Federal Register, Volume 76 Issue 138 (Tuesday, July 19, 2011)

[Federal Register Volume 76, Number 138 (Tuesday, July 19, 2011)]
[Proposed Rules]
[Pages 42772-42947]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16972]

[[Page 42771]]

Vol. 76

Tuesday,

No. 138

July 19, 2011

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, 414, 415 et al.

Medicare Program; Payment Policies Under the Physician Fee Schedule
and Other Revisions to Part B for CY 2012; Proposed Rule

Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 /
Proposed Rules

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 410, 414, 415, and 495

[CMS-1524-P]
RIN 0938-AQ25

Medicare Program; Payment Policies Under the Physician Fee
Schedule and Other Revisions to Part B for CY 2012

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule addresses changes to the physician fee
schedule and other Medicare Part B payment policies to ensure that our
payment systems are updated to reflect changes in medical practice and
the relative value of services. It also addresses, implements or
discusses certain provisions of the Patient Protection and Affordable
Care Act, as amended by the Health Care and Education Reconciliation
Act of 2010 (collectively known as the Affordable Care Act) and the
Medicare Improvements for Patients and Providers Act of 2008. In
addition, this proposed rule discusses payments for Part B drugs;
Physician Quality Reporting System; the Electronic Prescribing (eRx)
Incentive Program; the Physician Resource-Use Feedback Program and the
value modifier; productivity adjustment for ambulatory surgical center
payment system and the ambulance, clinical laboratory, and durable
medical equipment prosthetics orthotics and supplies (DMEPOS) fee
schedules; and other Part B related issues. (See the Table of Contents
for a listing of the specific issues addressed in this proposed rule.)

DATES: Comment date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on August 30, 2011.

ADDRESSES: In commenting, please refer to file code CMS-1524-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the instructions for
``submitting a comment.''
2. By regular mail. You may mail written comments to the following
address only:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-1524-P, P.O. Box 8013, Baltimore, MD
21244-8013.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address only:
Centers for Medicare & Medicaid Services,Department of Health and
Human Services,Attention: CMS-1524-P,Mail Stop C4-26-05,7500 Security
Boulevard,Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments before the close of the comment period
to either of the following addresses:
a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services,Department of Health and Human Services,Room 445-G, Hubert H.
Humphrey Building,200 Independence Avenue, SW.,Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey 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 for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services,Department of Health and Human Services,7500 Security
Boulevard,Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call telephone number (410) 786-1066 in advance to schedule your
arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.

FOR FURTHER INFORMATION CONTACT:
Ryan Howe, (410) 786-3355, for issues related to the physician fee
schedule practice expense methodology, direct practice expense inputs,
and telehealth services.
Elizabeth Truong, (410) 786-6005, or Sara Vitolo, (410) 786-5714,
for issues related to potentially misvalued services.
Ken Marsalek, (410) 786-4502, for issues related the multiple
procedure payment reduction and pathology services.
Sara Vitolo, (410) 786-5714, for issues related to malpractice
RVUs.
Michael Moore, (410) 786-6830, for issues related to geographic
practice cost indices.
Elizabeth Truong, (410) 786-6005, for issues related to the
sustainable growth rate, or the anesthesia or physician fee schedule
conversion factors.
Bonny Dahm, (410) 786-4006, for issues related to payment for
covered outpatient drugs and biologicals.
Claudia Lamm, (410) 786-3421, for issues related to the
chiropractic services demonstration budget neutrality issue.
Jamie Hermansen, (410) 786-2064, or Stephanie Frilling, (410) 786-
4507 for issues related to the annual wellness visit.
Christine Estella, (410) 786-0485, for issues related to the
physician quality reporting system, incentives for Electronic
Prescribing (eRx) and Physician Compare.
Gift Tee, (410) 786-9316, for issues related to the Physician
Resource Use Feedback Program and physician value modifier.
Stephanie Frilling, (410) 786-4507 for issues related to the 3-day
Payment Window.
Pam West, (410) 786-2302, for issues related to the technical
corrections.
Rebecca Cole or Erin Smith, (410) 786-4497, for issues related to
physician payment not previously identified.

SUPPLEMENTARY 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 regulations.gov
Web site (http://www.regulations.gov) as soon as possible after they
have been received: 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 1-800-743-3951.

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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 regulations impact appears throughout the
preamble and, therefore, is not discussed exclusively in section VII.
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. Resource-Based Malpractice RVUs
4. Refinements to the RVUs
5. Application of Budget Neutrality to Adjustments of RVUs
B. Components of the Fee Schedule Payment Amounts
C. Most Recent Changes to Fee Schedule
II. Provisions of the Proposed Rule for the Physician Fee Schedule
A. Resource-Based Practice Expense (PE) Relative Value Units
(RVUs)
1. Overview
2. Practice Expense Methodology
a. Direct Practice Expense
b. Indirect Practice Expense per Hour Data
c. Allocation of PE to Services
(1) Direct Costs
(2) Indirect Costs
d. Facility and Nonfacility Costs
e. Services With Technical Components (TCs) and Professional
Components (PCs)
f. PE RVU Methodology
(1) Setup File
(2) Calculate the Direct Cost PE RVUs
(3) Create the Indirect Cost PE RVUs
(4) Calculate the Final PE RVUs
(5) Setup File Information
(6) Equipment Cost per Minute
3. Changes to Direct PE Inputs
a. Inverted Equipment Minutes
b. Labor and Supply Input Duplication
c. AMA RUC Recommendations for Moderation Sedation Direct PE
Inputs
d. Updates to Price and Useful Life for Existing Direct Inputs
4. Development of Code-Specific PE RVUs
5. Physician Time for Select Services
B. Potentially Misvalued Services Under the Physician Fee
Schedule
1. Valuing Services Under the PFS
2. Identifying, Reviewing, and Validating the RVUs of
Potentially Misvalued Services Under the PFS
a. Background
b. Progress in Identifying and Reviewing Potentially Misvalued
Codes
c. Validating RVUs of Potentially Misvalued Codes
3. Consolidating Reviews of Potentially Misvalued Codes
4. Proposed Public Nomination Process
5. CY 2012 Identification and Review of Potentially Misvalued
Services
a. Code Lists
b. Specific Codes
(1) Codes Potentially Requiring Updates to Direct PE Inputs
(2) Codes Without Direct Practice Expense Inputs in the Non-
Facility Setting
(3) Codes Potentially Requiring Updates to Physician Work
6. Code-Specific Issues
a. CY 2012 Codes With Site-of-Service Anomalies
(1) Background
(2) Revised Work RVUs for Codes With Site-of-Service Anomalies
(A) Foot Arthrodesis
(B) Submandibular Gland Excision
(C) Urological Procedures
(D) Epidural Lysis
(E) Intrathecal Epidural Catheters and Pumps
(F) Neurostimulators
(G) Repair of Eye Wound
b. Payment for Bone Density Tests
C. Expanding the Multiple Procedure Payment Reduction (MPPR)
Policy
1. Background
2. CY 2012 Expansion of the MPPR Policy to the Professional
Component of Advance Imaging Services
3. Further Expansion of the MPPR Under Consideration for Future
Year
D. Malpractice RVUs
1. Overview of the Methodology for Calculation of Malpractice
RVUs
2. Proposed Revisions to Malpractice RVUs for Certain
Cardiothoracic Surgery Services
E. Geographic Practice Cost Indices (GPCIs)
1. Background
2. Proposed GPCI Revisions for CY 2012
a. Physician Work GPCIs
b. Practice Expense GPCIs
(1) Affordable Care Act Analysis and Revisions for PE GPCIs
(A) General Analysis for the CY 2012 PE GPCIs
(B) Analysis of ACS Rental Data
(C) Employee Wage Analysis
(D) Purchased Services Analysis
(E) Determining the PE GPCI Cost Share Weights
(i) Practice Expense
(ii) Employee Compensation
(iii) Office Rent
(iv) Purchased Services
(v) Equipment, Supplies, and Other Misc Expenses
(vi) Physician Work and Malpractice GPCIs
(F) PE GPCI Floor for Frontier States
(2) Summary of CY 2012 PE Proposal
c. Malpractice GPCIs
3. Payment Localities
4. Report From the Institute of Medicine
III. Medicare Telehealth Services for the Physician Fee Schedule
A. Billing and Payment for Telehealth Services
1. History
2. Current Telehealth Billing and Payment Policies
B. Requests for Adding Services to the List of Medicare
Telehealth Services
C. Submitted Requests for Addition to the List of Telehealth
Services for CY 2012
1. Smoking Cessation Services
2. Critical Care Services
3. Domiciliary or Rest Home Evaluation and Management Services
4. Genetic Counseling Services
5. Online Evaluation and Management Services
6. Data Collection Services
7. Audiology Services
D. The Process for Adding HCPCS Codes as Medicare Telehealth
Services
E. Telehealth Consultations in Emergency Departments
IV. Other Provisions of the Proposed Regulation
A. Part B Drug Payment: Average Sales Price (ASP) Issues
1. Widely Available Market Price (WAMP)/Average Manufacturer
Price (AMP)
2. AMP Threshold and Price Substitutions
a. AMP Threshold
b. AMP Price Substitution
(1) Inspector General Studies
(2) Proposal
(3) Timeframe for and Duration of Price Substitutions
3. ASP Reporting Update
a. ASP Reporting Template Update
b. Reporting of ASP Units and Sales Volume for Certain Products
B. Discussion of Budget Neutrality for the Chiropractic Services
Demonstration
C. Proposed Productivity Adjustment for the Ambulatory Surgical
Center Payment System, and the Ambulance, Clinical Laboratory and
DMEPOS Fee Schedules
D. Section 105: Extension of Payment for Technical Component of
Certain Physician Pathology Services
1. Background and Statutory Authority
2. Proposed Revisions to Payment for TC of Certain Physician
Pathology Services
E. Section 4103 of the Affordable Care Act: Medicare Coverage
and Payment of the Annual Wellness Visit Providing aPersonalized
Prevention Plan Covered Under Medicare Part B
1. Incorporation of a Health Risk Assessment as Part of the
Annual Wellness Visit
a. Background and Statutory Authority--Medicare Part B Coverage
of an Annual Wellness Visit Providing Personalized Prevention Plan
Services
b. Implementation
(1) Definition of a ``Health Risk Assessment''
(2) Proposed Changes to the Definitions of First Annual Wellness
Visit and Subsequent Annual Wellness Visit
2. The Addition of a Health Risk Assessment as a Required
Element for the Annual Wellness Visit Beginning in 2012
a. Payment for AWV Services With the Inclusion of an HRA Element
F. Quality Reporting Initiatives
1. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
a. Program Background and Statutory Authority
b. Methods of Participation
(1) Individual Eligible Professionals
(2) Group Practices
(A) Background and Authority
(B) Proposed Definition of Group Practice
(C) Proposed Process for Physician Group Practices to
Participate as Group Practices

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c. Proposed Reporting Period
d. Proposed Reporting Mechanisms--Individual Eligible
Professionals
(1) Claims-Based Reporting
(2) Registry-Based Reporting
(A) Proposed Requirements for the Registry-Based Reporting
Mechanism--Individual Eligible Professionals
(B) 2012 Proposed Qualification Requirements for Registries
(3) EHR-Based Reporting
(A) Direct EHRs
(i) Proposed Requirements for the Direct EHR-Based Reporting
Mechanism--Individual Eligible Professionals
(ii) 2012 Proposed Qualification Requirements for Direct EHRs
(B) EHR Data Submission Vendors
(i) 2012 Proposed Qualification Requirements for EHR Data
Submission Vendors
(C) Proposed Qualification Requirements for EHR Direct and Data
Submission Vendors and Their Products for the 2013 Physician Quality
Reporting System
e. Incentive Payments for the 2012 Physician Quality Reporting
System
(1) Proposed Criteria for Satisfactory Reporting of Individual
Quality Measures for Individual Eligible Professionals via Claims
(2) Proposed 2012 Criteria for Satisfactory Reporting of
Individual Quality Measures for Individual Eligible Professionals
via Registry
(3) Proposed Criteria for Satisfactory Reporting of Individual
Quality Measures for Individual Eligible Professionals via EHR
(4) Proposed Criteria for Satisfactory Reporting of Measures
Groups via Claims--Individual Eligible Professionals
(5) Proposed 2012 Criteria for Satisfactory Reporting of
Measures Groups via Registry--Individual Eligible Professionals
(6) Proposed 2012 Criteria for Satisfactory Reporting on
Physician Quality Reporting System Measures by Group Practices Under
the GPRO
f. 2012 Physician Quality Reporting System Measures
(1) Statutory Requirements for the Selection of Proposed 2012
Physician Quality Reporting System Measures
(2) Other Considerations for the Selection of Proposed 2012
Physician Quality Reporting System Measures
(3) Proposed 2012 Physician Quality Reporting System Individual
Measures
(A) Proposed 2012 Physician Quality Reporting System Core
Measures Available for Claims, Registry, and/or EHR-Based Reporting
(B) Proposed 2012 Physician Quality Reporting System Individual
Measures for Claims and Registry Reporting
(C) Proposed 2012 Measures Available for EHR-Based Reporting
(4) 2012 Physician Quality Reporting System Measures Groups
(5) Proposed 2012 Physician Quality Reporting System Quality
Measures for Group Practices Selected To Participate in the GPRO
(GPRO)
g. Maintenance of Certification Program Incentive
h. Feedback Reports
i. Informal Review
j. Future Payment Adjustments for the Physician Quality
Reporting System
2. Incentives and Payment Adjustments for Electronic Prescribing
(eRx)--The Electronic Prescribing Incentive Program
a. Program Background and Statutory Authority
b. Eligibility
(1) Individual Eligible Professionals
(A) Definition of Eligible Professional
(2) Group practices
(A) Proposed Definition of ``Group Practice''
(B) Proposed Process To Participate in the eRx Incentive
Program--eRx GPRO
c. Proposed Reporting Periods
(1) Proposed Reporting Periods for the 2012 and 2013 eRx
Incentives
(2) Proposed Reporting Periods for the 2013 and 2014 eRx Payment
Adjustments
d. Proposed Criteria for Determining Successful Electronic
Prescribers
(1) Reporting the Electronic Prescribing Quality Measure
(2) The Reporting Denominator for the Electronic Prescribing
Measure
(3) The Numerator for the Electronic Prescribing Measure
e. Required Functionalities and Part D Electronic Prescribing
Standards
(1) ``Qualified'' Electronic Prescribing System
(2) Part D Electronic Prescribing Standards
f. Proposed Reporting Mechanisms for the 2012 and 2013 Reporting
Periods
(1) Claims-Based Reporting
(2) Registry-Based Reporting
(3) EHR-Based Reporting
g. The 2012 and 2013 eRx Incentives
(1) Applicability of 2012 and 2013 eRx Incentives for Eligible
Professionals and eRx GPROs
(2) Proposed Reporting Criteria for Being a Successful
Electronic for the 2012 and 2013 eRx Incentives--Individual Eligible
Professionals
(3) Proposed Criteria for Being a Successful Electronic
Prescriber 2012 and 2013 eRx Incentives--Group Practices
(4) No Double Payments
h. The 2013 and 2014 Electronic Prescribing Payment Adjustments
(1) Proposed Limitations to the 2013 and 2014 eRx Payment
Adjustments--Individual Eligible Professionals
(2) Proposed Requirements for the 2013 and 2014 eRx Payment
Adjustments--Individual Eligible Professionals
(3) Proposed Requirements for the 2013 and 2014 eRx Payment
Adjustments--Group Practices
(4) Significant Hardship Exemptions
(A) Proposed Significant Hardship Exemptions
(i) Inability to Electronically Prescribe Due to Local, State,
or Federal Law or Regulation
(ii) Eligible Professionals Who Prescribe Fewer Than 100
Prescriptions During a 6-Month, Payment Adjustment Reporting Period
(B) Process for Submitting Significant Hardship Exemptions--
Individual Eligible Professionals
G. Physician Compare Web Site
1. Background and Statutory Authority
2. Proposed Plans
H. Medicare EHR Incentive Program for Eligible Professionals for
the 2012 Payment Year
1. Background
2. The Proposed Physician Quality Reporting System-Medicare EHR
Incentive Pilot
a. EHR Data Submission Vendor-Based Reporting Option
b. EHR-Based Reporting Option
3. Method for EPs To Indicate Election To Participate in the
Physician Quality Reporting System-Medicare EHR Incentive Pilot for
Payment Year 2012
I. Improvements to the Physician Feedback Program and
Establishment of the Value-Based Payment Modifier (Effect of
Sections 3003 and 3007 of the Affordable Care Act on the Program)
1. Overview
2. Background
3. Future Considerations for Phase III Physician Feedback
Program
a. Phase III Physician Feedback Reports (Fall 2011) Feedback
Program
(1) Physician Group Reports
(2) Reports to Individual Physicians
b. Refinement of the Physician Feedback Program in 2011:
Individual Physicians/Medical Group Practices/Specialties
c. Beyond 2011: Future Scale Up and Dissemination for Increased
Physician Feedback Reporting
4. The Value-Based Payment Modifier: Section 3007 of the
Affordable Care Act
a. Measures of Quality of Care and Costs
(1) Quality of Care Measures
(A) Proposed Quality of Care Measures for the Value-Modifier
(B) Potential Quality of Care Measures for Additional Dimensions
of Care in the Value Modifier
(i) Outcome Measures
(ii) Care Coordination/Transition Measures
(iii) Patient Safety, Patient Experience and Functional Status
(2) Cost Measures
(A) Proposed Cost Measures for the Value Modifier
(B) Potential Cost Measures for Future Use in the Value Modifier
b. Assessing Physician Performance and Applying the Value
Modifier
c. Dates for Implementation of the Value Modifier
d. Initial Performance Period
e. Other Issues
(1) Systems-Based Care
(2) Special Circumstances for Physicians in Rural Areas and
Other Underserved Communities
J. Bundling of Payments for Services Provided to Outpatients Who
Later Are Admitted as Inpatients: 3-Day Payment Window Policy and
the Impact on Wholly Owned or Wholly Operated Physician Practices
1. Introduction
2. Background

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3. Applicability of the 3-Day Payment Window Policy for Services
Furnished in Physician Practices
a. Payment Methodology
b. Identification of Wholly Owned or Wholly Operated Physician
Practices
K. Hospital Discharge Care Coordination
L. Technical Corrections
1. Outpatient Speech-Language Pathology Services: Conditions and
Exclusions
2. Outpatient Diabetes Self-Management Training and Diabetes
Outcome Measurements
a. Proposed Changes to the Definition of Deemed Entity
b. Proposed Changes to the Condition of Coverage Regarding
Training Orders
3. Practice Expense Relative Value Units (RVUs)
V. Collection of Information Requirements
A. Part B Drug Payment
B. The Physician Quality Reporting System (formerly the
Physician Quality Reporting Initiative (PQRI))
C. Electronic Prescribing (eRx) Incentive Program
D. Proposed Changes to the Medicare Electronic Health Record
(EHR) Incentive Program for Eligible Professionals for the 2012
Payment Year
VI. Response to Comments
VII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. RVU Impacts
1. Resource-Based Work, PE, and Malpractice RVUs
2. CY 2012 PFS Impact Discussion
a. Changes in RVUs
b. Combined Impact
D. Effects of Proposal To Review Potentially Misvalued Codes on
an Annual Basis Under the PFS
E. Effect of Proposed Revisions to Malpractice RUVs
F. Effect of Proposed Changes to Geographic Practice Cost
Indices (GPCIs)
G. Effects of Proposed Changes to Medicare Telehealth Services
Under the Physician Fee Schedule
H. Effects of Impact of Other Provisions of the Proposed Rule
1. Part B Drug Payment: ASP Issues
2. Discussion of Budget Neutrality for the Chiropractic Services
Demonstration
3. Extension of Payment for Technical Component of Certain
Physician Pathology Services
4. Section 4103: Medicare Coverage of Annual Wellness Visit
Providing a Personalized Prevention Plan: Incorporation of a Health
Risk Assessment as Part of the Annual Wellness Visit.
5. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
6. Incentives for Electronic Prescribing (eRx)--The Electronic
Prescribing Incentive Program
7. Physician Compare Web Site
8. Medicare EHR Incentive Program
9. Physician Feedback Program/Value Modifier Payment
10. Bundling of Payments for Services Provided to Outpatients
Who Later Are Admitted as Inpatients: 3-Day Payment Window Policy
and the Impact on Wholly Owned or Wholly Operated Physician Offices
I. Alternatives Considered
J. Impact on Beneficiaries
K. Accounting Statement
L. Conclusion
VIII. Addenda Referenced in This Proposed Rule and Available Only
Through the Internet on the CMS Web Site
Regulations Text

Acronyms

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 as
follows:

AA--Anesthesiologist assistant
AACE--American Association of Clinical Endocrinologists
AACVPR--American Association of Cardiovascular and Pulmonary
Rehabilitation
AADE--American Association of Diabetes Educators
AANA--American Association of Nurse Anesthetists
ABMS--American Board of Medical Specialties
ABN--Advanced Beneficiary Notice
ACC--American College of Cardiology
ACGME--Accreditation Council on Graduate Medical Education
ACLS--Advanced cardiac life support
ACP--American College of Physicians
ACR--American College of Radiology
ACS--American Community Survey
ADL--Activities of daily living
AED--Automated external defibrillator
AFROC--Association of Freestanding Radiation Oncology Centers
AFS--Ambulance Fee Schedule
AHA--American Heart Association
AHFS-DI--American Hospital Formulary Service-Drug Information
AHRQ--[HHS] Agency for Healthcare Research and Quality
AMA--American Medical Association
AMA RUC--[AMA's Specialty Society] Relative (Value) Update Committee
AMA-DE--American Medical Association Drug Evaluations
AMI--Acute Myocardial Infarction
AMP--Average Manufacturer Price
AO--Accreditation organization
AOA--American Osteopathic Association
APA--American Psychological Association
APC--Administrative Procedures Act
APTA--American Physical Therapy Association
ARRA--American Recovery and Reinvestment Act (Pub. L. 111-5)
ASC--Ambulatory surgical center
ASP--Average Sales Price
ASPE--Assistant Secretary of Planning and Evaluation (ASPE)
ASRT--American Society of Radiologic Technologists
ASTRO--American Society for Therapeutic Radiology and Oncology
ATA--American Telemedicine Association
AWP--Average wholesale price
AWV--Annual Wellness Visit
BBA--Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA--[Medicare, Medicaid and State Child Health Insurance Program]
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BIPA--Medicare, Medicaid, and SCHIP Benefits Improvement Protection
Act of 2000 (Pub. L. 106-554)
BLS--Bureau of Labor and Statistics
BMD--Bone mineral density
BMI--Body mass index
BN--Budget neutrality
BPM--Benefit Policy Manual
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
CARE--Continuity Assessment Record and Evaluation
CBIC--Competitive Bidding Implementation Contractor
CBP--Competitive Bidding Program
CBSA--Core-Based Statistical Area
CDC--Centers for Disease Control and Prevention
CEM--Cardiac Event Monitoring
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
CMD--Contractor Medical Director
CME--Continuing medical education
CMHC--Community Mental Health Center
CMPs--Civil money penalties
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
CPI-U Consumer price index for urban consumers
CPR--Cardiopulmonary resuscitation
CPT--[Physicians] Current Procedural Terminology (4th Edition, 2002,
copyrighted by the American Medical Association)
CQM--Clinical quality measures
CR--Cardiac rehabilitation
CRF--Chronic Renal Failure
CRNA--Certified registered nurse anesthetist
CROs--Clinical research organizations
CRP--Canalith repositioning
CRT--Certified respiratory therapist
CSC--Computer Sciences Corporation
CSW--Clinical social worker
CT--Computed Tomography
CTA--Computed Tomography Angography
CWF--Common Working File
CY--Calendar Year
D.O.--Doctor of Osteopathy
DEA--Drug Enforcement Agency
DHHS--Department of Health and Human Services
DHS--Designated health services

