Number of Part B
Enrollees from 2003 to 2004
This factor is our estimate of the percent change in the average
number of fee-for-service enrollees from 2003 to 2004. 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 1.7 percent from 2003 to 2004. Table 18 illustrates
how this figure was determined:
Table 18
------------------------------------------------------------------------
2003 2004
------------------------------------------------------------------------
Overall....................................... \1\ 38.535 \1\ 39.013
Medicare +Choice.............................. \1\ 4.689 \1\ 4.606
Net........................................... \1\ 33.847 \1\ 34.407
Percent Increase.............................. ........... \2\ 1.7
------------------------------------------------------------------------
\1\ Millions.
\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, the estimate may change
substantially as actual Medicare fee-for-service enrollment for 2004
becomes known.
Factor 3--Estimated Real Gross Domestic Product Per Capita Growth in
2004
We estimate that the growth in real per capita GDP from 2003 to
2004 will be 2.8 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
2004.
Factor 4--Percentage Change in Expenditures for Physicians' Services
Resulting From Changes in Law or Regulations in CY 2004 Compared With
CY 2003
We are not projecting any change in spending in 2004 due to changes
in law or regulations.
2. Detail on the 2003 SGR
A more detailed discussion of our revised estimates of the four
elements of the 2003 SGR follows.
Factor 1--Changes in Fees for Physicians' Services (Before Applying
Legislative Adjustments) for 2003
This factor was calculated as a weighted average of the 2003 fee
increases that apply for the different types of services included in
the definition of physicians' services for the SGR.
We estimate that services paid using the physician fee schedule
account for approximately 82.7 percent of total allowed charges
included in the SGR in 2003. These services were updated using the 2003
MEI of 3.0 percent. We estimate that diagnostic laboratory tests
represent approximately 7.1 percent of total allowed charges included
in the SGR in 2003. These services were updated by the 2003 CPI-U of
1.1 percent. We estimate that drugs represent 10.2 percent of Medicare
allowed charges included in the SGR in 2003. 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 weighted average fee increases for
drugs of 1.9 percent in 2003. Table 19 shows the weighted average of
the MEI, laboratory and drug price increases for 2003:
Table 19
------------------------------------------------------------------------
Weight Update
------------------------------------------------------------------------
Physician..................................... 0.827 3.0
Laboratory.................................... 0.071 1.1
Drugs......................................... 0.102 1.9
Weighted Average.............................. 1.000 2.8
------------------------------------------------------------------------
After taking into account the elements described in table 19, we
estimate that the weighted-average increase in fees for physicians'
services in 2003 under the SGR (before applying any legislative
adjustments) will be 2.8 percent.
Factor 2--The Percentage Change in the Average Number of Part B
Enrollees from 2002 to 2003
Our actuaries estimate that the average number of Medicare Part B
fee-for-service enrollees (excluding beneficiaries enrolled in M+C
plans) increased by 2.4 percent in 2003. Table 20 illustrates how we
determined this figure:
Table 20
[In millions]
------------------------------------------------------------------------
2002 2003
------------------------------------------------------------------------
Overall....................................... 38.074 38.535
[[Page 63251]]
Medicare +Choice.............................. 5.005 4.689
Net........................................... 33.069 33.847
Percent Increase.............................. ........... 2.4%
------------------------------------------------------------------------
Our actuaries' estimate of the 2.8 percent change in the average
number of fee-for-service enrollees, net of Medicare+Choice enrollment
for 2003, compared to 2002 is different from our preliminary estimate
(1.2 percent for 2003 from the December 31, 2002 final rule (67 FR
80029)) 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 2002 that is different than the figure we
used one year ago. Further, we now have information on actual fee-for-
service enrollment for the first 8 months of 2003. We would caution
that our estimate of fee-for-service enrollment for 2003 could change
again once we have complete information for the entire year.
Factor 3--Estimated Real Gross Domestic Product Per Capita Growth in
2003
We estimate that the growth in real per capita GDP will be 1.4
percent in 2003. Our past experience indicates that there have also
been large differences between our estimates of real per capita GDP
growth made prior to the year's end and the actual change in this
factor. Thus, it is likely that this figure will change further as
complete actual information on 2003 economic performance becomes
available to us in 2004.
Factor 4--Percentage Change in Expenditures for Physicians' Services
Resulting From Changes in Law or Regulations in 2003 Compared With 2002
There were no statutory or regulatory changes that affected
Medicare expenditures for services included in the SGR in 2003.
3. 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 accounted for
approximately 84.1 percent of total Medicare allowed charges included
in the SGR in 2002, and are updated using the MEI. The MEI for 2002 was
2.6 percent. Diagnostic laboratory tests represent approximately 7.2 of
total Medicare allowed charges included in the SGR, and are typically
updated by the CPI-U. However, the BBA required a 0.0 percent update in
2002 for laboratory services. Drugs represented approximately 8.7
percent of total Medicare allowed charges included in the SGR in 2002.
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 2.8 percent in 2002. Table 21 shows
the weighted average of the MEI, laboratory and drug price increases
for 2002:
Table 21
------------------------------------------------------------------------
Weight Update
------------------------------------------------------------------------
Physician..................................... 0.841 2.6
Laboratory.................................... 0.072 0.0
Drugs......................................... 0.087 2.8
Weighted Average.............................. 1.000 2.5
------------------------------------------------------------------------
After taking into account the elements described in table 21, we
estimate that the weighted-average increase in fees for physicians'
services in 2002 under the SGR (before applying any legislative
adjustments) was 2.5 percent.
Factor 2--The Percentage Change in the Average Number of Part B
Enrollees from 2001 to 2002
We estimate the increase in the average number of fee-for-service
enrollees (excluding beneficiaries enrolled in M+C plans) from 2001 to
2002 was 3.2 percent. Our calculation of this factor is based on
complete data from 2002. Table 22 illustrates the calculation of this
factor:
Table 22
[In millions]
------------------------------------------------------------------------
2001 2002
------------------------------------------------------------------------
Overall....................................... 37.650 38.074
Medicare +Choice.............................. 5.608 5.005
Net........................................... 32.041 33.069
Percent Increase.............................. ........... 3.2%
------------------------------------------------------------------------
Factor 3--Estimated Real Gross Domestic Product Per Capita Growth in
2002
We estimate that the growth in real per capita GDP was 1.4 percent
in 2002. This is a final figure based on complete data for 2002.
Factor 4--Percentage Change in Expenditures for Physicians' Services
Resulting From Changes in Law or Regulations in 2002 Compared With 2001
Sections 101 through 104 of the BIPA added Medicare coverage for a
variety of new services that will affect the 2002 SGR. In addition,
section 112 of BIPA made changes that will result in additional
Medicare coverage for certain drugs that will affect 2002 spending for
services included in the SGR. Prior to the enactment of the BIPA,
Medicare paid only 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. We are also adjusting this
factor to account for including screening mammography services in the
SGR consistent with our discussion of this issue in the November 1,
2001 Federal Register (66 FR 55318). After taking these provisions into
account, our final estimate of the percentage change in expenditures
for physicians' services resulting from changes in law or regulations
is 1.0 percent for 2002.
VIII. Anesthesia and Physician Fee Schedule Conversion Factors for
Calendar Year 2004
The 2004 physician fee schedule CF will be $35.1339. The 2004
national average anesthesia conversion factor is $16.43.
The specific calculations to determine the physician fee schedule
and anesthesia CFs for 2004 are explained below.
Detail on Calculation of the 2004 Physician Fee Schedule Conversion
Factor
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.
We are illustrating the calculation for the 2004 physician fee
schedule CF in table 23:
[[Page 63252]]
Table 23
------------------------------------------------------------------------
------------------------------------------------------------------------
2003 Conversion Factor....................................... $36.7856
2004 Update.................................................. 0.9551
2004 Conversion Factor....................................... $35.1339
------------------------------------------------------------------------
Anesthesia Fee Schedule Conversion Factor
Anesthesia services do not have RVUs like other physician fee
schedule services. Therefore, we account for any necessary RVU
adjustments through an adjustment to the anesthesia fee schedule CF. We
are adjusting the anesthesia CF to reflect the RVUs adjustments being
made to all other physician fee schedule services to match the revised
MEI weights. The 2003 anesthesia CF is $17.05. Physician work
represents 79.02 percent of the anesthesia CF (0.7902). We are
decreasing this portion of the anesthesia CF by 0.57 percent (0.9943).
