Federal Register: July 13, 2009 (Volume 74, Number 132)
DOCID: fr13jy09-23 FR Doc E9-15835
DEPARTMENT OF HEALTH AND HUMAN SERVICES
U.S. Citizenship and Immigration Services
CFR Citation: 42 CFR Parts 410, 411, 414, et al.
RIN ID: RIN 0938-AP40
CMS ID: [CMS-1413-P]
NOTICE: Part II
DOCID: fr13jy09-23
DOCUMENT ACTION: Proposed rule.
SUBJECT CATEGORY:
Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2010
DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on Monday, August 31, 2009.
DOCUMENT SUMMARY:
This proposed rule would address proposed changes to Medicare Part B payment policy. We are proposing these changes to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services. This proposed rule discusses: Refinements to resourcebased work, practice expense and malpractice relative value units (RVUs); geographic practice cost indices (GPCIs); telehealth services; several coding issues; physician fee schedule update for CY 2010; payment for covered part B outpatient drugs and biologicals; the competitive acquisition program (CAP); payment for renal dialysis services; the chiropractic services demonstration; comprehensive outpatient rehabilitation facilities; physician self referral; the ambulance fee schedule; the clinical laboratory fee schedule; durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS); and certain provisions of the Medicare Improvements for Patients and Providers Act of 2008. (See the Table of contents for a listing of the specific issues.)
SUMMARY:
Health and Human Services Department, Centers for Medicare & Medicaid Services
SUPPLEMENTAL INFORMATION
Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http:// www.regulations.gov. Follow the search instructions on that Web site to view public comments.
Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 18007433951.
Table of Contents
To assist readers in referencing sections contained in this
preamble, we are providing a table of contents. Some of the issues
discussed in this preamble affect the payment policies, but do not
require changes to the regulations in the Code of Federal Regulations
(CFR). Information on the regulation's impact appears throughout the
preamble, and therefore, is not exclusively in section V. of this proposed rule.
I. Background
A. Development of the Relative Value System
1. Work RVUs
2. Practice Expense Relative Value Units (PE RVUs)
3. ResourceBased Malpractice RVUs
4. Refinements to the RVUs
5. Adjustments to RVUs Are Budget Neutral
B. Components of the Fee Schedule Payment Amounts
C. Most Recent Changes to Fee Schedule
II. Provisions of the Proposed Regulation
A. ResourceBased Practice Expense (PE) Relative Value Units (RVUs)
1. Current Methodology
a. Data Sources for Calculating Practice Expense
b. Allocation of PE to Services
c. Facility and Nonfacility Costs
d. Services With Technical Components (TCs) and Professional Components (PCs)
e. Transition Period
f. PE RVU Methodology
2. PE Proposals for CY 2010
a. SMS and Supplemental Survey Background
b. Physician Practice Information Survey (PPIS)
c. Equipment Utilization Rate
d. Miscellaneous PE Issues
e. AMA RUC PE Recommendations for Direct PE Inputs
B. Geographic Practice Cost Indices (GPCIs): Locality Discussion
1. UpdateExpiration of 1.0 Work GPCI Floor
2. Payment Localities
C. Malpractice RVUs
1. Background
2. Proposed Methodology for the Revision of ResourceBased Malpractice RVUs
D. Medicare Telehealth Services
1. Requests for Adding Services to the List of Medicare Telehealth Services
2. Submitted Requests for Addition to the List of Telehealth Services
E. Specific Coding Issues Related to Physician Fee Schedule
1. Canalith Repositioning
2. Payment for an Initial Preventive Physical Examination (IPPE)
3. Audiology Codes: Policy Clarification of Existing CPT Codes
4. Consultation Services
F. Potentially Misvalued Codes Under the Physician Fee Schedule
1. Valuing Services Under the Physician Fee Schedule
2. High Cost Supplies
3. Review of Services Often Billed Together and the Possibility of Expanding the Multiple Procedure Payment Reduction (MPPR) to Additional Nonsurgical Services
4. AMA RUC Review of Potentially Misvalued Services
a. Site of Service Anomalies
b. ``23Hour'' Stay
5. Establishing Appropriate Relative Values for Physician Fee Schedule Services
G. Issues Related to the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)
1. Section 102: Elimination of Discriminatory Copayment Rates for Medicare Outpatient Psychiatric Services
2. Section 131(b): Physician Payment, Efficiency, and Quality ImprovementsPhysician Quality Reporting Initiative (PQRI)
3. Section 131(c): Physician Resource Use Measurement and Reporting Program
4. Section 131(d): Plan for Transition to ValueBased Purchasing Program for Physicians and Other Practitioners
5. Section 132: Incentives for Electronic Prescribing (E Prescribing)The EPrescibing Incentive Program
6. Section 135: Implementation of Accreditation Standards for Suppliers Furnishing the Technical Component (TC) of Advanced Diagnostic Imaging Services
7. Section 139: Improvements for Medicare Anesthesia Teaching Programs
8. Section 144(a): Payment and Coverage Improvements for Patients With Chronic Obstructive Pulmonary Disease and Other ConditionsCardiac Rehabilitation Services
9. Section 144(a): Payment and Coverage Improvements for Patients With Chronic Obstructive Pulmonary Disease and Other ConditionsPulmonary Rehabitation Services
10. Section 152(b): Coverage of Kidney Disease Patient Education Services
11. Section 153: Renal Dialysis Provisions
12. Section 182(b): Revision of Definition of MedicallyAccepted
Indication for Drugs; Compendia for Determination of Medically
Accepted Indications for OffLabel Uses of Drugs and Biologicals in an AntiCancer Chemotherapeutic Regimen
H. Part B Drug Payment
1. Average Sales Price (ASP) Issues
2. Competitive Acquisition Program (CAP) Issues
I. Provisions Related to Payment for Renal Dialysis Services Furnished by EndStage Renal Disease (ESRD) Facilities
J. Discussion of Chiropractic Services Demonstration
1. Background
2. Analysis of Demonstration
3. Payment Adjustment
K. Comprehensive Outpatient Rehabilitation Facilities (CORF) and Rehabilitation Agency Issues
L. Ambulance Fee Schedule: Technical Correction to the Rural Adjustment Factor Regulations (414.610)
M. Clinical Laboratory Fee Schedule: Signature on Requisition
N. Physician SelfReferral
1. General Background
2. Physician Stand in the Shoes
O. Durable Medical EquipmentRelated Issues
1. Damages to Suppliers Awarded a Contract Under the Acquisition of Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (Medicare DMEPOS Competitive Bidding Program) Caused by the Delay of the Program
2. Notification to Beneficiaries for Suppliers Regarding Grandfathering
P. Physician Fee Schedule Update for CY 2010
III. Collection of Information Requirements
IV. Response to Comments
V. Regulatory Impact Analysis
Regulation Text
Addendum AExplanation and Use of Addendum B