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DME--Durable Medical Equipment
DMEPOS--Durable medical equipment, prosthetics, orthotics, and
supplies
DOJ--Department of Justice
DOQ--Doctors Office Quality
DOS--Date of service
DOTPA--Development of Outpatient Therapy Alternatives
DRA--Deficit Reduction Act of 2005 (Pub. L. 109-171)
DSMT--Diabetes Self-Management Training Services
DXA CPT--Dual energy X-ray absorptiometry
E/M--Evaluation and Management Medicare Services
ECG--Electrocardiogram
EDI--Electronic data interchange
EEG--Electroencephalogram
EGC--Electrocardiogram
EHR--Electronic health record
EKG--Electrocardiogram
EMG--Electromyogram
EMTALA--Emergency Medical Treatment and Active Labor Act
EOG--Electro-oculogram
EPO--Erythopoeitin
EPs--Eligible Professional
eRx--Electronic Prescribing
ESO--Endoscopy Supplies
ESRD--End-Stage Renal Disease
FAA--Federal Aviation Administration
FAX--Facsimile
FDA--Food and Drug Administration (HHS)
FFS--Fee-for-service
FISH--In Situ Hybridization Testing
FOTO--Focus On Therapeutic Outcomes
FQHC--Federally Qualified Health Center
FQHC--Federally Qualified Health Center
FR--Federal Register
FTE--full time equivalent
GAF--Geographic adjustment factor
GAFs--Geographic Adjustment Factors
GAO--Government Accountability Office
GEM--Generating Medicare [Physician Quality Performance Measurement
Results]
GFR--Glomerular filtration rate
GME--Graduate Medical Education
GPCIs--Geographic Practice Cost Indices
GPO--Group purchasing organization
GPOs--Group purchasing organizations
GPRO--Group Practice Reporting Option
GPS--Geographic Positioning System
GQ--Via asynchronous telecommunications system
GSA--General Services Administration
GT--Growth Target
HAC--Hospital-acquired conditions
HBAI--Health and Behavior Assessment and Intervention
HCC--Hierarchal Condition Category
HCPAC--Health Care Professionals Advisory Committee
HCPCS--Healthcare Common Procedure Coding System
HCRIS--Healthcare Cost Report Information System
HDL/LDL--High-density lipoprotein/Low-density lipoprotein
HDRT--High dose radiation therapy
HEMS--Helicopter Emergency Medical Services
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. 104-191)
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
HMO--Health Maintenance Organization
HOPD--Hospital outpatient department
HPSA--Health Professional Shortage Area
HRA--Health Risk Assessment
HRSA--Health Resources Services Administration (HHS)
HSIP--HPSA Surgical Incentive Program
HUD--Department of Housing and Urban Development
HUD--Housing and Urban Development
IACS--Individuals Access to CMS Systems
IADL--Instrumental activities of daily living
ICD--International Classification of Diseases
ICF--Intermediate care facilities
ICF--International Classification of Functioning, Disability and
Health
ICR--Intensive cardiac rehabilitation
ICR--Information collection requirement
IDE--Investigational device exemption
IDTF--Independent diagnostic testing facility
IFC--Interim final rule with comment period
IGI--IHS Global Insight, Inc.
IME--Indirect Medical Education
IMRT--Intensity-Modulated Radiation Therapy
INR--International Normalized Ratio
IOM--Institute of Medicine
IOM--Internet Only Manual
IPCI--indirect practice cost index
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--Intra-service work per unit of time
JRCERT--Joint Review Committee on Education in Radiologic Technology
KDE--Kidney Disease Education
LCD--Local coverage determination
LOPS--loss of protective sensation
LUGPA--Large Urology Group Practice Association
M.D.--Doctor of Medicine
MA--Medicare Advantage program
MAC--Medicare Administrative Contractor
MA-PD--Medicare Advantage-Prescription Drug Plans
MAV--Measure Applicability Validation
MCMP--Medicare Care Management Performance
MCP--Monthly Capitation Payment
MDRD--Modification of Diet in Renal Disease
MedCAC--Medicare Evidence Development and Coverage Advisory
Committee (formerly the Medicare Coverage Advisory Committee (MCAC))
MedPAC--Medicare Payment Advisory Commission
MEI--Medicare Economic Index
MGMA--Medical Group Management Association
MIEA-TRHCA--Medicare Improvements and Extension Act of 2006 (that
is, Division B) of the Tax Relief and Health Care Act of 2006
(TRHCA) (Pub. L. 109-432)
MIPPA--Medicare Improvements for Patients and Providers Act of 2008
(Pub. L. 110-275)
MMA--Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Pub. L. 108-173)
MMEA--Medicare and Medicaid Extenders Act of 2010 (Pub. L. 111-309)
MMSEA--Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L.
110-173)
MNT--Medical Nutrition Therapy
MOC--Maintenance of certification
MP--Malpractice
MPC--Multispecialty Points of Comparison
MPPR--Multiple Procedure Payment Reduction Policy
MQSA--Mammography Quality Standards Act of 1992 (Pub. L. 102-539)
MRA--Magnetic Resonance Angiography
MRI--Magnetic Resonance Imaging
MSA--Metropolitan Statistical Area
MSP--Medicare Secondary Payer
MUE--Medically Unlikely Edit
NAICS--North American Industry Classification System
NBRC--National Board for Respiratory Care
NCCI--National Correct Coding Initiative
NCD--National Coverage Determination
NCQA--National Committee for Quality Assurance
NCQDIS--National Coalition of Quality Diagnostic Imaging Services
NDC--National Drug Codes
NF--Nursing facility
NISTA--National Institute of Standards and Technology Act
NP--Nurse practitioner
NPI--National Provider Identifier
NPP--Nonphysician practitioner
NPPES--National Plan & Provider Enumeration System
NPPs--Nonphysician Practioners
NQF--National Quality Forum
NRC--Nuclear Regulatory Commission
NSQIP--National Surgical Quality Improvement Program
NTSB--National Transportation Safety Board
NUBC--National Uniform Billing Committee
OACT--[CMS] Office of the Actuary
OBRA--Omnibus Budget Reconciliation Act
OCR--Optical Character Recognition
ODF--Open door forum
OES--Occupational Employment Statistics
OGPE--Oxygen generating portable equipment
OIG--Office of the Inspector General
OMB--Office of Management and Budget
ONC--[HHS] Office of the National Coordinator for Health IT
OPPS--Outpatient prospective payment system
OSCAR--Online Survey and Certification and Reporting
PA--Physician Assistant
PACE--Program of All-inclusive Care for the Elderly
PACMBPRA--Preservation of Access to Care for Medicare Beneficiaries
and Pension Relief Act of 2010 (Pub. L. 111-192)
PAT--Performance assessment tool

[[Page 42777]]

PC--Professional Components
PCI--Percutaneous coronary intervention
PCIP--Primary Care Incentive Payment Program
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
PHI--Protected health information
PHP--Partial hospitalization program
PIM--[Medicare] Program Integrity Manual
PLI--Professional liability insurance
POA--Present on admission
POC--Plan of care
PODs--Physician owned distributors
PPATRA--Physician Payment and Therapy Relief Act
PPI--Producer price index
PPIS--Physician Practice Expense Information Survey
PPPS--Personalized Prevention Plan Services
PPS--Prospective payment system
PPTA--Plasma Protein Therapeutics Association
PQRI--Physician Quality Reporting Initiative
PR--Pulmonary rehabilitation
PRA--Paperwork Reduction Act
PSA--Physician scarcity areas
PT--Physical therapy
PTA--Physical therapy assistant
PTCA--Percutaneous transluminal coronary angioplasty
PVBP--Physician and Other Health Professional Value-Based Purchasing
Workgroup
QDCs--(Physician Quality Reporting System) Quality Data Codes
RA--Radiology assistant
RAC--Medicare Recovery Audit Contractor
RBMA--Radiology Business Management Association
RFA--Regulatory Flexibility Act
RHC--Rural Health Clinic
RHQDAPU--Reporting Hospital Quality Data Annual Payment Update
Program
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
RVRBS--Resource-Based Relative Value Scale
RVU--Relative Value Unit
SBA--Small Business Administration
SCHIP--State Children's Health Insurance Programs
SDW--Special Disability Workload
SGR--Sustainable growth rate
SLP--Speech-language pathology
SMS--Socioeconomic Monitoring Surveys
SMS--Monitoring Survey
SMS--[AMAs] Socioeconomic Monitoring System
SNF--Skilled Nursing Facility
SOR--System of record
SRS--Stereotactic radiosurgery
SSA--Social Security Administration
SSI--Social Security Income
STARS--Services Tracking and Reporting System
STATS--Short Term Alternatives for Therapy Services
STS--Society for Thoracic Surgeons
TC--Technical Components
TIN--Tax identification number
TJC--Joint Commission
TRHCA--Tax Relief and Health Care Act of 2006 (Pub. L. 109-432)
TTO--Transtracheal oxygen
UAF--Update Adjustment Factor
UPMC--University of Pittsburgh Medical Center
URAC--Utilization Review Accreditation Committee
USDE--United States Department of Education
USP-DI--United States Pharmacopoeia-Drug Information
VA--Department of Veterans Affairs
VBP--Value-based purchasing
WAC--Wholesale Acquisition Cost
WAMP--Widely available market price
WAMP--Widely Available Market Price
WHO--World Health Organization

Addenda Available Only Through the Internet on the CMS Web Site

In the past, the Addenda referred to throughout the preamble of our
annual PFS proposed and final rules with comment period were included
in the printed Federal Register. However, beginning with the CY 2012
PFS proposed rule, the PFS Addenda will no longer appear in the Federal
Register. Instead these Addenda to the annual proposed and final rules
with comment period will be available only through the Internet. The
PFS Addenda along with other supporting documents and tables referenced
in this proposed rule are available through the Internet on the CMS Web
site at http://www.cms.gov/PhysicianFeeSched/. Click on the link on the
left side of the screen titled, ``PFS Federal Regulations Notices'' for
a chronological list of PFS Federal Register and other related
documents. For the CY 2012 PFS proposed rule, refer to item CMS-1524-P.
For complete details on the availability of the Addenda referenced in
this proposed rule, we refer readers to section VIII. of this proposed
rule. Readers who experience any problems accessing any of the Addenda
or other documents referenced in this proposed rule and posted on the
CMS Web site identified above should contact Erin Smith at (410) 786-
4497.

CPT (Current Procedural Terminology) Copyright Notice

Throughout this proposed rule, we use CPT codes and descriptions to
refer to a variety of services. We note that CPT codes and descriptions
are copyright 2010 American Medical Association. All Rights Reserved.
CPT is a registered trademark of the American Medical Association
(AMA). Applicable Federal Acquisition Regulations (FAR) and Defense
Federal Acquisition Regulations (DFAR) apply.

I. 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) are 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 resource-based relative value
system, Medicare payment for physicians' services was based on
reasonable charges. We note that throughout this proposed rule, unless
otherwise noted, the term ``practitioner'' is used to describe both
physicians and nonphysician practitioners (such as physician
assistants, nurse practitioners, clinical nurse specialists, certified
nurse-midwives, psychologists, or social workers) that are permitted to
furnish and bill Medicare under the PFS for their services.

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.
101-239), and OBRA 1990, (Pub. L. 101-508). 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 resource-based, 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 was 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 code-specific vignettes for the
original physician work RVUs, Harvard worked with panels of experts,
both inside and outside the Federal government, and

[[Page 42778]]

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,
in part, on our review of recommendations received from the American
Medical Association's (AMA's) 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.
103-432), enacted on October 31, 1994, amended section
1848(c)(2)(C)(ii) of the Act and required us to develop resource-based
PE RVUs for each physicians 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.
105-33), amended section 1848(c)(2)(C)(ii) of the Act to delay
implementation of the resource-based PE RVU system until January 1,
1999. In addition, section 4505(b) of the BBA provided for a 4-year
transition period from charge-based PE RVUs to resource-based RVUs.
We established the resource-based PE RVUs for each physician's
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 resource-based system for PE over a 4-year period,
resource-based PE RVUs did not become fully effective until 2002.
This resource-based 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
nonphysician health professionals (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 out-of-office setting. We have
since refined and revised these inputs based on recommendations from
the AMA RUC. The AMA's SMS data provided aggregate specialty-specific
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
(HOPD). 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. 106-113) 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 direct PE
RVUs from the top-down to the bottom-up methodology beginning in CY
2007 and provided for a 4-year transition for the new PE RVUs under
this new methodology. This transition ended in CY 2010 and direct PE
RVUs are calculated in CY 2012 using this methodology, unless otherwise
noted.
In the CY 2010 PFS final rule with comment period (74 FR 61749), we
updated the PE/hour (PE/HR) data that are used in the calculation of PE
RVUs for most specialties. For this update, we used the Physician
Practice Information Survey (PPIS) conducted by the AMA. The PPIS is a
multispecialty, nationally representative, PE survey of both physicians
and nonphysician practitioners (NPPs) using a survey instrument and
methods highly consistent with those of the SMS and the supplemental
surveys used prior to CY 2010. We note that in CY 2010, for oncology,
clinical laboratories, and independent diagnostic testing facilities
(IDTFs), we continued to use the supplemental survey data to determine
PE/HR values (74 FR 61752). Beginning in CY 2010, we provided for a 4-
year transition for the new PE RVUs using the updated PE/HR data. In CY
2012, the third year of the transition, PE RVUs are calculated based on
a 75/25 blend of the new PE RVUs developed using the PPIS data and the
previous PE RVUs based on the SMS and supplemental survey data.
3. Resource-Based Malpractice RVUs
Section 4505(f) of the BBA amended section 1848(c) of the Act to
require that we implement resource-based malpractice RVUs for services
furnished on or after CY 2000. The resource-based malpractice 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 physician-owned insurers from all the
States, the District of Columbia, and Puerto Rico. In the CY 2010 PFS
final rule with comment period (74 FR 61758), we implemented the Second
Five-Year Review and update of the malpractice RVUs. In the CY 2011 PFS
final rule with comment period, we described our approach for
determining malpractice RVUs for new or revised codes that become
effective before the next Five Year Review and update (75 FR 73208).
Accordingly, to develop the CY 2012 malpractice RVUs for new or revised
codes we cross-walked the new or revised code to the malpractice RVUs
of a similar source code and adjusted for differences in work (or, if
greater, the clinical labor portion of the fully implemented PE RVUs)
between the source code and the new or revised code.
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 Five-Year Review of
Work RVUs was published on November 22, 1996 (61 FR 59489) and was
effective in 1997. The Second Five-Year Review of Work RVUs was
published in the CY 2002 PFS final rule with comment period (66 FR
55246) and was effective in 2002. The Third Five-Year Review of Work
RVUs was published in the CY 2007 PFS final rule with comment period
(71 FR 69624) and was effective on January 1,

[[Page 42779]]

2007. The Fourth Five-Year Review of Work RVUs was initiated in the CY
2010 PFS final rule with comment period where we solicited candidate
codes from the public for this review (74 FR 61941). Proposed revisions
to work RVUs and corresponding changes to PE and malpractice RVUs
affecting payment for physicians' services for the Fourth Five-Year
Review of Work RVUs were published in a separate notice (76 FR 32410).
We will review public comments, make adjustments to our proposals in
response to comments, as appropriate, and include final values in the
CY 2012 PFS final rule with comment period, effective for services
furnished beginning January 1, 2012.
In 1999, the AMA 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 bottom-up methodology for determining resource-based PE RVUs and
transitioned the new methodology over a 4-year period. A comprehensive
review of PE was undertaken prior to the 4-year transition period for
the new PE methodology from the top-down to the bottom-up methodology,
and this transition was completed in CY 2010. In CY 2010, we also
incorporated the new PPIS data to update thespecialty specific PE/HR
data used to develop PE RVUs, adopting a 4-year transition to PE RVUs
developed using the PPIS data.
In the CY 2005 PFS final rule with comment period (69 FR 66236), we
implemented the First Five-Year Review of the malpractice RVUs (69 FR
66263). Minor modifications to the methodology were addressed in the CY
2006 PFS final rule with comment period (70 FR 70153). The Second Five-
Year Review and update of resource-based malpractice RVUs was published
in the CY 2010 PFS final rule with comment period (74 FR 61758) and was
effective in CY 2010.
In addition to the Five-Year Reviews, beginning for CY 2009, CMS
and the AMA RUC have identified and reviewed a number of potentially
misvalued codes on an annual basis based on various identification
screens. This annual review of work and PE RVUs for potentially
misvalued codes was supplemented by section 3134 of the Affordable Care
Act, which requires the agency to periodically identify, review and
adjust values for potentially misvalued codes with an emphasis on the
following categories: (1) Codes and families of codes for which there
has been the fastest growth; (2) codes or families of codes that have
experienced substantial changes in practice expenses; (3) codes that
are recently established for new technologies or services; (4) multiple
codes that are frequently billed in conjunction with furnishing a
single service; (5) codes with low relative values, particularly those
that are often billed multiple times for a single treatment; (6) codes
which have not been subject to review since the implementation of the
RBRVS (the so-called `Harvard valued codes'); and (7) other codes
determined to be appropriate by the Secretary.
5. Application of Budget Neutrality to Adjustments of RVUs
Budget neutrality typically requires that expenditures not increase
or decrease as a result of changes or revisions to policy. However,
section 1848(c)(2)(B)(ii)(II) of the Act requires adjustment only if
the change in expenditures resulting from the annual revisions to the
PFS exceeds a threshold amount. Specifically, 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
revisions to the 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.

B. Components of the Fee Schedule Payment Amounts

To calculate the payment for every physician's service, the
components of the fee schedule (physician work, PE, and malpractice
RVUs) are adjusted by a geographic practice cost index (GPCI). The
GPCIs reflect the relative costs of physician work, PE, and malpractice
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 2011 PFS final rule with comment period (75 FR 73170)
implemented changes to the PFS and other Medicare Part B payment
policies. It also finalized many of the CY 2010 interim RVUs and
implemented interim RVUs for new and revised codes for CY 2011 to
ensure that our payment systems are updated to reflect changes in
medical practice and the relative values of services. The CY 2011 PFS
final rule with comment period also addressed other policies, as well
as certain provisions of the Affordable Care Act and the Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA).
In the CY 2011 PFS final rule with comment period, we announced the
following for CY 2011: the total PFS update of -10.1 percent; the
initial estimate for the sustainable growth rate of -13.4 percent; and
the CF of $25.5217. These figures were calculated based on the
statutory provisions in effect on November 2, 2010, when the CY 2011
PFS final rule was issued.
On December 30, 2010, we published a correction notice (76 FR 1670)
to correct several technical and typographical errors that occurred in
the CY 2011 PFS final rule with comment period. This correction notice
announced a revised CF for CY 2011 of $25.4999.
On November 30, 2010, the Physician Payment and Therapy Relief Act
of 2010 (PPATRA) (Pub. L. 111-286) was signed into law. Section 3 of
Public Law 111-286 modified the policy finalized in the CY 2011 PFS
final rule with comment period (75 FR 73241), effective January 1,
2011, regarding the payment reduction applied to multiple therapy
services provided to the same patient on the same day in the office
setting by one provider and paid for under the PFS (hereinafter, the
therapy multiple procedure payment reduction (MPPR)). The PPATRA
provision changed the therapy MPPR percentage from 25 to 20 percent of
the PE component of payment for the second and subsequent ``always''
therapy services furnished in the office setting on the same day to the
same patient by one provider, and excepted the payment reductions
associated with the therapy MPPR from budget neutrality under the PFS.
On December 15, 2010, the Medicare and Medicaid Extenders Act of
2010 (MMEA) (Pub. L. 111-309) was signed into law. Section 101 of
Public Law 111-309 provided for a 1-year zero percent update for the CY
2011 PFS. As a result of the MMEA, the CY 2011 PFS

[[Page 42780]]

conversion factor was revised to $33.9764.

II. Provisions of the Proposed Rule for the Physician Fee Schedule

A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)

1. Overview
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 us to
develop a methodology for a resource-based system for determining PE
RVUs for each physician's service. We develop PE RVUs by looking at the
direct and indirect physician practice resources involved in furnishing
each service. Direct expense categories include clinical labor, medical
supplies, and medical equipment. Indirect expenses include
administrative labor, office expense, and all other expenses. The
sections that follow provide more detailed information about the
methodology for translating the resources involved in furnishing each
service into service-specific PE RVUs. In addition, we note that
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. Therefore, if revisions to the 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. We
refer readers to the CY 2010 PFS final rule with comment period (74 FR
61743 through 61748) for a more detailed history of the PE methodology.
2. Practice Expense Methodology
a. Direct Practice Expense
We use a bottom-up approach to 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 RUC. For a detailed explanation
of the bottom-up direct PE methodology, including examples, we refer
readers to the Five-Year 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).
b. Indirect Practice Expense per Hour Data
We use survey data on indirect practice expenses incurred per hour
worked (PE/HR) in developing the indirect portion of the PE RVUs. Prior
to CY 2010, we primarily used the practice expense per hour (PE/HR) by
specialty that was obtained from the AMA's Socioeconomic Monitoring
Surveys (SMS). The AMA administered a new survey in CY 2007 and CY
2008, the Physician Practice Expense Information Survey (PPIS), which
was expanded (relative to the SMS) to include nonphysician
practitioners (NPPs) paid under the PFS.
The PPIS is a multispecialty, nationally representative, PE survey
of both physicians and NPPs using a consistent survey instrument and
methods highly consistent with those used for the SMS and the
supplemental surveys. The PPIS gathered information from 3,656
respondents across 51 physician specialty and healthcare professional
groups. We believe the PPIS is the most comprehensive source of PE
survey information available to date. Therefore, we used the PPIS data
to update the PE/HR data for almost all of the Medicare-recognized
specialties that participated in the survey for the CY 2010 PFS.
When we changed over to the PPIS data beginning in CY 2010, we did
not change the PE RVU methodology itself or the manner in which the PE/
HR data are used in that methodology. We only updated the PE/HR data
based on the new survey. Furthermore, as we explained in the CY 2010
PFS final rule with comment period (74 FR 61751), because of the
magnitude of payment reductions for some specialties resulting from the
use of the PPIS data, we finalized a 4-year transition (75 percent old/
25 percent new for CY 2010, 50 percent old/50 percent new for CY 2011,
25 percent old/75 percent new for CY 2012, and 100 percent new for CY
2013) from the previous PE RVUs to the PE RVUs developed using the new
PPIS data.
Section 303 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173) added section
1848(c)(2)(H)(i) of the Act, which requires us to use the medical
oncology supplemental survey data submitted in 2003 for oncology drug
administration services. Therefore, the PE/HR for medical oncology,
hematology, and hematology/oncology reflects the continued use of these
supplemental survey data.
We do not use the PPIS data for reproductive endocrinology, sleep
medicine, and spine surgery since these specialties are not separately
recognized by Medicare, nor do we have a method to blend these data
with Medicare-recognized specialty data.
Supplemental survey data on independent labs, from the College of
American Pathologists, were implemented for payments in CY 2005.
Supplemental survey data from the National Coalition of Quality
Diagnostic Imaging Services (NCQDIS), representing independent
diagnostic testing facilities (IDTFs), were blended with supplementary
survey data from the American College of Radiology (ACR) and
implemented for payments in CY 2007. Neither IDTFs nor independent labs
participated in the PPIS. Therefore, we continue to use the PE/HR that
was developed from their supplemental survey data.
Consistent with our past practice, the previous indirect PE/HR
values from the supplemental surveys for medical oncology, independent
laboratories, and IDTFs were updated to CY 2006 using the MEI to put
them on a comparable basis with the PPIS data.
Previously, we have established PE/HR values for various
specialties without SMS or supplemental survey data by crosswalking
them to other similar specialties to estimate a proxy PE/HR. For
specialties that were part of the PPIS for which we previously used a
crosswalked PE/HR, we instead use the PPIS-based PE/HR. We continue
previous crosswalks for specialties that did not participate in the
PPIS. However, beginning in CY 2010 we changed the PE/HR crosswalk for
portable x-ray suppliers from radiology to IDTF, a more appropriate
crosswalk because these specialties are more similar to each other with
respect to physician time.
For registered dietician services, the proposed resource-based PE
RVUs have been calculated in accordance with the final policy that
crosswalks the specialty to the ``All Physicians'' PE/HR data, as
adopted in the CY 2010 PFS final rule with comment period (74 FR 61752)
and discussed in more detail in the CY 2011 PFS final rule with comment
period (75 FR 73183).
There are four specialties whose utilization data will be newly
incorporated into ratesetting for CY 2012. We are proposing to use
proxy

[[Page 42781]]

PE/HR values for these specialties by crosswalking values from other,
similar specialties as follows: Speech Language Pathology from Physical
Therapy; Hospice and Palliative Care from All Physicians; Geriatric
Psychiatry from Psychiatry; and Intensive Cardiac Rehabilitation from
Cardiology. Additionally, since section 1833(a)(1)(K) of the Act (as
amended by section 3114 of the Affordable Care Act) requires that
payment for services provided by a certified nurse midwife be paid at
100 percent of the PFS amount, this specialty will no longer be
excluded from the ratesetting calculation. We are proposing to
crosswalk the PE\HR data from Obstetrics/gynecology to Certified Nurse
Midwife. These newly proposed changes are reflected in the ``PE HR''
file available on the CMS Web site under the supporting data files for
the CY 2012 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.
As provided in the CY 2010 PFS final rule with comment period (74
FR 61751), CY 2012 is the third year of the 4 year transition to the PE
RVUs calculated using the PPIS data. Therefore, in general, the CY 2012
PE RVUs are a 25 percent/75 percent blend of the previous PE RVUs based
on the SMS and supplemental survey data and the new PE RVUS developed
using the PPIS data as described previously.
c. Allocation of PE to Services
To establish PE RVUs for specific services, it is necessary to
establish the direct and indirect PE associated with each service.
(1) Direct Costs
The relative relationship between the direct cost portions of the
PE RVUs for any two services is determined by the relative relationship
between the sum of the direct cost resources (that is, the clinical
staff, equipment, and supplies) typically required to provide the
services. The costs of these resources are calculated from the refined
direct PE inputs in our PE database. For example, if one service has a
direct cost sum of $400 from our PE database and another service has a
direct cost sum of $200, the direct portion of the PE RVUs of the first
service would be twice as much as the direct portion of the PE RVUs for
the second service.
(2) Indirect Costs
Section II.A.2.b. of this proposed rule describes the current data
sources for specialty-specific indirect costs used in our PE
calculations. We 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.
We also incorporate the survey data described earlier in the PE/HR
discussion. The general approach to developing the indirect portion of
the PE RVUs is described as follows:
For a given service, we use the direct portion of the PE
RVUs calculated as previously described and the average percentage that
direct costs represent of total costs (based on survey data) across the
specialties that perform the service to determine an initial indirect
allocator. For example, if the direct portion of the PE RVUs for a
given service were 2.00 and direct costs, on average, represented 25
percent of total costs for the specialties that performed the service,
the initial indirect allocator would be 6.00 since 2.00 is 25 percent
of 8.00.
We then add the greater of the work RVUs or clinical labor
portion of the direct portion of the PE RVUs to this initial indirect
allocator. In our example, if this service had work RVUs of 4.00 and
the clinical labor portion of the direct PE RVUs was 1.50, we would add
6.00 plus 4.00 (since the 4.00 work RVUs are greater than the 1.50
clinical labor portion) to get an indirect allocator of 10.00. In the
absence of any further use of the survey data, the relative
relationship between the indirect cost portions of the PE RVUs for any
two services would be determined by the relative relationship between
these indirect cost allocators. For example, if one service had an
indirect cost allocator of 10.00 and another service had an indirect
cost allocator of 5.00, the indirect portion of the PE RVUs of the
first service would be twice as great as the indirect portion of the PE
RVUs for the second service.
We next incorporate the specialty-specific indirect PE/HR
data into the calculation. As a relatively extreme example for the sake
of simplicity, assume in our previous example that, based on the survey
data, the average indirect cost of the specialties performing the first
service with an allocator of 10.00 was half of the average indirect
cost of the specialties performing the second service with an indirect
allocator of 5.00. In this case, the indirect portion of the PE RVUs of
the first service would be equal to that of the second service.
d. Facility and Nonfacility Costs
For procedures that can be furnished in a physician's office, as
well as in a hospital or facility setting, we establish two PE RVUs:
facility and nonfacility. The methodology for calculating PE RVUs is
the same for both the facility and nonfacility RVUs, but is applied
independently to yield two separate PE RVUs. Because Medicare makes a
separate payment to the facility for its costs of furnishing a service,
the facility PE RVUs are generally lower than the nonfacility PE RVUs.
e. 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), each of
which may be performed independently or by different providers, or they
may be performed together as a ``global'' service. When services have
PC and TC 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 bottom-up methodology.)
f. PE RVU Methodology
For a more detailed description of the PE RVU methodology, we refer
readers to the CY 2010 PFS final rule with comment period (74 FR 61745
through 61746).
(1) Setup File
First, we create a setup file for the PE methodology. The setup
file contains the direct cost inputs, the utilization for each
procedure code at the specialty and facility/nonfacility place of
service level, and the specialty-specific PE/HR data from the surveys.
(2) 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.
Apply a scaling adjustment to the direct inputs.
Step 2: Calculate the current aggregate pool of direct PE costs.
This is the product of the current aggregate PE (aggregate direct and
indirect) RVUs, the CF, and the average direct PE percentage from the
survey data.
Step 3: Calculate the aggregate pool of direct costs. This is the
sum of the product of the direct costs for each service from Step 1 and
the utilization data for that service.