Practice expenses represent 13.75 percent (0.1375) of the anesthesia
CF. We are reducing this portion of the anesthesia conversion factor by
0.77 percent (0.9923) for the adjustment to match the RVUs with the MEI
weights. In addition, we are increasing the practice expense portion of
the anesthesia CF by 0.18 percent (1.0018) for changes to anesthesia
practice expenses resulting from the refinement of practice expense
RVUs. Taken together, we are reducing the practice expense portion of
the anesthesia fee schedule CF by 0.59 percent (0.9923 x 1.0018 =
0.9941). Professional liability insurance represents 7.23 percent
(0.0723) of the anesthesia CF. We are increasing this portion of the
anesthesia CF by 19.86 percent (1.1986). Taken together, the
adjustments to the work, practice expense and malpractice portions of
the anesthesia CF result in a total adjustment of 1.090 percent (0.7903
*0.9943) + ((0.1347 x 0.9941) + (0.0723 x 1.1986) = 1.0090. To
determine the anesthesia fee schedule CF for 2004, we used the
following figures:
Table 24
------------------------------------------------------------------------
------------------------------------------------------------------------
2003 Anesthesia Conversion Factor............................ $17.0522
Adjustments to match MEI weights and practice expense factor. 1.0090
2004 Update.................................................. 0.9551
2004 Anesthesia Conversion Factor............................ $16.4339
------------------------------------------------------------------------
IX. Telehealth Originating Site Facility Fee Payment Amount Update
Section 1834(m) of the Act establishes the payment amount for the
Medicare telehealth originating site facility fee for telehealth
services provided from October 1, 2001, through December 31 2002, at
$20. For telehealth services provided on or after January 1 of each
subsequent calendar year, the telehealth originating site facility fee
is increased by the percentage increase in the MEI as defined in
section 1842(i)(3) of the Act. The MEI increase for 2004 is 2.9
percent.
Therefore, for CY 2004, the payment amount for HCPCS code ``Q3014,
telehealth originating site facility fee'' is 80 percent of the lesser
of the actual charge or $21.20.
The Medicare telehealth originating site facility fee and MEI
increase by the applicable time period is shown below.
Table 25
------------------------------------------------------------------------
MEI
Facility fee increase Period
(percent)
------------------------------------------------------------------------
$20.00.......................................... N/A 10/01/2001-
12/31/2002
$20.60.......................................... 3.0 01/01/2003-
12/31/2003
$21.20.......................................... 2.9 01/01/2004-
12/31/2004
------------------------------------------------------------------------
X. Provisions of the Final Regulations
This final rule with comment period adopts the provisions of the
August 2003 proposed rule except as noted elsewhere in the preamble.
The following is a highlight of the changes made from the proposed
rule.
For geographic practice cost indices, based upon the volatility of
the premium data collected, our review of the comments received on the
August 15, 2003 proposed rule, and our review of malpractice GPCIs, we
have modified some of our GPCI calculations and assumptions. We reduced
the overall impact associated with revision to the malpractice GPCIs by
a factor of 50 percent to mitigate for the volatility of the data. As
directed by the statute, we will implement half of this change in the
first year (CY 2004) and half of this change in the second year (CY
2005).
For the creation G codes for monitoring heart rhythms issue, based
on concerns raised by commenters, we will not proceed with the proposed
HCPCS codes because we want to ensure that any HCPCS codes developed,
encompass the various technologies that are being utilized for such
monitoring.
For changes in payments to physicians managing patients on
dialysis, we are moving forward with our proposals and we are adjusting
the payment rates for the established G codes. In addition we are
adding additional codes to address the concerns raised about home
dialysis.
For the definition of diabetes for diabetes self-management
training we adopted the AACE clinical definition. We also expanded our
general language to include other types of diabetes.
For excision of benign and malignant lesions, we are not moving
forward with our proposal, however, we will maintain the 2003 work RVUs
as interim values for 2004 to allow opportunity for the specialty to
resurvey these services.
For payment policies for anesthesia services we have decided to
allow teaching anesthesiologists to bill, similarly to teaching CRNAs,
for their involvement in two concurrent cases involving residents.
XI. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
XII. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, if we proceed with a subsequent document, we will respond to the
major comments in the preamble to that document.
XIII. Regulatory Impact Analysis
We have examined the impact of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 16, 1980 Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, when regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts, and equity). A regulatory impact analysis must be
prepared for final rules with economically significant effects (that
is, a final rule that would have an annual effect on the economy of
$100
[[Page 63253]]
million or more in any 1 year, or would adversely affect in a material
way the economy, a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or
tribal governments or communities).
We have simulated the effect of the physician fee schedule changes
that we are adopting in this final rule. We are making several changes
to the physician fee schedule RVUs in this final rule. In general,
section 1848(c)(2)(B)(ii)(II) requires that changes to RVUs cannot
increase or decrease expenditures more than $20 million. Thus, changes
to the RVUs made pursuant to section 1848(c)(2)(B)(ii)(II) must be
budget neutral. That is, increases in payments resulting from RVU
changes must be offset by decreases in payments for other services and
there will be redistribution in payment among physicians, practitioners
and suppliers that bill Medicare for physician fee schedule services.
We expect that the changes we are making to the physician fee schedule
RVUs under section 1848(c) will result in a redistribution of Medicare
allowed charges of more than $100 million in one year. For this reason,
we are considering this final rule to be economically significant.
Therefore, this final rule is a major rule and we have prepared a
regulatory impact analysis.
The RFA requires that we analyze regulatory options for small
businesses and other entities. We prepare a Regulatory Flexibility
Analysis unless we certify that a rule would not have a significant
economic impact on a substantial number of small entities. The analysis
must include a justification concerning the reason action is being
taken, the kinds and number of small entities the rule affects, and an
explanation of any meaningful options that achieve the objectives and
less significant adverse economic impact on the small entities.
Section 1102(b) of the Act requires us to prepare a regulatory
impact analysis for any final rule that may have a significant impact
on the operations of a substantial number of small rural hospitals.
This analysis must conform to the provisions of section 603 of the RFA.
For purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside a Metropolitan
Statistical Area and has fewer than 100 beds.
For purposes of the RFA, physicians, non-physician practitioners,
and suppliers are considered small businesses if they generate revenues
of $6 million or less. Approximately 95 percent of physicians (except
mental health specialists) are considered to be small entities. There
are about 900,000 physicians, other practitioners and medical suppliers
that receive Medicare payment under the physician fee schedule.
The analysis and discussion provided in this section as well as
elsewhere in this final rule complies with the RFA requirements.
Section 202 of the Unfunded Mandates Reform Act of 1995 also requires
that agencies assess anticipated costs and benefits before issuing any
rule that may result in expenditure in any 1 year by State, local, or
tribal governments, in the aggregate, or by the private sector, of $110
million. This final rule would not impose unfunded mandates on State,
local, or tribal governments, or on the private sector of more than
$110 million dollars.
We have examined this final rule in accordance with Executive Order
13132 and have determined that this regulation would not have any
significant impact on the rights, roles, or responsibilities of State,
local, or tribal governments.
We have prepared the following analysis, which together with the
rest of this preamble, meets all assessment requirements. It explains
the rationale for, and purposes of, the rule, details the costs and
benefits of the rule, analyzes alternatives, and presents the measures
we propose to use to minimize the burden on small entities. As
indicated elsewhere in this final rule, we are making changes to the
Medicare Economic Index, refining resource-based practice based
practice expense RVUs, creating new codes for dialysis patient visits
to their physicians and making a variety of other changes to our
regulations, payments or payment policy to ensure that our payment
systems are updated to reflect changes in medical practice and the
relative value of services. We provide information for each of the
policy changes in the relevant sections in this final rule. While this
rule revises the definition of diabetes for the purposes of outpatient
diabetes self-management training, it does not impose reporting,
record-keeping and other compliance requirements. We are unaware of any
relevant Federal rules that duplicate, overlap or conflict with this
proposed rule. The relevant sections of this final rule contain a
description of significant alternatives.
A. Physician Fee Schedule Relative Value Units
As indicated above, we are making changes to the work and practice
expense RVUs under the provisions of section 1848(c)(2) of the Act and
section 429(b) of BIPA. Under section 1848(c)(2) of the Act,
adjustments to RVUs may not cause the amount of expenditures to differ
by more than $20 million from the amount of expenditures that would
have resulted without such adjustments. We are making several changes
under section 1848(c)(2) that would result in a change of expenditures
that would exceed $20 million threshold if we made no offsetting
adjustments to either the conversion factor or RVUs.
With respect to practice expense, our policy has been to meet the
budget neutrality requirements in the statute by incorporating a
rescaling adjustment in the practice expense methodology. That is, we
estimate the aggregate number of practice expense relative values that
will be paid under current and revised policy in CY 2004. We apply a
uniform adjustment factor to make the aggregate number of revised
practice expense relative values equal the estimated number that would
be paid under current policy. We are applying this policy for all
changes that we are making under section 1848(c).
Table 26 shows the specialty level impact on payment of changes
being made for CY 2004. The payment impacts reflect averages for each
specialty based on Medicare utilization. The payment impact for an
individual physician would be different from the average, based on the
mix of services the physician provides. The average change in total
revenues would be less than the impact displayed here since physicians
furnish services to both Medicare and non-Medicare patients and
specialties may receive substantial Medicare revenues for services that
are not paid under the physician fee schedule. For instance,
independent laboratories receive 17 of their revenues from physician
schedule services and the remainder for laboratory fee schedule
services that are unaffected by this rule. We modeled the impact of all
changes to the relative value units and illustrated their effect in
table 26. The column labeled ``NPRM'' shows the combined effect of all
of the changes contained in the August 15, 2003 proposed rule (see 68
FR 49033 to 49038 for a detailed discussion of each provision).