Addendum BProposed Relative Value Units and Related Information Used in Determining Medicare Payments for CY 2010
Addendum C[Reserved]
Addendum DProposed 2010 Geographic Adjustment Factors (GAFs)
Addendum EProposed 2010 Geographic Practice Cost Indices (GPCIs) by State and Medicare Locality
[[Page 33522]]
Addendum FProposed CY 2010 ESRD Wage Index for Urban Areas Based on CBSA Labor Market Areas
Addendum GPropsoed CY 2010 ESRD Wage Index Based on CBSA Labor Market Areas for Rural Areas
Acronyms
In addition, because of the many organizations and terms to which
we refer by acronym in this final rule with comment period, we are
listing these acronyms and their corresponding terms in alphabetical order below:
AACVPR American Association of Cardiovascular and Pulmonary Rehabilitation
ACC American College of Cardiology
ACGME Accreditation Council on Graduate Medical Education
ACR American College of Radiology
AFROC Association of Freestanding Radiation Oncology Centers AHA American Heart Association
AHRQ [HHS'] Agency for Healthcare Research and Quality
AIDS Acquired immune deficiency syndrome
AMA American Medical Association
AMP Average manufacturer price
AOA American Osteopathic Association
APA American Psychological Association
APTA American Physical Therapy Association
ASC Ambulatory surgical center
ASP Average sales price
ASRT American Society of Radiologic Technologists
ASTRO American Society for Therapeutic Radiology and Oncology ATA American Telemedicine Association
AWP Average wholesale price
BBA Balanced Budget Act of 1997 (Pub. L. 10533)
BBRA [Medicare, Medicaid and State Child Health Insurance Program] Balanced Budget Refinement Act of 1999 (Pub. L. 106113)
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement Protection Act of 2000 (Pub. L. 106554)
BLS Bureau of Labor Statistics
BN Budget neutrality
CABG Coronary artery bypass graft
CAD Coronary artery disease
CAH Critical access hospital
CAHEA Committee on Allied Health Education and Accreditation CAP Competitive acquisition program
CBSA CoreBased Statistical Area
CCHIT Certification Commission for Healthcare Information Technology
CEAMA Council on Education of the American Medical Association CF Conversion factor
CfC Conditions for Coverage
CFR Code of Federal Regulations
CKD Chronic kidney disease
CLFS Clinical laboratory fee schedule
CMA California Medical Association
CMHC Community mental health center
CMP Civil money penalty
CMS Centers for Medicare & Medicaid Services
CNS Clinical nurse specialist
CoP Condition of participation
COPD Chronic obstructive pulmonary disease
CORF Comprehensive Outpatient Rehabilitation Facility
COS Cost of service
CPEP Clinical Practice Expert Panel
CPI Consumer Price Index
CPIU Consumer price index for urban customers
CPT [Physicians'] Current Procedural Terminology (4th Edition, 2002, copyrighted by the American Medical Association)
CR Cardiac rehabilitation
CRNA Certified registered nurse anesthetist
CRP Canalith repositioning
CRT Certified respiratory therapist
CSW Clinical social worker
CY Calendar year
DHS Designated health services
DME Durable medical equipment
DMEPOS Durable medical equipment, prosthetics, orthotics, and supplies
DOQ Doctor's Office Quality
DRA Deficit Reduction Act of 2005 (Pub. L. 109171)
DSMT Diabetes selfmanagement training
E/M Evaluation and management
EDI Electronic data interchange
EEG Electroencephalogram
EHR Electronic health record
EKG Electrocardiogram
EMG Electromyogram
EMTALA Emergency Medical Treatment and Active Labor Act
EOG Electrooculogram
EPO Erythropoietin
ESRD Endstage renal disease
FAX Facsimile
FDA Food and Drug Administration (HHS)
FEV Forced expiratory volume
FFS Feeforservice
FR Federal Register
FVC Forced expiratory vital capacity (liters)
GAF Geographic adjustment factor
GAO General Accountability Office
GEM Generating Medicare [Physician Quality Performance Measurement Results]
GFR Glomerular filtration rate
GPO Group purchasing organization
GPCI Geographic practice cost index
HAC Hospitalacquired conditions
HBAI Health and behavior assessment and intervention
HCPAC Health Care Professional Advisory Committee
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
HDRT High dose radiation therapy
HH PPS Home Health Prospective Payment System
HHA Home health agency
HHRG Home health resource group
HHS [Department of] Health and Human Services
HIPAA Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104191)
HIT Health information technology
HITECH Health Information Technology for Economic and Clinical
Health Act (Title IV of Division B of the Recovery Act, together with Title XIII of Division A of the Recovery Act)
HITSP Healthcare Information Technology Standards Panel
HIV Human immunodeficiency virus
HOPD Hospital outpatient department
HPSA Health Professional Shortage Area
HRSA Health Resources Services Administration (HHS)
ICD International Classification of Diseases
IACS Individuals Access to CMS Systems
ICF Intermediate care facilities
ICR Intensive cardiac rehabilitation
ICR Information collection requirement
IDTF Independent diagnostic testing facility
IFC Interim final rule with comment period
IMRT IntensityModulated Radiation Therapy
IPPE Initial preventive physical examination
IPPS Inpatient prospective payment system
IRS Internal Revenue Service
ISO Insurance services office
IVD Ischemic Vascular Disease
IVIG Intravenous immune globulin
IWPUT Intraservice work per unit of time
JRCERT Joint Review Committee on Education in Radiologic Technology JUA Joint underwriting association
KDE Kidney disease education
MA Medicare Advantage
MAPD Medicare AdvantagePrescription Drug Plans
MCMP Medicare Care Management Performance
MedCAC Medicare Evidence Development and Coverage Advisory Committee (formerly the Medicare Coverage Advisory Committee (MCAC))
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MIEATRHCA Medicare Improvements and Extension Act of 2006 (that is,
Division B of the Tax Relief and Health Care Act of 2006 (TRHCA) (Pub. L. 109432)
MIPPA Medicare Improvements for Patients and Providers Act of 2008 (Pub. L. 110275)
MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108173)
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L. 110173)
MNT Medical nutrition therapy
MP Malpractice
MPPR Multiple procedure payment reduction
MQSA Mammography Quality Standards Act of 1992 (Pub. L. 102539) MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MSDRG Medicare SeverityDiagnosis related group
MSA Metropolitan statistical area
NCD National Coverage Determination
NCH National Claims History
NCPDP National Council for Prescription Drug Programs
NCQDIS National Coalition of Quality Diagnostic Imaging Services NDC National drug code
NF Nursing facility
NISTA National Institute of Standards and Technology Act
NP Nurse practitioner
NPDB National Practitioner Data Bank
NPI National Provider Identifier
[[Page 33523]]
NPP Nonphysician practitioner
NPPES National Plan and Provider Enumeration System