[[Page 42782]]

Step 4: Using the results of Step 2 and Step 3 calculate a direct
PE scaling 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 CF. Note that
the actual value of the CF used in this calculation does not influence
the final direct cost PE RVUs, as long as the same CF is used in Step 2
and Step 5. Different CFs will result in different direct PE scaling
factors, but this has no effect on the final direct cost PE RVUs since
changes in the CFs and changes in the associated direct scaling factors
offset one another.
(3) Create the Indirect Cost PE RVUs
Create indirect allocators.
Step 6: Based on the survey data, calculate direct and indirect PE
percentages for each physician specialty.
Step 7: Calculate direct and indirect PE percentages at the service
level by taking a weighted average of the results of Step 6 for the
specialties that furnish the service. Note that for services with TCs
and PCs, the direct and indirect percentages for a given service do not
vary by the PC, TC, and global components.
Step 8: Calculate the service level allocators for the indirect PEs
based on the percentages calculated in Step 7. The indirect PEs are
allocated based on the three components: the direct PE RVUs, the
clinical PE RVUs, and the work RVUs.
For most services the indirect allocator is: indirect percentage *
(direct PE RVUs/direct percentage) + work RVUs.
There are two situations where this formula is modified:
If the service is a global service (that is, a service
with global, professional, and technical components), then the indirect
allocator is: indirect percentage (direct PE RVUs/direct percentage) +
clinical PE RVUs + work RVUs.
If the clinical labor PE RVUs exceed the work RVUs (and
the service is not a global service), then the indirect allocator is:
indirect percentage (direct PE RVUs/direct percentage) + clinical PE
RVUs.

Note: For global services, the indirect allocator is based on
both the work RVUs and the clinical labor PE RVUs. We do this to
recognize that, for the PC service, indirect PEs will be allocated
using the work RVUs, and for the TC service, indirect PEs will be
allocated using the direct PE RVUs and the clinical labor PE RVUs.
This also allows the global component RVUs to equal the sum of the
PC and TC RVUs.

For presentation purposes in the examples in Table 2, the formulas
were divided into two parts for each service.
The first part does not vary by service and is the
indirectpercentage (direct PE RVUs/direct percentage).
The second part is either the work RVUs, clinical PE RVUs,
or both depending on whether the service is a global service and
whether the clinical PE RVUs exceed the work RVUs (as described earlier
in this step).
Apply a scaling adjustment to the indirect allocators.
Step 9: Calculate the current aggregate pool of indirect PE RVUs by
multiplying the current aggregate pool of PE RVUs by the average
indirect PE percentage from the survey data.
Step 10: Calculate an aggregate pool of indirect PE RVUs for all
PFS services by adding the product of the indirect PE allocators for a
service from Step 8 and the utilization data for that service.
Step 11: Using the results of Step 9 and Step 10, calculate an
indirect PE adjustment so that the aggregate indirect allocation does
not exceed the available aggregate indirect PE RVUs and apply it to
indirect allocators calculated in Step 8.
Calculate the indirect practice cost index.
Step 12: Using the results of Step 11, calculate aggregate pools of
specialty-specific adjusted indirect PE allocators for all PFS services
for a specialty by adding the product of the adjusted indirect PE
allocator for each service and the utilization data for that service.
Step 13: Using the specialty-specific indirect PE/HR data,
calculate specialty-specific aggregate pools of indirect PE for all PFS
services for that specialty by adding the product of the indirect PE/HR
for the specialty, the physician time for the service, and the
specialty's utilization for the service across all services performed
by the specialty.
Step 14: Using the results of Step 12 and Step 13, calculate the
specialty-specific indirect PE scaling factors.
Step 15: Using the results of Step 14, calculate an indirect
practice cost index at the specialty level by dividing each specialty-
specific indirect scaling factor by the average indirect scaling factor
for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service
level to ensure the capture of all indirect costs. Calculate a weighted
average of the practice cost index values for the specialties that
furnish the service. (Note: For services with TCs and PCs, we calculate
the indirect practice cost index across the global 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 RVUs.
(4) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 6 to the indirect PE RVUs
from Step 17 and apply the final PE budget neutrality (BN) adjustment.
The final PE BN adjustment is calculated by comparing the 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'' later in this
section.)
(5) Setup File Information
Specialties excluded from ratesetting calculation: For the
purposes of calculating the PE RVUs, we exclude certain specialties,
such as certain nonphysician practitioners paid at a percentage of the
PFS and low-volume specialties, from the calculation. These specialties
are included for the purposes of calculating the BN adjustment. They
are displayed in Table 1. We note that since specialty code 97
(physician assistant) is paid at a percentage of the PFS and therefore
excluded from the ratesetting calculation, this specialty has been
added to the table for CY 2012.

Table 1--Specialties Excluded From Ratesetting Calculation
------------------------------------------------------------------------
Specialty code Specialty description
------------------------------------------------------------------------
49................................ Ambulatory surgical center.
50................................ Nurse practitioner.
51................................ Medical supply company with
certified orthotist.
52................................ Medical supply company with
certified prosthetist.
53................................ Medical supply company with
certified
prosthetist[dash]orthotist.
54................................ Medical supply company not included
in 51, 52, or 53.
55................................ Individual certified orthotist.
56................................ Individual certified prosthestist.
57................................ Individual certified prosthetist-
orthotist.
58................................ Individuals not included in 55, 56,
or 57.

[[Page 42783]]

59................................ Ambulance service supplier, e.g.,
private ambulance companies,
funeral homes, etc.
60................................ Public health or welfare agencies.
61................................ Voluntary health or charitable
agencies.
73................................ Mass immunization roster biller.
74................................ Radiation therapy centers.
87................................ All other suppliers (e.g., drug and
department stores).
88................................ Unknown supplier/provider specialty.
89................................ Certified clinical nurse specialist.
95................................ Competitive Acquisition Program
(CAP) Vendor.
96................................ Optician.
97................................ Physician assistant.
A0................................ Hospital.
A1................................ SNF.
A2................................ Intermediate care nursing facility.
A3................................ Nursing facility, other.
A4................................ HHA.
A5................................ Pharmacy.
A6................................ Medical supply company with
respiratory therapist.
A7................................ Department store.
1................................. Supplier of oxygen and/or oxygen
related equipment.
2................................. Pedorthic personnel.
3................................. Medical supply company with
pedorthic personnel.
------------------------------------------------------------------------

Crosswalk certain low volume physician specialties:
Crosswalk the utilization of certain specialties with relatively low
PFS utilization to the associated specialties.
Physical therapy utilization: Crosswalk the utilization
associated with all physical therapy services to the specialty of
physical therapy.
Identify professional and technical services not
identified under the usual TC and 26 modifiers: Flag the services that
are PC and TC services, but do not use TC and 26 modifiers (for
example, electrocardiograms). This flag associates the PC and TC with
the associated global code for use in creating the indirect PE RVUs.
For example, the professional service, CPT code 93010
(Electrocardiogram, routine ECG with at least 12 leads; interpretation
and report only), is associated with the global service, CPT code 93000
(Electrocardiogram, routine ECG with at least 12 leads; with
interpretation and report).
Payment modifiers: Payment modifiers are accounted for in
the creation of the file. For example, services billed with the
assistant at surgery modifier are paid 16 percent of the PFS amount for
that service; therefore, the utilization file is modified to only
account for 16 percent of any service that contains the assistant at
surgery modifier.
Work RVUs: The setup file contains the work RVUs from this
final rule with comment period.
(6) Equipment Cost per Minute
The equipment cost per minute is calculated as:

(1/(minutes per year * usage)) * price * ((interest rate/(1-(1/((1 +
interest rate) [caret] life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous
(that is, usage = 1); generally 150,000 minutes.
usage = equipment utilization assumption; 0.75 for certain expensive
diagnostic imaging equipment (see 74 FR 61753 through 61755 and
section II.A.3. of the CY 2011 PFS final rule with comment period)
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.

This interest rate was proposed and finalized during rulemaking for
CY 1998 PFS (62 FR 33164). We solicit comment regarding reliable data
on current prevailing loan rates for small businesses.

Note: The use of any particular conversion factor (CF) in Table
2 to illustrate the PE calculation has no effect on the resulting
RVUs.

BILLING CODE 4120-01-P

[[Page 42784]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.000

BILLING CODE 4120-01-C

[[Page 42785]]

3. Changes to Direct PE Inputs
In this section, we discuss other specific CY 2012 proposals and
changes related to direct PE inputs. The proposed changes that follow
are included in the proposed CY 2012 direct PE database, which is
available on the CMS Web site under the supporting data files for the
CY 2012 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.
a. Inverted Equipment Minutes
It has come to our attention that the minutes allocated for two
particular equipment items have been inverted. This inversion affects
three codes: 37232 (Revascularization, endovascular, open or
percutaneous, tibial/peroneal artery, unilateral, each additional
vessel; with transluminal angioplasty (List separately in addition to
code for primary procedure)), 37233 (Revascularization, endovascular,
open or percutaneous, tibial/peroneal artery, unilateral, each
additional vessel; with atherectomy, includes angioplasty within the
same vessel, when performed (List separately in addition to code for
primary procedure)), and 37234 (Revascularization, endovascular, open
or percutaneous, tibial/peroneal artery, unilateral, each additional
vessel; with transluminal stent placement(s), includes angioplasty
within the same vessel, when performed (List separately in addition to
code for primary procedure)). In each case, the number of minutes
allocated to the ``printer, dye sublimation (photo, color)'' (ED031)
should be appropriately allocated to the ``stretcher'' (EF018). The
number of minutes allocated to the stretcher should be appropriately
allocated to the printer. Therefore, the proposed CY 2012 database
includes direct PE input corrections to the times associated with the
two equipment items in the three codes.
b. Labor and Supply Input Duplication
We recently identified a number of CPT codes with inadvertently
duplicated labor and supply inputs in the PE database. We are proposing
to remove the duplicate labor and supply inputs in the proposed CY 2012
database as detailed in Table 3.

Table 3--Labor and Supply Input Duplication
--------------------------------------------------------------------------------------------------------------------------------------------------------
CPT Code Short code descriptor CMS Labor/supply code Description of labor/supply
--------------------------------------------------------------------------------------------------------------------------------------------------------
12011............................... Repair superficial wound(s) SA048 pack, minimum multi-specialty visit
15360............................... Apply cult derm sub t/a/l.. SA054 pack, post-op incision care (suture)
19361............................... Breast reconstr w/lat flap. L037D RN/LPN/MTA
21147............................... Reconstruct midface lefort. SA054 pack, post-op incision care (suture)
23515............................... Treat clavicle fracture.... SA052 pack, post-op incision care (staple)
25415............................... Repair radius & ulna....... SA052 pack, post-op incision care (staple)
Repair radius & ulna....... SA052 pack, post-op incision care (staple)
28005............................... Treat foot bone lesion..... SA054 pack, post-op incision care (suture)
28456............................... Treat midfoot fracture..... SA054 pack, post-op incision care (suture)
28485............................... Treat metatarsal fracture.. SA054 pack, post-op incision care (suture)
32998............................... Perq rf ablate tx pul tumor SG079 tape, surgical paper 1in (Micropore)
35501............................... Artery bypass graft........ L037D RN/LPN/MTA
Artery bypass graft........ SA048 pack, minimum multi-specialty visit
35509............................... Artery bypass graft........ L037D RN/LPN/MTA
Artery bypass graft........ SA048 pack, minimum multi-specialty visit
35601............................... Artery bypass graft........ L037D RN/LPN/MTA
Artery bypass graft........ SA048 pack, minimum multi-specialty visit
36147............................... Access av dial grft for SB008 drape, sterile, c-arm, fluoro
eval.
Access av dial grft for SH026 Conray Inj (iothalamate 43%)
eval.
Access av dial grft for SK093 x-ray ID card (flashcard)
eval.
37231............................... Tib/per revasc stent & SK034 film, x-ray 14in x 17in
ather.
45541............................... Correct rectal prolapse.... SJ032 lubricating jelly (K-Y) (5gm uou)
45550............................... Repair rectum/remove SJ032 lubricating jelly (K-Y) (5gm uou)
sigmoid.
46258............................... Remove in/ex hem grp w/ SD003 anoscope
fistu.
Remove in/ex hem grp w/ SD003 anoscope
fistu.
Remove in/ex hem grp w/ SD003 anoscope
fistu.
46261............................... Remove in/ex hem grps & SD003 anoscope
fiss.
Remove in/ex hem grps & SD003 anoscope
fiss.
Remove in/ex hem grps & SD003 anoscope
fiss.
58563............................... Hysteroscopy ablation...... SB027 gown, staff, impervious
64704............................... Revise hand/foot nerve..... SA054 pack, post-op incision care (suture)
64726............................... Release foot/toe nerve..... SA054 pack, post-op incision care (suture)
64782............................... Remove limb nerve lesion... SA054 pack, post-op incision care (suture)
65810............................... Drainage of eye............ SA082 pack, ophthalmology visit (w-dilation)
67228............................... Treatment of retinal lesion L038A COMT/COT/RN/CST
Treatment of retinal lesion SA082 pack, ophthalmology visit (w-dilation)
Treatment of retinal lesion SH049 lidocaine 2% w-epi inj (Xylocaine w-epi)
76813............................... Ob us nuchal meas 1 gest... SK022 film, 8in x (ultrasound, MRI)
78730............................... Urinary bladder retention.. SB044 underpad 2ft x 3ft (Chux)
88365............................... Insitu hybridization (fish) SM016 eye shield, splash protection
91038............................... Esoph imped funct test > 1h SJ016 denture cup
95875............................... Limb exercise test......... SC051 syringe 10-12ml
--------------------------------------------------------------------------------------------------------------------------------------------------------

BILLING CODE 4120-01-C

[[Page 42786]]

c. AMA RUC Recommendations for Moderation Sedation Direct PE Inputs
For services described by certain codes, the direct PE database
includes nonfacility inputs that reflect the assumption that moderation
sedation is inherent in the procedure. These codes are listed in Table
4. The AMA RUC has recently provided CMS with a recommendation that
standardizes the nonfacility direct PE inputs that account for moderate
sedation as typically furnished as part of these services.
Specifically, the RUC recommended that the direct PE inputs allocated
for moderate sedation include the following:
Clinical Labor Inputs: Registered Nurse (L051A) time that includes
two minutes of time to initiate sedation, the number of minutes
associated with the physician intra-service work time, and 15 minutes
for every hour of patient recovery time for post-service patient
monitoring.
Supply Inputs: ``Pack, conscious sedation'' (SA044) that includes:
an angiocatheter 14g-24g, bandage, strip 0.75in x 3in, catheter,
suction, dressing, 4in x 4.75in (Tegaderm), electrode, ECG (single),
electrode, ground, gas, oxygen, gauze, sterile 4in x 4in, gloves,
sterile, gown, surgical, sterile, iv infusion set, kit, iv starter,
oxygen mask (1) and tubing (7 ft), pulse oximeter sensor probe wrap,
stop cock, 3-way, swab-pad, alcohol, syringe 1ml, syringe-needle 3ml
22-26g, tape, surgical paper 1in (Micropore), tourniquet, and non-latex
1in x 18in.
Equipment Inputs: ``table, instrument, mobile'' (EF027), ``ECG, 3-
channel (with SpO2, NIBP, temp, resp)'' (EQ011), ``IV infusion pump''
(EQ032), ``pulse oxymetry recording software (prolonged monitoring)''
(EQ212), and ``blood pressure monitor, ambulatory, w-battery charger''
(EQ269).
We have reviewed this recommendation and generally agree with these
inputs. However, we note that the equipment item ``ECG, 3-channel (with
SpO2, NIBP, temp, resp)'' (EQ011) incorporates the functionality of the
equipment items ``pulse oxymetry recording software (prolonged
monitoring)'' (EQ212), and ``blood pressure monitor, ambulatory, w-
battery charger'' (EQ269). Therefore we have not included these two
items as standard nonfacility inputs for moderation sedation.
We propose to accept the AMA RUC recommendation with the refinement
as stated. The CY 2012 direct PE database reflects these proposed
changes and is available on the CMS Web site under the supporting data
files for the CY 2012 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.

Table 4--Inherent Moderate Sedation Codes Valued In The Nonfacility
Setting
------------------------------------------------------------------------
CPT Code Short descriptor
------------------------------------------------------------------------
19298........................... Place breast rad tube/caths
20982........................... Ablate bone tumor(s) perq
22520........................... Percut vertebroplasty thor
22521........................... Percut vertebroplasty lumb
22526........................... Idet single level
22527........................... Idet 1 or more levels
31615........................... Visualization of windpipe
31620........................... Endobronchial us add-on
31622........................... Dx bronchoscope/wash
31623........................... Dx bronchoscope/brush
31624........................... Dx bronchoscope/lavage
31625........................... Bronchoscopy w/biopsy(s)
31626........................... Bronchoscopy w/markers
31627........................... Navigational bronchoscopy
31628........................... Bronchoscopy/lung bx each
31629........................... Bronchoscopy/needle bx each
31634........................... Bronch w/balloon occlusion
31635........................... Bronchoscopy w/fb removal
31645........................... Bronchoscopy clear airways
31646........................... Bronchoscopy reclear airway
31656........................... Bronchoscopy inj for x-ray
32201........................... Drain percut lung lesion
32550........................... Insert pleural cath
32553........................... Ins mark thor for rt perq
35471........................... Repair arterial blockage
35472........................... Repair arterial blockage
35475........................... Repair arterial blockage
35476........................... Repair venous blockage
36147........................... Access av dial grft for eval
36148........................... Access av dial grft for proc
36200........................... Place catheter in aorta
36245........................... Place catheter in artery
36481........................... Insertion of catheter vein
36555........................... Insert non-tunnel cv cath
36557........................... Insert tunneled cv cath
36558........................... Insert tunneled cv cath
36560........................... Insert tunneled cv cath
36561........................... Insert tunneled cv cath
36563........................... Insert tunneled cv cath
36565........................... Insert tunneled cv cath
36566........................... Insert tunneled cv cath
36568........................... Insert picc cath
36570........................... Insert picvad cath
36571........................... Insert picvad cath
36576........................... Repair tunneled cv cath
36578........................... Replace tunneled cv cath
36581........................... Replace tunneled cv cath
36582........................... Replace tunneled cv cath
36583........................... Replace tunneled cv cath
36585........................... Replace picvad cath
36590........................... Removal tunneled cv cath
36870........................... Percut thrombect av fistula
37183........................... Remove hepatic shunt (tips)
37184........................... Prim art mech thrombectomy
37185........................... Prim art m-thrombect add-on
37186........................... Sec art m-thrombect add-on
37187........................... Venous mech thrombectomy
37188........................... Venous m-thrombectomy add-on
37203........................... Transcatheter retrieval
37210........................... Embolization uterine fibroid
37220........................... Iliac revasc
37221........................... Iliac revasc w/stent
37222........................... Iliac revasc add-on
37223........................... Iliac revasc w/stent add-on
37224........................... Fem/popl revas w/tla
37225........................... Fem/popl revas w/ather
37226........................... Fem/popl revasc w/stent
37227........................... Fem/popl revasc stnt & ather
37228........................... Tib/per revasc w/tla
37229........................... Tib/per revasc w/ather
37230........................... Tib/per revasc w/stent
37231........................... Tib/per revasc stent & ather
37232........................... Tib/per revasc add-on
37233........................... Tibper revasc w/ather add-on
37234........................... Revsc opn/prq tib/pero stent
37235........................... Tib/per revasc stnt & ather
43200........................... Esophagus endoscopy
43201........................... Esoph scope w/submucous inj
43202........................... Esophagus endoscopy biopsy
43216........................... Esophagus endoscopy/lesion
43217........................... Esophagus endoscopy
43234........................... Upper gi endoscopy exam
43235........................... Uppr gi endoscopy diagnosis
43236........................... Uppr gi scope w/submuc inj
43239........................... Upper gi endoscopy biopsy
43453........................... Dilate esophagus
43456........................... Dilate esophagus
43458........................... Dilate esophagus
44385........................... Endoscopy of bowel pouch
44386........................... Endoscopy bowel pouch/biop
44388........................... Colonoscopy
44389........................... Colonoscopy with biopsy
44390........................... Colonoscopy for foreign body
44391........................... Colonoscopy for bleeding
44392........................... Colonoscopy & polypectomy
44393........................... Colonoscopy lesion removal
44394........................... Colonoscopy w/snare
44901........................... Drain app abscess percut
45303........................... Proctosigmoidoscopy dilate
45305........................... Proctosigmoidoscopy w/bx
45307........................... Proctosigmoidoscopy fb
45308........................... Proctosigmoidoscopy removal
45309........................... Proctosigmoidoscopy removal
45315........................... Proctosigmoidoscopy removal
45317........................... Proctosigmoidoscopy bleed
45320........................... Proctosigmoidoscopy ablate
45332........................... Sigmoidoscopy w/fb removal
45333........................... Sigmoidoscopy & polypectomy
45335........................... Sigmoidoscopy w/submuc inj
45338........................... Sigmoidoscopy w/tumr remove
45339........................... Sigmoidoscopy w/ablate tumr
45340........................... Sig w/balloon dilation
45378........................... Diagnostic colonoscopy
45379........................... Colonoscopy w/fb removal
45380........................... Colonoscopy and biopsy
45381........................... Colonoscopy submucous inj
45382........................... Colonoscopy/control bleeding
45383........................... Lesion removal colonoscopy
45384........................... Lesion remove colonoscopy
45385........................... Lesion removal colonoscopy
45386........................... Colonoscopy dilate stricture
47000........................... Needle biopsy of liver
47382........................... Percut ablate liver rf
47525........................... Change bile duct catheter
48511........................... Drain pancreatic pseudocyst
49021........................... Drain abdominal abscess
49041........................... Drain percut abdom abscess
49061........................... Drain percut retroper absc
49411........................... Ins mark abd/pel for rt perq
49418........................... Insert tun ip cath perc
49440........................... Place gastrostomy tube perc
49441........................... Place duod/jej tube perc
49442........................... Place cecostomy tube perc

[[Page 42787]]

49446........................... Change g-tube to g-j perc
50021........................... Renal abscess percut drain
50200........................... Renal biopsy perq
50382........................... Change ureter stent percut
50384........................... Remove ureter stent percut
50385........................... Change stent via transureth
50386........................... Remove stent via transureth
50387........................... Change ext/int ureter stent
50592........................... Perc rf ablate renal tumor
50593........................... Perc cryo ablate renal tum
57155........................... Insert uteri tandems/ovoids
58823........................... Drain pelvic abscess percut
66720........................... Destruction ciliary body
69300........................... Revise external ear
77371........................... Srs multisource
77600........................... Hyperthermia treatment
77605........................... Hyperthermia treatment
77610........................... Hyperthermia treatment
77615........................... Hyperthermia treatment
92960........................... Cardioversion electric ext
93312........................... Echo transesophageal
93314........................... Echo transesophageal
93451........................... Right heart cath
93452........................... Left hrt cath w/ventrclgrphy
93453........................... R&l hrt cath w/ventriclgrphy
93454........................... Coronary artery angio s&i
93455........................... Coronary art/grft angio s&i
93456........................... Rhrt coronary artery angio
93457........................... Rhrt art/grft angio
93458........................... Lhrt artery/ventricle angio
93459........................... Lhrt art/grft angio
93460........................... R&l hrt art/ventricle angio
93461........................... R&l hrt art/ventricle angio
93464........................... Exercise w/hemodynamic meas
93505........................... Biopsy of heart lining
93566........................... Inject r ventr/atrial angio
93568........................... Inject pulm art hrt cath
93642........................... Electrophysiology evaluation
------------------------------------------------------------------------

d. Updates to Price and Useful Life for Existing Direct Inputs
In the CY 2011 PFS final rule with comment period (75 FR 73205), we
finalized a process to act on public requests to update equipment and
supply price and equipment useful life inputs through annual rulemaking
beginning with the CY 2012 PFS proposed rule.
During 2010, we received a request to update the price of ``tray,
bone marrow biopsy-aspiration'' (SA062) from $24.27 to $34.47. The
request included multiple invoices that documented updated prices for
the supply item. We also received a request to update the useful life
of ``holter monitor'' (EQ127) from 7 years to 5 years, based on its
entry in the AHA's publication, ''Estimated Useful Lives of Depreciable
Hospital Assets,'' which we use as a standard reference. In each of
these cases, we are proposing to accept the updated inputs, as
requested. The CY 2012 direct PE database reflects these proposed
changes and is available on the CMS Web site under the supporting data
files for the CY 2012 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.
4. Development of Code-Specific PE RVUs
When creating G codes, we often develop work, PE, and malpractice
RVUs by crosswalking the RVUs from similar (reference) codes. In most
of these cases, the PE RVUs are directly crosswalked pending the
availability of utilization data. Once that data is available, we
crosswalk the direct PE inputs and develop PE RVUs using the regular
practice expense methodology, including allocators that are derived
from utilization data. For CY 2012, we are using this process to
develop PE RVUs for the following services: G0245 (Initial physician
evaluation and management of a diabetic patient with diabetic sensory
neuropathy resulting in a loss of protective sensation (LOPS) which
must include: (1) The diagnosis of LOPS, (2) a patient history, (3) a
physical examination that consists of at least the following elements:
(a) Visual inspection of the forefoot, hindfoot and toe web spaces, (b)
evaluation of a protective sensation, (c) evaluation of foot structure
and biomechanics, (d) evaluation of vascular status and skin integrity,
and (e) evaluation and recommendation of footwear and (4) patient
education); G0246 (Follow-up physician evaluation and management of a
diabetic patient with diabetic sensory neuropathy resulting in a loss
of protective sensation (LOPS) to include at least the following: (1) A
patient history, (2) a physical examination that includes: (a) Visual
inspection of the forefoot, hindfoot and toe web spaces, (b) evaluation
of protective sensation, (c) evaluation of foot structure and
biomechanics, (d) evaluation of vascular status and skin integrity, and
(e) evaluation and recommendation of footwear, and (3) patient
education); G0247 (Routine foot care by a physician of a diabetic
patient with diabetic sensory neuropathy resulting in a loss of
protective sensation (LOPS) to include, the local care of superficial
wounds (for example, superficial to muscle and fascia) and at least the
following if present: (1) Local care of superficial wounds, (2)
debridement of corns and calluses, and (3) trimming and debridement of
nails); G0341 (Percutaneous islet cell transplant, includes portal vein
catheterization and infusion); G0342 (Laparoscopy for islet cell
transplant, includes portal vein catheterization and infusion); G0343
(Laparotomy for islet cell transplant, includes portal vein
catheterization and infusion); and G0365 (Vessel mapping of vessels for
hemodialysis access (services for preoperative vessel mapping prior to
creation of hemodialysis access using an autogenous hemodialysis
conduit, including arterial inflow and venous outflow)). The values in
Addendum B reflect the updated PE RVUs.
In addition, there is a series of G-codes describing surgical
pathology services with PE RVUs historically valued outside of the
regular PE methodology. These codes are: G0416 (Surgical pathology,
gross and microscopic examination for prostate needle saturation biopsy
sampling, 1-20 specimens); G0417 (Surgical pathology, gross and
microscopic examination for prostate needle saturation biopsy sampling,
21-40 specimens); G0418 (Surgical pathology, gross and microscopic
examination for prostate needle saturation biopsy sampling, 41-60
specimens); and G0419 (Surgical pathology, gross and microscopic
examination for prostate needle saturation biopsy sampling, greater
than 60 specimens.) The PE RVUs for these codes were established as
described in the CY 2009 PFS final rule with comment period (73 FR
69751). In reviewing these values for CY 2012, we noted that because
the PE RVUs established through rulemaking in CY 2009 were neither
developed using the regular PE methodology nor directly crosswalked
from other codes, the PE RVUs for these codes were not adjusted to
account for the CY 2011 MEI rebasing and revising, which is discussed
in the CY 2011 PFS final rule with comment period (75 FR 73262). While
it was technically appropriate to insulate the PE RVUs from that
adjustment in CY 2011, upon further review, we believe adjusting these
PE RVUs would result in more accurate payment rates relative to the
RVUs for other PFS services. Therefore, we are proposing to adjust the
PE RVUs for these codes by 1.182, the adjustment rate that accounted
for the MEI rebasing and revising for CY 2011. The PE RVUs in Addendum
B reflect the proposed updates.
5. Physician Time for Select Services
As we describe in section II.A.2.f. of this proposed rule with
comment period, in creating the indirect practice cost index, we
calculate specialty-specific aggregate pools of indirect PE for all PFS
services for that specialty by adding the product of the indirect PE/HR
for the specialty, the physician time for the service, and the
specialty's utilization for the service across all services performed
by the specialty.

