[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR405.512]

[Page 127]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 405_FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED--Table of 
Contents
 
          Subpart E_Criteria for Determining Reasonable Charges
 
Sec.  405.512  Carriers' procedural terminology and coding systems.

    (a) General. Procedural terminology and coding systems are designed 
to provide physicians and third party payers with a common language that 
accurately describes the kinds and levels of services provided and that 
can serve as a basis for coverage and payment determinations.
    (b) Modification of terminology and/or coding systems. A carrier 
that wishes to modify its system of procedural terminology and coding 
shall submit its request to the Centers for Medicare & Medicaid Services 
with all pertinent data and information for approval before the revision 
is implemented. The Centers for Medicare & Medicaid Services will 
evaluate the proposal in the light of the guidelines specified in 
paragraph (c) of this section and such other considerations as may be 
pertinent, and consult with the Assistant Secretary for Health. The 
Centers for Medicare & Medicaid Services will approve such a revision if 
it determines that the potential advantages of the proposed new system, 
outweigh the disadvantages.
    (c) Guidelines. The following considerations and guidelines are 
taken into account in evaluating a carrier's proposal to change its 
system of procedural terminology and coding:
    (1) The rationale for converting to the new terminology and coding;
    (2) The estimated short-run and long-run impact on the cost of the 
health insurance program, other medical care costs, administrative 
expenses, and the reliability of the estimates;
    (3) The degree to which the conversion to the proposed new 
terminology and coding can be accomplished in a way that permits full 
implementation of the reasonable charge criteria in accordance with the 
provisions of this subpart;
    (4) The degree to which the proposed new terminology and coding are 
accepted by physicians in the carrier's area (physician acceptance is 
assumed only if a majority of the Medicare and non-Medicare bills and 
claims completed by physicians in the area and submitted to the carrier 
can reasonably be expected to utilize the proposed new terminology and 
coding);
    (5) The extent to which the proposed new terminology and coding 
system is used by the carrier in its non-Medicare business;
    (6) The clarity with which the proposed system defines its 
terminology and whether the system lends itself to:
    (i) Accurate determinations of coverage;
    (ii) Proper assessment of the appropriate level of payment; and
    (iii) Meeting the carrier's or Professional Standards Review 
Organizations' review needs and such other review needs as may be 
appropriate;
    (7) Compatibility of the new terminology and coding system with 
other systems that the carrier and other carriers may utilize in the 
administration of the Medicare program--e.g., its compatibility with 
systems and statistical requirements and with the historical data in the 
carrier's processing system; and
    (8) Compatibility of the proposed system with the carriers methods 
for determining payment under the fee schedule for physicians' services 
for services which are identified by a single element of terminology but 
which may vary in content.

[40 FR 7639, Feb. 21, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977, 
as amended at 59 FR 10298, Mar. 4, 1994]