NQF National Quality Forum
NRC Nuclear Regulatory Commission
NTTAA National Technology Transfer and Advancement Act of 1995 (Pub. L. 104113)
NUBC National Uniform Billing Committee
OACT [CMS'] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act
ODF Open door forum
OIG Office of Inspector General
OMB Office of Management and Budget
ONC [HHS'] Office of the National Coordinator
OPPS Outpatient prospective payment system
OSA Obstructive Sleep Apnea
OSCAR Online Survey and Certification and Reporting
P4P Pay for performance
PA Physician assistant
PBM Pharmacy benefit manager
PC Professional component
PCF Patient compensation fund
PCI Percutaneous coronary intervention
PDE Prescription drug event
PDP Prescription drug plan
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment, Chain, and Ownership System
PERC Practice Expense Review Committee
PFS Physician Fee Schedule
PGP [Medicare] Physician Group Practice
PHP Partial hospitalization program
PIM [Medicare] Program Integrity Manual
PLI Professional liability insurance
POA Present on admission
POC Plan of care
PPI Producer price index
PPIS Physician Practice Information Survey
PPS Prospective payment system
PPTA Plasma Protein Therapeutics Association
PQRI Physician Quality Reporting Initiative
PRA Paperwork Reduction Act
PSA Physician scarcity areas
PSG Polysomnography
PT Physical therapy
PTCA Percutaneous transluminal coronary angioplasty
RA Radiology assistant
Recovery Act American Recovery and Reinvestment Act (Pub. L. 1115) ResDAC Research Data Assistance Center
RFA Regulatory Flexibility Act
RIA Regulatory impact analysis
RN Registered nurse
RNAC Reasonable net acquisition cost
RPA Radiology practitioner assistant
RRT Registered respiratory therapist
RUC [AMA's Specialty Society] Relative (Value) Update Committee RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SLP Speechlanguage pathology
SMS [AMA's] Socioeconomic Monitoring System
SNF Skilled nursing facility
SOR System of record
SRS Stereotactic radiosurgery
TC Technical Component
TIN Tax identification number
TRHCA Tax Relief and Health Care Act of 2006 (Pub. L. 109432) TTO Transtracheal oxygen
UPMC University of Pittsburgh Medical Center
USDE United States Department of Education
VBP Valuebased purchasing
WAMP Widely available market price
I. Background
Since January 1, 1992, Medicare has paid for physicians' services
under section 1848 of the Social Security Act (the Act), ``Payment for
Physicians' Services.'' The Act requires that payments under the
physician fee schedule (PFS) be based on national uniform relative
value units (RVUs) based on the relative resources used in furnishing a
service. Section 1848(c) of the Act requires that national RVUs be
established for physician work, practice expense (PE), and malpractice
expense. Before the establishment of the resourcebased relative value
system, Medicare payment for physicians' services was based on reasonable charges.
A. Development of the Relative Value System
1. Work RVUs
The concepts and methodology underlying the PFS were enacted as part of the Omnibus Budget Reconciliation Act (OBRA) of 1989 (Pub. L. 101239), and OBRA 1990, (Pub. L. 101508). The final rule, published on November 25, 1991 (56 FR 59502), set forth the fee schedule for payment for physicians' services beginning January 1, 1992. Initially, only the physician work RVUs were resourcebased, and the PE and malpractice RVUs were based on average allowable charges.
The physician 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 physician work RVUs for most codes in a cooperative agreement with the Department of Health and Human Services (DHHS). In constructing the codespecific vignettes for the original physician work RVUs, Harvard worked with panels of experts, both inside and outside the Federal government, and obtained input from numerous physician specialty groups.
Section 1848(b)(2)(B) of the Act specifies that the RVUs for anesthesia services are based on RVUs from a uniform relative value guide, with appropriate adjustment of the conversion factor (CF), in a manner to assure that fee schedule amounts for anesthesia services are consistent with those for other services of comparable value. We established a separate CF for anesthesia services, and we continue to utilize time units as a factor in determining payment for these services. As a result, there is a separate payment methodology for anesthesia services.
We establish physician work RVUs for new and revised codes based on our review of recommendations received from the American Medical Association's (AMA) Specialty Society Relative Value Update Committee (RUC).
2. Practice Expense Relative Value Units (PE RVUs)
Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 103432), enacted on October 31, 1994, amended section
1848(c)(2)(C)(ii) of the Act and required us to develop resourcebased
PE RVUs for each physician's service beginning in 1998. We were to
consider general categories of expenses (such as office rent and wages
of personnel, but excluding malpractice expenses) comprising PEs.
Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 10533), amended section 1848(c)(2)(C)(ii) of the Act to delay implementation of the resourcebased PE RVU system until January 1, 1999. In addition, section 4505(b) of the BBA provided for a 4year transition period from chargebased PE RVUs to resourcebased RVUs.
We established the resourcebased PE RVUs for each physicians' service in a final rule, published November 2, 1998 (63 FR 58814), effective for services furnished in 1999. Based on the requirement to transition to a resourcebased system for PE over a 4year period, resourcebased PE RVUs did not become fully effective until 2002.
This resourcebased system was based on two significant sources of
actual PE data: The Clinical Practice Expert Panel (CPEP) data; and the
AMA's Socioeconomic Monitoring System (SMS) data. The CPEP data were
collected from panels of physicians, practice administrators, and
nonphysicians (for example, registered nurses (RNs)) nominated by
physician specialty societies and other groups. The CPEP panels
identified the direct inputs required for each physician's service in
both the office setting and outofoffice setting. We have since
refined and revised these inputs based on recommendations from the RUC. The AMA's SMS data provided aggregate
[[Page 33524]]
specialtyspecific information on hours worked and PEs.
Separate PE RVUs are established for procedures that can be performed in both a nonfacility setting, such as a physician's office, and a facility setting, such as a hospital outpatient department. The difference between the facility and nonfacility RVUs reflects the fact that a facility typically receives separate payment from Medicare for its costs of providing the service, apart from payment under the PFS. The nonfacility RVUs reflect all of the direct and indirect PEs of providing a particular service.
Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106113) directed the Secretary of Health and Human Services (the Secretary) to establish a process under which we accept and use, to the maximum extent practicable and consistent with sound data practices, data collected or developed by entities and organizations to supplement the data we normally collect in determining the PE component. On May 3, 2000, we published the interim final rule (65 FR 25664) that set forth the criteria for the submission of these supplemental PE survey data. The criteria were modified in response to comments received, and published in the Federal Register (65 FR 65376) as part of a November 1, 2000 final rule. The PFS final rules published in 2001 and 2003, respectively, (66 FR 55246 and 68 FR 63196) extended the period during which we would accept these supplemental data through March 1, 2005.
In the Calendar Year (CY) 2007 PFS final rule with comment period (71 FR 69624), we revised the methodology for calculating PE RVUs beginning in CY 2007 and provided for a 4year transition for the new PE RVUs under this new methodology.
3. ResourceBased Malpractice (MP) RVUs
Section 4505(f) of the BBA amended section 1848(c) of the Act requiring us to implement resourcebased malpractice (MP) RVUs for services furnished on or after 2000. The resourcebased MP RVUs were implemented in the PFS final rule published November 2, 1999 (64 FR 59380). The MP RVUs were based on malpractice insurance premium data collected from commercial and physicianowned insurers from all the States, the District of Columbia, and Puerto Rico.
4. Refinements to the RVUs
Section 1848(c)(2)(B)(i) of the Act requires that we review all RVUs no less often than every 5 years. The first 5Year Review of the physician work RVUs was published on November 22, 1996 (61 FR 59489) and was effective in 1997. The second 5Year Review was published in the CY 2002 PFS final rule with comment period (66 FR 55246) and was effective in 2002. The third 5Year Review of physician work RVUs was published in the CY 2007 PFS final rule with comment period (71 FR 69624) and was effective on January 1, 2007. (Note: Additional codes relating to the third 5Year Review of physician work RVUs were addressed in the CY 2008 PFS final rule with comment period (72 FR 66360).)
In 1999, the AMA's RUC established the Practice Expense Advisory Committee (PEAC) for the purpose of refining the direct PE inputs. Through March 2004, the PEAC provided recommendations to CMS for over 7,600 codes (all but a few hundred of the codes currently listed in the AMA's Current Procedural Terminology (CPT) codes). As part of the CY 2007 PFS final rule with comment period (71 FR 69624), we implemented a new methodology for determining resourcebased PE RVUs and are transitioning this over a 4year period. (Note: In section II.A.2. of this proposed rule, we are proposing to use new survey data under the PE methodology.)
In the CY 2005 PFS final rule with comment period (69 FR 66236), we implemented the first 5Year Review of the MP RVUs (69 FR 66263). (Note: In section II.C. of this proposed rule, we are proposing to update the malpractice RVUs with the use of new data.)
5. Adjustments to RVUs are Budget Neutral
Section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments in RVUs for a year may not cause total PFS payments to differ by more than $20 million from what they would have been if the adjustments were not made. In accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if adjustments to RVUs cause expenditures to change by more than $20 million, we make adjustments to ensure that expenditures do not increase or decrease by more than $20 million.
As explained in the CY 2009 PFS final rule with comment period (73 FR 69730), as required by section 133(b) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110275), the separate budget neutrality (BN) adjustor resulting from the third 5 Year Review of physician work RVUs is being applied to the CF beginning with CY 2009 rather than the work RVUs.
B. Components of the Fee Schedule Payment Amounts
To calculate the payment for every physicians' service, the components of the fee schedule (physician work, PE, and MP RVUs) are adjusted by a geographic practice cost index (GPCI). The GPCIs reflect the relative costs of physician work, PE, and malpractice expense in an area compared to the national average costs for each component.
RVUs are converted to dollar amounts through the application of a CF, which is calculated by CMS' Office of the Actuary (OACT).
The formula for calculating the Medicare fee schedule payment amount for a given service and fee schedule area can be expressed as: Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU malpractice x GPCI malpractice)] x CF
C. Most Recent Changes to the Fee Schedule
The CY 2009 PFS final rule with comment period (73 FR 69726) implemented changes to the PFS and other Medicare Part B payment policies finalized the CY 2008 interim RVUs and implemented interim RVUs for new and revised codes for CY 2009 to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services.
The CY 2009 PFS final rule with comment period also addressed other policies, as well as certain provisions of the MIPPA.
As required by the statute, and based on section 131 of the MIPPA,
the CY 2009 PFS final rule with comment period also announced that the
PFS update is 1.1 percent for CY 2009, the initial estimate for the
sustainable growth rate for CY 2009 is 7.4 percent, and the conversion factor (CF) for CY 2009 is $36.0666.
II. Provisions of the Proposed Regulation
A. ResourceBased Practice Expense (PE) Relative Value Units (RVUs)
Practice expense (PE) is the portion of the resources used in furnishing the service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages but excluding malpractice expenses, as specified in section 1848(c)(1)(B) of the Act.
Section 121 of the Social Security Amendments of 1994 (Pub. L. 103
432), enacted on October 31, 1994, required CMS to develop a methodology for a resourcebased system for determining
[[Page 33525]]
PE RVUs for each physician's service. Until that time, PE RVUs were
based on historical allowed charges. This legislation stated that the
revised PE methodology must consider the staff, equipment, and supplies
used in the provision of various medical and surgical services in
various settings beginning in 1998. The Secretary has interpreted this
to mean that Medicare payments for each service would be based on the
relative PE resources typically involved with furnishing the service.
The initial implementation of resourcebased PE RVUs was delayed from January 1, 1998, until January 1, 1999, by section 4505(a) of the BBA. In addition, section 4505(b) of the BBA required that the new payment methodology be phased in over 4 years, effective for services furnished in CY 1999, and fully effective in CY 2002. The first step toward implementation of the statute was to adjust the PE values for certain services for CY 1998. Section 4505(d) of the BBA required that, in developing the resourcebased PE RVUs, the Secretary must
In CY 1999, we began the 4year transition to resourcebased PE RVUs utilizing a ``topdown'' methodology whereby we allocated aggregate specialtyspecific practice costs to individual procedures. The specialtyspecific PEs were derived from the American Medical Association's (AMA's) Socioeconomic Monitoring Survey (SMS). In addition, under section 212 of the BBRA, we established a process extending through March 2005 to supplement the SMS data with data submitted by a specialty. The aggregate PEs for a given specialty were then allocated to the services furnished by that specialty on the basis of the direct input data (that is, the staff time, equipment, and supplies) and work RVUs assigned to each CPT code.