[[Page 42788]]

During a review of the physician time data for the CY 2012 PFS
rulemaking, we noted an anomaly regarding the physician time allotted
to a series of group service codes that are listed in Table 5. We
believe that the time associated with these codes reflects the typical
amount of time spent by the practitioner in furnishing the group
service. However, because the services are billed per patient receiving
the service, the time for these codes should be divided by the typical
number of patients per session. In reviewing the data used in the
valuation of work RVUs for these services, we noted that in one
vignette for these services, the typical group session consisted of 6
patients. Therefore we are proposing adjusted times for these services
based on 6 patients. However, we seek comment on the typical number of
patients seen per session for each of these services.
As a result of our review, we are also proposing to update our
physician time file to reflect the physician time associated with
certain G-codes that were previously missing from the file. Our
proposed time values for these G-codes as well as the group service
codes described previously can be found in the proposed CY 2012
Physician Time file, which is available on the CMS Web site under the
supporting data files for the CY 2012 PFS proposed rule at
http:[sol][sol]www.cms.gov/PhysicianFeeSched/.

Table 5--Group Education and Therapy Codes With Proposed Time Changes
------------------------------------------------------------------------
CPT Code Short descriptor
------------------------------------------------------------------------
90849........................... Multiple family group psytx
90853........................... Group psychotherapy
90857........................... Intac group psytx
92508........................... Speech/hearing therapy
96153........................... Intervene hlth/behave group
97150........................... Group therapeutic procedures
97804........................... Medical nutrition group
G0271........................... Group mnt 2 or more 30 mins
G0421........................... Ed svc ckd grp per session
G0109........................... Diab manage trn ind/group
------------------------------------------------------------------------

B. Potentially Misvalued Services Under the Physician Fee Schedule

1. Valuing Services Under the PFS
As discussed in section I. of this proposed rule, in order to value
services under the PFS, section 1848(c) of the Act requires the
Secretary to determine relative values for physicians' services based
on three components: Work, practice expense (PE), and malpractice.
Section 1848(c)(1)(A) of the Act defines the work component to include
``the portion of the resources used in furnishing the service that
reflects physician time and intensity in furnishing the service.''
Additionally, the statute provides that the work component shall
include activities that occur before and after direct patient contact.
Furthermore, the statute specifies that with respect to surgical
procedures, the valuation of the work component for the code must
reflect a ``global'' concept in which pre-operative and post-operative
physicians' services related to the procedure are also included.
In addition, section 1848(c)(2)(C)(i) of the Act specifies that
``the Secretary shall determine a number of work relative value units
(RVUs) for the service based on the relative resources incorporating
physician time and intensity required in furnishing the service.'' As
discussed in detail in sections I.A.2. and I.A.3. of this proposed
rule, the statute also defines the PE and malpractice components and
provides specific guidance in the calculation of the RVUs for each of
these components. Section 1848(c)(1)(B) of the Act defines the PE
component as ``the portion of the resources used in furnishing the
service that reflects the general categories of expenses (such as
office rent and wages of personnel, but excluding malpractice expenses)
comprising practice expenses.''
Section 1848(c)(2)(C)(ii) of the Act specifies that the ``Secretary
shall determine a number of practice expense relative value units for
the services for years beginning with 1999 based on the relative
practice expense resources involved in furnishing the service.''
Furthermore, section 1848(c)(2)(B) of the Act directs the Secretary to
conduct a periodic review, not less often than every 5 years, of the
RVUs established under the PFS. On March 23, 2010, the Affordable Care
Act was enacted, further requiring the Secretary to periodically
identify and review and identify potentially misvalued codes, and make
appropriate adjustments to the relative values of those services
identified as being potentially misvalued. Section 3134(a) of the
Affordable Care Act added a new section 1848(c)(2)(K) of the Act which
requires the Secretary to periodically identify potentially misvalued
services using certain criteria, and to review and make appropriate
adjustments to the relative values for those services. Section 3134(a)
of the Affordable Care Act also added a new section 1848(c)(2)(L) of
the Act which requires the Secretary to develop a validation process to
validate the RVUs of certain potentially misvalued codes under the PFS,
identified using the same categorical criteria used to identify
potentially misvalued codes, and to make appropriate adjustments.
As discussed in section I.A.1. of this proposed rule, we generally
establish physician work RVUs for new and revised codes based on our
review of recommendations received from the AMA RUC. We also receive
recommendations from the AMA RUC regarding direct PE inputs for
services, which we evaluate in order to develop the PE RVUs under the
PFS. The AMA RUC also provides recommendations to us on the values for
codes that have been identified as potentially misvalued. To respond to
concerns expressed by MedPAC, the Congress, and other stakeholders
regarding accurate valuation of services under the PFS, the AMA RUC
created the Five-Year Review Identification Workgroup in 2006. In
addition to providing recommendations to us for work RVUs and physician
times, the AMA RUC's Practice Expense Subcommittee reviews direct PE
inputs (clinical labor, medical supplies, and medical equipment) for
individual services.
In accordance with section 1848(c) of the Act, we determine
appropriate adjustments to the RVUs, taking into account the
recommendations provided by the AMA RUC and MedPAC, explain the basis
of these adjustments, and respond to public comments in the PFS
proposed and final rules. We note that section 1848(c)(2)(A)(ii) of the
Act authorizes the use of extrapolation and other techniques to
determine the RVUs for physicians' services for which specific data are
not available, in addition to taking into account the results of
consultations with organizations representing physicians.
2. Identifying, Reviewing, and Validating the RVUs of Potentially
Misvalued Services under the PFS
a. Background
In its March 2006 Report to the Congress, MedPAC noted that
``misvalued services can distort the price signals for physicians'
services as well as for other health care services that physicians
order, such as hospital services.'' In that same report MedPAC
postulated that physicians' services under the PFS can become misvalued
over time for a number of reasons: For example, MedPAC stated, ``when a
new service is added to the physician fee schedule, it may be assigned
a relatively high value because of the time, technical skill, and
psychological stress that are often required to furnish that service.
Over time, the work required for certain services would be expected to

[[Page 42789]]

decline as physicians become more familiar with the service and more
efficient in furnishing it.'' That is, the amount of physician work
needed to furnish an existing service may decrease when new
technologies are incorporated. Services can also become overvalued when
practice expenses decline. This can happen when the costs of equipment
and supplies fall, or when equipment is used more frequently, reducing
its cost per use. Likewise, services can become undervalued when
physician work increases or practice expenses rise. In the ensuing
years since MedPAC's 2006 report, additional groups of potentially
misvalued services have been identified by the Congress, CMS, MedPAC,
the AMA RUC, and other stakeholders.
In recent years CMS and the AMA RUC have taken increasingly
significant steps to address potentially misvalued codes. As MedPAC
noted in its March 2009 Report to the Congress, in the intervening
years since MedPAC made the initial recommendations, ``CMS and the AMA
RUC have taken several steps to improve the review process.'' Most
recently, section 1848(c)(2)(K)(ii) of the Act (as added by section
3134(a) of the Affordable Care Act) directed the Secretary to
specifically examine, as determined appropriate, potentially misvalued
services in seven categories as follows:
Codes and families of codes for which there has been the
fastest growth.
Codes or families of codes that have experienced
substantial changes in practice expenses.
Codes that are recently established for new technologies
or services.
Multiple codes that are frequently billed in conjunction
with furnishing a single service.
Codes with low relative values, particularly those that
are often billed multiple times for a single treatment.
Codes which have not been subject to review since the
implementation of the RBRVS (the so-called ``Harvard-valued codes'').
Other codes determined to be appropriate by the Secretary.
Section 1848(c)(2)(K)(iii) of the Act also specifies that the
Secretary may use existing processes to receive recommendations on the
review and appropriate adjustment of potentially misvalued services. In
addition, the Secretary may conduct surveys, other data collection
activities, studies, or other analyses, as the Secretary determines to
be appropriate, to facilitate the review and appropriate adjustment of
potentially misvalued services. This section also authorizes the use of
analytic contractors to identify and analyze potentially misvalued
codes, conduct surveys or collect data, and make recommendations on the
review and appropriate adjustment of potentially misvalued services.
Additionally, this section provides that the Secretary may coordinate
the review and adjustment of the RVUs with the periodic review
described in section 1848(c)(2)(B) of the Act. Finally, section
1848(c)(2)(K)(iii)(V) of the Act specifies that the Secretary may make
appropriate coding revisions (including using existing processes for
consideration of coding changes) which may include consolidation of
individual services into bundled codes for payment under the physician
fee schedule.
b. Progress in Identifying and Reviewing Potentially Misvalued Codes
Over the last several years, CMS, in conjunction with the AMA RUC,
has identified and reviewed numerous potentially misvalued codes in all
seven of the categories specified in section 1848(c)(2)(K)(ii) of the
Act, and we plan to continue our work examining potentially misvalued
codes in these areas over the upcoming years, consistent with the new
legislative requirements on this issue. In the current process, we
request the AMA RUC to review potentially misvalued codes that we
identify and make recommendations on revised work RVUs and/or direct PE
inputs for those codes to us. The AMA RUC, through its own processes,
also might identify and review potentially misvalued procedures. We
then assess the recommended revised work RVUs and/or direct PE inputs
and, in accordance with section 1848(c) of the Act, we determine if the
recommendations constitute appropriate adjustments to the RVUs under
the PFS.
Since CY 2009, as a part of the annual potentially misvalued code
review, we have reviewed over 700 potentially misvalued codes to refine
work RVUs and direct PE inputs in addition to continuing the
comprehensive Five-Year Review process. We have adopted appropriate
work RVUs and direct PE inputs for these services as a result of these
reviews.
Our prior reviews of codes under the potentially misvalued codes
initiative has included codes in all seven categories specified in
section 1848(c)(2)(K)(ii) of the Act. That is, we have reviewed and
assigned more appropriate values to--
Codes and families of codes for which there has been the
fastest growth;
Codes or families of codes that have experienced
substantial changes in practice expenses;
Codes that were recently established for new technologies
or services;
Multiple codes that are frequently billed in conjunction
with furnishing a single service;
Codes with low relative values, particularly those that
are often billed multiple times for a single treatment;
Codes which had not been subject to review since the
implementation of the RBRVS (``Harvard valued''); and
Codes potentially misvalued as determined by the
Secretary.
In this last category, we have previously proposed policies in CYs
2009, 2010, and 2011, and requested that the AMA RUC review codes for
which there have been shifts in the site-of-service (that is, codes
that were originally valued as being furnished in the inpatient
setting, but that are now predominantly furnished on an outpatient
basis), as well as codes that qualify as ``23-hour stay'' outpatient
services (these services typically have lengthy hospital outpatient
recovery periods). We note that a detailed discussion of the extensive
prior reviews of potentially misvalued codes is included in the CY 2011
PFS final rule with comment period (75 FR 73215 through 73216).
In CY 2011, we identified additional codes under section
1848(c)(2)(K)(ii) of the Act that we believe are ripe for review and
referred them to the AMA RUC (75 FR 73215 through 73216). Specifically,
we identified potentially misvalued codes in the category of ``Other
codes determined to be appropriate by the Secretary,'' referring lists
of codes with low work RVUs but that are high volume based on claims
data as well as targeted key codes that the AMA RUC uses as reference
services for valuing other services, termed ``multispecialty points of
comparison'' services.
Since the publication of the CY 2011 PFS final rule with comment
period, we released the Fourth Five-Year Review of Work (76 FR 32410),
which discussed the identification and review of an additional 173
potentially misvalued codes. We initiated the Fourth Five-Year Review
of work RVUs by soliciting public comments on potentially misvalued
codes for all services included in the CY 2010 PFS final rule with
comment period that was published in the Federal Register on November
25, 2009. In addition to the codes submitted by the commenters, we
identified a number of potentially misvalued codes and requested the
AMA RUC to review and provide recommendations. Our identification of
potentially misvalued codes for the

[[Page 42790]]

Fourth Five-Year Review focused on two Affordable Care Act categories:
Site-of-service anomaly codes and ``Harvard valued'' codes. As
discussed in the Fourth Five-Year Review of Work (76 FR 32410), we sent
the AMA RUC an initial list of 219 codes for review. Consistent with
our past practice, we requested the AMA RUC to review codes on a
``family'' basis rather than in isolation in order to ensure that
appropriate relativity in the system was retained. Consequently, the
AMA RUC included additional codes for review, resulting in a total of
290 codes for the Fourth Five-Year Review of Work. Of those 290 codes,
53 were subsequently sent to the CPT Editorial Panel to consider coding
changes, 14 were not reviewed by the AMA RUC (and subsequently not
reviewed by us) because the specialty society that had originally
requested the review in its public comments on the CY 2010 PFS final
rule with comment period elected to withdraw the codes, 36 were not
reviewed by the AMA RUC because their values were set as interim final
in the CY 2011 PFS final rule with comment period, and 14 were not
reviewed by us because they were noncovered services under Medicare.
Therefore, the AMA RUC reviewed 173 of the 290 codes initially
identified for the Fourth Five-Year Review of Work, and provided the
recommendations that were addressed in detail in the Fourth Five-Year
Review of Work (76 FR 32410). In addition, under the Fourth Five-Year
Review of Work, we reviewed recommendations for five additional
potentially misvalued codes from the Health Care Professionals Advisory
Committee (HCPAC), a deliberative body of nonphysician practitioners
that also convenes during the AMA RUC meeting. The HCPAC represents
physician assistants, chiropractors, nurses, occupational therapists,
optometrists, physical therapists, podiatrists, psychologists,
audiologists, speech pathologists, social workers, and registered
dieticians.
In summary, since CY 2009, CMS and the AMA RUC have addressed a
number of potentially misvalued codes. For CY 2009, the AMA RUC
recommended revised work values and/or PE inputs for 204 misvalued
services (73 FR 69883). For CY 2010, an additional 113 codes were
identified as misvalued and the AMA RUC provided us new recommendations
for revised work RVUs and/or PE inputs for these codes to us as
discussed in the CY 2010 PFS final rule with comment period (74 FR
61778). For CY 2011, CMS reviewed and adopted more appropriate values
for 209 codes under the annual review of potentially misvalued codes.
For CY 2012, we recently released the Fourth Five-Year Review of Work,
which discussed the review of 173 potentially misvalued codes and
proposed appropriate adjustments to RVUs. In section II.B.5.of this
proposed rule, we also provide a list of codes identified for future
consideration as part of the potentially misvalued codes initiative,
that is, in addition to the codes that are part of the Fourth Five-Year
Review of Work, as discussed in that section, we are requesting the AMA
RUC review these codes and submit recommendations to us.
c. Validating RVUs of Potentially Misvalued Codes
In addition to identifying and reviewing potentially misvalued
codes, section 3134(a) of the Affordable Care Act added a new section
1848(c)(2)(L) of the Act, which specifies that the Secretary shall
establish a formal process to validate RVUs value units under the PFS.
The validation process may include validation of work elements (such as
time, mental effort and professional judgment, technical skill and
physical effort, and stress due to risk) involved with furnishing a
service and may include validation of the pre-, post-, and intra-
service components of work. The Secretary is directed to validate a
sampling of the work RVUs of codes identified through any of the seven
categories of potentially misvalued codes specified by section
1848(c)(2)(K)(ii) of the Act. Furthermore, the Secretary may conduct
the validation using methods similar to those used to review
potentially misvalued codes, including conducting surveys, other data
collection activities, studies, or other analyses as the Secretary
determines to be appropriate to facilitate the validation of RVUs of
services.
In the CY 2011 PFS proposed rule (75 FR 40068), we solicited public
comments on possible approaches and methodologies that we should
consider for a validation process. We received a number of comments
regarding possible approaches and methodologies for a validation
process. As discussed in the CY 2011 PFS final rule with comment period
(75 FR 73217), some commenters were skeptical that there could be
viable alternative methods to the existing AMA RUC code review process
for validating physician time and intensity that would preserve the
appropriate relativity of specific physician's services under the
current payment system. These commenters generally urged us to rely
solely on the AMA RUC to provide valuations for services under the PFS.
While a number of commenters strongly opposed our plans to develop
a formal validation process, many other commenters expressed support
for the development and establishment of a system-wide validation
process of the work RVUs under the PFS. As noted in the CY 2011 PFS
final rule with comment period (75 FR 73217 through 73218), these
commenters commended us for seeking new approaches to validation, as
well as being open to suggestions from the public on this process. A
number of commenters submitted technical advice and offered their time
and expertise as resources for us to draw upon in any examination of
possible approaches to developing a formal validation process.
However, in response to our solicitation of comments regarding time
and motion studies, a number of commenters opposed the approach of
using time and motion studies to validate estimates of physician time
and intensity, stating that properly conducted time and motion studies
are extraordinarily expensive and, given the thousands of codes paid
under the PFS, it would be unlikely that all codes could be studied. As
we stated in the CY 2011 PFS final rule with comment period (75 FR
73218), we understand that these studies would require significant
resources and we remain open to suggestions for other approaches to
developing a formal validation process. We note that MedPAC suggested
in its comment letter (75 FR 73218) that we should consider
``collecting data on a recurring basis from a cohort of practices and
other facilities where physicians and nonphysician clinical
practitioners work.'' As we stated previously, we intend to establish a
more extensive validation process of RVUs in the future in accordance
with the requirements of section 1848(c)(2)(L) of the Act.
While we received a modest number of comments specifically
addressing technical and methodological aspects of developing a
validation system, we believe it would be beneficial to provide an
additional opportunity for stakeholders to submit comments on data
sources and possible methodologies for developing a system-wide
validation system. We are particularly interested in comments regarding
data sources and studies which may be used to validate estimates of
physician time and intensity that could be factored into the work RVUs,
especially for services with rapid growth in Medicare expenditures,
which is one of the Affordable Care Act

[[Page 42791]]

categories that the statute specifically directs us to examine. We are
also soliciting comments regarding MedPAC's suggestion of ``collecting
data on a recurring basis from a cohort of practices and other
facilities where physicians and nonphysician clinical practitioners
work.''
We plan to discuss the validation process in more detail in a
future PFS rule once we have considered the matter further in
conjunction with the public comments received on the CY 2011
rulemaking, as well as this proposed rule. We note that any proposals
we would make on the formal validation process would be subject to
public comment, and we would consider those comments before finalizing
the policies.
3. Consolidating Reviews of Potentially Misvalued Codes
As previously discussed, we are statutorily required to review the
RVUs of services paid under the PFS no less often than every 5 years.
In the past, we have satisfied this requirement by conducting periodic
reviews of work, PE, and malpractice RVUs for established services
every 5 years in what is commonly known as CMS' Five-Year Reviews of
Work, PE, and Malpractice RVUs. Recently, on May 24, 2011, we released
the proposed notice regarding the Fourth Five-Year Review of Work RVUs.
The most recent comprehensive Five-Year Review of PE RVUs occurred for
CY 2010; the same year we began using the Physician Practice
Information Survey (PPIS) data to update the PE RVUs. The last Five-
Year Review of Malpractice RVUs also occurred for CY 2010. These Five-
Year Reviews have historically included codes identified and nominated
by the public for review, as well as those identified by CMS and the
AMA RUC.
In addition to the Five-Year Reviews, beginning for CY 2009, CMS
and the AMA RUC have identified and reviewed a number of potentially
misvalued codes on an annual basis using various identification
screens, such as codes with high growth rates, codes that are
frequently billed together in one encounter, and codes that are valued
as inpatient services but that are now predominately furnished as
outpatient services. These annual reviews have not included codes
identified by the public as potentially misvalued since historically,
the public has the opportunity to submit potentially misvalued codes
during the Five-Year Review process.
With the enactment of the Affordable Care Act in 2010, which
endorsed our initiative to identify and review potentially misvalued
codes and emphasized the importance of our ongoing work in this area to
improve accuracy and appropriateness of payments under the PFS, we
believe that continuing the annual identification and review of
potentially misvalued codes is necessary. Given that we are engaging in
extensive reviews of work RVUs and direct PE inputs of potentially
misvalued codes on an annual basis, we believe that separate and
``freestanding'' Five-Year Reviews of Work and PE may have become
redundant with our annual efforts. Therefore, for CY 2012 and forward,
we propose to consolidate the formal Five-Year Review of Work and PE
with the annual review of potentially misvalued codes. That is, we
would begin meeting the statutory requirement to review work and PE
RVUs for potentially misvalued codes at least once every 5 years
through an annual process, rather than once every 5 years. Furthermore,
to allow for public input and to preserve the public's ability to
identify and nominate potentially misvalued codes for review, we are
proposing a process by which the public could submit codes for our
potential review, along with supporting documentation, on an annual
basis. Our review of these codes would be incorporated into our
potentially misvalued codes initiative. This proposal is further
discussed in section II.B.4. of this proposed rule. We are soliciting
comments on our proposal to consolidate the formal Five-Year Reviews of
Work and PE with the annual review of potentially misvalued codes.
We note that while we are proposing to review the physician work
RVUs and direct PE inputs of potentially misvalued codes on an annual
basis, we are not proposing at this time to review malpractice RVUs on
an annual basis. As discussed in section II.D. of this proposed rule,
in general, malpractice RVUs are based on malpractice insurance premium
data on a specialty level. The last comprehensive review and update of
the malpractice RVUs occurred for CY 2010 using data obtained from the
PPIS data. Since it is not feasible to conduct such extensive physician
surveys to obtain updated specialty level malpractice insurance premium
data on an annual basis, we believe the comprehensive review of
malpractice RVUs should continue to occur at 5-year intervals.
Furthermore, in identifying and reviewing potentially misvalued
codes on an annual basis, we note that this new proposed process
presents us with the opportunity to review simultaneously both the work
RVUs and the direct PE inputs, in conjunction, for each code.
Heretofore, the work RVUs and direct PE inputs of potentially misvalued
codes were commonly reviewed separately and at different times. For
example, a code may have been identified as potentially misvalued based
solely on its work RVUs so the AMA RUC would have reviewed the code and
provided us with recommendations on the physician times and work RVUs.
However, the code's direct PE inputs would not have necessarily been
reviewed concurrently and therefore, the AMA RUC would not have
necessarily provided us with recommendations for any changes in the
direct PE inputs of the code that could have been necessary to ensure
that the PE RVUs of the code are determined more appropriately.
Therefore, while this code may have been recently reviewed and revised
under the potentially misvalued codes initiative for physician work,
the PE component of the code could still be potentially misvalued.
Going forward, we believe combining the review of both physician work
and PE for each code under our potentially misvalued codes initiative
will more accurately align the review of these codes and lead to more
accurate and appropriate payments under the PFS.
Finally, it is important to note that the code-specific resource
based relative value framework under the PFS system is one in which
services are ranked relative to each other. That is, the work RVUs
assigned to a code are based on the physician time and intensity
expended on that particular service as compared to the physician time
and intensity of the other services paid under the PFS. This concept of
relativity to other services also applies to the PE RVUs, particularly
when it comes to reviewing and assigning correct direct PE inputs that
are relative to other similar services. Consequently, we are
emphasizing the need to review codes that are identified as part of the
potentially misvalued initiative to ensure that appropriate relativity
is constructed and maintained in several key relationships:
The work and PE RVUs of codes are ranked appropriately
within the code family. That is, the RVUs of services within a family
should be ranked progressively so that less intensive services and/or
services that require less physician time and/or require fewer or less
expensive direct PE inputs should be assigned lower work or PE RVUs
relative to other codes within the family. For example, if a code for
treatment of elbow fracture is under review under the potentially
misvalued