The column labeled ``Practice Expense Refinements'' shows the
impact on payment from further changes to the practice expense inputs
that we made using information that became available to us since the
proposed rule. In some cases, we made changes to the practice expense
inputs in response to public comments. In other situations, we may have
received
[[Page 63254]]
a price for an item of medical equipment or supplies where we
previously did not have one. In most cases, these changes may increase
or decrease the practice expense RVU for a given code but will have
very little impact across all of the services provided by a specialty.
However, in one case, we include prices for several items of equipment
and supplies that are generally used by otolaryngologists. The addition
of this new information increased payment for many procedural services
provided by otolaryngologists and reduced payment for their diagnostic
services. The net effect of these changes is to increase payments to
otolaryngologists by the 1 percent shown in table x. Audiologists
provide many of the same diagnostic services that are billed to
Medicare by otolaryngologists resulting in the approximate 2 percent
decrease in payment shown in table 26 for audiologists. Similarly,
there may be some very small additional impact on allergy from the
additional practice expense refinements. There were a number of coding
changes made by CPT to central venous access codes. It is possible
there may be small impact on payment from these coding changes for
interventional radiology.
The ``Practice Expense Refinements'' column also shows an increase
in payment of 2 percent for radiation oncology and 1 percent for
portable x-ray suppliers. These impacts are a result of our decision to
use the non-physician work pool methodology to develop the practice
expense RVUs for procedure code 77418 (Intensity Modulated Radiation
Therapy).
We also modeled the effect of adjusting the RVUs to match the new
MEI weights. Because we are increasing the malpractice RVUs by
approximately 20 percent, adjusting the RVUs to match the new MEI
weights will result in an increase in payment for those specialties
that perform services with high malpractice RVUs. Payments to cardiac
surgery, neurosurgery, orthopedic surgery, thoracic surgery and
vascular surgery will increase by approximately 1 percent. The column
labeled ``Total'' shows the impact of all changes that we are making to
the work and practice expense RVUs for 2004.
[[Page 63255]]
Table 26.--Impact of Physician Fee Schedule Changes on Total Medicare Allowed Charges by Physician, Practitioner
and Supplier Subcategory
----------------------------------------------------------------------------------------------------------------
Adjusting
Medicare Practice RVUs to
Specialty allowed NPRM expense match MEI Total
charges (percent) refinements weights (percent)
(millions) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Physicians:
ALLERGY/IMMUNOLOGY.................... $153 -1 -1 0 -2
ANESTHESIOLOGY........................ 1,327 0 0 0 0
CARDIAC SURGERY....................... 321 0 0 1 0
CARDIOLOGY............................ 5,759 0 0 0 0
CLINICS............................... 1,167 0 0 0 0
COLON AND RECTAL SURGERY.............. 101 1 0 0 1
CRITICAL CARE......................... 108 -1 0 0 -1
DERMATOLOGY........................... 1,708 0 0 0 0
EMERGENCY MEDICINE.................... 1,444 0 0 0 0
ENDOCRINOLOGY......................... 246 1 0 0 1
FAMILY PRACTICE....................... 4,005 1 0 0 1
GASTROENTEROLOGY...................... 1,513 -1 0 0 -1
GENERAL PRACTICE...................... 954 0 0 0 0
GENERAL SURGERY....................... 2,110 -1 0 0 0
GERIATRICS............................ 97 -1 1 0 0
HAND SURGERY.......................... 46 -2 0 0 -2
HEMATOLOGY/ONCOLOGY................... 1,086 1 0 0 1
INFECTIOUS DISEASE.................... 336 0 0 0 0
INTERNAL MEDICINE..................... 7,917 1 0 0 1
INTERVENTIONAL RADIOLOGY.............. 155 0 -1 0 0
NEPHROLOGY............................ 1,187 0 0 0 0
NEUROLOGY............................. 1,072 1 0 0 1
NEUROSURGERY.......................... 433 0 0 1 1
OBSTETRICS/GYNECOLOGY................. 550 1 0 0 1
OPHTHALMOLOGY......................... 4,291 -1 0 0 -1
ORTHOPEDIC SURGERY.................... 2,645 -2 0 1 -1
OTOLARNGOLOGY......................... 735 2 1 0 3
PATHOLOGY............................. 799 0 0 0 0
PEDIATRICS............................ 58 0 0 0 0
PHYSICAL MEDICINE..................... 594 1 0 0 1
PLASTIC SURGERY....................... 274 0 0 0 0
PSYCHIATRY............................ 1,073 0 0 0 0
PULMONARY DISEASE..................... 1,305 -1 0 0 -1
RADIATION ONCOLOGY.................... 1,002 -3 2 0 0
RADIOLOGY............................. 4,230 0 0 0 0
RHEUMATOLOGY.......................... 352 1 0 0 1
THORACIC SURGERY...................... 446 -1 0 1 0
UROLOGY............................... 1,540 2 0 0 1
VASCULAR SURGERY...................... 429 -1 0 1 0
Practitioners:
AUDIOLOGIST........................... 25 -1 -2 1 -1
CHIROPRACTOR.......................... 589 0 0 0 0
CLINICAL PSYCHOLOGIST................. 449 0 0 0 0
CLINICAL SOCIAL WORKER................ 277 0 0 0 0
NURSE ANESTHETIST..................... 452 0 0 1 1
NURSE PRACTITIONER.................... 434 -1 1 0 0
OPTOMETRY............................. 611 1 0 0 0
ORAL/MAXILLOFACIAL SURGERY............ 33 8 0 0 8
PHYSICAL/OCCUPATIONAL THERAPY......... 835 0 0 1 0
PHYSICIANS ASSISTANT.................. 322 0 0 0 0
PODIATRY.............................. 1,307 -1 0 0 -1
Suppliers:
DIAGNOSTIC TESTING FACILITY........... 728 0 0 0 0
INDEPENDENT LABORATORY................ 508 2 0 0 1
PORTABLE X-RAY SUPPLIER............... 82 -1 1 0 0
Other:
ALL OTHER............................. 54 0 0 0 0
ALL PHYSICIAN FEE SCHEDULE............ 60,385 0 0 0 0
----------------------------------------------------------------------------------------------------------------
The statutory methodology for updating physician fee schedule
conversion factor is specified in section 1848(d)(4) of the Act.
Consistent with the requirements of section 1848(d)(4) of the Act, as
explained in section VI of this final rule, we are reducing the
physician fee schedule conversion factor by approximately 4.5 percent.
In table 27, we are showing the estimated change in average payments by
specialty based on provisions of this final rule
[[Page 63256]]
and the estimated physician fee schedule update.
Table 27.--Impact of Physician Fee Schedule Changes on Total Medicare Allowed Charges by Physician,
Practitioner, and Supplier Subcategory Including the Effect of the Physician Fee Schedule Update
----------------------------------------------------------------------------------------------------------------
Physician
Medicare Impact of fee
Specialty allowed RVU changes schedule Total
charges (percent) update (percent)
(millions) (percent)
----------------------------------------------------------------------------------------------------------------
Physicians:
ALLERGY/IMMUNOLOGY.................................. $153 -2 -4.5 -6
ANESTHESIOLOGY...................................... 1,327 0 -4.5 -4
CARDIAC SURGERY..................................... 321 0 -4.5 -4
CARDIOLOGY.......................................... 5,759 0 -4.5 -4
CLINICS............................................. 1,167 0 -4.5 -4
COLON AND RECTAL SURGERY............................ 101 1 -4.5 -4
CRITICAL CARE....................................... 108 -1 -4.5 -5
DERMATOLOGY......................................... 1,708 0 -4.5 -5
EMERGENCY MEDICINE.................................. 1,444 0 -4.5 -4
ENDOCRINOLOGY....................................... 246 1 -4.5 -4
FAMILY PRACTICE..................................... 4,005 1 -4.5 -4
GASTROENTEROLOGY.................................... 1,513 -1 -4.5 -5
GENERAL PRACTICE.................................... 954 0 -4.5 -4
GENERAL SURGERY..................................... 2,110 0 -4.5 -5
GERIATRICS.......................................... 97 0 -4.5 -5
HAND SURGERY........................................ 46 -2 -4.5 -7
HEMATOLOGY/ONCOLOGY................................. 1,086 1 -4.5 -4
INFECTIOUS DISEASE.................................. 336 0 -4.5 -5
INTERNAL MEDICINE................................... 7,917 1 -4.5 -4
INTERVENTIONAL RADIOLOGY............................ 155 0 -4.5 -5
NEPHROLOGY.......................................... 1,187 0 -4.5 -5
NEUROLOGY........................................... 1,072 1 -4.5 -3
NEUROSURGERY........................................ 433 1 -4.5 -4
OBSTETRICS/GYNECOLOGY............................... 550 1 -4.5 -4
OPHTHALMOLOGY....................................... 4,291 -1 -4.5 -5
ORTHOPEDIC SURGERY.................................. 2,645 -1 -4.5 -6
OTOLARNGOLOGY....................................... 735 3 -4.5 -2
PATHOLOGY........................................... 799 0 -4.5 -4
PEDIATRICS.......................................... 58 0 -4.5 -4
PHYSICAL MEDICINE................................... 594 1 -4.5 -4
PLASTIC SURGERY..................................... 274 0 -4.5 -4
PSYCHIATRY.......................................... 1,073 0 -4.5 -5
PULMONARY DISEASE................................... 1,305 -1 -4.5 -6
RADIATION ONCOLOGY.................................. 1,002 0 -4.5 -5
RADIOLOGY........................................... 4,230 0 -4.5 -5
RHEUMATOLOGY........................................ 352 1 -4.5 -3
THORACIC SURGERY.................................... 446 0 -4.5 -4
UROLOGY............................................. 1,540 1 -4.5 -3
VASCULAR SURGERY.................................... 429 0 -4.5 -5
Practitioners:
AUDIOLOGIST......................................... 25 -1 -4.5 -6
CHIROPRACTOR........................................ 589 0 -4.5 -4
CLINICAL PSYCHOLOGIST............................... 449 0 -4.5 -5
CLINICAL SOCIAL WORKER.............................. 277 0 -4.5 -5
NURSE ANESTHETIST................................... 452 1 -4.5 -4
NURSE PRACTITIONER.................................. 434 0 -4.5 -4
OPTOMETRY........................................... 611 0 -4.5 -4
ORAL/MAXILLOFACIAL SURGERY.......................... 33 8 -4.5 3
PHYSICAL/OCCUPATIONAL THERAPY....................... 835 0 -4.5 -4
PHYSICIANS ASSISTANT................................ 322 0 -4.5 -4
PODIATRY............................................ 1,307 -1 -4.5 -5
Suppliers:
DIAGNOSTIC TESTING FACILITY......................... 728 0 -4.5 -5
INDEPENDENT LABORATORY.............................. 508 1 -4.5 -3
PORTABLE X-RAY SUPPLIER............................. 82 0 -4.5 -4
Other:
ALL OTHER........................................... 54 0 -4.5 -4
ALL PHYSICIAN FEE SCHEDULE.......................... 60,385 0 -4.5 -4
----------------------------------------------------------------------------------------------------------------
[[Page 63257]]
Table 28 shows the impact on payments for selected high volume
procedures of all of the changes previously discussed. This table shows
the combined impact of the change in the work, practice expense and
malpractice RVUs and the estimated physician fee schedule update on
total payment for the procedure. There are separate columns that show
the change in the facility rates and the non-facility rates. For an
explanation of facility and non-facility practice expense refer to
Sec. 414.22(b)(5)(i).