For CY 2007, we implemented a new methodology for calculating PE RVUs. Under this new methodology, we use the same data sources for calculating PE, but instead of using the ``topdown'' approach to calculate the direct PE RVUs, under which the aggregate direct and indirect costs for each specialty are allocated to each individual service, we now utilize a ``bottomup'' approach to calculate the direct costs. Under the ``bottom up'' approach, we determine the direct PE by adding the costs of the resources (that is, the clinical staff, equipment, and supplies) typically required to provide each service. The costs of the resources are calculated using the refined direct PE inputs assigned to each CPT code in our PE database, which are based on our review of recommendations received from the AMA's Relative Value Update Committee (RUC). For a more detailed explanation of the PE methodology, see the FiveYear Review of Work Relative Value Units Under the PFS and Proposed Changes to the Practice Expense Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629).
Note: In section II.A.1 of this proposed rule, we discuss the
current methodology used for calculating PE. In section II.A.2. of
this proposed rule, which contains PE proposals for CY 2010, we are
proposing to use data from the AMA Physician Practice Information
Survey (PPIS) in place of the AMA's SMS survey data and supplemental survey data that is currently used in the PE methodology.
1. Current Methodology
a. Data Sources for Calculating Practice Expense
The AMA's SMS survey data and supplemental survey data from the specialties of cardiothoracic surgery, vascular surgery, physical and occupational therapy, independent laboratories, allergy/immunology, cardiology, dermatology, gastroenterology, radiology, independent diagnostic testing facilities (IDTFs), radiation oncology, and urology are used to develop the PE per hour (PE/HR) for each specialty. For those specialties for which we do not have PE/HR, the appropriate PE/HR is obtained from a crosswalk to a similar specialty.
The AMA developed the SMS survey in 1981 and discontinued it in 1999. Beginning in 2002, we incorporated the 1999 SMS survey data into our calculation of the PE RVUs, using a 5year average of SMS survey data. (See the CY 2002 PFS final rule with comment period (66 FR 55246).) The SMS PE survey data are adjusted to a common year, 2005. The SMS data provide the following six categories of PE costs:
In accordance with section 212 of the BBRA, we established a process to supplement the SMS data for a specialty with data collected by entities and organizations other than the AMA (that is, those entities and organizations representing the specialty itself). (See the Criteria for Submitting Supplemental Practice Expense Survey Data interim final rule with comment period (65 FR 25664).) Originally, the deadline to submit supplementary survey data was through August 1, 2001. In the CY 2002 PFS final rule (66 FR 55246), the deadline was extended through August 1, 2003. To ensure maximum opportunity for specialties to submit supplementary survey data, we extended the deadline to submit surveys until March 1, 2005 in the Revisions to Payment Policies Under the Physician Fee Schedule for CY 2004 final rule with comment period (68 FR 63196) (hereinafter referred to as CY 2004 PFS final rule with comment period).
The direct cost data for individual services were originally developed by the Clinical Practice Expert Panels (CPEP). The CPEP data include the supplies, equipment, and staff times specific to each procedure. The CPEPs consisted of panels of physicians, practice administrators, and nonphysicians (for example, RNs) who were nominated by physician specialty societies and other groups. There were 15 CPEPs consisting of 180 members from more than 61 specialties and subspecialties. Approximately 50 percent of the panelists were physicians.
The CPEPs identified specific inputs involved in each physician's service provided in an office or facility setting.
[[Page 33526]]
The inputs identified were the quantity and type of nonphysician labor,
medical supplies, and medical equipment. The CPEP data has been regularly updated by various RUC committees on PE.
b. Allocation of PE to Services
The aggregate level specialtyspecific PEs are derived from the
AMA's SMS survey and supplementary survey data. To establish PE RVUs
for specific services, it is necessary to establish the direct and indirect PE associated with each service.
(i) Direct costs. The direct costs are determined by adding the
costs of the resources (that is, the clinical staff, equipment, and
supplies) typically required to provide the service. The costs of these
resources are calculated from the refined direct PE inputs in our PE
database. These direct inputs are then scaled to the current aggregate
pool of direct PE RVUs. The aggregate pool of direct PE RVUs can be
derived using the following formula: (PE RVUs x physician CF) x
(average direct percentage from SMS /(Supplemental PE/HR data)).
(ii) Indirect costs. The SMS and supplementary survey data are the
source for the specialtyspecific aggregate indirect costs used in our
PE calculations. We then allocate the indirect costs to the code level
on the basis of the direct costs specifically associated with a code
and the greater of either the clinical labor costs or the physician
work RVUs. For calculation of the 2010 PE RVUs, we use the 2008
procedurespecific utilization data crosswalked to 2010 services. To arrive at the indirect PE costs
c. Facility and Nonfacility Costs
Procedures that can be furnished in a physician's office, as well
as in a hospital or facility setting have two PE RVUs: Facility and
nonfacility. The nonfacility setting includes physicians' offices,
patients' homes, freestanding imaging centers, and independent
pathology labs. Facility settings include hospitals, ambulatory
surgical centers (ASCs), and skilled nursing facilities (SNFs). The
methodology for calculating PE RVUs is the same for both facility and
nonfacility RVUs, but is applied independently to yield two separate PE
RVUs. Because the PEs for services provided in a facility setting are
generally included in the payment to the facility (rather than the
payment to the physician under the PFS), the PE RVUs are generally lower for services provided in the facility setting.
d. Services With Technical Components (TCs) and Professional Components (PCs)
Diagnostic services are generally comprised of two components: A professional component (PC) and a technical component (TC), both of which may be performed independently or by different providers. When services have TCs, PCs, and global components that can be billed separately, the payment for the global component equals the sum of the payment for the TC and PC. This is a result of using a weighted average of the ratio of indirect to direct costs across all the specialties that furnish the global components, TCs, and PCs; that is, we apply the same weighted average indirect percentage factor to allocate indirect expenses to the global components, PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum to the global under the bottomup methodology.)
e. Transition Period
As discussed in the CY 2007 PFS final rule with comment period (71 FR 69674), the change to the PE methodology was implemented over a 4 year period. In CY 2010, the transition period is concluded and PE RVUs will be calculated based entirely on the current methodology. f. PE RVU Methodology
The following is a description of the PE RVU methodology. (i) Setup File
First, we create a setup file for the PE methodology. The setup
file contains the direct cost inputs, the utilization for each
procedure code at the specialty and facility/nonfacility place of
service level, and the specialtyspecific survey PE per physician hour data.
(ii) Calculate the Direct Cost PE RVUs
Sum the Costs of Each Direct Input
Step 1: Sum the direct costs of the inputs for each service. The
direct costs consist of the costs of the direct inputs for clinical
labor, medical supplies, and medical equipment. The clinical labor cost
is the sum of the cost of all the staff types associated with the
service; it is the product of the time for each staff type and the wage
rate for that staff type. The medical supplies cost is the sum of the
supplies associated with the service; it is the product of the quantity
of each supply and the cost of the supply. The medical equipment cost
is the sum of the cost of the equipment associated with the service; it
is the product of the number of minutes each piece of equipment is used in the
[[Page 33527]]
service and the equipment cost per minute. The equipment cost per
minute is calculated as described at the end of this section. Apply a BN Adjustment to the Direct Inputs
Step 2: Calculate the current aggregate pool of direct PE costs. To do this, multiply the current aggregate pool of total direct and indirect PE costs (that is, the current aggregate PE RVUs multiplied by the CF) by the average direct PE percentage from the SMS and supplementary specialty survey data.