[[Page 42792]]

codes initiative, we would expect the work and PE RVUs for all the
codes in the family also be reviewed in order to ensure that relativity
is appropriately constructed and maintained within this family.
Furthermore, as we noted in the CY 2010 PFS final rule with comment
period (74 FR 61941), when we submit codes to the AMA RUC and request
their review, in order to maintain relativity, we emphasized the
importance of reviewing the base code of a family. The base code is the
most important code to review because it is the basis for the valuation
of other codes within the family and allows for all related codes to be
reviewed at the same time (74 FR 61941).
The work and PE RVUs of codes are appropriately relative
based on comparison of physician time and/or intensity and/or direct
inputs to other services furnished by physicians in the same specialty.
To continue the example shown previously, if a code for treatment of
elbow fracture is under review, we would expect this code to be
compared to other codes, such as codes for treatment of humerus
fracture, or other codes furnished by physicians in the same specialty,
in order to ensure that the work and PE RVUs are appropriately relative
within the specialty.
The work and PE RVUs of codes are appropriately relative
when compared to services across specialties. While it may be
challenging to compare codes that describe completely unrelated
services, since the entire PFS is a budget neutral system where payment
differentials are dependent on the relative differences between
services, it is essential that services across specialties are
appropriately valued relative to each other. To illustrate the point,
if a service furnished primarily by dermatology is analogous in
physician time and intensity to another service furnished primarily by
allergy/immunology, then we would expect the work RVUs for the two
services to be similar, even though the two services may be otherwise
unrelated.
4. Proposed Public Nomination Process
Under the previous Five-Year Reviews, the public was provided with
the opportunity to nominate potentially misvalued codes for review. To
allow for public input and to preserve the public's ability to identify
and nominate potentially misvalued codes for review under our annual
potentially misvalued codes initiative, we are proposing a process by
which on an annual basis the public could submit codes, along with
documentation supporting the need for review. We are proposing that
stakeholders may nominate potentially misvalued codes by submitting the
code with supporting documentation during the 60-day public comment
period following the release of the annual PFS final rule with comment
period. We would evaluate the supporting documentation and decide
whether the nominated code should be reviewed as potentially misvalued
during the following year. If we were to receive an overwhelming number
of nominated codes that qualified as potentially misvalued in any given
year, we would prioritize the codes for review and could decide to hold
our review of some of the potentially misvalued codes for a future
year. We note that we may identify additional potentially misvalued
codes for review by the AMA RUC based on the seven statutory categories
under section 1848(c)(2)(K)(ii) of the Act.
We encourage stakeholders who believe they have identified a
potentially misvalued code, supported by documentation, to nominate
codes through the public process. We emphasize that in order to ensure
that a nominated code will be fully considered to qualify as a
potentially misvalued code to be reviewed under our annual process,
accompanying documentation must be provided to show evidence of the
code's inappropriate valuation, either in terms of inappropriate
physician times, work RVUs, and/or direct PE inputs. The AMA RUC
developed certain ``Guidelines for Compelling Evidence'' for the Third
Five-Year Review which we believe could be applicable for members of
the public as they gather supporting documentation for codes they wish
to publicly nominated for the annual review of potentially misvalued
codes. The specific documentation that we would seek under this
proposal includes the following:
Documentation in the peer reviewed medical literature or
other reliable data that there have been changes in physician work due
to one or more of the following:
++ Technique.
++ Knowledge and technology.
++ Patient population.
++ Site-of-service.
++ Length of hospital stay.
++ Physician time.
An anomalous relationship between the code being proposed
for review and other codes. For example, if code ``A'' describes a
service that requires more work than codes ``B,'' ``C,'' and ``D,'' but
is nevertheless valued lower. The commenter would need to assemble
evidence on service time, technical skill, patient severity,
complexity, length of stay and other factors for the code being
considered and the codes to which it is compared. These reference
services may be both inter- and intra-specialty.
Evidence that technology has changed physician work, that
is, diffusion of technology.
Analysis of other data on time and effort measures, such
as operating room logs or national and other representative databases.
Evidence that incorrect assumptions were made in the
previous valuation of the service, such as a misleading vignette,
survey, or flawed crosswalk assumptions in a previous evaluation;
Prices for certain high cost supplies or other direct PE
inputs that are used to determine PE RVUs are inaccurate and do not
reflect current information.
Analyses of physician time, work RVU, or direct PE inputs
using other data sources (for example, Department of Veteran Affairs
(VA) National Surgical Quality Improvement Program (NSQIP), the Society
for Thoracic Surgeons (STS), and the Physician Quality Reporting
Initiative (PQRI) databases).
National surveys of physician time and intensity from
professional and management societies and organizations, such as
hospital associations.
We note that when a code is nominated, and supporting documentation
is provided, we would expect to receive a description of the reasons
for the code's misvaluation with the submitted materials. That is, we
would require a description and summary of the evidence is required
that shows how the service may have changed since the original
valuation or may have been inappropriately valued due to an incorrect
assumption. We would also appreciate specific Federal Register
citations, if they exist, where commenters believe the nominated codes
were previously valued erroneously. We are also proposing to consider
only nominations of active codes that are covered by Medicare at the
time of the nomination.
After we receive the nominated codes during the 60-day comment
period following the release of the annual PFS final rule with comment
period, we intend to review the supporting documentation and determine
whether they appear to be potentially misvalued codes appropriate for
review under the annual process. We are proposing that, in the
following PFS proposed rule, we would publish a list of the codes
received under the public nomination process during the previous year
and

[[Page 42793]]

indicate whether the codes would be included in our annual review of
potentially misvalued codes. We would also indicate the codes that we
would not be including in our annual review, whether due to
insufficient documentation or for other reasons. Under this proposed
process, the first opportunity for the public to nominate codes would
be during the public comment period for the CY 2012 PFS final rule with
comment period. We would publish in the CY 2013 PFS proposed rule, the
list of nominated codes, and whether they will be reviewed as
potentially misvalued codes. We would request the AMA RUC review these
potentially misvalued codes identified by the public, along with any
other codes identified by us, and provide to us recommendations for
appropriate physician times, work RVUs, and direct PE inputs. We are
soliciting public comments on this proposed code nomination process and
we will consider any suggestions to modify and improve the proposed
process.
5. CY 2012 Identification and Review of Potentially Misvalued Services
a. Code Lists
While we anticipate receiving nominations from the public for
potentially misvalued codes in conjunction with rulemaking, we believe
it is imperative that we continue the work of the review initiatives
over the last several years and drive the agenda forward to identify,
review, and adjust values for potentially misvalued codes for CY 2012.
In the CY 2011 PFS proposed rule (75 FR 40068 through 40069), we
identified, and referred to the AMA RUC, a list of potentially
misvalued codes in three areas:
Codes on the AMA RUC's multi-specialty points of
comparison (MPC) list (used as reference codes in the valuation of
other codes),
Services with low work RVUs that are billed in multiples
(a statutory category); and
Codes that have low work RVUs for which CMS claims data
show high volume (that is, high utilization of these codes represents a
significant dollar impact in the payment system).
Our understanding is that the AMA RUC is currently working towards
reviewing these codes at our request. We intend to provide an update
and discuss any RVU adjustments to codes that have been identified as
potentially misvalued in the CY 2012 PFS final rule, as they move
through the review process.
Meanwhile, for CY 2012, we are continuing with the work to identify
and review additional services under the potentially misvalued codes
initiative. Stakeholders have noted that many of the services
previously identified under the potentially misvalued codes initiative
were concentrated in certain specialties. To develop a robust and
representative list of codes for review under the potentially misvalued
codes initiative, we examined the highest PFS expenditure services by
specialty (based on our most recently available claims data and using
the specialty categories listed in the PFS specialty impact table, see
Table 64 in section VII.B. of this proposed rule) and identified those
that have not been reviewed since CY 2006 (which was the year we
completed the Third Five-Year Review of Work and before we began our
potentially misvalued codes initiative).
In our examination of the highest PFS expenditure codes for each
specialty (we used the specialty categories listed in the PFS specialty
impact table, see Table 64 in section VII.B. of this proposed rule), we
noted that E/M services consistently appeared in the top 20 high PFS
expenditure services. We noted as well that most of the E/M services
have not been reviewed since the comprehensive review of services for
the Third Five-Year Review of Work in CY 2006. Therefore, after an
examination of the highest PFS expenditure codes for each specialty, we
have developed two code lists of potentially misvalued codes which we
are proposing to refer to the AMA RUC for review.
First, we are requesting that the AMA RUC conduct a comprehensive
review of all E/M codes, including the codes listed in Table 6. During
the intervening years, there has been significant interest in delivery
system reform, such as patient-centered medical homes and making the
primary care physician the focus of managing the patient's chronic
conditions. The chronic conditions challenging the Medicare population
include heart disease, diabetes, respiratory disease, breast cancer,
allergy, Alzheimer's disease, and factors associated with obesity.
Thus, as the focus of primary care has evolved from an episodic
treatment-based orientation to a focus on comprehensive patient-
centered care management in order to meet the challenges of preventing
and managing chronic disease, we believe a more current review of E/M
codes is warranted. We note that although physicians in primary care
specialties bill a high percentage of their services using the E/M
codes, physicians in non-primary care specialties also bill these codes
for some of their services.
Since we believe the focus of primary care has evolved to meet the
challenges of preventing and managing chronic disease since the last
comprehensive review of the E/M codes, we would like the AMA RUC to
prioritize review of the E/M codes and provide us with recommendations
on the physician times, work RVUs and direct PE inputs of at least half
of the E/M codes listed in Table 6 by July 2012 in order for us to
include any revised valuations for these codes in the CY 2013 PFS final
rule with comment period. We would expect the AMA RUC to review the
remaining E/M codes listed in Table 6 by July 2013 in order for us to
complete the comprehensive re-evaluation of E/M services and include
the revised valuations for these codes in the CY 2014 PFS final rule
with comment period.

Table 6--E/M Codes Referred for AMA RUC Review
------------------------------------------------------------------------
CPT Code Short descriptor
------------------------------------------------------------------------
99201........................... Office/outpatient visit new
99202........................... Office/outpatient visit new
99203........................... Office/outpatient visit new
99204........................... Office/outpatient visit new
99205........................... Office/outpatient visit new
99211........................... Office/outpatient visit est
99212........................... Office/outpatient visit est
99213........................... Office/outpatient visit est
99214........................... Office/outpatient visit est
99215........................... Office/outpatient visit est
99217........................... Observation care discharge
99218........................... Initial observation care
99219........................... Initial observation care
99220........................... Initial observation care
99221........................... Initial hospital care
99222........................... Initial hospital care
99223........................... Initial hospital care
99224........................... Subsequent observation care
99225........................... Subsequent observation care
99226........................... Subsequent observation care
99231........................... Subsequent hospital care
99232........................... Subsequent hospital care
99233........................... Subsequent hospital care
99234........................... Observ/hosp same date
99235........................... Observ/hosp same date
99236........................... Observ/hosp same date
99238........................... Hospital discharge day
99239........................... Hospital discharge day
99281........................... Emergency dept visit
99282........................... Emergency dept visit
99283........................... Emergency dept visit
99284........................... Emergency dept visit
99285........................... Emergency dept visit
99291........................... Critical care first hour
99292........................... Critical care addl 30 min
99304........................... Nursing facility care init
99305........................... Nursing facility care init
99306........................... Nursing facility care init
99307........................... Nursing fac care subseq
99308........................... Nursing fac care subseq
99309........................... Nursing fac care subseq
99310........................... Nursing fac care subseq

[[Page 42794]]

99315........................... Nursing fac discharge day
99316........................... Nursing fac discharge day
99318........................... Annual nursing fac assessmnt
99324........................... Domicil/r[dash]home visit new pat
99325........................... Domicil/r[dash]home visit new pat
99326........................... Domicil/r[dash]home visit new pat
99327........................... Domicil/r[dash]home visit new pat
99328........................... Domicil/r[dash]home visit new pat
99334........................... Domicil/r[dash]home visit est pat
99335........................... Domicil/r[dash]home visit est pat
99336........................... Domicil/r[dash]home visit est pat
99337........................... Domicil/r[dash]home visit est pat
99341........................... Home visit new patient
99342........................... Home visit new patient
99343........................... Home visit new patient
99344........................... Home visit new patient
99345........................... Home visit new patient
99347........................... Home visit est patient
99348........................... Home visit est patient
99349........................... Home visit est patient
99350........................... Home visit est patient
99354........................... Prolonged service office
99355........................... Prolonged service office
99356........................... Prolonged service inpatient
99357........................... Prolonged service inpatient
99406........................... Behav chng smoking 3-10 min
99407........................... Behav chng smoking > 10 min
99460........................... Init nb em per day hosp
99461........................... Init nb em per day non[dash]fac
99462........................... Sbsq nb em per day hosp
99463........................... Same day nb discharge
99464........................... Attendance at delivery
99465........................... Nb resuscitation
99466........................... Ped crit care transport
99467........................... Ped crit care transport addl
99468........................... Neonate crit care initial
99469........................... Neonate crit care subsq
99471........................... Ped critical care initial
99472........................... Ped critical care subsq
99475........................... Ped crit care age 2-5 init
99476........................... Ped crit care age 2-5 subsq
99477........................... Init day hosp neonate care
99478........................... Ic lbw inf < 1500 gm subsq
99479........................... Ic lbw inf 1500-2500 g subsq
99480........................... Ic inf pbw 2501-5000 g subsq
92002........................... Eye exam new patient
92004........................... Eye exam new patient
92012........................... Eye exam established pat
92014........................... Eye exam & treatment
------------------------------------------------------------------------

Second, we are also providing a select list of high PFS expenditure
procedural codes representing services furnished by an array of
specialties, as listed in Table 7. These procedural codes have not been
reviewed since CY 2006 (before we began our potentially misvalued codes
initiatives in CY 2008) and, based on the most recently available data,
have CY 2010 allowed charges of greater than $10 million at the
specialty level (based on the specialty categories listed in the PFS
specialty impact table and CY 2010 Medicare claims data). A number of
the codes in Table 7 would not otherwise be identified as potentially
misvalued services using the screens we have used in recent years with
the AMA RUC or based on one of the six specific statutory categories
under section 1848(c)(2)(k)(ii) of the Act. However, we identified the
potentially misvalued codes listed in Table 7 under the seventh
statutory category, ``other codes determined to be appropriate by the
Secretary.'' We selected these codes based on the fact that they have
not been reviewed for at least 6 years, and in many cases the last
review occurred more than 10 years ago. They represent high Medicare
expenditures under the PFS; thus, we believe that a review to assess
changes in physician work and update direct PE inputs is warranted.
Furthermore, since these codes have significant impact on PFS payment
on a specialty level, a review of the relativity of the code to ensure
that the work and PE RVUs are appropriately relative within the
specialty and across specialties, as discussed previously, is
essential. For these reasons, we have identified these codes as
potentially misvalued and are requesting that the AMA RUC review the
codes listed in Table 7 and provide us with recommendations on the
physician times, work RVUs and direct PE inputs in a timely manner.
That is, similar to our request for the AMA RUC to review E/M codes in
a timely manner, we are requesting that the AMA RUC review at least
half of the procedural codes listed in Table 7 by July 2012 in order
for us to include any revised valuations for these codes in the CY 2013
PFS final rule with comment period.

Table 7--Select List of Procedural Codes Referred for AMA RUC Review
------------------------------------------------------------------------
CPT Code Short descriptor
------------------------------------------------------------------------
95117........................... Immunotherapy Injections
33533........................... Cabg, Arterial, Single
33405........................... Replacement Of Aortic Valve
33430........................... Replacement Of Mitral Valve
93015........................... Cardiovascular Stress Test
93880........................... Extracranial Study
93000........................... Electrocardiogram, Complete
17311........................... Mohs, 1 Stage, H/N/Hf/G
17312........................... Mohs Addl Stage
17004........................... Destroy Premlg Lesions 15+
45378........................... Diagnostic Colonoscopy
43235........................... Uppr Gi Endoscopy, Diagnosis
47562........................... Laparoscopic Cholecystectomy
47563........................... Laparo Cholecystectomy/Graph
49505........................... Prp I/Hern Init Reduc > 5 Yr
96413........................... Chemo, Iv Infusion, 1 Hr
96367........................... Tx/Proph/Dg Addl Seq Iv Inf
96365........................... Ther/Proph/Diag Iv Inf, Init
62311........................... Inject Spine L/S (Cd)
35476........................... Repair Venous Blockage
36870........................... Percut Thrombect Av Fistula
35475........................... Repair Arterial Blockage
95903........................... Motor Nerve Conduction Test
95819........................... Eeg, Awake And Asleep
95861........................... Muscle Test, 2 Limbs
22612........................... Lumbar Spine Fusion
63047........................... Removal Of Spinal Lamina
22851........................... Apply Spine Prosth Device
76830........................... Transvaginal Us, Non[dash]Ob
67028........................... Injection Eye Drug
92235........................... Eye Exam With Photos
66982........................... Cataract Surgery, Complex
27447........................... Total Knee Arthroplasty
27130........................... Total Hip Arthroplasty
27236........................... Treat Thigh Fracture
69210........................... Remove Impacted Ear Wax
31237........................... Nasal/Sinus Endoscopy, Surg
88342........................... Immunohistochemistry
88112........................... Cytopath, Cell Enhance Tech
88312........................... Special Stains Group 1
97140........................... Manual Therapy
90862........................... Medication Management
90801........................... Psy Dx Interview
90805........................... Psytx, Off, 20[dash]30 Min W/E&M
94720........................... Monoxide Diffusing Capacity
94240........................... Residual Lung Capacity
77014........................... Ct Scan For Therapy Guide
77301........................... Radiotherapy Dose Plan, Imrt
77421........................... Stereoscopic X[dash]Ray Guidance
70450........................... Ct Head/Brain W/O Dye
70553........................... Mri Brain W/O & W/Dye
72148........................... Mri Lumbar Spine W/O Dye
20610........................... Drain/Inject, Joint/Bursa
53850........................... Prostatic Microwave Thermotx
50590........................... Fragmenting Of Kidney Stone
76872........................... Us, Transrectal
35301........................... Rechanneling Of Artery
98941........................... Chiropractic Manipulation
98940........................... Chiropractic Manipulation
98942........................... Chiropractic Manipulation
90806........................... Psytx, Off, 45-50 Min
90818........................... Psytx, Hosp, 45-50 Min
90808........................... Psytx, Office, 75-80 Min
72141........................... Mri Neck Spine W/O Dye
73221........................... Mri Joint Upr Extrem W/O Dye
70551........................... Mri Brain W/O Dye
92083........................... Visual Field Examination(S)
97530........................... Therapeutic Activities
97112........................... Neuromuscular Reeducation
97001........................... Pt Evaluation
------------------------------------------------------------------------

b. Specific Codes
On an ongoing basis, public stakeholders (including physician
specialty societies, beneficiaries, and other members of the public)
bring concerns to us regarding direct PE inputs and physician work. In
the past, we would consider these concerns and address them through
proposals in annual rulemaking, technical corrections, or by requesting
that the AMA RUC consider the issue.
Since last year's rulemaking, the public has brought a series of
issues to our attention that relate directly to direct PE inputs and
physician work. We believe that some of these issues will serve as
examples of codes that might be brought forward by the public

[[Page 42795]]

as potentially misvalued in the proposed nomination process as
discussed previously in section II.B.4. of this proposed rule.
(1) Codes Potentially Requiring Updates to Direct PE Inputs
Abdomen and Pelvis CT. For CY 2011, AMA CPT created a series of new
codes that describe combined CTs of the abdomen and pelvis. Prior to
2011, these services would have been billed using multiple stand-alone
codes for each body region. The new codes are: 74176 (Computed
tomography, abdomen and pelvis; without contrast material); 74177
(Computed tomography, abdomen and pelvis; with contrast material); and
74178 (Computed tomography, abdomen and pelvis; without contrast
material in one or both body regions, followed by with contrast
material(s) and further sections in one or both body regions.)
As stated in the CY 2011 PFS final rule with comment period (75 FR
73350), we accepted the AMA RUC- recommended direct PE inputs for these
codes, with refinements to the equipment minutes to assure that the
time associated with the equipment items reflected the time during the
intra-service period when a clinician is using the piece of equipment,
plus any additional time the piece of equipment is not available for
use for another patient due to its use during the designated procedure.
We believe that the direct PE inputs of the new codes reflect the
typical resources required to furnish the services in question.
However, stakeholders have alerted us that the resulting PE RVUs
for the new codes reflect an anomalous rank order in comparison to the
previously existing stand-alone codes. Specifically, the PE RVUs for
the codes that describe CT scans without contrast for either body
region are greater than the PE RVUs for 74176, which describes a CT
scan of both body regions. We believe that the anomalous rank order of
the PE RVUs for this series of codes may be the result of outdated
direct PE inputs for the previously existing stand-alone codes. The
physician work for those codes was last reviewed by the AMA RUC during
the Third Five-Year Review of Work for CY 2007. However, the direct PE
inputs for the codes have not been reviewed since 2003. Therefore, we
are requesting that the AMA RUC review both the direct PE inputs and
work values of the following codes in accordance with the consolidated
approach to reviewing potentially misvalued codes as outlined in
section II.B.2.c. of this proposed rule:
72192 Computed tomography, pelvis; without contrast
material
72193 Computed tomography, pelvis; with contrast
material(s)
72194 Computed tomography, pelvis; without contrast
material, followed by contrast material(s) and further sections
74150 Computed tomography, abdomen; without contrast
material
74160 Computed tomography, abdomen; with contrast
material(s)
74170 Computed tomography, abdomen; without contrast
material, followed by contrast material(s) and further sections
Tissue Pathology. A stakeholder informed us that the direct PE
inputs associated with a particular tissue examination code are
atypical. Specifically, the stakeholder suggested that the AMA RUC
relied upon an atypical clinical vignette in identifying the direct PE
inputs for the service associated with CPT code 88305 (Level IV--
Surgical pathology, gross and microscopic examination Abortion--
spontaneous/missed, Artery, biopsy, Bone marrow, biopsy, Bone
exostosis, Brain/meninges, other than for tumor resection, Breast,
biopsy, not requiring microscopic evaluation of surgical margins,
Breast, reduction mammoplasty, Bronchus, biopsy, Cell block, any
source, Cervix, biopsy, Colon, biopsy, Duodenum, biopsy, Endocervix,
curettings/biopsy, Endometrium, curettings/biopsy, Esophagus, biopsy,
Extremity, amputation, traumatic, Fallopian tube, biopsy, Fallopian
tube, ectopic pregnancy, Femoral head, fracture, Fingers/toes,
amputation, non-traumatic, Gingiva/oral mucosa, biopsy, Heart valve,
Joint, resection, Kidney, biopsy, Larynx, biopsy, Leiomyoma(s), uterine
myomectomy--without uterus, Lip, biopsy/wedge resection, Lung,
transbronchial biopsy, Lymph node, biopsy, Muscle, biopsy, Nasal
mucosa, biopsy, Nasopharynx/oropharynx, biopsy, Nerve, biopsy,
Odontogenic/dental cyst, Omentum, biopsy, Ovary with or without tube,
non-neoplastic, Ovary, biopsy/wedge resection, Parathyroid gland,
Peritoneum, biopsy, Pituitary tumor, Placenta, other than third
trimester, Pleura/pericardium--biopsy/tissue, Polyp, cervical/
endometrial, Polyp, colorectal, Polyp, stomach/small intestine,
Prostate, needle biopsy, Prostate, TUR, Salivary gland, biopsy, Sinus,
paranasal biopsy, Skin, other than cyst/tag/debridement/plastic repair,
Small intestine, biopsy, Soft tissue, other than tumor/mass/lipoma/
debridement, Spleen, Stomach, biopsy, Synovium, Testis, other than
tumor/biopsy/castration, Thyroglossal duct/brachial cleft cyst, Tongue,
biopsy, Tonsil, biopsy, Trachea, biopsy, Ureter, biopsy, Urethra,
biopsy, Urinary bladder, biopsy, Uterus, with or without tubes and
ovaries, for prolapse, Vagina, biopsy, Vulva/labia, biopsy).
The stakeholder claims that in furnishing the typical service, the
required material includes a single block of tissue and 1-3 slides. The
stakeholder argues that the typical costs for the service amount is
approximately $18, but the PE RVUs for 2011 result in a national
payment rate of $69.65 for the technical component of the service.
Because the direct PE inputs associated with this code have not been
reviewed since 1999, we are asking that the AMA RUC review both the
direct PE inputs and work values of this code as soon as possible in
accordance with the consolidated approach to reviewing potentially
misvlaued codes as outlined in section II.B.2.c. of this proposed rule
though the work for this code was reviewed in April 2010.
In Situ Hybridization Testing. We received comments from the Large
Urology Group Practice Association (LUGPA) regarding two new
cytopathology codes that describe in situ hybridization testing of
urine specimens. Prior to CY 2011, all in situ hybridization testing
was coded and billed using CPT Codes 88365 (In situ hybridization (eg,
FISH), each probe), 88367 (Morphometric analysis, in situ hybridization
(quantitative or semi-quantitative) each probe; using computer-assisted
technology) and 88368 (Morphometric analysis, in situ hybridization
(quantitative or semi-quantitative) each probe; manual). The
appropriate CPT code listed would be billed one time for each probe
used in the performance of the test, regardless of the medium of the
specimen (that is, blood, tissue, tumor, bone marrow or urine).
For CY 2011, the AMA's CPT Editorial Panel created two new
cytopathology codes that describe in situ hybridization testing using
urine samples: CPT code 88120 (Cytopathology, in situ hybridization
(eg, FISH), urinary tract specimen with morphometric analysis, 3-5
molecular probes, each specimen; manual) and CPT code 88121
(Cytopathology, in situ hybridization (eg, FISH), urinary tract
specimen with morphometric analysis, 3-5 molecular probes, each
specimen; using computer-assisted technology).
Because the descriptors indicate that the new codes account for
approximately 4 probes, whereas 88367 and 88368 describe each probe,
there are more PE RVUs associated with the new codes than with the
previously existing codes that are currently still used for any
specimen except for urine.