Table 28.--Impact of Final Rule and Physician Fee Schedule Update on Medicare Payment for Selected Procedures
----------------------------------------------------------------------------------------------------------------
Non-Facility Facility
HCPCS MOD DESC --------------------------------------------------------------------
Old New % change Old New % change
----------------------------------------------------------------------------------------------------------------
11721............ ...... Debride nail, 6 $37.52 $36.19 -4 29.06 28.11 -3
or more.
17000............ ...... Destroy benign/ 61.43 57.27 -7 33.11 33.73 2
premlg lesion.
27130............ ...... Total hip N/A N/A N/A 1,343.41 1,290.82 -4
arthroplasty.
27236............ ...... Treat thigh N/A N/A N/A 1,068.99 1,024.86 -4
fracture.
27244............ ...... Treat thigh N/A N/A N/A 1,155.44 1,050.15 -9
fracture.
27447............ ...... Total knee N/A N/A N/A 1,445.67 1,390.25 -4
arthroplasty.
33533............ ...... CABG, arterial, N/A N/A N/A 1,799.18 1,742.99 -3
single.
35301............ ...... Rechanneling of N/A N/A N/A 1,073.77 1,043.83 -3
artery.
43239............ ...... Upper GI 337.69 305.31 -10 155.97 150.02 -4
endoscopy,
biopsy.
45385............ ...... Lesion removal 545.53 471.85 -14 290.61 271.23 -7
colonoscopy.
66821............ ...... After cataract 231.01 227.32 -2 214.83 224.15 4
laser surgery.
66984............ ...... Cataract surg w/ N/A N/A N/A 672.81 645.06 -4
iol, 1 stage.
67210............ ...... Treatment of 604.39 544.58 -10 548.47 528.41 -4
retinal lesion.
71010............ 26 Chest x-ray..... 9.20 8.78 -5 9.20 8.78 -5
71020............ 26 Chest x-ray..... 11.04 10.54 -5 11.04 10.54 -5
76091............ ...... Mammogram, both 94.17 89.94 -4 N/A N/A N/A
breasts.
76091............ 26 Mammogram, both 44.14 42.16 -4 44.14 42.16 -4
breasts.
76092............ ...... Mammogram, 82.77 79.40 -4 N/A N/A N/A
screening.
76092............ 26 Mammogram, 36.05 34.08 -5 36.05 34.08 -5
screening.
77427............ ...... Radiation tx 168.11 158.81 -6 168.11 158.81 -6
management, x5.
78465............ 26 Heart image 75.41 71.67 -5 75.41 71.67 -5
(3d), multiple.
88305............ 26 Tissue exam by 40.83 39.00 -4 40.83 39.00 -4
pathologist.
90801............ ...... Psy dx interview 148.98 141.94 -5 140.52 133.16 -5
90806............ ...... Psytx, off, 45- 96.38 91.70 -5 92.70 88.54 -4
50 min.
90807............ ...... Psytx, off, 45- 102.63 97.32 -5 100.06 95.21 -5
50 min w/e&m.
90862............ ...... Medication 50.76 48.13 -5 47.82 45.32 -5
management.
90935............ ...... Hemodialysis, N/A N/A N/A 71.36 67.81 -5
one evaluation.
92004............ ...... Eye exam, new 123.60 119.46 -3 88.29 83.62 -5
patient.
92012............ ...... Eye exam 61.43 60.08 -2 36.05 34.08 -5
established pat.
92014............ ...... Eye exam & 91.60 88.19 -4 58.86 55.86 -5
treatment.
92980............ ...... Insert N/A N/A N/A 800.45 763.81 -5
intracoronary
stent.
92982............ ...... Coronary artery N/A N/A N/A 594.46 566.71 -5
dilation.
93000............ ...... Electrocardiogra 26.12 24.95 -2 N/A N/A N/A
m, complete.
93010............ ...... Electrocardiogra 8.83 8.43 -5 8.83 8.43 -5
m report.
93015............ ...... Cardiovascular 104.10 99.78 -4 N/A N/A N/A
stress test.
93307............ 26 Echo exam of 48.19 46.03 -4 48.19 46.03 -4
heart.
93510............ 26 Left heart 231.38 237.86 3 231.38 237.86 3
catheterization.
98941............ ...... Chiropractic 35.68 34.08 -4 31.27 29.86 -5
manipulation.
99203............ ...... Office/ 92.70 90.65 -2 70.26 67.46 -4
outpatient
visit, new.
99204............ ...... Office/ 132.06 128.24 -3 103.74 99.08 -4
outpatient
visit, new.
99205............ ...... Office/ 168.48 161.97 -4 137.58 130.70 -5
outpatient
visit, new.
99211............ ...... Office/ 20.60 20.73 1 8.83 8.43 -5
outpatient
visit, est.
99212............ ...... Office/ 36.42 36.19 -1 23.17 22.13 -4
outpatient
visit, est.
99213............ ...... Office/ 51.13 49.89 -2 34.58 33.03 -4
outpatient
visit, est.
99214............ ...... Office/ 79.82 77.29 -3 56.65 53.75 -5
outpatient
visit, est.
99215............ ...... Office/ 116.98 112.43 -4 91.23 86.78 -5
outpatient
visit, est.
99221............ ...... Initial hospital N/A N/A N/A 65.85 62.54 -5
care.
99222............ ...... Initial hospital N/A N/A N/A 109.25 104.00 -5
care.
99223............ ...... Initial hospital N/A N/A N/A 151.92 144.75 -5
care.
99231............ ...... Subsequent N/A N/A N/A 32.74 31.27 -4
hospital care.
99232............ ...... Subsequent N/A N/A N/A 54.07 51.30 -5
hospital care.
99233............ ...... Subsequent N/A N/A N/A 76.88 73.43 -4
hospital care.
99236............ ...... Observ/hosp same N/A N/A N/A 216.67 211.86 -2
date.
99238............ ...... Hospital N/A N/A N/A 69.16 65.70 -5
discharge day.
99239............ ...... Hospital N/A N/A N/A 93.80 89.24 -5
discharge day.
99241............ ...... Office 47.45 47.08 -1 33.11 31.97 -3
consultation.
99242............ ...... Office 88.29 86.08 -3 68.05 65.35 -4
consultation.
99243............ ...... Office 116.61 113.83 -2 90.49 86.43 -4
consultation.
99244............ ...... Office 165.90 160.91 -3 134.27 127.89 -5
consultation.
99245............ ...... Office 215.20 206.94 -4 177.67 169.35 -5
consultation.
99251............ ...... Initial N/A N/A N/A 34.95 33.73 -3
inpatient
consult.
99252............ ...... Initial N/A N/A N/A 70.26 67.46 -4
inpatient
consult.
99253............ ...... Initial N/A N/A N/A 96.01 91.35 -5
inpatient
consult.
[[Page 63258]]
99254............ ...... Initial N/A N/A N/A 137.95 131.05 -5
inpatient
consult.