Step 3: Calculate the aggregate pool of direct costs. To do this, for all PFS services, sum the product of the direct costs for each service from Step 1 and the utilization data for that service.
Step 4: Using the results of Step 2 and Step 3 calculate a direct PE BN adjustment so that the aggregate direct cost pool does not exceed the current aggregate direct cost pool and apply it to the direct costs from Step 1 for each service.
Step 5: Convert the results of Step 4 to an RVU scale for each
service. To do this, divide the results of Step 4 by the Medicare PFS CF.
(iii) Create the indirect PE RVUs.
Create indirect allocators.
Step 6: Based on the SMS and supplementary specialty survey data, calculate direct and indirect PE percentages for each physician specialty.
Step 7: Calculate direct and indirect PE percentages at the service level by taking a weighted average of the results of Step 6 for the specialties that furnish the service. Note that for services with TCs and PCs, we are calculating the direct and indirect percentages across the global components, PCs, and TCs. That is, the direct and indirect percentages for a given service (for example, echocardiogram) do not vary by the PC, TC and global component.
Step 8: Calculate the service level allocators for the indirect PEs based on the percentages calculated in Step 7. The indirect PEs are allocated based on the three components: The direct PE RVU, the clinical PE RVU, and the work RVU.
For most services the indirect allocator is: indirect percentage * (direct PE RVU/direct percentage) + work RVU.
There are two situations where this formula is modified:
Note: For global services, the indirect allocator is based on both the work RVU and the clinical labor PE RVU. We do this to recognize that, for the professional service, indirect PEs will be allocated using the work RVUs, and for the TC service, indirect PEs will be allocated using the direct PE RVU and the clinical labor PE RVU. This also allows the global component RVUs to equal the sum of the PC and TC RVUs.
For presentation purposes in the examples in the Table 1, the formulas were divided into two parts for each service. The first part does not vary by service and is the indirect percentage * (direct PE RVU/direct percentage). The second part is either the work RVU, clinical PE RVU, or both depending on whether the service is a global service and whether the clinical PE RVU exceeds the work RVU (as described earlier in this step.)
Apply a BN Adjustment to the Indirect Allocators
Step 9: Calculate the current aggregate pool of indirect PE RVUs by multiplying the current aggregate pool of PE RVUs by the average indirect PE percentage from the physician specialty survey data. This is similar to the Step 2 calculation for the direct PE RVUs.
Step 10: Calculate an aggregate pool of indirect PE RVUs for all PFS services by adding the product of the indirect PE allocators for a service from Step 8 and the utilization data for that service. This is similar to the Step 3 calculation for the direct PE RVUs.
Step 11: Using the results of Step 9 and Step 10, calculate an indirect PE adjustment so that the aggregate indirect allocation does not exceed the available aggregate indirect PE RVUs and apply it to indirect allocators calculated in Step 8. This is similar to the Step 4 calculation for the direct PE RVUs.
Calculate the Indirect Practice Cost Index
Step 12: Using the results of Step 11, calculate aggregate pools of specialtyspecific adjusted indirect PE allocators for all PFS services for a specialty by adding the product of the adjusted indirect PE allocator for each service and the utilization data for that service.
Step 13: Using the specialtyspecific indirect PE/HR data, calculate specialtyspecific aggregate pools of indirect PE for all PFS services for that specialty by adding the product of the indirect PE/HR for the specialty, the physician time for the service, and the specialty's utilization for the service.
Step 14: Using the results of Step 12 and Step 13, calculate the specialtyspecific indirect PE scaling factors as under the current methodology.
Step 15: Using the results of Step 14, calculate an indirect practice cost index at the specialty level by dividing each specialty specific indirect scaling factor by the average indirect scaling factor for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service level to ensure the capture of all indirect costs. Calculate a weighted average of the practice cost index values for the specialties that furnish the service.
Note: For services with TCs and PCs, we calculate the indirect practice cost index across the global components, PCs, and TCs. Under this method, the indirect practice cost index for a given service (for example, echocardiogram) does not vary by the PC, TC and global component.
Step 17: Apply the service level indirect practice cost index calculated in Step 16 to the service level adjusted indirect allocators calculated in Step 11 to get the indirect PE RVU.
(iv) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 6 to the indirect PE RVUs from Step 17.
Step 19: Calculate and apply the final PE BN adjustment by
comparing the results of Step 18 to the current pool of PE RVUs. This
final BN adjustment is required primarily because certain specialties
are excluded from the PE RVU calculation for ratesetting purposes, but
all specialties are included for purposes of calculating the final BN
adjustment. (See ``Specialties excluded from ratesetting calculation'' below in this section.)
(v) Setup File Information
[[Page 33528]]
TC and 26 modifiers: Flag the services that are PC and TC services, but do not use TC and 26 modifiers (for example, electrocardiograms). This flag associates the PC and TC with the associated global code for use in creating the indirect PE RVU. For example, the professional service code 93010 is associated with the global code 93000.
(vi) Equipment cost per minute
The equipment cost per minute is calculated as:
(1/(minutes per year * usage)) * price * ((interest rate/(1(1/((1 + interest rate) ** life of equipment)))) + maintenance)
Where:
minutes per year = maximum minutes per year if usage were continuous (that is, usage = 1); 150,000 minutes.
usage = equipment utilization assumption; 0.9 for certain equipment
(see section II.A.2. of this proposed rule) and 0.5. for others. price = price of the particular piece of equipment.
interest rate = 0.11.
life of equipment = useful life of the particular piece of equipment.
maintenance = factor for maintenance; 0.05.
Note: To illustrate the PE calculation, in Table 1 we have used
the conversion factor (CF) of $36.0666 which is the CF effective
January 1, 2009 as published in CY 2009 PFS final rule with comment period.
BILLING CODE 412001P
[[Page 33529]]
[GRAPHIC] [TIFF OMITTED] TP13JY09.139
[[Page 33530]]
BILLING CODE 412001C
Note: Proposed PE RVU in Table 1, row 27, may not match Addendum B due to rounding.