[[Page 42796]]

However, because the previously existing codes are billed per probe,
the payment for a test using a different specimen type could vary
depending upon the number of probes. For example, a practitioner
furnishing a test involving a blood specimen and using two probes would
bill CPT code 88368 (total RVUs: 6.28) three times with the result of
18.84 RVUs. A practitioner furnishing the same test but using a urine
sample instead of a blood sample would receive payment based on the
13.47 RVUs associated with CPT code 88120.
CMS accepted the RUC- recommended work values and direct PE inputs,
without refinement, for the two new cytopathology codes that describe
in situ hybridization testing using urine samples. We have reviewed the
direct PE recommendations made by the AMA RUC and, at this time,
believe that these inputs are appropriate.
However, we share LUGPA's concerns regarding the potential payment
discrepancies between the codes that describe the same test using
different specimen media. Therefore, we are asking the AMA RUC to
review the both the direct PE inputs and work values of the following
codes in accordance with the consolidated approach to reviewing
potentially misvlaued codes as outlined in section II.B.2.c. of this
proposed rule: CPT codes 88365 (In situ hybridization (e.g., FISH),
each probe); 88367 (Morphometric analysis, in situ hybridization
(quantitative or semi-quantitative) each probe; using computer-assisted
technology); and 88368 (Morphometric analysis, in situ hybridization
(quantitative or semi-quantitative) each probe; manual.)
(2) Codes Without Direct Practice Expense Inputs in the Non-
Facility Setting
Certain stakeholders have requested that we create nonfacility PE
values for a series of kyphoplasty services CPT codes:
22523 (Percutaneous vertebral augmentation, including
cavity creation (fracture reduction and bone biopsy included when
performed) using mechanical device, 1 vertebral body, unilateral or
bilateral cannulation (e.g., kyphoplasty); thoracic),
22524 (Percutaneous vertebral augmentation, including
cavity creation (fracture reduction and bone biopsy included when
performed) using mechanical device, 1 vertebral body, unilateral or
bilateral cannulation (e.g., kyphoplasty); lumbar).
22525 (Percutaneous vertebral augmentation, including
cavity creation (fracture reduction and bone biopsy included when
performed) using mechanical device, 1 vertebral body, unilateral or
bilateral cannulation (e.g., kyphoplasty); each additional thoracic or
lumbar vertebral body (List separately in addition to code for primary
procedure).
In the case of these codes, we are asking the RUC to make
recommendations regarding the appropriateness of creating nonfacility
direct PE inputs. If the RUC were to recommend direct PE
recommendations, we would review those recommendations as part of the
annual process.
Ultrasound Equipment. A stakeholder has raised concern about
potential inconsistencies with the inputs and the prices related to
ultrasound equipment in the direct PE database. Upon reviewing inputs
and prices for ultrasound equipment, we have noted that there are 17
different pieces of ultrasound and ultrasound-related equipment in the
database that are associated with 110 CPT Codes. The price inputs for
ultrasound equipment range from $1,304.33 to $466,492.00. Therefore, we
are asking the AMA RUC to review the ultrasound equipment included in
those codes as well as how the way the equipment is described and
priced in the direct PE database.
In the past, the AMA RUC has provided us with valuable
recommendations regarding particular categories of equipment and supply
items that are used as direct PE inputs for a range of codes. For
example, in the 2011 PFS final rule (75 FR 73204), we made changes to a
series of codes following the RUC's review of services that include the
radiographic fluoroscopic room (CMS Equipment Code EL014) as a direct
PE input. The RUC review revealed the use of the item to no longer be
typical for certain services in which it had been specified within the
direct cost inputs. These recommendations have often prompted our
proposals that have served to maintain appropriate relativity within
the PFS, and we hope that the RUC will continue to address issues
relating to equipment and supply inputs that affect many codes.
Furthermore, we believe that in these kinds of cases, it may be
appropriate to make changes to the related direct PE inputs for a
series of codes without reevaluating the physician work or other direct
PE inputs for the individual codes. In other words, while we generally
believe that both the work and the direct practice expense inputs
should be reviewed whenever the RUC makes recommendations regarding
either component of a code's value, we recognize the value of discrete
RUC reviews of direct PE items that serve as inputs for a series of
service codes.
(3) Codes Potentially Requiring Updates to Physician Work
Cholecystectomy. We received a comment regarding a potential
relativity problem between two cholecystectomy (gall bladder removal)
CPT codes. CPT code 47600 (Cholecystectomy;) has a work RVU of 17.48,
and CPT code 47605 (Cholecystectomy; with cholangiography) has a work
RVU of 15.98. Upon examination of the physician time and visits
associated with these codes, we found that CPT code 47600 includes 115
minutes of intra-service time and a total time of 420 minutes,
including 3 office visits, 3 subsequent hospital care days, and 1
hospital discharge management day. CPT code 47605 includes 90 minutes
of intra-service time and a total time of 387 minutes, including 2
office visits, 3 subsequent hospital care days, and 1 hospital
discharge management day. We believe that the difference in physician
time and visits is the cause for the difference in work RVU for these
codes. However, upon clinical review, it does not appear that these
visits appropriately reflect the relativity of these two services, as
CPT code 47600 should not have more time and visits associated with the
service than CPT code 47605. Therefore, we are asking the AMA RUC to
review these two cholecystectomy CPT codes, 47600 and 47605.
We thank the public for bringing these issues to our attention and
kindly request that the public continue to do so. Please see section
II.B.4. of this proposed notice for more information on the proposed
public process for the nomination of potentially misvalued codes.
6. Code-Specific Issues
a. CY 2012 Codes With Site-of-Service Anomalies
(1) Background
The AMA RUC reviewed a number of site-of-service anomaly codes for
CY 2012, many of which are site-of-service anomaly codes that have had
interim values in place since CY 2009. These are CPT codes that have
experienced a change in the typical site-of-service since the original
valuation of the codes. Specifically, these codes were originally
furnished in the inpatient setting, but Medicare claims data show that
the typical case has shifted to being furnished in the outpatient
setting. Since the procedures were typically furnished in the inpatient
setting when the codes were originally valued, the work RVUs for these
codes would have

[[Page 42797]]

been valued to include the inpatient physician work furnished, as well
as to reflect the intensive follow-up care normally associated with an
inpatient procedure. As we discussed in the CY 2011 final rule with
comment period (75 FR 73221), when the typical case for a service has
shifted from the inpatient setting to an outpatient or physician's
office setting, we do not believe the inclusion of inpatient hospital
visits in the post-operative period is appropriate. For example,
inpatient E/M visit codes such as CPT codes 99231 (Level 1 subsequent
hospital care, per day); 99232 (Level 2 subsequent hospital care, per
day); and 99233 (Level 3 subsequent hospital care, per day), should not
be included in the valuation of these services. Additionally, we
believe that it is reasonable to expect that there have been changes in
medical practice for these services, and that such changes would
represent a decrease in physician time or intensity or both. The AMA
RUC reviewed 40 CPT codes that were identified as having site-of-
service anomalies and recommended revised RVUs to CMS for 29 codes for
CY 2009 and 11 codes for CY 2010. In the CY 2010 PFS proposed rule and
final rule with comment period (74 FR 33556 and 74 FR 61777,
respectively), we encouraged the AMA RUC to utilize the building block
methodology when revaluing services with site-of-service anomalies. In
the CY 2011 PFS final rule with comment period (75 FR 73221), we also
stated that in the CYs 2009 and 2010 PFS final rules with comment
period (73 FR 69883 and 74 FR 61776 through 61778, respectively), we
indicated that although we would accept the AMA RUC valuations for
these site-of-service anomaly codes on an interim basis through CY
2010, we had ongoing concerns about the methodology used by the AMA RUC
to value these services. We requested that the AMA RUC re-examine the
site-of-service anomaly codes and adjust the work RVU, time, and post-
service visits to reflect those typical of a service furnished in an
outpatient or physician's office setting.
Following our request in the CY 2011 PFS final rule with comment
period, the AMA RUC re-reviewed these site-of-service anomaly codes and
recommended work RVUs to us. Of the 40 CPT codes on the CY 2009 and CY
2010 site-of-service anomaly code lists in the CY 2011 PFS final rule
with comment period, 1 CPT code was not re-reviewed, as it was
addressed in the CY 2011 PFS final rule with comment period as a part
of the vagal nerve stimulator family of services. Ten of the remaining
39 site-of-service anomaly codes were addressed in the Five-Year Review
of Work, published in the Federal Register on June 6, 2011 (76 FR
32410). The remaining 29 CPT codes are addressed in this CY 2012 PFS
proposed rule. We will summarize and respond to public comments, and
adopt final work RVUs for all 40 CPT codes on the CY 2009 and CY 2010
site-of-service anomaly lists in the CY 2012 PFS final rule with
comment period. In addition, several other CPT codes have since been
identified as having site-of-service anomalies and were addressed in
the Five-Year Review of Work (76 FR 32410). We will respond to public
comments and adopt final work values for these codes in the CY 2012 PFS
final rule with comment period. A complete list of the 40 CPT codes
with site-of-service anomalies identified in CY 2009 and CY 2010, the
rule in which each code was addressed, the AMA RUC- recommended work
RVU, and the CMS proposed or interim work RVU can be found in Table 8.
When Medicare claims data show that the typical setting for a CPT
code has shifted from the inpatient setting to the outpatient setting,
we continue to believe that the work RVU, time, and post-service visits
of the code should reflect the current outpatient setting. For many of
the site-of-service anomaly CPT codes, we believe that the AMA RUC
appropriately accounted for this site-of-service shift in its
recommendations to us, and we agree with the AMA RUC-recommended work
RVU for 19 of the 40 CY 2009 and CY 2010 site-of-service anomaly codes.
However, we found that for the remainder of these site-of-service
anomaly codes (21 of 40), the AMA RUC often recommended maintaining
inpatient visits or removing inpatient visits and/or time without a
corresponding decrease in work RVU. In those cases, we disagreed with
the AMA RUC-recommended work RVU and adjusted the work RVU, time, and
visits to reflect those typical of a service furnished in an outpatient
or physician's office setting. In the Fourth Five-Year Review of Work
(76 FR 32410), we discussed in detail our methodology for revaluing the
site-of-service anomaly codes addressed in that proposed notice. We
continue that discussion here, and a full description of our
methodology for revaluing the site-of-service anomaly codes for CY 2012
is included later in this section.

Table 8--CMS Decisions on Codes With Site-of-Service Anomalies
--------------------------------------------------------------------------------------------------------------------------------------------------------
CMS
CMS Work RVU decision AMA RUC CMS Work RVU Proposed/
CPT Code Short descriptor publication Recommended decision interim
work RVU Work RVU
--------------------------------------------------------------------------------------------------------------------------------------------------------
21025................................ Excision of bone, lower jaw.. CY 2012 PFS NPRM............. 10.03 Agree.................. 10.03
23415................................ Release of shoulder ligament. CY 2012 PFS NPRM............. 9.23 Agree.................. 9.23
25116................................ Remove wrist/forearm lesion.. CY 2012 PFS NPRM............. 7.56 Agree.................. 7.56
28120................................ Part removal of ankle/heel... Fourth Five-Year Review of 8.27 Disagree............... 7.31
Work.
28122................................ Partial removal of foot bone. Fourth Five-Year Review of 7.72 Disagree............... 6.76
Work.
28725................................ Fusion of foot bones......... CY 2012 PFS NPRM............. 12.18 Disagree............... 11.22
28730................................ Fusion of foot bones......... CY 2012 PFS NPRM............. 12.42 Disagree............... 10.70
36825................................ Artery[dash]vein autograft... Fourth Five-Year Review of 15.13 Disagree............... 14.17
Work.
42415................................ Excise parotid gland/lesion.. Fourth Five-Year Review of 18.12 Disagree............... 17.16
Work.
42420................................ Excise parotid gland/lesion.. Fourth Five-Year Review of 21.00 Disagree............... 19.53
Work.
42440................................ Excise submaxillary gland.... CY 2012 PFS NPRM............. 7.13 Disagree............... 6.14
49507................................ Prp i/hern init block >5 yr.. Fourth Five-Year Review of 10.05 Disagree............... 9.09
Work.
49521................................ Rerepair ing hernia, blocked. Fourth Five-Year Review of 12.44 Disagree............... 11.48
Work.
49587................................ Rpr umbil hern, block > 5 yr. Fourth Five-Year Review of 8.04 Disagree............... 7.08
Work.
52341................................ Cysto w/ureter stricture tx.. CY 2012 PFS NPRM............. 5.35 Agree.................. 5.35
52342................................ Cysto w/up stricture tx...... CY 2012 PFS NPRM............. 5.85 Agree.................. 5.85
52343................................ Cysto w/renal stricture tx... CY 2012 PFS NPRM............. 6.55 Agree.................. 6.55
52344................................ Cysto/uretero, stricture tx.. CY 2012 PFS NPRM............. 7.05 Agree.................. 7.05
52345................................ Cysto/uretero w/up stricture. CY 2012 PFS NPRM............. 7.55 Agree.................. 7.55

[[Page 42798]]

52346................................ Cystouretero w/renal strict.. CY 2012 PFS NPRM............. 8.58 Agree.................. 8.58
52400................................ Cystouretero w/congen repr... CY 2012 PFS NPRM............. 8.69 Agree.................. 8.69
52500................................ Revision of bladder neck..... CY 2012 PFS NPRM............. 8.14 Agree.................. 8.14
52640................................ Relieve bladder contracture.. Fourth Five-Year Review of 4.79 Agree.................. 4.79
Work.
53445................................ Insert uro/ves nck sphincter. CY 2012 PFS NPRM............. 15.39 Disagree............... 13.00
54410................................ Remove/replace penis prosth.. CY 2012 PFS NPRM............. 15.18 Agree.................. 15.18
54530................................ Removal of testis............ CY 2012 PFS NPRM............. 8.46 Agree.................. 8.46
57287................................ Revise/remove sling repair... Fourth Five-Year Review of 11.15 Agree.................. 11.15
Work.
61885................................ Insrt/redo neurostim 1 array. CY 2011 PFS Final Rule....... 6.44 Disagree............... 6.05
62263................................ Epidural lysis mult sessions. CY 2012 PFS NPRM............. 6.54 Disagree............... 5.00
62350................................ Implant spinal canal cath.... CY 2012 PFS NPRM............. 6.05 Agree.................. 6.05
62355................................ Remove spinal canal catheter. CY 2012 PFS NPRM............. 4.35 Disagree............... 3.55
62360................................ Insert spine infusion device. CY 2012 PFS NPRM............. 4.33 Agree.................. 4.33
62361................................ Implant spine infusion pump.. CY 2012 PFS NPRM............. 5.65 Disagree............... 5.00
62362................................ Implant spine infusion pump.. CY 2012 PFS NPRM............. 6.10 Disagree............... 5.60
62365................................ Remove spine infusion device. CY 2012 PFS NPRM............. 4.65 Disagree............... 3.93
63650................................ Implant neuroelectrodes...... CY 2012 PFS NPRM............. 7.20 Disagree............... 7.15
63685................................ Insrt/redo spine n generator. CY 2012 PFS NPRM............. 6.05 Disagree............... 5.19
64708................................ Revise arm/leg nerve......... CY 2012 PFS NPRM............. 6.36 Agree.................. 6.36
64831................................ Repair of digit nerve........ CY 2012 PFS NPRM............. 9.16 Agree.................. 9.16
65285................................ Repair of eye wound.......... CY 2012 PFS NPRM............. 16.00 Disagree............... 15.36
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Revised Work RVUs for Codes With Site-of-Service Anomalies
(A) Foot Arthrodesis

For CPT code 28725 (Arthrodesis; subtalar) and 28730 (Arthrodesis,
midtarsal or tarsometatarsal, multiple or transverse) the most recently
available Medicare claims data suggests that these site-of-service
anomaly codes could be ``23-hour stay'' outpatient services. As we
discussed in the CY 2011 PFS final rule with comment period (75 FR
73226 through 73227) and the Five-Year Review of Work (76 FR 32410),
the ``23-hour stay service'' is a term of art describing services that
typically have lengthy hospital outpatient recovery periods. For these
23-hour stay services, the typical patient is commonly at the hospital
for less than 24-hours, but often stays overnight at the hospital.
Unless a treating physician has written an order to admit the patient
as an inpatient, the patient is considered for Medicare purposes to be
a hospital outpatient, not an inpatient, and our claims data support
that the typical 23-hour stay service is billed as an outpatient
service.
As we discussed in the Five-Year Review of Work (76 FR 32410), we
believe that the values of the codes that fall into the 23-hour stay
category should not reflect work that is typically associated with an
inpatient service. However, as we stated in the CY 2011 PFS final rule
with comment period (75 FR 73226 through 73227), we find it is
plausible that while the patient receiving the outpatient 23-hour stay
service remains a hospital outpatient, the patient would typically be
cared for by a physician during that lengthy recovery period at the
hospital. While we do not believe that post-procedure hospital visits
would be at the inpatient level since the typical case is an outpatient
who would be ready to be discharged from the hospital in 23-hours or
less, we believe it is generally appropriate to include the intra-
service time of the inpatient hospital visit in the immediate post-
service time of the 23-hour stay code under review. In addition, we
indicated that we believe it is appropriate to include a half day,
rather than a full day, of a discharge day management service. We
finalized this policy in the CY 2011 PFS final rule with comment period
(75 FR 73226 through 73227) and encouraged the AMA RUC to apply this
methodology in developing the recommendations it provides to us for
valuing 23-hour stay codes, in order to ensure the consistent and
appropriate valuation of the physician work for these services.
For CY 2010, CPT codes 28725 and 28730 were identified as
potentially misvalued through the site-of-service anomaly screen and
were reviewed by the AMA RUC. For both of these services, based on
reference services and specialty survey data, the AMA RUC recommended
maintaining the current (CY 2009) work RVU, which we then increased
slightly based on the redistribution of RVUs that resulted from the CY
2010 policy to no longer recognize the CPT consultation codes (74 FR
61775). The AMA RUC re-reviewed CPT codes 28725 and 28730 for CY 2012
and, contrary to the 23-hour stay policy we finalized in the CY 2011
PFS final rule with comment period (75 FR 73226 through 73227),
recommended replacing the hospital inpatient post-operative visit in
the

[[Page 42799]]

current work values with a subsequent observation care service,
specifically CPT code 99224 (Level 1 subsequent observation care, per
day) and recommended maintaining the current interim value of the two
CPT codes. Specifically, for CY 2012 the AMA RUC recommended a work RVU
of 12.18 for CPT code 28725 and a work RVU of 12.42 for CPT code 28730.
We disagree with the AMA RUC-recommended values for CPT codes 28725
and 28730. We believe the appropriate methodology for valuing these
codes entails accounting for the removal of the inpatient visits in the
work value for the site-of-service anomaly codes since these services
are no longer typically furnished in the inpatient setting. We do not
believe it is appropriate to simply exchange the inpatient post-
operative visits in the original value with subsequent observation care
visits and maintain the current work RVUs.
As the data suggests, these two site-of-service anomaly codes
resemble 23-hour stay outpatient services, and since the AMA RUC's
recommended value continues to include inpatient visits (or subsequent
observation care codes) in the post-operative period, we applied the
23-hour stay policy described previously. Specifically, we removed the
subsequent observation care service, reduced the one day of discharge
management service to one-half day, and adjusted physician work RVUs
and times accordingly. As a result, for CY 2012 we are proposing a work
RVU of 11.22 for CPT code 28725, and a work RVU of 10.70 for CPT code
28730, with aforementioned refinements to time. A complete list of CMS
time refinements can be found in Table 9.
(B) Submandibular Gland Excision

For CY 2009, CPT code 42440 (Excision of submandibular
(submaxillary) gland) was identified as potentially misvalued through
the site-of-service anomaly screen and was reviewed by the AMA RUC.
Based on reference services and specialty survey data, the AMA RUC
recommended maintaining the current (CY 2008) work RVU of 7.05 for this
service and removing the inpatient subsequent hospital care visit
blocks to reflect the current outpatient place of service. In CY 2010,
while CMS adopted the AMA RUC-recommended work value on an interim
final basis and referred the service back to the AMA RUC to be
reexamined, the work RVU for CPT code 42440 used under the PFS was
increased to 7.13 based on the redistribution of RVUs that resulted
from our policy to no longer recognize the CPT consultation codes (74
FR 61775). Upon re-review for CY 2012, the AMA RUC resubmitted its
previous recommendation and again recommended that the current work RVU
of 7.13 for CPT code 42440 be maintained.
We disagree with the AMA RUC-recommended work RVU of 7.13 for CPT
code 42440 and believe a work RVU of 6.14 is more appropriate for this
service. As stated previously, we believe the appropriate methodology
for valuing site-of-service anomaly codes entails not just removing the
inpatient visits, but also accounting for the removal of the inpatient
visits in the work value of the CPT code. To appropriately revalue this
CPT code to reflect an outpatient service we started with the original
CY 2008 work RVU of 7.05 then, in accordance with the policy discussed
in section II.B. of this proposed notice, we removed the value of the
subsequent hospital care service and one-half discharge day management
service, and added back the subsequent hospital care intra-service time
to the immediate post-operative care service. As a result, we are
proposing an alternative work RVU of 6.14 with refinements to the time
for CPT code 42440 for CY 2012. A complete list of CMS time refinements
can be found in Table 9.
(C) Urological Procedures

----------------------------------------------------------------------------------------------------------------
AMA RUC CMS
CPT Code Short descriptor Recommended CMS Work RVU Proposed
work RVU decision work RVU
----------------------------------------------------------------------------------------------------------------
53445............................. Insert uro/ves nck 15.39 Disagree............ 13.00
sphincter.
54410............................. Remove/replace penis 15.18 Agree............... 15.18
prosth.
54530............................. Removal of testis......... 8.46 Agree............... 8.46
----------------------------------------------------------------------------------------------------------------

For CY 2009, CPT code 53445 (Insertion of inflatable urethral/
bladder neck sphincter, including placement of pump, reservoir, and
cuff) was identified as potentially misvalued through the site-of-
service anomaly screen and was reviewed by the AMA RUC. The AMA RUC
recommended that CPT code 53445 should be removed from the site-of-
service anomaly screen and that the current work RVU of 15.21 should be
maintained because, although the Medicare claims data indicated that
this service is predominately furnished in the outpatient setting,
survey respondents indicated this service is typically furnished in the
facility setting. In CY 2010, while we adopted the AMA RUC-recommended
work value on an interim final basis and referred the service back to
the AMA RUC to be reexamined, the work RVU for CPT code 53445 used
under the PFS was increased to 15.39 based on the redistribution of
RVUs that resulted from our policy to no longer recognize the CPT
consultation codes (74 FR 61775). Upon re-review for CY 2012, the AMA
RUC reaffirmed its previous recommendation. Despite Medicare claims
data showing that this service is typically furnished in the outpatient
setting, the AMA RUC believes it is appropriate for CPT code 53445 to
have inpatient visits because the specialty society that most commonly
furnishes these procedures asserts that the typical patient spends at
least one night in the hospital. The AMA RUC has requested that the
specialty society conduct an additional survey to address more
specifically whether an overnight stay is

[[Page 42800]]

typical for CPT code 53445 and 54410. The AMA RUC recommended that the
current work RVU of 15.39 for CPT code 53445 be maintained.
We disagree with the AMA RUC-recommended work RVU of 15.39 for CPT
code 53445 and believe a work RVU of 13.00 is more appropriate for this
service. As stated previously in our discussion of 23-hour stay codes,
as well as in the CY 2010 PFS final rule with comment period (74 FR
61777), even though a service may typically have a lengthy hospital
outpatient recovery period, it should not reflect work that is
typically associated with an inpatient service. Upon clinical review of
this service and the time and visits associated with it, we believe
that the survey 25th percentile work RVU of 13.00 appropriately
accounts for the work required to furnish this service. Therefore, we
are proposing a work RVU of 13.00 for CPT code 53445 for CY 2012.
(D) Epidural Lysis

For CY 2009, CPT code 62263 (Percutaneous lysis of epidural
adhesions using solution injection (eg, hypertonic saline, enzyme) or
mechanical means (eg, catheter) including radiologic localization
(includes contrast when administered), multiple adhesiolysis sessions;
2 or more days,) was identified as potentially misvalued through the
site-of-service anomaly screen and was reviewed by the AMA RUC. Based
on reference services and specialty survey data, the AMA RUC
recommended maintaining the current (CY 2008) work RVU of 6.41 for this
service and removing the inpatient subsequent hospital care visits to
reflect the current outpatient place of service. In CY 2010, while we
adopted the AMA RUC-recommended work value on an interim final basis
and referred the service back to the AMA RUC to be reexamined, the work
RVU for CPT code 62263 used under the PFS was increased to 6.54 based
on the redistribution of RVUs that resulted from our policy to no
longer recognize the CPT consultation codes (74 FR 61775). Upon re-
review for CY 2012, the AMA RUC reaffirmed its previous recommendation
and recommended that the current work RVU of 6.54 for CPT code 62263 be
maintained.
We disagree with the AMA RUC-recommended work RVU of 6.45 for CPT
code 62263. As stated previously, we believe the appropriate
methodology for valuing site-of-service anomaly codes entails not just
removing the inpatient visits, but also accounting for the removal of
the inpatient visits in the work value of the CPT code. Upon clinical
review, we believe that the survey median work RVU of 5.00
appropriately accounts for the removal of the inpatient visits as well
as the increase in intra-service time and post-operative office visits
in this service. Therefore, we are proposing a work RVU of 5.00 for CPT
code 62263 for CY 2012.
(E) Intrathecal Epidural Catheters and Pumps

----------------------------------------------------------------------------------------------------------------
AMA RUC CMS
CPT Code Short descriptor Recommended CMS Work RVU Proposed
work RVU decision work RVU
----------------------------------------------------------------------------------------------------------------
62350............................. Implant spinal canal cath. 6.05 Agree............... 6.05
62355............................. Remove spinal canal 4.35 Disagree............ 3.55
catheter.
62360............................. Insert spine infusion 4.33 Agree............... 4.33
device.
62361............................. Implant spine infusion 5.65 Disagree............ 5.00
pump.
62362............................. Implant spine infusion 6.10 Disagree............ 5.60
pump.
62365............................. Remove spine infusion 4.65 Disagree............ 3.93
device.
----------------------------------------------------------------------------------------------------------------

For CY 2009, CPT code 62355 (Removal of previously implanted
intrathecal or epidural catheter) was identified as potentially
misvalued through the site-of-service anomaly screen and was reviewed
by the AMA RUC. Based on reference services and specialty survey data,
the AMA RUC recommended a work RVU of 4.30, approximately midway
between the survey median and 75th percentile. The AMA RUC recommended
removing the inpatient building blocks to reflect the outpatient site-
of-service, removing all but 1 of the post-procedure office visits to
reflect the shift in global period from 90 days to 10 days, and
reducing the physician time associated with this service. In CY 2010,
while we adopted the AMA RUC-recommended work value on an interim final
basis and referred the service back to the AMA RUC to be reexamined,
the work RVU for CPT code 62355 used under the PFS was increased to
4.35 based on the redistribution of RVUs that resulted from the CMS
policy to no longer recognize the CPT consultation codes (74 FR 61775).
Upon re-review for CY 2012, the AMA RUC reaffirmed its previous
recommendation and ultimately recommended that the current work RVU of
4.35 for CPT code 62355 be maintained.
We disagree with the AMA RUC-recommended work RVU of 4.35 for CPT
code 62355. As stated previously, we believe the appropriate
methodology for valuing site-of-service anomaly codes entails not just
removing the inpatient visits, but also accounting for the removal of
the inpatient visits in the work value of the CPT code. We do not
believe that the reduction from the CY 2008 work RVU of 6.60 to the CY
2009 work RVU of 4.30 adequately accounts for the removal of 3
subsequent hospital care visits and half a discharge management day,
which together represent a work RVU of 5.40. Also, the time required to
furnish this service dropped significantly, even after considering the
global period change. Upon clinical review, we believe that the survey
median work RVU of 3.55 appropriately accounts for the removal of the
inpatient visits and decreased