99255............ ...... Initial N/A N/A N/A 189.81 180.94 -5
inpatient
consult.
99261............ ...... Follow-up N/A N/A N/A 22.07 20.73 -6
inpatient
consult.
99262............ ...... Follow-up N/A N/A N/A 43.77 42.16 -4
inpatient
consult.
99263............ ...... Follow-up N/A N/A N/A 65.11 62.19 -4
inpatient
consult.
99282............ ...... Emergency dept N/A N/A N/A 26.85 26.00 -3
visit.
99283............ ...... Emergency dept N/A N/A N/A 60.33 57.62 -4
visit.
99284............ ...... Emergency dept N/A N/A N/A 94.17 89.94 -4
visit.
99285............ ...... Emergency dept N/A N/A N/A 146.77 140.18 -4
visit.
99291............ ...... Critical care, 210.05 229.07 9 200.11 191.13 -4
first hour.
99292............ ...... Critical care, 107.78 101.19 -6 100.06 95.21 -5
add'l 30 min.
99301............ ...... Nursing facility 71.00 67.46 -5 61.06 57.97 -5
care.
99302............ ...... Nursing facility 96.75 92.05 -5 81.30 77.65 -4
care.
99303............ ...... Nursing facility 119.92 114.19 -5 101.16 96.27 -5
care.
99311............ ...... Nursing fac 40.83 39.00 -4 30.53 28.81 -6
care, subseq.
99312............ ...... Nursing fac 62.54 59.38 -5 50.40 48.13 -5
care, subseq.
99313............ ...... Nursing fac 85.71 81.16 -5 71.73 68.16 -5
care, subseq.
99348............ ...... Home visit, est 74.31 70.62 -5 N/A N/A N/A
patient.
99350............ ...... Home visit, est 167.74 160.21 -4 N/A N/A N/A
patient.
G0317............ ...... ESRDrelsvc 4+/ 262.28 285.29 9 262.28 285.29 9
mo; 20+yr.
G0318............ ...... ESRDrelsvc 2-3/ 262.28 237.51 -9 262.28 237.51 -9
mo; 20+yr.
G0319............ ...... ESRDrelsvc 1/mo; 262.28 190.07 -28 262.28 190.07 -28
20+yr.
----------------------------------------------------------------------------------------------------------------
B. Geographic Practice Cost Index Changes
Section 1848(e)(1)(A) of the Act requires that payments under the
Medicare physician fee schedule vary among payment areas only to the
extent that area costs vary as reflected by the area GPCIs. The GPCIs
measure areas cost differences in the three components of the physician
fee schedule: Physician work, practice expenses, and malpractice
insurance. Section 1848(e)(1)(C) of the Act requires that the GPCIs be
reviewed and, if necessary, revised at least every 3 years. Due to
problems with the availability of U.S. Census Bureau data, which is the
major resource utilized in both the work and practice expense GPCIs, we
have updated only the malpractice GPCI in this regulation.
The first GPCI revision was implemented in 1995. The second
revision was implemented in 1998. The third revision was implemented in
2001. This constitutes the fourth revision to the GPCIs. Section
1848(e)(1)(C) of the Act also requires that GPCI revisions be phased in
equally over a 2-year period if more than one year has elapsed since
the last adjustment.
In order to mitigate the volatility associated with malpractice
insurance premiums, we reduced the percent change in the malpractice
GPCIs by a factor of 50 percent. As directed by the statute, we will
implement \1/2\ of this change in the first year (CY 2004) and \1/2\ of
this change in the second year (CY 2005). During this two-year phase-
in, we will continue to work with the State Departments of Insurance to
obtain the most current malpractice premium data available. As more
current data are obtained, we will review and revise the malpractice
GPCIs as appropriate.
An estimate of the 2004 proposed malpractice GPCI changes can be
demonstrated by a comparison of area geographic adjustment factors
(GAFs). The GAFs are a weighted composite of each area's work, practice
expense, and malpractice expense GPCIs using the national GPCI cost
share weights. While we do not actually use the GAFs in computing the
fee schedule payment for a specific service, they are useful in
comparing overall area costs and payments. The actual effect on payment
for any specific service will deviate from the GAF to the extent that
the service's proportions of work, practice expenses, and malpractice
expense RVUs differ from those of the GAF. Table 27 shows the estimated
effects of the revised 2004 malpractice GPCIs on area GAFs. As directed
by statute, the 2004 GAFs reflect only \1/2\ of the impact of the
revision to the malpractice GPCIs.
With the exception of Detroit, Michigan, no locality experienced an
increase of more than 1 percent in total payments due to the revision
of their malpractice GPCI for 2004. Alternatively, locality specific
decreases in total payments due to the revision of the malpractice
GPCIs do not exceed 1 percent for any given locality in 2004.
Table 29.--Revised Geographic Adjustment Factors from Final Rule
----------------------------------------------------------------------------------------------------------------
Locality Percent
Carrier No. No. Locality name 2003 GAF 2004 GAF difference
----------------------------------------------------------------------------------------------------------------
00510............................... 00 Alabama............... 0.927 0.923 -0.4
00831............................... 01 Alaska................ 1.115 1.113 -0.1
00832............................... 00 Arizona............... 0.991 0.991 0.0
00520............................... 13 Arkansas.............. 0.889 0.885 -0.4
31146............................... 26 Anaheim/Santa Ana, CA. 1.096 1.098 0.1
31146............................... 18 Los Angeles, CA....... 1.088 1.088 0.0
31140............................... 03 Marin/Napa/Solano, CA. 1.103 1.104 0.0
31140............................... 07 Oakland/Berkeley, CA.. 1.112 1.111 0.0
[[Page 63259]]
31140............................... 05 San Francisco, CA..... 1.221 1.223 0.2
31140............................... 06 San Mateo, CA......... 1.199 1.201 0.2
31140............................... 09 Santa Clara, CA....... 1.184 1.184 0.1
31146............................... 17 Ventura, CA........... 1.061 1.060 -0.1
31146............................... 99 Rest of California*... 1.010 1.008 -0.2
31140............................... 99 Rest of California*... 1.010 1.008 -0.2
00824............................... 01 Colorado.............. 0.983 0.982 -0.2
00591............................... 00 Connecticut........... 1.092 1.092 0.0
00902............................... 01 Delaware.............. 1.016 1.018 0.2
00903............................... 01 DC + MD/VA Suburbs.... 1.094 1.095 0.1
00590............................... 03 Fort Lauderdale, FL... 1.034 1.036 0.3
00590............................... 04 Miami, FL............. 1.079 1.085 0.5
00590............................... 99 Rest of Florida....... 0.972 0.974 0.2
00511............................... 01 Atlanta, GA........... 1.026 1.027 0.1
00511............................... 99 Rest of Georgia....... 0.936 0.935 -0.1
00833............................... 01 Hawaii/Guam........... 1.046 1.046 0.0
05130............................... 00 Idaho................. 0.912 0.907 -0.5
00952............................... 16 Chicago, IL........... 1.079 1.087 0.7
00952............................... 12 East St. Louis, IL.... 0.983 0.988 0.5
00952............................... 15 Suburban Chicago, IL.. 1.054 1.059 0.5
00952............................... 99 Rest of Illinois...... 0.939 0.940 0.1
00630............................... 00 Indiana............... 0.940 0.935 -0.5
00826............................... 00 Iowa.................. 0.912 0.909 -0.4
00650............................... 00 Kansas *.............. 0.928 0.925 -0.3
00740............................... 02 Kansas *.............. 0.928 0.925 -0.3
00660............................... 00 Kentucky.............. 0.923 0.921 -0.2
00528............................... 01 New Orleans, LA....... 0.985 0.984 0.0
00528............................... 99 Rest of Louisiana..... 0.930 0.929 -0.1
31142............................... 03 Southern Maine........ 0.977 0.975 -0.2
31142............................... 99 Rest of Maine......... 0.930 0.927 -0.3
00901............................... 01 Baltimore/Surr. Cntys, 1.025 1.025 0.0
MD.
00901............................... 99 Rest of Maryland...... 0.972 0.970 -0.2
31143............................... 01 Metropolitan Boston... 1.117 1.118 0.2
31143............................... 99 Rest of Massachusetts. 1.053 1.054 0.1
00953............................... 01 Detroit, MI........... 1.095 1.106 1.0
00953............................... 99 Rest of Michigan...... 0.990 0.992 0.2
00954............................... 00 Minnesota............. 0.966 0.962 -0.5
00512............................... 00 Mississippi........... 0.900 0.896 -0.4
00740............................... 04 Metropolitan Kansas 0.974 0.975 0.1
City, MO.
00523............................... 01 Metropolitan St. 0.965 0.966 0.0
Louis, MO.
00740............................... 99 Rest of Missouri *.... 0.890 0.889 -0.1
00523............................... 99 Rest of Missouri *.... 0.890 0.889 -0.1
00751............................... 01 Montana............... 0.912 0.913 0.1
00655............................... 00 Nebraska.............. 0.902 0.898 -0.4
00834............................... 00 Nevada................ 1.026 1.025 -0.1
31144............................... 40 New Hampshire......... 0.999 1.001 0.2
00805............................... 01 Northern NJ........... 1.109 1.111 0.2
00805............................... 99 Rest of New Jersey.... 1.058 1.060 0.2
00521............................... 05 New Mexico............ 0.940 0.938 -0.2
00803............................... 01 Manhattan, NY......... 1.221 1.225 0.3
00803............................... 02 Nyc Suburbs/Long I., 1.174 1.179 0.4
NY.