* The direct adj = [current PE RVUs * CF * avg dir pct] / [sum direct inputs] = [Step 2] / [Step 3]
** The indirect adj = [current PE RVUs * avg ind pct] / [sum of ind allocators] = [Step 9] / [Step 10]
2. PE Proposals for CY 2010
a. SMS and Supplemental Survey Background
Currently, we use PE/HR obtained from the SMS surveys from 1995 1999. For several specialties that collected additional PE/HR data through a more recent supplemental survey, we accepted and incorporated these data in developing current PE/HR values.
While the SMS survey was not specifically designed for the purpose of establishing PE RVUs, we found these data to be the best available at the time. The SMS was a multispecialty survey effort conducted using a consistent survey instrument and method across specialties. The survey sample was randomly drawn from the AMA Physician Masterfile to ensure national representativeness. The AMA discontinued the SMS survey in 1999.
As required by the BBRA, we also established a process by which specialty groups could submit supplemental PE data. In the May 3, 2000 interim final rule entitled, Medicare Program; Criteria for Submitting Supplemental Practice Expense Survey Data, (65 FR 25664), we established criteria for acceptance of supplemental data. The criteria were modified in the CY 2001 and CY 2003 PFS final rules with comment period (65 FR 65380 and 67 FR 79971, respectively). We currently use supplemental survey data for the following specialties: Cardiology; dermatology; gastroenterology; radiology; cardiothoracic surgery; vascular surgery; physical and occupational therapy; independent laboratories; allergy/immunology; independent diagnostic testing facilities (IDTFs); radiation oncology; medical oncology; and urology.
Because the SMS data and the supplemental survey data are from different time periods, we have historically inflated them by the MEI to help put them on as comparable a time basis as we can when calculating the PE RVUs. This MEI proxy has been necessary in the past due to the lack of contemporaneous, consistently collected, and comprehensive multispecialty survey data.
b. Physician Practice Information Survey (PPIS)
The AMA has conducted a new survey, the PPIS, which was expanded (relative to the SMS) to include nonphysician practitioners (NPPs) paid under the PFS. The PPIS, administered in CY 2007 and CY 2008, was designed to update the specialtyspecific PE/HR data used to develop PE RVUs.
The AMA and our contractor, The Lewin Group (Lewin), analyzed the
PPIS data and calculated the PE/HR for physician and nonphysician
specialties, respectively. The AMA's summary worksheets and Lewin's
final report are available on the CMS Web site at http://www.cms.gov/
PhysicianFeeSched/. (See AMA PPIS Worksheets 13 and Lewin Group Final
Report PPIS.) Table 2 shows the current indirect PE/HR based on SMS and
supplemental surveys, the PPIS indirect PE/HR, and the indirect cost percentages of total costs.
Table 2Indirect PE/HR and Indirect Percentages
[Current and PPIS] Current PPIS
Specialty indirect indirect Current PPIS Current crosswalk
PE/HR PE/HR indirect % indirect %
All Physicians............... $59.04 $86.36 67 74
Allergy and Immunology....... 153.29 162.68 62 67
Anesthesiology............... 19.76 29.37 56 82
Audiology.................... 59.04 72.17 67 85 All Physicians.
Cardiology................... 131.02 88.04 56 65
Cardiothoracic Surgery....... 61.75 67.83 68 83
Chiropractor................. 49.60 65.33 69 86 Internal Medicine.
Clinical Laboratory (Billing 66.46 71.01 37 37 Independently) *.
Clinical Psychology.......... 29.07 20.07 90 93 Psychiatry.
Clinical Social Work......... 29.07 17.80 90 97 Psychiatry.
Colon & Rectal Surgery....... 53.93 90.85 77 80
Dermatology.................. 158.49 184.62 70 70
Emergency Medicine........... 36.85 38.36 88 94
Endocrinology................ 49.60 84.39 69 73
Family Medicine.............. 52.79 90.15 62 76
Gastroenterology............. 101.30 96.78 70 75
General Practice............. 52.79 78.59 62 69
General Surgery.............. 53.93 82.74 77 82
Geriatrics................... 49.60 54.14 69 74
Hand Surgery................. 98.56 148.78 72 77
Independent Diagnostic 466.16 501.45 50 50 Testing Facilities *.
Internal Medicine............ 49.60 84.03 69 76
Interventional Pain Medicine. 59.04 156.79 67 70
Interventional Radiology..... 118.48 82.55 58 81
Medical Oncology............. 141.84 129.94 59 56
Nephrology................... 49.60 66.00 69 80
Neurology.................... 66.05 110.39 74 87
Neurosurgery................. 89.64 115.76 86 87
Nuclear Medicine............. 118.48 39.80 58 77
Obstetrics/Gynecology........ 69.74 99.32 67 67
Ophthalmology................ 103.28 170.08 65 70
Optometry.................... 59.04 88.02 67 77 All Physicians.
Oral Surgery (Dentist only).. 96.01 173.19 71 65 Otolaryngology. [[Page 33531]]
Orthopaedic Surgery.......... 98.56 131.40 72 81
Osteopathic Manipulative 59.04 53.93 67 93 Therapy.
Otolaryngology............... 96.01 141.53 71 75
Pain Medicine................ 59.04 122.41 67 70
Pathology.................... 59.80 74.98 70 74
Pediatrics................... 51.52 76.27 62 69
Physical Medicine and 84.92 110.13 71 84 Rehabilitation.
Physical Therapy............. 35.17 57.26 65 84
Plastic Surgery.............. 99.32 134.82 67 74
Podiatry..................... 59.04 74.76 67 82 All Physicians.
Psychiatry................... 29.07 30.09 90 94
Pulmonary Disease............ 44.63 55.26 76 74
Radiation Oncology (Hospital 114.00 126.66 50 56 Based & Freestanding).
Radiology.................... 118.48 95.60 58 71
Registered Dieticians........ 59.04 18.45 67 84 All Physicians.
Rheumatology................. 84.92 98.08 71 67
Urology...................... 119.57 97.02 69 73
Vascular Surgery............. 60.10 83.98 63 73
\*\ Did not participate in PPIS. Data based on Supplemental Survey.
The PPIS is a multispecialty, nationally representative, PE survey of both physician and NPPs using a consistent survey instrument and methods highly consistent with those used for the SMS and the supplemental surveys. The PPIS has gathered information from 3,656 respondents across 51 physician specialty and health care professional groups. We believe the PPIS is the most comprehensive source of PE survey information available to date.
As noted, the BBRA required us to establish criteria for accepting
supplemental survey data. Since the supplemental surveys were specific to individual specialties and not part of a comprehensive
multispecialty survey, we had required certain precision levels be met
in order to ensure that the supplemental data was sufficiently valid,
and to be accepted for use in the development of the PE RVUs. Because
the PPIS is a contemporaneous, consistently collected, and
comprehensive multispecialty survey, we do not believe similar
precision requirements are necessary and are not proposing to establish them for the use of the PPIS data.