[[Page 42801]]

time for this service. Therefore, we are proposing a work RVU of 3.55
for CPT code 62355 for CY 2012.
For CY 2009, CPT code 62361 (Implantation or replacement of device
for intrathecal or epidural drug infusion; nonprogrammable pump) was
identified as potentially misvalued through the site-of-service anomaly
screen and was reviewed by the AMA RUC. Based on reference services and
specialty survey data, the AMA RUC recommended a work RVU of 5.60,
approximately midway between the survey median and 75th percentile. The
AMA RUC recommended removing the inpatient visits to reflect the
outpatient site-of-service, removing all but 1 of the post-procedure
office visits to reflect the shift in global period from 90 days to 10
days, and reducing the physician time associated with this service. In
CY 2010, while we adopted the AMA RUC-recommended work value on an
interim final basis and referred the service back to the AMA RUC to be
reexamined, the work RVU for CPT code 62361 used under the PFS was
increased to 5.65 based on the redistribution of RVUs that resulted
from our policy to no longer recognize the CPT consultation codes (74
FR 61775). Upon re-review for CY 2012, the AMA RUC reaffirmed its
previous recommendation and ultimately recommended that the current
work RVU of 5.65 for CPT code 62361 be maintained.
We disagree with the AMA RUC-recommended work RVU of 5.65 for CPT
code 62361. As stated previously, we believe the appropriate
methodology for valuing site-of-service anomaly codes entails not just
removing the inpatient visits, but also accounting for the removal of
the inpatient visits in the work value of the CPT code. We do not
believe that the reduction from the CY 2008 work RVU of 6.59 to the CY
2009 work RVU of 5.60 adequately accounts for the removal of 3
subsequent hospital care visits and half a discharge management day,
which together represent a work RVU of 5.40. Also, the time required to
furnish this service dropped significantly, even after considering the
global period change. Upon clinical review, we believe that the survey
25th percentile work RVU of 5.00 appropriately accounts for the removal
of the inpatient visits and decreased time for this service. Therefore,
we are proposing a work RVU of 5.00 for CPT code 62361 for CY 2012.
For CY 2009, CPT code 62362 (Implantation or replacement of device
for intrathecal or epidural drug infusion; programmable pump, including
preparation of pump, with or without programming) was identified as
potentially misvalued through the site-of-service anomaly screen and
was reviewed by the AMA RUC. Based on reference services and specialty
survey data, the AMA RUC recommended a work RVU of 6.05, approximately
midway between the survey median and 75th percentile. The AMA RUC
recommended removing the inpatient visits to reflect the outpatient
site-of-service, removing all but 1 of the post-procedure office visits
to reflect the shift in global period from 90 days to 10 days, and
reducing the physician time associated with this service. In CY 2010,
while CMS adopted the AMA RUC-recommended work value on an interim
final basis and referred the service back to the AMA RUC to be
reexamined, the work RVU for CPT code 62362 used under the PFS was
increased to 6.10 based on the redistribution of RVUs that resulted
from our policy to no longer recognize the CPT consultation codes (74
FR 61775). Upon re-review for CY 2012, the AMA RUC reaffirmed its
previous recommendation and ultimately recommended that the current
work RVU of 6.10 for CPT code 62362 be maintained.
We disagree with the AMA RUC-recommended work RVU of 6.10 for CPT
code 62362. As stated previously, we believe the appropriate
methodology for valuing site-of-service anomaly codes entails not just
removing the inpatient visits, but also accounting for the removal of
the inpatient visits in the work value of the CPT code. We do not
believe that the reduction from the CY 2008 work RVU of 8.58 to the CY
2009 work RVU of 6.05 adequately accounts for the removal of 3
subsequent hospital care visits and half a discharge management day,
which together represent a work RVU of 5.40. Also, the time required to
furnish this service dropped significantly, even after considering the
global period change. Upon clinical review, we believe that the survey
median work RVU of 5.60 appropriately accounts for the removal of the
inpatient visits and decreased time for this service. Therefore, we are
proposing a work RVU of 5.60 for CPT code 62362 for CY 2012.
For CY 2009, CPT code 62365 (Removal of subcutaneous reservoir or
pump, previously implanted for intrathecal or epidural infusion) was
identified as potentially misvalued through the site-of-service anomaly
screen and was reviewed by the AMA RUC. Based on reference services and
specialty survey data, the AMA RUC recommended a work RVU of 4.60, the
survey median. The AMA RUC recommended removing the inpatient visits to
reflect the outpatient site-of-service, removing all but 1 of the post-
procedure office visits to reflect the shift in global period from 90
days to 10 days, and reducing the physician time associated with this
service. In CY 2010, while CMS adopted the AMA RUC-recommended work
value on an interim final basis and referred the service back to the
AMA RUC to be reexamined, the work RVU for CPT code 62365 used under
the PFS was increased to 4.65 based on the redistribution of RVUs that
resulted from our policy to no longer recognize the CPT consultation
codes (74 FR 61775). Upon re-review for CY 2012, the AMA RUC reaffirmed
its previous recommendation and ultimately recommended that the current
work RVU of 4.65 for CPT code 62365 be maintained.
We disagree with the AMA RUC-recommended work RVU of 4.65 for CPT
code 62365. As stated previously, we believe the appropriate
methodology for valuing site-of-service anomaly codes entails not just
removing the inpatient visits, but also accounting for the removal of
the inpatient visits in the work value of the CPT code. We do not
believe that the reduction from the CY 2008 work RVU of 6.57 to the CY
2009 work RVU of 4.60 adequately accounts for the removal of 3
subsequent hospital care visits and half a discharge management day,
which together represent a work RVU of 5.40. Also, the time required to
furnish this service dropped significantly, even after considering the
global period change. We believe that this service is similar to that
of CPT code 33241 (Subcutaneous removal of single or dual chamber
pacing cardioverter-defibrillator pulse generator) which has a work RVU
of 3.29 but does not include a half day of discharge management
service. Upon clinical review, we believe that a work RVU of 3.93, that
is a work RVU of 3.29 plus a work RVU of 0.64 to account for the half
day of discharge management service, appropriately accounts for the
removal of the inpatient visits and decreased time for this service.
Therefore, we are proposing a work RVU of 3.93 for CPT code 62365 for
CY 2012.
(F) Neurostimulators

[[Page 42802]]

For CY 2009, CPT code 63650 (Percutaneous implantation of
neurostimulator electrode array, epidural) or mechanical means (such
as, catheter) including radiologic localization (includes contrast when
administered), multiple adhesiolysis sessions; 2 or more days, was
identified as potentially misvalued through the site-of-service anomaly
screen and was reviewed by the AMA RUC. Based on reference services and
specialty survey data, the AMA RUC recommended the survey median work
RVU of 7.15, and removing the inpatient subsequent hospital care visits
to reflect the current outpatient place of service. In CY 2010, while
we adopted the AMA RUC-recommended work value on an interim final basis
and referred the service back to the AMA RUC to be reexamined, the work
RVU for CPT code 63650 used under the PFS was increased to 7.20 based
on the redistribution of RVUs that resulted from the our policy to no
longer recognize the CPT consultation codes (74 FR 61775). Upon re-
review for CY 2012, the AMA RUC reaffirmed its previous recommendation
and ultimately recommended that the current work RVU of 7.20 for CPT
code 63650 be maintained.
We disagree with the AMA RUC-recommended work RVU of 7.20 for CPT
code 63650. As stated previously, we believe the appropriate
methodology for valuing site-of-service anomaly codes entails not just
removing the inpatient visits, but also accounting for the removal of
the inpatient visits in the work value of the CPT code. Upon clinical
review, we believe that the survey median work RVU of 7.15
appropriately accounts for the removal of the inpatient visits, as well
as the physician time and post-operative office visit changes.
Therefore, we are proposing a work RVU of 7.15 for CPT code 63650 for
CY 2012.
For CY 2009, CPT code 63685 (Insertion or replacement of spinal
neurostimulator pulse generator or receiver, direct or inductive
coupling) was identified as potentially misvalued through the site-of-
service anomaly screen and was reviewed by the AMA RUC. Based on
reference services and specialty survey data, the AMA RUC recommended
the survey median work RVU of 6.00, and removing the inpatient
subsequent hospital care visits to reflect the current outpatient place
of service. In CY 2010, while we adopted the AMA RUC-recommended work
value on an interim final basis and referred the service back to the
AMA RUC to be reexamined, the work RVU for CPT code 63685 used under
the PFS was increased to 7.05 based on the redistribution of RVUs that
resulted from the our policy to no longer recognize the CPT
consultation codes (74 FR 61775). Upon re-review for CY 2012, the AMA
RUC reaffirmed its previous recommendation and ultimately recommended
that the current work RVU of 6.05 for CPT code 63685 be maintained.
We disagree with the AMA RUC-recommended work RVU of 6.05 for CPT
code 63685. As stated previously, we believe the appropriate
methodology for valuing site-of-service anomaly codes entails not just
removing the inpatient visits, but also accounting for the removal of
the inpatient visits in the work value of the CPT code. Upon clinical
review, we believe that the survey 25th percentile work RVU of 5.19
appropriately accounts for the removal of the inpatient visits, as well
as the physician time and post-operative office visit changes.
Therefore, we are proposing a work RVU of 5.19 for CPT code 63685 for
CY 2012.
(G) Repair of Eye Wound

Data suggest that CPT code 65285 (Repair of laceration; cornea and/
or sclera, perforating, with reposition or resection of uveal tissue)
is a ``23-hour stay'' outpatient service. For these 23-hour stay
services, the typical patient is commonly at the hospital for less than
24 hours, but often stays overnight at the hospital. As we discussed
previously and in the Five-Year Review of Work (76 FR 32410), we
believe that the values of the codes that fall into the 23-hour stay
category should not reflect work that is typically associated with an
inpatient service.
For CY 2009, CPT code 65285 was identified as potentially misvalued
through the site-of-service anomaly screen and was reviewed by the AMA
RUC. Based on specialty survey data indicating that this service
typically requires an overnight stay, the AMA RUC recommended removing
the CPT code from the site-of-service anomaly list and maintaining the
current (CY 2008) work RVU of 14.43, as well as current physician times
and visits. In CY 2010, while we adopted the AMA RUC-recommended work
value on an interim final basis and referred the service back to the
AMA RUC to be reexamined, the work RVU for CPT code 65285 used under
the PFS was increased to 14.71 based on the redistribution of RVUs that
resulted from the our policy to no longer recognize the CPT
consultation codes (74 FR 61775).
The AMA RUC re-reviewed CPT code 65285 for CY 2012 and recommended
removing the half day of subsequent hospital care service, but contrary
to the 23-hour stay policy we finalized in the CY 2011 PFS final rule
with comment period (75 FR 73226 through 73227), recommended
maintaining the one full day of discharge management service. The AMA
RUC also recommended an increase in intra-service time and post-
procedure office visits. Ultimately, the AMA RUC recommended a work RVU
of 16.00 for CPT code 65285 for CY 2012.

[[Page 42803]]

We disagree with the AMA RUC recommended value for CPT code 65285.
As the most recently available Medicare claims data suggest these two
site-of-service anomaly codes resemble 23-hour stay outpatient
services, and since the AMA RUC's recommended value continues to
include one full day of discharge management service, we applied the
23-hour stay policy described previously. That is, we reduced the one
day of discharge management service to one-half day, and adjusted
physician work RVUs and times accordingly. As a result, we are
proposing an alternative work RVU of 15.36 with refinements to the time
for CPT code 65285 for CY 2012.
A complete list of CMS time refinements can be found in Table 9.
BILLING CODE 4120-01-P

[[Page 42804]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.001

[[Page 42805]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.002

[[Page 42806]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.003

[[Page 42807]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.004

[[Page 42808]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.005

[[Page 42809]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.006

BILLING CODE 4120-01-C
b. Payment for Bone Density Tests
Section 1848(b)(6) of the Act (as amended by section 3111(a) of the
Affordable Care Act) changed the payment calculation for dual-energy x-
ray absorptiometry (DXA) services described by two specified DXA CPT
codes for CYs 2010 and 2011. This provision required payment for these
services at 70 percent of the product of the CY 2006 RVUs for these DXA
codes, the CY 2006 CF, and the geographic adjustment for the relevant
payment year.
Effective January 1, 2007, the CPT codes for DXA services were
revised. The former DXA CPT codes 76075 (Dual energy X-ray
absorptiometry (DXA), bone density study, one or more sites;

[[Page 42810]]

axial skeleton (eg, hips, pelvis, spine)); 76076 (Dual energy X-ray
absorptiometry (DXA), bone density study, one or more sites;
appendicular skeleton (peripheral) (for example, radius, wrist, heel));
and 76077 (Dual energy X-ray absorptiometry (DXA), bone density study,
one or more sites; vertebral fracture assessment) were deleted and
replaced with new CPT codes 77080, 77081, and 77082 that have the same
respective code descriptors as the predecessor codes. Section 1848(b)
of the Act, as amended, specifies that the revised payment applies to
two of the predecessor codes (CPT codes 76075 and 76077) and ``any
succeeding codes,'' which are, in this case, CPT codes 77080 and 77082.
As mentioned previously, section 1848(b) of the Act revised the
payment for CPT codes 77080 and 77082 during CY 2010 and CY 2011. We
provided for payment in CYs 2010 and 2011 under the PFS for CPT codes
77080 and 77082 at the specified rates (70 percent of the product of
the CY 2006 RVUs for these DXA codes, the CY 2006 conversion factor
(CF), and the geographic adjustment for the relevant payment year).
Because the statute specifies a payment calculation for these services
for CYs 2010 and 2011 as described previously, for those years we
implemented the payment provision by imputing RVUs for these services
that would provide the specified payment amount for these services when
multiplied by the current year's conversion factor.
For CY 2012, the payment rate for CPT codes 77080 and 77082 will be
based upon resource-based, rather than imputed, RVUs, and the current
year's conversion factor. The CY 2012 work, PE, and malpractice RVUs
for these codes are shown in Table 10, as well as in Addendum B of this
proposed rule.

Table 10--CY 2012 RVUS for DXA CPT Codes 77080 and 77082
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fully Fully
Physician implemented Transitional implemented Transitional Malpractice
CPT Code Modifier work RVU non-facility non-facility facility PE facility PE RVU
PE RVU PE RVU RVU RVU
--------------------------------------------------------------------------------------------------------------------------------------------------------
77080...................................... ........... 0.20 1.26 1.44 NA NA 0.02
77080...................................... TC 0.00 1.18 1.36 NA NA 0.01
77080...................................... 26 0.20 0.08 0.08 0.08 0.08 0.01
77082...................................... ........... 0.17 0.63 0.65 NA NA 0.02
77082...................................... TC 0.00 0.56 0.58 NA NA 0.01
77082...................................... 26 0.17 0.07 0.07 0.07 0.07 0.01
--------------------------------------------------------------------------------------------------------------------------------------------------------

In addition to temporarily changing the payment rate for the two
DXA CPT codes, section 3111(b) of the Affordable Care Act also
authorizes the Secretary to enter into agreement with the Institute of
Medicine of the National Academies to conduct a study on the
ramifications of Medicare payment reductions for dual-energy x-ray
absorptiometry (as described in section 1848(b)(6) of the Act) during
years 2007, 2008, and 2009 on beneficiary access to bone mass density
tests. This study has not yet been conducted. In the absence of this
study, we request that the AMA RUC review CPT codes 77080 and 77082
during CY 2012.

C. Expanding the Multiple Procedure Payment Reduction (MPPR) Policy

1. Background
Medicare has a longstanding policy to reduce payment by 50 percent
for the second and subsequent surgical procedures furnished to the same
patient by the same physician on the same day, largely based on the
presence of efficiencies in the practice expense (PE) and pre- and
post-surgical physician work. Effective January 1, 1995, the MPPR
policy, with the same percentage reduction, was extended to nuclear
medicine diagnostic procedures (CPT codes 78306, 78320, 78802, 78803,
78806, and 78807). In the CY 1995 PFS final rule with comment period
(59 FR 63410), we indicated that we would consider applying the policy
to other diagnostic tests in the future.
Consistent with recommendations of MedPAC in its March 2005 Report
to the Congress on Medicare Payment Policy, under the CY 2006 PFS, the
MPPR policy was extended to the technical component (TC) of certain
diagnostic imaging procedures performed on contiguous areas of the body
in a single session (70 FR 70261). The reduction recognizes that, for
the second and subsequent imaging procedures, there are some
efficiencies in clinical labor, supplies, and equipment time. In
particular, certain clinical labor activities and supplies are not
duplicated for subsequent procedures and, because equipment time and
indirect costs are allocated based on clinical labor time, those would
also be reduced accordingly.
The imaging MPPR policy originally applied to computed tomography
(CT) and computed tomographic angiography (CTA), magnetic resonance
imaging (MRI) and magnetic resonance angiography (MRA), and ultrasound
services within 11 families of codes based on imaging modality and body
region. When we adopted the policy in CY 2007, we stated that we
believed efficiencies were most likely to occur when imaging procedures
are performed on contiguous body areas because the patient and
equipment have already been prepared for the second and subsequent
procedures, potentially yielding resource savings in areas such as
clerical time, technical preparation, and supplies (70 FR 45850). The
MPPR policy originally applied only to procedures furnished in a single
session involving contiguous body areas within a family of codes, not
across families. Additionally, while the MPPR policy applies to TC-only
services and to the TC of global services, it does not apply to
professional component (PC) services.
Under the current imaging MPPR policy, full payment is made for the
TC of the highest paid procedure, and payment is reduced by 50 percent
of the TC for each additional procedure when an MPPR scenario applies.
We originally planned to phase in the imaging MPPR policy over a 2-year
period, with a 25 percent reduction in CY 2006 and a 50 percent
reduction in CY 2007 (70 FR 70263). However, the Deficit Reduction Act
of 2005 (DRA) (Pub. L. 109-171) amended the statute to place a cap on
the PFS payment amount for most imaging procedures at the amount paid
under the hospital outpatient prospective payment system (OPPS). In
view of the new OPPS payment cap added by the DRA, we decided in the
PFS final rule with comment period for 2006 that it would be prudent to
retain the imaging MPPR at 25 percent while we continued to examine the
appropriate payment levels (71 FR 69659). The DRA also exempted reduced
expenditures attributable to the imaging MPPR policy from the PFS

[[Page 42811]]

budget neutrality provision. Effective July 1, 2010, section 3135(b) of
the Affordable Care Act amended the statute to increase the MPPR on the
TC of imaging services under the policy established in the CY 2006 PFS
final rule with comment period from 25 to 50 percent, and exempted the
reduced expenditures attributable to this further change from the PFS
budget neutrality provision.
In the July 2009 GAO report entitled, ``Medicare Physician
Payments: Fees Could Better Reflect Efficiencies Achieved when Services
are Provided Together,'' the GAO recommended that we take further steps
to ensure that fees for services paid under the PFS reflect
efficiencies that occur when services are furnished by the same
physician to the same beneficiary on the same day. The GAO recommended
the following: (1) Expanding the existing imaging MPPR policy for
certain services to the PC to reflect efficiencies in physician work
for certain imaging services; and (2) expanding the MPPR to reflect PE
efficiencies that occur when certain nonsurgical, nonimaging services
are furnished together. The GAO report also encouraged us to focus on
service pairs that have the most impact on Medicare spending.
In its March 2010 report, MedPAC noted its concerns about
mispricing of services under the PFS. MedPAC indicated that it would
explore whether expanding the unit of payment through packaging or
bundling would improve payment accuracy and encourage more efficient
use of services.
In the CYs 2009 and 2010 PFS proposed rules (73 FR 38586 and 74 FR
33554, respectively), we stated that we planned to analyze nonsurgical
services commonly furnished together (for example, 60 to 75 percent of
the time) to assess whether an expansion of the MPPR policy could be
warranted. MedPAC encouraged us to consider duplicative physician work,
as well as PE, in any expansion of the MPPR policy.
Section 1848(c)(2)(K) of the Act (as added by section 3134(a) of
the Affordable Care Act) specifies that the Secretary shall identify
potentially misvalued codes by examining multiple codes that are
frequently billed in conjunction with furnishing a single service, and
review and make appropriate adjustments to their relative values. As a
first step in applying this provision, in the CY 2010 final rule with
comment period, we implemented a limited expansion of the imaging MPPR
policy to additional combinations of imaging services.
Effective January 1, 2011 the imaging MPPR applies regardless of
code family; that is, the policy applies to multiple imaging services
furnished within the same family of codes or across families. This
policy is consistent with the standard PFS MPPR policy for surgical
procedures that does not group procedures by body region. The current
imaging MPPR policy applies to CT and CTA, MRI and MRA, and ultrasound
procedures services furnished to the same patient in the same session,
regardless of the imaging modality, and is not limited to contiguous
body areas.
We note that section 1848(c)(2)(B)(v)(VI) of the Act (as added by
section 3135(b) of the Affordable Care Act) specifies that reduced
expenditures attributable to the increase in the imaging MPPR from 25
to 50 percent (effective for fee schedules established beginning with
2010 and for services furnished on or after July 1, 2010) are excluded
from the PFS budget neutrality adjustment. That is, the reduced
payments for code combinations within a family of codes (contiguous
body areas) are excluded from budget neutrality. However, this
exclusion only applies to reduced expenditures attributable to the
increase in the MPPR percentage from 25 to 50 percent, and not to
reduced expenditures attributable to our policy change regarding
additional code combinations across code families (non-continguous body
areas) that are subject to budget neutrality under the PFS.
The complete list of codes subject to the CY 2011 MPPR policy for
diagnostic imaging services is included in Addendum F.
As a further step in applying the provisions of section 3134(a) of
the Affordable Care Act, effective January 1, 2011, we implemented an
MPPR for therapy services. The MPPR applies to separately payable
``always therapy'' services, that is, services that are only paid by
Medicare when furnished under a therapy plan of care. Contractor-priced
codes, bundled codes, and add-on codes are excluded because an MPPR
would not be applicable for ``always therapy'' services furnished in
combination with these codes. The complete list of codes subject to the
MPPR policy for therapy services is included in Addendum H.
In the CY 2011 proposed rule (75 FR 44075), we proposed to apply a
50 percent payment reduction to the PE component of the second and
subsequent therapy services for multiple ``always therapy'' services
furnished to a single patient in a single day. However, in response to
public comments, in the CY 2011 PFS final rule with comment period (75
FR 73232), we adopted a 25 percent payment reduction to the PE
component of the second and subsequent therapy services for multiple
``always therapy'' services furnished to a single patient in a single
day.
Subsequent to publication of the CY 2011 PFS final rule with
comment period, section 3 of the Physician Payment and Therapy Relief
Act of 2010 (Pub. L. 111-286) revised the payment reduction percentage
from 25 percent to 20 percent for therapy services furnished in office
settings. The payment reduction percentage remains at 25 percent for
services furnished in institutional settings. Section 4 of the
Physician Payment and Therapy Relief Act of 2010 exempted the reduced
expenditures attributable to the therapy MPPR policy from the PFS
budget neutrality provision. Under our current policy as amended by the
Physician Payment and Therapy Relief Act, for institutional services,
full payment is made for the service or unit with the highest PE and
payment for the PE component for the second and subsequent procedures
or additional units of the same service is reduced by 25 percent. For
non-institutional services, full payment is made for the service or
unit with the highest PE and payment for the PE component for the
second and subsequent procedures or additional units of the same
service is reduced by 20 percent.
The MPPR policy applies to multiple units of the same therapy
service, as well as to multiple different services, when furnished to
the same patient on the same day. It applies to services furnished by
an individual or group practice or ``incident to'' a physician's
service. The MPPR applies when multiple therapy services are billed on
the same date of service for one patient by the same practitioner or
facility under the same National Provider Identifier (NPI), regardless
of whether the services are furnished in one therapy discipline or
multiple disciplines, including, physical therapy, occupational
therapy, or speech-language pathology.
The MPPR policy applies in all settings where outpatient therapy
services are paid under Part B. This includes both services paid under
the PFS that are furnished in the office setting, as well as to
institutional services paid at the PFS rates that are furnished by
outpatient hospitals, home health agencies, comprehensive outpatient
rehabilitation facilities (CORFs), and other entities that are paid
under Medicare Part B for outpatient therapy services.

[[Page 42812]]

2. CY 2012 Proposed Expansion of the MPPR Policy to the Professional
Component of Advanced Imaging Services
Over the past 3 years, as part of the potentially misvalued service
initiative, the AMA RUC has examined several services that are billed
together at least 90 percent of the time as part of the potentially
misvalued service initiative. In several cases, the AMA RUC recommended
work values for new codes that describe the combined services, and
those recommended values reflected the expected efficiencies. For
example, for CY 2011, the AMA RUC valued the work for a series of new
codes that describe CT of the abdomen and pelvis, specifically CPT
codes:
74176 (Computed tomography, abdomen and pelvis; without
contrast material).
74177 (Computed tomography, abdomen and pelvis; with
contrast material).
74178 (Computed tomography, abdomen and pelvis; without
contrast material in one or both body regions, followed by with
contrast material(s) and further sections in one or both body regions).
We accepted the AMA RUC-recommended work values for these codes in
the CY 2011 PFS final rule with comment period (75 FR 73229). The AMA
RUC-recommended work values reflected an expected efficiency for the
typical combined service that paralleled the reductions that would
typically result from a MPPR adjustment. For example, in support of the
recommended work value of 1.74 RVUs for 74176, the AMA RUC explained
that the full value of 74150 (Computed tomography, abdomen; without
contrast material) (Work RVU = 1.19) plus half the value of 72192
(Computed tomography, pelvis; without contrast material) (\1/2\ Work
RVU = 0.55) equals 1.74 work RVUs. The AMA RUC stated that its
recommended valuation was appropriate even though the combined current
work RVUs for 74150 and 72192 would result in a total work RVU of 2.28.
Furthermore, the AMA RUC validated its estimation of work efficiency
for the combined service by comparing the code favorably with the work
value associated with 74182 (Magnetic resonance, for example, proton
imaging, abdomen; with contrast material(s)) (Work RVU = 1.73), which
has a similar intra-service time, 20 minutes. Thus, we believe our
current and proposed MPPR formulations are consistent with the AMA
RUC's work to review code pairs for unaccounted-for efficiencies and to
appropriately value comprehensive codes for a bundle of component
services.
We continue to believe that there may be additional imaging and
other diagnostic services for which there are efficiencies in work when
furnished together, resulting in potentially excessive payment for
these services under current policy.
As noted, Medicare has a longstanding policy to reduce payment by
50 percent for the second and subsequent surgical procedures and
nuclear medicine diagnostic procedures furnished to the same patient by
the same physician on the same day. In continuing to apply the
provisions of section 3134(a) of the Affordable Care Act, for CY 2012
we are proposing to expand the MPPR to the PC of Advanced Imaging
Services (CT, MRI, and Ultrasound), that is, the same list of codes to
which the MPPR on the TC of advanced imaging already applies (see
Addendum F). Thus, the MPPR would apply to the PC and the TC of the
codes. Specifically, we propose to expand the 50 percent payment
reduction currently applied to the TC to apply also to the PC of the
second and subsequent advanced imaging services furnished in the same
session. Full payment would be made for the PC and TC of the highest
paid procedure, and payment would be reduced by 50 percent for the PC
and TC for each additional procedure furnished to the same patient in
the same session. This proposal is based on the expected efficiencies
in furnishing multiple services in the same session due to duplication
of physician work--primarily in the pre- and post-service periods, with
smaller efficiencies in the intraservice period.
This proposal is consistent with the statutory requirement for the
Secretary to identify, review, and adjust the relative values of
potentially misvalued services under the PFS as specified by section
3134(a) of the Affordable Care Act. The proposal is also consistent
both with our longstanding policy on surgical and nuclear medicine
diagnostic procedures, which apply a 50 percent reduction to second and
subsequent procedures. Furthermore, it is responsive to continued
concerns about significant growth in imaging spending, and to MedPAC
(March 2010) and GAO (July 2009) recommendations regarding the
expansion of MPPR policies under the PFS to account for additional
efficiencies.
Finally, as noted, the proposal is consistent with the RUC's recent
methodology and rationale in valuing the work for a combined CT of the
pelvis (CPT codes 72192, 72193 and 72194), and abdomen (CPT codes
74150, 74160 and 74170) where the RUC assumed the work efficiency for
the second service was 50 percent. Savings resulting from this proposal
would be redistributed to other PFS services as required by the general
statutory PFS budget neutrality provision.
3. Further Expansion of the MPPR Under Consideration for Future Years
Currently, the MPPR focuses only on a select number of codes. We
will be aggressively looking for efficiencies in other sets of codes
during the following years and will consider implementing more
expansive reduction policies in CY 2013 and beyond. We invite public
comment on the following MPPR policies which are under consideration.
Any proposals would be presented in future rulemaking and subject to
further public comment:
Apply the MPPR to the TC of All Imaging Services. This
approach would apply a payment reduction to the TC of the second and
subsequent imaging services performed in the same session. Such an
approach could define imaging consistent with our existing definition
of imaging for purposes of the statutory cap on payment at the OPPS
rate (including x-ray, ultrasound (including echocardiography), nuclear
medicine (including positron emission tomography), magnetic resonance
imaging, computed tomography, and fluoroscopy, but excluding diagnostic
and screening mammography). Add-on codes that are always furnished with
another service and have been valued accordingly could be excluded.
Such an approach would be based on the expected efficiencies due to
duplication of clinical labor activities, supplies, and equipment time.
This approach would apply to approximately 530 HCPCS codes, including
the 119 codes to which the current imaging MPPR applies. Savings would
be redistributed to other PFS services as required by the statutory PFS
budget neutrality provision.
Apply the MPPR to the PC of All Imaging Services. This
approach would apply a payment reduction to the PC of the second or
subsequent imaging services furnished in the same encounter. Such an
approach could define imaging consistent with our existing definition
of imaging for the cap on payment at the OPPS rate. Add-on codes that
are always furnished with another service and have been valued
accordingly could be excluded.
This approach would be based on efficiencies due to duplication of
physician work primarily in the pre- and post-service periods, with
smaller

[[Page 42813]]

efficiencies in the intraservice period. This approach would apply to
approximately 530 HCPCS codes, including the 119 codes to which the
current imaging MPPR applies. Savings would be redistributed to other
PFS services as required by the statutory PFS budget neutrality
provision.
Apply the MPPR to the TC of All Diagnostic Tests. This
approach would apply a payment reduction to the TC of the second and
subsequent diagnostic tests (such as radiology, cardiology, audiology,
etc.) furnished in the same encounter. Add-on codes that are always
furnished with another service and have been valued accordingly could
be excluded.
The approach would be based on the expected efficiencies due to
duplication of clinical labor activities, supplies, and equipment time.
The approach would apply to approximately 700 HCPCS codes, including
the approximately 560 HCPCS codes subject to the OPPS cap. The savings
would be redistributed to other PFS services as required by the
statutory PFS budget neutrality provision.