00803............................... 03 Poughkpsie/N Nyc 1.046 1.047 0.1
Suburbs, NY.
14330............................... 04 Queens, NY............ 1.156 1.161 0.4
00801............................... 99 Rest of New York...... 0.968 0.964 -0.4
05535............................... 00 North Carolina........ 0.941 0.939 -0.2
00820............................... 01 North Dakota.......... 0.911 0.907 -0.4
00883............................... 00 Ohio.................. 0.968 0.968 0.0
00522............................... 00 Oklahoma.............. 0.912 0.907 -0.7
00835............................... 01 Portland, OR.......... 1.000 0.998 -0.3
00835............................... 99 Rest of Oregon........ 0.932 0.929 -0.4
00865............................... 01 Metropolitan 1.064 1.067 0.3
Philadelphia, PA.
00865............................... 99 Rest of Pennsylvania.. 0.957 0.955 -0.2
00973............................... 20 Puerto Rico........... 0.790 0.784 -0.8
00870............................... 01 Rhode Island.......... 1.033 1.033 0.0
00880............................... 01 South Carolina........ 0.922 0.919 -0.4
00820............................... 02 South Dakota.......... 0.894 0.889 -0.6
05440............................... 35 Tennessee............. 0.931 0.928 -0.3
00900............................... 31 Austin, TX............ 0.986 0.988 0.2
00900............................... 20 Beaumont, TX.......... 0.960 0.960 0.0
00900............................... 09 Brazoria, TX.......... 0.997 0.999 0.1
00900............................... 11 Dallas, TX............ 1.031 1.033 0.3
[[Page 63260]]
00900............................... 28 Fort Worth, TX........ 0.983 0.985 0.2
00900............................... 15 Galveston, TX......... 0.991 0.992 0.1
00900............................... 18 Houston, TX........... 1.025 1.026 0.1
00900............................... 99 Rest of Texas......... 0.929 0.932 0.2
00910............................... 09 Utah.................. 0.951 0.948 -0.2
31145............................... 50 Vermont............... 0.965 0.962 -0.3
00973............................... 50 Virgin Islands........ 0.991 0.992 0.1
00904............................... 00 Virginia.............. 0.949 0.947 -0.2
00836............................... 02 Seattle (King Cnty), 1.038 1.038 0.0
WA.
00836............................... 99 Rest of Washington.... 0.971 0.970 -0.1
00884............................... 16 West Virginia......... 0.929 0.933 0.5
00951............................... 00 Wisconsin............. 0.958 0.954 -0.4
00825............................... 21 Wyoming............... 0.938 0.936 -0.2
----------------------------------------------------------------------------------------------------------------
C. Tracking Codes
We are adopting a policy that will allow CMS to create national
payment policy and determine national payment amounts for CPT tracking
codes regardless of whether a national coverage determination for a
specific service has been made. Our policy will have no effect on
Medicare expenditures but will allow for more flexibility in
determining payment rates for new services.
D. G Codes for Managing Dialysis Patients
As previously discussed in section II.D., we have reviewed our
current payment policy for the monthly dialysis capitation payment in
response to concerns that have been raised over whether our payment
policy is consistent with current medical practice. We are establishing
new G codes for these services and are aligning Medicare's payment to
recognize the higher amount of physician work associated with more
frequent face-to-face visits. Aggregated Medicare payments to
physicians for treating dialysis patients will not be increased or
decreased by the establishment of these new procedure codes. Relative
to payment based on the current CPT codes, Medicare payments to
physicians for providing fewer than four visits per month will
decrease. If the physician provides four or more visits per month,
payment will increase. The net effect of these payment changes will not
increase or decrease aggregate Medicare payment for physician services
provided to dialysis patients.
E. Rebasing and Revising the MEI
Section IV.B. of this final rule discusses rebasing and revising
the MEI for the CY 2004 physician fee schedule. Substituting the 2000
MEI weights in place of the 1996 weights increases the MEI by 0.1
percent for 2004. After 2004, the MEI in some years is likely to be
unaffected by using more recent year weights while other years may have
slightly higher increases (between 0.1 to 0.2 percentage points).
F. Definition of Diabetes for Diabetes Self-Management Training
In section III.A., we revised the definition of diabetes for
purposes of the Outpatient Diabetes Self-Management Training benefit
and are using this definition to determine beneficiary eligibility for
Medical Nutrition Therapy when the beneficiary has a diagnosis of
diabetes. The streamlining of the beneficiary eligibility requirements
for Outpatient Diabetes Self-Management Training will reduce
administrative burden for the referring physician or qualified non-
physician practitioner and for the accredited Outpatient Diabetes Self-
Management Training programs by simplifying documentation requirements
and eliminating the need for reconsiderations and appeals to clarify
that the requirements have been met. As indicated in the February 28,
2003 Federal Register (68 FR 9572), we incorporated an adjustment to
the SGR consistent with our original estimates of expenditures
associated with this new benefit. Our experience is that expenditures
have been less than originally estimated. We expect that simplifying
administrative requirements associated with this new benefit will make
it more likely that expenditures for diabetes self-management training
will be consistent with original estimates and there will be no
increase in Medicare expenditures from making these modifications.
G. Payment Policies for Anesthesia Services
In section III.D. of this final rule, we discussed Medicare payment
for anesthesia services involving anesthesiologists and residents.
Effective January 1, 2004, we are revising our teaching anesthesia
rules to allow teaching anesthesiologists to bill, similar to teaching
CRNAs, for their involvement in two concurrent cases with residents.
The policy change will allow anesthesiologists to be paid either under
the rules for medical direction or the same way that teaching CRNAs are
paid for two concurrent cases. We are uncertain how the practice
arrangements of teaching anesthesiologists will change as a result of
this new policy. We believe that most teaching anesthesiologists will
continue to function under the medical direction practice model for
concurrent cases involving residents. Therefore, we believe there will
be minimal change in Medicare program expenditures as a result of this
change.
H. Alternatives Considered
This proposed rule contains a range of policies. The preamble
identifies those policies when discretion has been exercised and
presents rationale for our decisions, including a presentation of
nonselected options.
I. Impact on Beneficiaries
Although changes in physicians' payments were large when the
physician fee schedule was implemented in 1992, we detected no problems
with beneficiary access to care. While it has been suggested that the
negative update for 2004 may affect beneficiary access to care, we note
that the formula to determine this update is set by statute and this
regulation cannot, and does not, change it. Nevertheless, we remain
concerned about the issue and will continue to study the issue to the
best of our ability with available resources.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
[[Page 63261]]
List of Subjects
42 CFR Part 410
Health facilities, Health professions, Kidney diseases,
42 CFR Part 414
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medicare, Reporting and recordkeeping
requirements, Rural areas, X-rays.
0
For the reasons set forth in the preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR chapter IV as follows:
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
0
1. The authority citation for part 410 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
2. Section 410.130 is amended by revising the definition of
``Diabetes'' to read as follows:
Sec. 410.130 Definitions
* * * * *
Diabetes means diabetes mellitus, a condition of abnormal glucose
metabolism diagnosed using the following criteria: A fasting blood
sugar greater than or equal to 126 mg/dL on two different occasions; a
2 hour post-glucose challenge greater than or equal to 200 mg/dL on 2
different occasions; or a random glucose test over 200 mg/dL for a
person with symptoms of uncontrolled diabetes.
* * * * *
0
3. Section 410.140 is amended by adding the definition of ``Diabetes''
in alphabetical order to read as follows:
Sec. 410.140 Definitions
* * * * *
Diabetes means diabetes mellitus, a condition of abnormal glucose
metabolism diagnosed using the following criteria: A fasting blood
sugar greater than or equal to 126 mg/dL on two different occasions; a
2 hour post-glucose challenge greater than or equal to 200 mg/dL on 2
different occasions; or a random glucose test over 200 mg/dL for a
person with symptoms of uncontrolled diabetes.
* * * * *
0
4. Section 410.141 is amended by revising paragraph (d) to read as
follows:
Sec. 410.141 Outpatient diabetes self-management training.
* * * * *
(d) Beneficiaries who may be covered. Medicare Part B covers
outpatient diabetes self-management training for a beneficiary who has
been diagnosed with diabetes.
* * * * *
PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES
0
1. The authority citation for part 414 continues to read as follows:
Authority: Secs. 1102, 1871, and 1881(b)(1) of the Social
Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(1)).
0
2. Section 414.22(b)(6)(iii) is revised to read as follows:
Sec. 414.22 Relative value units (RVUs).
* * * * *
(b) * * *
(6) * * *
(iii) CMS will consider for use in determining practice expense
RVUs for the physician fee schedule survey data and related materials
submitted to CMS by March 1, 2004 to determine CY 2005 practice expense
RVUs and by March 1, 2005 to determine CY 2006 practice expense RVUs.