For physician specialties, the survey responses were adjusted for nonresponse bias. Nonresponse bias is the bias that results when the characteristics of survey respondents differ in meaningful ways, such as in the mix of practice sizes, from the general population. The non response adjustment was developed based on a comparison of practice size and other characteristic information between the PPIS survey respondents and data from the AMA Masterfile (for physician specialties) or information from specialty societies (for nonphysician specialties). For six specialties (that is, chiropractors, clinical social workers, nuclear medicine, osteopathic manipulative therapy, physical therapy, and registered dietians) such an adjustment was not possible due to a lack of available characteristic data. The AMA and Lewin have indicated that the nonresponse weighting has only a small impact on PE/HR values.
Under our current policy, various specialties without SMS or supplemental survey data have been crosswalked to other similar specialties to obtain a proxy PE/HR. For specialties that were part of the PPIS for which we currently use a crosswalked PE/HR, we are proposing instead to use the PPISbased PE/HR. We are proposing to continue current crosswalks for specialties that did not participate in PPIS.
Supplemental survey data on independent labs, from the College of American Pathologists, was implemented for payments in CY 2005. Supplemental survey data from the National Coalition of Quality Diagnostic Imaging Services (NCQDIS), representing IDTFs, was blended with supplementary survey data from the American College of Radiology (ACR) and implemented for payments in CY 2007. Neither IDTFs nor Independent Labs participated in PPIS. Therefore, we are proposing to continue using the current PE/HR that was developed using their supplemental survey data.
We are not proposing to use the PPIS data for reproductive endocrinology, sleep medicine, and spine surgery since these specialties are not separately recognized by Medicare and we do not know how to blend this data with the Medicare recognized specialty data. We seek comment on this issue.
We are not proposing changes to the manner in which the PE/HR data are used in the current PE RVU methodology. We are merely proposing to update the PE/HR data itself based on the new survey. We propose to utilize the PE/HR developed using PPIS data for all Medicare recognized specialties that participated in the PPIS for payments effective January 1, 2010. The impact of using the new PPISbased PE/HR is discussed in the Regulatory Impact Analysis in section V. of this proposed rule.
c. Equipment Utilization Rate
As part of the PE methodology associated with the allocation of
equipment costs for calculating PE RVUs, we have adopted an equipment
usage assumption of 50 percent. Most recently, we included a discussion
in the CY 2008 PFS proposed rule on this equipment usage assumption (72
FR 38132). We noted that if the assumed equipment usage percentage is
set too high, the result would be an insufficient allowance at the
service level for the practice costs associated with equipment. If the
assumed equipment usage percentage is set too low, the result would be
an excessive allowance for the practice costs of equipment at the service level. We acknowledged that
[[Page 33532]]
the current 50 percent usage assumption does not capture the actual
usage rates for all equipment, but stated that we did not believe that
we had strong empirical evidence to justify any alternative approaches.
The commenters' recommendations about making adjustments to the 50 percent utilization rate assumption varied. Certain commenters recommended we do nothing until stronger empirical evidence is available, while other commenters recommended a decrease in the utilization assumption, and some commenters recommended an increase in the utilization assumption. The particular changes recommended in the utilization assumption were, in most cases, directly related to a specific code.
In the CY 2008 PFS final rule with comment period (72 FR 66232), we agreed with commenters that the equipment utilization rate should continue to be examined for accuracy. We reiterated our commitment to continue to work with interested parties on this issue. We indicated that we would continue to monitor the appropriateness of the equipment utilization assumption, and evaluate whether changes should be proposed in light of the data available.
Since the publication of the CY 2008 PFS final rule with comment period, MedPAC addre
FOR FURTHER INFORMATION CONTACT
Rick Ensor, (410) 7865617, for issues related to practice expense methodology.
Craig Dobyski, (410) 7864584, for issues related to geographic practice cost indices.
Esther Markowitz, (410) 7864595, for issues related to telehealth services.
Ken Marsalek, (410) 7864502, for issues related to the physician
practice information survey and the multiple procedure payment reduction.
Cathleen Scally, (410) 7865714, for issues related to the initial preventive physical examination or consultation services.
Regina WalkerWren, (410) 7869160, for issues related to the phasing out of the outpatient mental health treatment limitation.
Diane Stern, (410) 7861133, for issues related to the physician
quality reporting initiative and incentives for eprescribing.
Lisa Grabert, (410) 7866827, for issues related to the Physician Resource Use Feedback Program.
Colleen Bruce, (410) 7865529, for issues related to valuebased purchasing.
Sandra Bastinelli, (410) 7863630, for issues related to the implementation of accreditation standards.
Jim Menas, (410) 7864507, for issues related to teaching anesthesia services.
Sarah McClain, (410) 7862994, for issues related to the coverage of cardiac rehabilitation services.
Dorothy Shannon, (410) 7863396, for issues related to payment for cardiac rehabilitation services.
Roya Lofti, (410) 7864072, for issues related to the coverage of pulmonary rehabilitation.
Jamie Hermansen, (410) 7862064, for issues related to kidney disease patient education programs.
Terri Harris, (410) 7866830 for issues related to payment for kidney disease patient education.
Henry Richter, (410) 7864562, or Lisa Hubbard, (410) 7865472, for
issues related to renal dialysis provisions and payments for endstage renal disease facilities.
Cheryl Gilbreath, (410) 7865919, for issues related to payment for covered outpatient drugs and biologicals.
Edmund Kasaitis, (410) 7860477, or Bonny Dahm, (410) 7864006, for
issues related to the Competitive Acquisition Program (CAP) for Part B drugs.
Pauline Lapin, (410) 7866883, for issues related to the chiropractic services demonstration budget neutrality issue.
Monique Howard, (410) 7863869, for issues related to CORF conditions of coverage.
Roechel Kujawa, (410) 7869111, for issues related to ambulance services.
Anne Tayloe Hauswald, (410) 7864546, for clinical laboratory issues.
Troy Barsky, (410) 7868873, or Roy Albert, (410) 7861872, for issues related to physician selfreferral.
Michelle Peterman, (410) 7862591, or Iffat Fatima, (410) 7866709 for issues related to the grandfathering
[[Page 33521]]
provisions of the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) Competitive Acquisition Program.
Ralph Goldberg, (410) 7864870, or Heidi Edmunds, (410) 7861781, for
issues related to the damages process caused by the termination of
contracts awarded in 2008 under the DMEPOS Competitive Bidding program.
Diane Milstead, (410) 7863355, or Gaysha Brooks, (410) 7869649, for
all other issues.