* * * * *
0
3. Section 414.46 is amended to--
0
a. Redesignate paragraphs (e) through (g) as paragraphs (f) through
(h), respectively.
0
b. Add new paragraph (e).
0
The addition reads as follows:
Sec. 414.46 Additional rules for payment of anesthesia services.
* * * * *
(e) Physicians involved with two concurrent cases with residents.
The physician can bill base units and time units based on the amount of
time the physician is actually present with the resident during each of
two concurrent cases furnished on or after January 1, 2004.
(1) To bill the base units, the physician must be present with the
resident during the pre- and post-anesthesia care included in the base
units.
(2) If the physician is not present with the resident during pre-
and post-anesthesia care, then the physician may bill the case as a
medically directed case in accordance with paragraph (d) of this
section.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.774,
Medicare--Supplementary Medical Insurance Program)
Dated: October 28, 2003.
Thomas A Scully,
Administrator, Centers for Medicare & Medicaid Services.
Approved: October 28, 2003.
Tommy G. Thompson,
Secretary.
Note: These addenda will not appear in the Code of Federal
Regulations.
Addendum A--Explanation and Use of Addenda B
The addenda on the following pages provide various data
pertaining to the Medicare fee schedule for physicians' services
furnished in 2003. Addendum B contains the RVUs for work, non-
facility practice expense, facility practice expense, and
malpractice expense, and other information for all services included
in the physician fee schedule.
In previous years, we have listed many services in Addendum B
that are not paid under the physician fee schedule. To avoid
publishing as many pages of codes for these services, we are not
including clinical laboratory codes and most alphanumeric codes
(Healthcare Common Procedure Coding System (HCPCS) codes not
included in CPT) in Addendum B.
Addendum B--2003 Relative Value Units and Related Information Used in
Determining Medicare Payments for 2003
This addendum contains the following information for each CPT
code and alphanumeric HCPCS code, except for alphanumeric codes
beginning with B (enteral and parenteral therapy), E (durable
medical equipment), K (temporary codes for non-physicians' services
or items), or L (orthotics), and codes for anesthesiology.
1. CPT/HCPCS code. This is the CPT or alphanumeric HCPCS number
for the service. Alphanumeric HCPCS codes are included at the end of
this addendum.
2. Modifier. A modifier is shown if there is a technical
component (modifier TC) and a professional component (PC) (modifier
-26) for the service. If there is a PC and a TC for the service,
Addendum B contains three entries for the code: One for the global
values (both professional and technical); one for modifier -26 (PC);
and one for modifier TC. The global service is not designated by a
modifier, and physicians must bill using the code without a modifier
if the physician furnishes both the PC and the TC of the service.
Modifier -53 is shown for a discontinued procedure. There will
be RVUs for the code (CPT code 45378) with this modifier.
3. Status indicator. This indicator shows whether the CPT/HCPCS
code is in the physician fee schedule and whether it is separately
payable if the service is covered.
A = Active code. These codes are separately payable under the
fee schedule if covered. There will be RVUs for codes with this
status. The presence of an ``A'' indicator does not mean that
Medicare has made a national decision regarding the coverage of
[[Page 63262]]
the service. Carriers remain responsible for coverage decisions in
the absence of a national Medicare policy.
B = Bundled code. Payment for covered services is always bundled
into payment for other services not specified. If RVUs are shown,
they are not used for Medicare payment. If these services are
covered, payment for them is subsumed by the payment for the
services to which they are incident. (An example is a telephone call
from a hospital nurse regarding care of a patient.)
C = Carrier-priced code. Carriers will establish RVUs and
payment amounts for these services, generally on a case-by-case
basis following review of documentation, such as an operative
report.
D = Deleted code. These codes are deleted effective with the
beginning of the calendar year.
E = Excluded from physician fee schedule by regulation. These
codes are for items or services that we chose to exclude from the
physician fee schedule payment by regulation. No RVUs are shown, and
no payment may be made under the physician fee schedule for these
codes. Payment for them, if they are covered, continues under
reasonable charge or other payment procedures.
F = Deleted/discontinued codes. Code not subject to a 90-day
grace period.
G = Code not valid for Medicare purposes. Medicare does not
recognize codes assigned this status. Medicare uses another code for
reporting of, and payment for, these services.
H = Deleted modifier. Either the TC or PC component shown for
the code has been deleted, and the deleted component is shown in the
data base with the H status indicator. (Code subject to a 90-day
grace period.)
I = Not valid for Medicare purposes. Medicare uses another code
for the reporting of, and the payment for, these services. (Code NOT
subject to a 90-day grace period.)
N = Non-covered service. These codes are non-covered services.
Medicare payment may not be made for these codes. If RVUs are shown,
they are not used for Medicare payment.
P = Bundled or excluded code. There are no RVUs for these
services. No separate payment should be made for them under the
physician fee schedule.
--If the item or service is covered as incident to a physician's
service and is furnished on the same day as a physician's service,
payment for it is bundled into the payment for the physician's
service to which it is incident (an example is an elastic bandage
furnished by a physician incident to a physician's service).
--If the item or service is covered as other than incident to a
physician's service, it is excluded from the physician fee schedule
(for example, colostomy supplies) and is paid under the other
payment provisions of the Act.
R = Restricted coverage. Special coverage instructions apply. If
the service is covered and no RVUs are shown, it is carrier-priced.
T = Injections. There are RVUs for these services, but they are
only paid if there are no other services payable under the physician
fee schedule billed on the same date by the same provider. If any
other services payable under the physician fee schedule are billed
on the same date by the same provider, these services are bundled
into the service(s) for which payment is made.
X = Exclusion by law. These codes represent an item or service
that is not within the definition of ``physicians' services'' for
physician fee schedule payment purposes. No RVUs are shown for these
codes, and no payment may be made under the physician fee schedule.
(Examples are ambulance services and clinical diagnostic laboratory
services.)
4. Description of code. This is an abbreviated version of the
narrative description of the code.
5. Physician work RVUs. These are the RVUs for the physician
work for this service in 2003. Codes that are not used for Medicare
payment are identified with a ``+''.
6. Facility practice expense RVUs. These are the fully
implemented resource-based practice expense RVUs for facility
settings.
7. Non-facility practice expense RVUs. These are the fully
implemented resource-based practice expense RVUs for non-facility
settings.
8. Malpractice expense RVUs. These are the RVUs for the
malpractice expense for the service for 2003.
9. Facility total. This is the sum of the work, fully
implemented facility practice expense, and malpractice expense RVUs.
10. Non-facility total. This is the sum of the work, fully
implemented non-facility practice expense, and malpractice expense
RVUs.
11. Global period. This indicator shows the number of days in
the global period for the code (0, 10, or 90 days). An explanation
of the alpha codes follows:
MMM = The code describes a service furnished in uncomplicated
maternity cases including antepartum care, delivery, and postpartum
care. The usual global surgical concept does not apply. See the 1999
Physicians' Current Procedural Terminology for specific definitions.
XXX = The global concept does not apply.
YYY = The global period is to be set by the carrier (for
example, unlisted surgery codes).
ZZZ = Code related to another service that is always included in
the global period of the other service. (Note: Physician work and
practice expense are associated with intra-service time and in some
instances the post-service time.)
--------------------
\1\ CPT codes and descriptions only are copyright 2003 American Medical
Association. All Rights Reserved. Applicable FARS/DFARS Apply.
\2\ Copyright 2003 American Dental Association. All rights reserved.
\3\ +Indicates RVUs are not used for Medicare payment.
[[Page 63262]]
Addendum B.--Relative Value Units (RVUS) and Related Information
--------------------------------------------------------------------------------------------------------------------------------------------------------
Physician Non- Non-
CPT\1\/HCPCS\2\ MOD Status Description work facility Facility Malpractice facility Facility Global
RVUs\3\ PE RVUs PE RVUs RVUs Total total
--------------------------------------------------------------------------------------------------------------------------------------------------------
0001T............ ............. C Endovas repr abdo ao 0.00 0.00 0.00 0.00 0.00 0.00 XXX
aneurys.
0002T............ ............. D endo repair abd aa 0.00 0.00 0.00 0.00 0.00 0.00 XXX
aorto uni.
0003T............ ............. C Cervicography......... 0.00 0.00 0.00 0.00 0.00 0.00 XXX
0005T............ ............. C Perc cath stent/brain 0.00 0.00 0.00 0.00 0.00 0.00 XXX
cv art.
0006T............ ............. C Perc cath stent/brain 0.00 0.00 0.00 0.00 0.00 0.00 XXX
cv art.
0007T............ ............. C Perc cath stent/brain 0.00 0.00 0.00 0.00 0.00 0.00 XXX
cv art.
0008T............ ............. C Upper gi endoscopy w/ 0.00 0.00 0.00 0.00 0.00 0.00 XXX
suture.
0009T............ ............. C Endometrial 0.00 0.00 0.00 0.00 0.00 0.00 XXX
cryoablation.
0010T............ ............. C Tb test, gamma 0.00 0.00 0.00 0.00 0.00 0.00 XXX
interferon.
0012T............ ............. C Osteochondral knee 0.00 0.00 0.00 0.00 0.00 0.00 XXX
autograft.
0013T............ ............. C Osteochondral knee 0.00 0.00 0.00 0.00 0.00 0.00 XXX
allograft.
0014T............ ............. C Meniscal transplant, 0.00 0.00 0.00 0.00 0.00 0.00 XXX
knee.
0016T............ ............. C Thermotx choroid vasc 0.00 0.00 0.00 0.00 0.00 0.00 XXX
lesion.
0017T............ ............. C Photocoagulat macular 0.00 0.00 0.00 0.00 0.00 0.00 XXX
drusen.
0018T............ ............. C Transcranial magnetic 0.00 0.00 0.00 0.00 0.00 0.00 XXX
stimul.
0019T............ ............. I Extracorp shock wave 0.00 0.00 0.00 0.00 0.00 0.00 XXX
tx, ms.
0020T............ ............. C Extracorp shock wave 0.00 0.00 0.00 0.00 0.00 0.00 XXX
tx, ft.
0021T............ ............. C Fetal oximetry, 0.00 0.00 0.00 0.00 0.00 0.00 XXX
trnsvag/cerv.
0023T............ ............. C Phenotype drug test, 0.00 0.00 0.00 0.00 0.00 0.00 XXX
hiv 1.
0024T............ ............. C Transcath cardiac 0.00 0.00 0.00 0.00 0.00 0.00 XXX
reduction.
0025T............ ............. D Ultrasonic pachymetry. 0.00 0.00 0.00 0.00 0.00 0.00 XXX
0026T............ ............. C Measure remnant 0.00 0.00 0.00 0.00 0.00 0.00 XXX
lipoproteins.
[[Page 63263]]
0027T............ ............. C Endoscopic epidural 0.00 0.00 0.00 0.00 0.00 0.00 XXX
lysis.
0028T............ ............. C Dexa body composition 0.00 0.00 0.00 0.00 0.00 0.00 XXX
study.
0029T............ ............. C Magnetic tx for 0.00 0.00 0.00 0.00 0.00 0.00 XXX
incontinence.
0030T............ ............. C Antiprothrombin 0.00 0.00 0.00 0.00 0.00 0.00 XXX
antibody.
0031T............ ............. C Speculoscopy.......... 0.00 0.00 0.00 0.00 0.00 0.00 XXX
0032T............ ............. C Speculoscopy w/direct 0.00 0.00 0.00 0.00 0.00 0.00 XXX
sample.
0033T............ ............. C Endovasc taa repr incl 0.00 0.00 0.00 0.00 0.00 0.00 XXX
subcl.
0034T............ ............. C Endovasc taa repr w/o 0.00 0.00 0.00 0.00 0.00 0.00 XXX
subcl.
0035T............ ............. C Insert endovasc 0.00 0.00 0.00 0.00 0.00 0.00 XXX
prosth, taa.
0036T............ ............. C Endovasc prosth, taa, 0.00 0.00 0.00 0.00 0.00 0.00 XXX
add-on.
0037T............ ............. C Artery transpose/ 0.00 0.00 0.00 0.00 0.00 0.00 XXX
endovas taa.
0038T............ ............. C Rad endovasc taa rpr w/ 0.00 0.00 0.00 0.00 0.00 0.00 XXX
cover.
0039T............ ............. C Rad s/i, endovasc taa 0.00 0.00 0.00 0.00 0.00 0.00 XXX
repair.
0040T............ ............. C Rad s/i, endovasc taa 0.00 0.00 0.00 0.00 0.00 0.00 XXX
prosth.
0041T............ ............. C Detect ur infect agnt 0.00 0.00 0.00 0.00 0.00 0.00 XXX
w/cpas.
0042T............ ............. C Ct perfusion w/ 0.00 0.00 0.00 0.00 0.00 0.00 XXX
contrast, cbf.
0043T............ ............. C Co expired gas 0.00 0.00 0.00 0.00 0.00 0.00 XXX
analysis.
0044T............ ............. C Whole body photography 0.00 0.00 0.00 0.00 0.00 0.00 XXX
0045T............ ............. C Whole body photography 0.00 0.00 0.00 0.00 0.00 0.00 XXX
0046T............ ............. C Cath lavage, mammary 0.00 0.00 0.00 0.00 0.00 0.00 XXX
duct(s.
0047T............ ............. C Cath lavage, mammary 0.00 0.00 0.00 0.00 0.00 0.00 XXX
duct(s).
0048T............ ............. C Implant ventricular 0.00 0.00 0.00 0.00 0.00 0.00 XXX
device.
0049T............ ............. C External circulation 0.00 0.00 0.00 0.00 0.00 0.00 XXX
assist.
0050T............ ............. C Removal circulation 0.00 0.00 0.00 0.00 0.00 0.00 XXX
assist.
0051T............ ............. C Implant total heart 0.00 0.00 0.00 0.00 0.00 0.00 XXX
system.
0052T............ ............. C Replace component 0.00 0.00 0.00 0.00 0.00 0.00 XXX
heart syst.
0053T............ ............. C Replace component 0.00 0.00 0.00 0.00 0.00 0.00 XXX
heart syst.
0054T............ ............. C Bone surgery using 0.00 0.00 0.00 0.00 0.00 0.00 XXX
computer.
0055T............ ............. C Bone surgery using 0.00 0.00 0.00 0.00 0.00 0.00 XXX
computer.
0056T............ ............. C Bone surgery using 0.00 0.00 0.00 0.00 0.00 0.00 XXX
computer.
0057T............ ............. C Uppr gi scope w/ thrml 0.00 0.00 0.00 0.00 0.00 0.00 XXX
txmnt.
0058T............ ............. C Cryopreservation, 0.00 0.00 0.00 0.00 0.00 0.00 XXX
ovary tiss.
0059T............ ............. C Cryopreservation, 0.00 0.00 0.00 0.00 0.00 0.00 XXX
oocyte.
0060T............ ............. C Electrical impedance 0.00 0.00 0.00 0.00 0.00 0.00 XXX
scan.
0061T............ ............. C Destruction of tumor, 0.00 0.00 0.00 0.00 0.00 0.00 XXX
breast.
10021............ ............. A Fna w/o image......... 1.26 2.22 0.55 0.08 3.56 1.89 XXX
10022............ ............. A Fna w/image........... 1.26 2.65 0.43 0.06 3.97 1.75 XXX
10040............ ............. A Acne surgery.......... 1.17 1.02 0.68 0.06 2.25 1.91 010
10060............ ............. A Drainage of skin 1.16 1.22 0.95 0.10 2.48 2.21 010
abscess.
10061............ ............. A Drainage of skin 2.39 1.84 1.53 0.20 4.43 4.12 010
abscess.
10080............ ............. A Drainage of pilonidal 1.16 3.19 1.16 0.11 4.46 2.43 010
cyst.
10081............ ............. A Drainage of pilonidal 2.44 4.16 1.53 0.23 6.83 4.20 010
cyst.
10120............ ............. A Remove foreign body... 1.21 1.48 0.42 0.12 2.81 1.75 010
10121............ ............. A Remove foreign body... 2.67 3.36 1.91 0.30 6.33 4.88 010
10140............ ............. A Drainage of hematoma/ 1.52 1.53 0.91 0.18 3.23 2.61 010
fluid.
10160............ ............. A Puncture drainage of 1.19 0.73 0.47 0.13 2.05 1.79 010
lesion.
10180............ ............. A Complex drainage, 2.24 3.27 2.09 0.30 5.81 4.63 010
wound.
11000............ ............. A Debride infected skin. 0.60 0.58 0.22 0.06 1.24 0.88 000
11001............ ............. A Debride infected skin 0.30 0.23 0.11 0.02 0.55 0.43 ZZZ
add-on.
11010............ ............. A Debride skin, fx...... 4.18 6.80 2.35 0.54 11.52 7.07 010
11011............ ............. A Debride skin/muscle, 4.92 8.12 2.39 0.64 13.68 7.95 000
fx.
11012............ ............. A Debride skin/muscle/ 6.84 12.02 3.90 1.07 19.93 11.81 000
bone, fx.
11040............ ............. A Debride skin, partial. 0.50 0.52 0.21 0.06 1.08 0.77 000
11041............ ............. A Debride skin, full.... 0.82 0.65 0.33 0.07 1.54 1.22 000
11042............ ............. A Debride skin/tissue... 1.11 0.98 0.47 0.11 2.20 1.69 000
11043............ ............. A Debride tissue/muscle. 2.37 3.47 2.63 0.29 6.13 5.29 010
11044............ ............. A Debride tissue/muscle/ 3.04 4.58 3.80 0.41 8.03 7.25 010
bone.
11055............ ............. R Trim skin lesion...... 0.43 0.56 0.17 0.02 1.01 0.62 000
11056............ ............. R Trim skin lesions, 2 0.61 0.64 0.24 0.04 1.29 0.89 000
to 4.
11057............ ............. R Trim skin lesions, 0.79 0.73 0.31 0.05 1.57 1.15 000
over 4.
11100............ ............. A Biopsy, skin lesion... 0.81 1.27 0.37 0.05 2.13 1.23 000
11101............ ............. A Biopsy, skin add-on... 0.41 0.34 0.19 0.02 0.77 0.62 ZZZ
11200............ ..