D. Malpractice RVUs

1. Overview of the Methodology for Calculation of Malpractice RVUs
Section 1848(c) of the Act requires that each service paid under
the PFS be comprised of three components: work, PE, and malpractice.
From 1992 to 1999, malpractice RVUs were charge-based, using weighted
specialty-specific malpractice expense percentages and 1991 average
allowed charges. Malpractice RVUs for new codes after 1991 were
extrapolated from similar existing codes or as a percentage of the
corresponding work RVU. Section 4505(f) of the BBA amended section
1848(c) of the Act which required us to implement resource-based
malpractice RVUs for services furnished beginning in 2000. Therefore,
initial implementation of resource-based malpractice RVUs occurred in
2000.
The statute also requires that we review, and if necessary adjust,
RVUs no less often than every 5 years. The first review and update of
resource-based malpractice RVUs was addressed in the CY 2005 PFS final
rule with comment period (69 FR 66263). Minor modifications to the
methodology were addressed in the CY 2006 PFS final rule with comment
period (70 FR 70153). In the CY 2010 PFS final rule with comment
period, we implemented the second review and update of malpractice
RVUs. For a discussion of the second review and update of malpractice
RVUs, see the CY 2010 PFS proposed rule (74 FR 33537) and final rule
with comment period (74 FR 61758).
As explained in the CY 2011 PFS final rule with comment period,
malpractice RVUs for new and revised codes effective before the next
Five-Year Review (for example, effective CY 2011 through CY 2014,
assuming that the next review of malpractice RVUs occurs for CY 2015)
are determined either by a direct crosswalk to a similar source code or
by a modified crosswalk to account for differences in work RVUs between
the new/revised code and the source code (75 FR 73208). For the
modified crosswalk approach, we adjust (or ``scale'') the malpractice
RVU for the new/revised code to reflect the difference in work RVU
between the source code and the new/revised work value (or, if greater,
the clinical labor portion of the fully implemented PE RVU) for the new
code. For example, if the proposed work RVU for a revised code is 10
percent higher than the work RVU for its source code, the malpractice
RVU for the revised code would be increased by 10 percent over the
source code RVU. This approach presumes the same risk factor for the
new/revised code and source code but uses the work RVU for the new/
revised code to adjust for risk-of-service. For codes reviewed in this
proposed rule the source code for each code is the code itself.
Therefore, we calculated the revised malpractice RVU for these codes by
scaling the current malpractice RVU by the percent difference in work
RVU between the current (CY 2011) work RVU and the work RVU proposed in
section II.B. of this proposed rule. Typically, the assigned
malpractice RVUs for new/revised codes effective between updates remain
in place until the next Five-Year Review of Malpractice, which is
expected to occur for CY 2015. We anticipate soliciting public comments
in the CY 2013 PFS proposed rule on matters relating to the CY 2015
Five-Year Review of Malpractice.
2. Proposed Revisions to Malpractice RVUs for Certain Cardiothoracic
Surgery Services
In addition to the scaling of malpractice RVUs to account for the
proportionate difference between current and proposed work RVUs
(proposed work RVU changes are discussed previously in section II.B.of
this proposed rule) there are 19 cardiothoracic surgery codes for which
we propose to scale the malpractice RVUs to account for the
proportionate difference between the current and proposed revised
specialty risk factor. These codes and their short descriptors are
listed below in Table 11. As discussed in the CY 2010 PFS proposed rule
(74 FR 33539), we assign malpractice RVUs to each service based upon a
weighted average of the malpractice risk factors of all specialties
that furnish the service. For the CY 2010 review of malpractice RVUs,
we used CY 2008 Medicare claims data on allowed services to establish
the frequency of a service by specialty. For a number of cardiothoracic
surgery CPT codes representing major open heart procedures performed
primarily on neonates and infants, CY 2008 Medicare claims data showed
zero allowed services. Therefore, our contractor set the number of
services to 1, and assigned a risk factor according to the average risk
factor for all services that do not explicitly have a separate
technical or professional component (average risk factor = 1.95). In
the CY 2010 PFS final rule with comment period, we published interim
final malpractice RVUs for these codes calculated using the average
physician risk factor, and finalized them in the CY 2011 PFS final rule
with comment period.
However, since publication of the CY 2010 PFS final rule with
comment period, stakeholders have expressed concern that the average
risk factor is not appropriate for these services, and that a cardiac
surgery risk factor would be more appropriate (cardiac surgery risk
factor = 6.93). While these CPT codes continue to have little to no
Medicare claims data, upon clinical review we agree that these CPT
codes represent cardiac surgery services and that the malpractice RVUs
should be calculated using the cardiac surgery risk factor.
Accordingly, we propose to scale the malpractice RVUs for these CPT
codes to reflect the proportionate difference between the average risk
factor and the cardiac surgery risk factor. To scale the malpractice
RVU we used the following formula: (cardiac surgery risk factor/average
risk factor) * CY 2011 malpractice RVU = Proposed CY 2012 malpractice
RVU. For example, CPT code 33471 (Valvotomy, pulmonary valve, closed
heart; via pulmonary artery) has a CY 2011 malpractice RVU of 1.62
which was calculated using the average risk factor of 1.95. To scale
this malpractice RVU to reflect the cardiac surgery risk factor of 6.93
we used the following calculation: (6.93 RF/1.95 RF)*1.62 MP RVU = 5.76
MP RVU.
CPT code 33692 (Complete repair tetralogy of Fallot without
pulmonary atresia;) has a CY 2011 work RVU of 31.54 and a malpractice
RVU of 2.23. However, in the Fourth Five-Year Review of Work (76 FR
32410) we have

[[Page 42814]]

proposed an interim final work RVU of 36.15 and adjusted the
malpractice RVU to 2.56 for this service. Therefore, the starting value
for calculating the proposed revised malpractice RVU based on the
cardiac surgery risk factor is the Five-Year Review malpractice RVU
instead of the CY 2011 malpractice RVU. Similar to the example shown
previously, the formula for this adjustment is as follows: (cardiac
surgery risk factor/average risk factor) * Five-Year Review malpractice
RVU = Proposed CY 2012 malpractice RVU.
Table 11 shows the proposed CY 2012 malpractice RVUs for these
cardiothoracic surgery codes.
We also propose to scale the malpractice RVU to reflect a change in
risk factor for CPT code 32442 (Removal of lung, total pneumonectomy;
with resection of segment of trachea followed by broncho-tracheal
anastomosis (sleeve pneumonectomy)). In the CY 2010 review of
malpractice RVUs we assigned CPT code 32442 the pulmonary disease risk
factor (2.09) and published the interim final malpractice RVU
calculated from this risk factor in the CY 2010 PFS final rule with
comment period. This value was finalized in the CY 2011 PFS final rule
with comment period.
Since finalizing this value, stakeholders have suggested that a
blended risk factor of thoracic surgery (6.49) and general surgery
(5.91) would be more appropriate for this service. As described in the
CY 2010 PFS final rule with comment period (74 FR 61760), we do not use
a blended risk factor for services with Medicare utilization under 100;
instead, we use the malpractice risk factor of the specialty that
performs the given service the most (the dominant specialty). As CPT
code 32442 has Medicare utilization well below the 100 occurrences
threshold, and current Medicare claims data show that the dominant
specialty for CPT code 32442 is thoracic surgery, we believe that the
thoracic surgery risk factor is the appropriate risk factor for this
service at this time. Applying the formula described previously to
adjust the malpractice RVU to reflect the thoracic surgery risk factor
rather than the pulmonary disease risk factor results in a malpractice
RVU of 13.21 for CPT code 32442. Therefore, we propose a malpractice
RVU of 13.21 for CPT code 32442 for CY 2012. Table 11 shows the
proposed CY 2012 malpractice RVUs for the cardiothoracic surgery codes
described in this section. All malpractice RVUs are listed in Addendum
B of this proposed rule, including those that are proposed to be
revised and those for which there is no proposed change for CY 2012.

Table 11--CY 2012 Proposed Malpractice (MP) RVUs for Selected Cardiothoracic Surgery Services
----------------------------------------------------------------------------------------------------------------
CY 2012 proposed specialty CY 2011 MP Proposed CY
CPT Code Short descriptor risk factor RVU 2012 MP RVU
----------------------------------------------------------------------------------------------------------------
33471 Valvotomy pulmonary valve...... Cardiac Surgery: 6.93......... 1.62 5.76
33472 Revision of pulmonary valve.... Cardiac Surgery: 6.93......... 1.63 5.80
33676 Close mult vsd w/resection..... Cardiac Surgery: 6.93......... 2.63 9.36
33677 Cl mult vsd w/rem pul band..... Cardiac Surgery: 6.93......... 2.74 9.75
33692 Repair of heart defects........ Cardiac Surgery: 6.93......... * 2.56 9.11
33762 Major vessel shunt............. Cardiac Surgery: 6.93......... 1.61 5.73
33768 Cavopulmonary shunting......... Cardiac Surgery: 6.93......... 0.56 1.99
33771 Repair great vessels defect.... Cardiac Surgery: 6.93......... 2.90 10.32
33775 Repair great vessels defect.... Cardiac Surgery: 6.93......... 2.33 8.29
33776 Repair great vessels defect.... Cardiac Surgery: 6.93......... 2.45 8.72
33777 Repair great vessels defect.... Cardiac Surgery: 6.93......... 2.42 8.61
33778 Repair great vessels defect.... Cardiac Surgery: 6.93......... 3.05 10.85
33779 Repair great vessels defect.... Cardiac Surgery: 6.93......... 3.09 10.99
33780 Repair great vessels defect.... Cardiac Surgery: 6.93......... 3.13 11.14
33781 Repair great vessels defect.... Cardiac Surgery: 6.93......... 3.09 10.99
33786 Repair arterial trunk.......... Cardiac Surgery: 6.93......... 2.98 10.60
33788 Revision of pulmonary artery... Cardiac Surgery: 6.93......... 1.93 6.87
33822 Revise major vessel............ Cardiac Surgery: 6.93......... 1.25 4.45
32442 Sleeve pneumonectomy........... Thoracic Surgery: 6.49........ 4.25 13.21
----------------------------------------------------------------------------------------------------------------
* The malpractice RVU listed for CPT code 33692 is the Five-Year Review of Work-adjusted malpractice RVU, not
the CY 2011 malpractice RVU. Please see above for additional detail.

E. Geographic Practice Cost Indices (GPCIs)

1. Background
Section 1848(e)(1)(A) of the Act requires us to develop separate
Geographic Practice Cost Indices (GPCIs) to measure resource cost
differences among localities compared to the national average for each
of the three fee schedule components (that is, physician work, practice
expense (PE), and malpractice). While requiring that the PE and
malpractice GPCIs reflect the full relative cost differences, section
1848(e)(1)(A)(iii) of the Act requires that the physician work GPCIs
reflect only one-quarter of the relative cost differences compared to
the national average. In addition, section 1848(e)(1)(G) of the Act
sets a permanent 1.5 work GPCI floor for services furnished in Alaska
beginning January 1, 2009, and section 1848(e)(1)(I) of the Act sets a
permanent 1.0 PE GPCI floor for services furnished in frontier States
beginning January 1, 2011.
Section 1848(e)(1)(E) of the Act provides for a 1.0 floor for the
work GPCIs which was set to expire at the end of 2009 until it was
extended through December 31, 2010 by section 3102(a) of the Affordable
Care Act. Because the work GPCI floor was set to expire at the end of
2010, the GPCIs published in Addendum E of the CY 2011 PFS final rule
with comment period did not reflect the 1.0 physician work floor.
However, section 1848(e)(1)(E) of the Act was amended on December 15,
2010, by section 103 of the Medicare and Medicaid Extenders Act (MMEA)
of 2010 (Pub. L. 111-309) to extend the 1.0 work GPCI floor through
December 31, 2011. Appropriate changes to the CY 2011 GPCIs were made
to reflect the 1.0

[[Page 42815]]

physician work floor required by section 103 of the MMEA. Since the
work GPCI floor provided in section 1848(e)(1)(E) of the Act is set to
expire prior to the implementation of the CY 2012 PFS, the CY 2012
physician work GPCIs, and summarized geographic adjustment factors
(GAFs), presented in this proposed rule do not reflect the 1.0 work
GPCI floor. As required by sections 1848(e)(1)(G) and (I) of the Act,
the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI floor for
frontier States will be applicable in CY 2012. Moreover, the limited
recognition of cost differences in employee compensation and office
rent for the PE GPCIs, and the related hold harmless provision,
required under section 1848(e)(1)(H) of the Act was only applicable for
CY 2010 and CY 2011 (75 FR 73253) and, therefore, is no longer
effective beginning in CY 2012.
Section 1848(e)(1)(C) of the Act requires us to review and, if
necessary, adjust the GPCIs not less often than every 3 years. This
section also specifies that if more than 1 year has elapsed since the
last GPCI revision, we must phase in the adjustment over 2 years,
applying only one-half of any adjustment in the first year.
As noted in the CY 2011 PFS final rule with comment period (75 FR
73252 through 73262), for the sixth GPCI update, we updated the data
used to compute all three GPCI components. Specifically, we utilized
the 2006 through 2008 Bureau of Labor Statistics (BLS) Occupational
Employment Statistics (OES) to calculate the physician work GPCIs (75
FR 73252). In addition, we used the 2006 through 2008 BLS OES data to
calculate the employee compensation sub-component of practice expense
(75 FR 73255). Consistent with previous updates, we used the 2-bedroom
residential apartment rent data from HUD (2010) at the 50th percentile
as a proxy for the relative cost differences in physician office rents
(75 FR 73256). Lastly, we calculated the malpractice GPCIs using
malpractice premium data from 2006 through 2007 (75 FR 73256).
Since more than 1 year had elapsed since the fifth GPCI update, the
sixth GPCI update changes are being phased in over a 2-year period as
required by law. The current CY 2011 GPCIs reflect the first year of
the transition. The proposed CY 2012 GPCIs reflect the full
implementation.
The Affordable Care Act requires that we analyze the current
methodology and data sources used to calculate the PE GPCI component.
Specifically, section 1848(e)(1)(H)(iv) of the Act (as added by section
3102(b) of the Affordable Care Act) requires the Secretary to ``analyze
current methods of establishing practice expense adjustments under
subparagraph (A)(i) and evaluate data that fairly and reliably
establishes distinctions in the cost of operating a medical practice in
different fee schedule areas.'' Section 1848(e)(1)(H)(iv) of the Act
also requires that such analysis shall include an evaluation of the
following:
The feasibility of using actual data or reliable survey
data developed by medical organizations on the costs of operating a
medical practice, including office rents and non-physician staff wages,
in different fee schedule areas.
The office expense portion of the practice expense
geographic adjustment; including the extent to which types of office
expenses are determined in local markets instead of national markets.
The weights assigned to each area of the categories within
the practice expense geographic adjustment.
In addition, the weights for different categories of practice
expense in the GPCIs have historically matched the weights developed by
the CMS Office of the Actuary (OACT) for use in the Medicare Economic
Index (MEI), the measure of inflation used as part of the basis for the
annual update to the physician fee schedule payment rates. In response
to comments received on the CY 2011 Physician Fee Schedule proposed
rule, however, we delayed moving to the new MEI weights developed by
OACT for CY 2011 pending further analysis.
Lastly, we asked the Institute of Medicine (IOM) to evaluate the
accuracy of the geographic adjustment factors used for Medicare
physician payment. IOM will prepare three reports for the Congress and
the Secretary of the Department of Health and Human Services. The first
report (Phase I) was released on June 1, 2011, and includes an
evaluation of the accuracy of geographic adjustment factors for the
hospital wage index and the GPCIs, and the methodology and data used to
calculate them. In addition, IOM is expected to release a supplemental
GPCI report in the summer of 2011. The third report, expected in spring
2012, will evaluate the effects of the adjustment factors on the
distribution of the health care workforce, quality of care, population
health, and the ability to provide efficient, high value care. Given
the timing of the release of IOM's first report and the fact that we do
not yet have the second supplemental report on the GPCIs, we are unable
to address the full scope of the IOM recommendations in this proposed
rule. The report can be accessed on the IOM's Web site at http://www.iom.edu/Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx. Additionally, we have included a
summary of GPCI-specific recommendations in section 4 below.
2. Proposed GPCI Revisions for CY 2012
The revised GPCI values we are proposing were developed by Acumen,
LLC (Acumen) under contract to us. As mentioned previously, there are
three GPCI components (physician work, PE, and malpractice), and all
GPCIs are developed through comparison to a national average for each
component. Additionally, each of the three GPCIs relies on its own data
source(s) and methodology for calculating its value, as described more
fully later in this section. As discussed in more detail later in this
section, we are proposing to revise the PE GPCIs for CY 2012, as well
as the cost share weights which correspond to all three GPCIs.
a. Physician Work GPCIs
The physician work GPCIs are designed to capture the relative cost
of physician labor by Medicare PFS locality. Previously, the physician
work GPCIs were developed using the median hourly earnings from the
2000 Census of workers in seven professional specialty occupation
categories which we used as a proxy for physicians' wages. Physicians'
wages are not included in the occupation categories because Medicare
payments are a key determinant of physicians' earnings. Including
physicians' wages in the physician work GPCIs would, in effect, have
made the indices dependent upon Medicare payments. As required by law,
the physician work GPCI reflects one-quarter of the relative wage
differences for each locality compared to the national average.
The physician work GPCI updates in CYs 2001, 2003, 2005, and 2008
were based on professional earnings data from the 2000 Census. For the
sixth GPCI update in CY 2011, we used the 2006 through 2008 Bureau of
Labor Statistics (BLS) Occupational Employment Statistics (OES) data as
a replacement for the 2000 Census data. We are not proposing to revise
the physician work GPCI data source for CY 2012. However, we note that
the work GPCIs will be revised to account for the expiration of the
statutory work floor. The 1.5 work floor for Alaska is permanent and
will be applicable in CY 2012. In addition, we are proposing to revise
the physician work cost share weight from 52.466 to 48.266 in line with
the 2011 MEI weights, which are

[[Page 42816]]

based on 2006 data (referred to hereinafter as the 2006-based MEI).
b. Practice Expense GPCIs
(1) Affordable Care Act Analysis and Revisions for PE GPCIs
(A) General Analysis for the CY 2012 PE GPCIs
As previously mentioned, section 1848(e)(1)(H)(iv) of the Act (as
added by section 3102(b) of the Affordable Care Act) requires the
Secretary to ``analyze current methods of practice expense adjustments
under subparagraph (A)(i) and evaluate data that fairly and reliably
establishes distinctions in the cost of operating a medical practice in
different fee schedule areas.''
Moreover, section 1848(e)(1)(H)(v) of the Act requires the
Secretary to make appropriate adjustments to the PE GPCIs as a result
of the required analysis no later than by January 1, 2012. We are
proposing to make four revisions to the PE data sources and cost share
weights discussed herein effective January 1, 2012. Specifically, we
are proposing to: (1) Revise the occupations used to calculate the
employee wage component of PE using BLS wage data specific to the
office of physicians' industry; (2) utilize two bedroom rental data
from the 2006-2008 American Community Survey as the proxy for physician
office rent; (3) create a purchased service index that accounts for
regional variation in labor input costs for contracted services from
industries comprising the ``all other services'' category within the
MEI office expense and the stand alone ``other professional expenses''
category of the MEI and; (4) use the 2006-based MEI (most recent MEI
weights finalized in the CY 2011 final rule with comment period) to
determine the GPCI cost share weights. These proposals are based on
analyses we conducted to address commenter concerns in the CY 2011
final rule with comment period. The main comments were related to: (1)
The occupational groups used to calculate the employee wage component
of PE, and (2) concerns by commenters stating that regional variation
in purchased services such as legal and accounting are not sufficiently
included in the employee wage index.
We began analyzing the current methods and data sources used in the
establishment of the PE GPCIs during the CY 2011 rulemaking process (75
FR 40084). With respect to our CY 2011 analysis, we began with a review
of the Government Accountability Office's (GAO) March 2005 Report
entitled, ``Medicare Physician Fees: Geographic Adjustment Indices Are
Valid in Design, but Data and Methods Need Refinement'' (GAO-05-119).
While we have raised concerns in the past about some of the GAO's GPCI
recommendations, we noted that with respect to the PE GPCIs, the GAO
did not indicate any significant issues with the methods underlying the
PE GPCIs. Rather, the report focused on some of the data sources used
in the method. For example, the GAO stated that the wage data used for
the PE GPCIs are not current. Similarly, commenters on previous PE GPCI
updates predominantly focused on either the data sources used in the
method or raised issues such as incentivizing the provision of care in
different geographic areas. However, the latter issue (incentivizing
the provision of care) is outside the scope of the statutory
requirement that the PE GPCIs reflect the relative costs of the mix of
goods and services comprising practice expenses in the different fee
schedule areas relative to the national average.
To further analyze the PE office expense in accordance with section
1848(e)(1)(H)(iv) of the Act, we examined the following issues: the
appropriateness of expanding the number of occupations included in the
employee wage index; the appropriateness of replacing rental data from
the Department of Housing and Urban Development (HUD) with data from
the 2006-2008 American Community Survey (ACS) two bedroom rental data
as a proxy for the office rent subcomponent of PE; and the
appropriateness of adjusting the ``all other services'' and ``other
professional expenses'' MEI categories for geographic variation in
labor-related costs. We also examined available ACS occupational group
data for potential use in determining geographic variation in the
employee wage component of PE.
An additional component of the analysis under section
1848(e)(1)(H)(iv) of the Act is to evaluate the weights assigned to
each of the categories within the practice expense geographic
adjustment. As discussed in the CY 2011 final rule with comment period
(75 FR 73256), in response to concerns raised by commenters and to
allow us time to conduct additional analysis, we did not revise the
GPCI cost share weights to reflect the weights used in the revised and
rebased 2006 MEI that we adopted beginning in CY 2011. In response to
those commenters, whom raised many points regarding the appropriateness
of assigning labor-related costs in the medical equipment and supplies
and miscellaneous component which do not reflect locality cost
differentials, we agreed to address the GPCI cost share weights again
in the CY 2012 PFS proposal. These issues are discussed in greater
detail in the section of this rule that discusses our determination of
the cost share weights.
We also stated in the CY 2011 final rule with comment period that
we would review the findings of the Secretary's Medicare Geographic
Payment Summit and the MEI technical advisory panel during future
rulemaking (75 FR 73256). The Secretary convened the National Summit on
Health Care Quality and Value on October 4, 2010. This Summit was
attended by a number of policy experts that engaged in detailed
discussions regarding geographic adjustment factors and geographic
variation in payment and the promotion of high quality care. This
National Summit was useful to informing us on issues which we are
studying further through three Institute of Medicine studies (including
the recently released first of three reports on Geographic Adjustment
Factors and a separate report on Geographic Variation in Health Care
Spending and the Promotion of High Value Care). In accordance with
Section 3102(b) of the Affordable Care Act, we are also continuing to
consider these issues in the course of notice and comment rulemaking
for the CY 2012 PFS, which includes revisions to the GPCI, and through
preparation of a report to the Congress that we will be submitting
later this year in accordance with section 3137(b) of the Affordable
Care Act on a plan for reforming the hospital wage index. In addition,
the Agency is currently working through the various administrative
requirements to formally organize the MEI technical advisory panel. We
expect that this panel will be convened in the near future. We look
forward to examining the recommendations of this panel once it has
issued its report.
(B) Analysis of ACS Rental Data
In the CY 2011 final rule with comment period, we finalized our
policy to use the 2010 apartment rental data produced by HUD at the
50th percentile as the proxy for relative cost differences in physician
office rents. However, as part of our analysis required by section
1848(e)(1)(H)(iv) of the Act, we have now examined the suitability of
utilizing 3-year (2006-2008) ACS rental data to serve as a proxy for
physician office rents We believe that the ACS rental data provide a
sufficient degree of reliability and are an appropriate source on which
to base our PE GPCI office rent proxy. We also believe that the ACS
data provide a higher degree of accuracy than the HUD data since the
ACS is updated annually

[[Page 42817]]

and is not based on data collected by the 2000 Census long form.
Moreover, it is our understanding that the Census long form, which is
utilized to collect the necessary base year rents for the HUD Fair
Market Rent (FMR) data, will no longer be available in future years.
Therefore, we are proposing to use the available 2006 through 2008 ACS
rental data for two bedroom residential units as the proxy for
physician office rent. We were not able to collect and analyze 5-year
ACS rental data in time for this proposed rule. We may use 5-year ACS
data in future rulemaking decisions and would welcome public comments
regarding utilization of the 5-year ACS rental data as a proxy for
physician office rent.
We believe the ACS data will more accurately reflect geographic
variation in the office rent component. As in past GPCI updates, we
propose to apply a nationally uniform weight to the office rent
component. Although we investigated varying the weight of the office
rent index for different localities, we could not find a comprehensive
data source that provides office rent information that would allow
direct measurement of the variation in this expense among fee schedule
areas. Therefore, we are proposing to use the 2006-based MEI weight for
fixed capital and utilities as the weight for the office rent category
in the PE GPCI, and using the ACS residential rent data to develop the
practice expense GPCI value. We welcome public comments on whether
there are potential data sources (especially publicly available
sources) that would readily provide comprehensive office rent
information that would allow us to accurately measure the geographic
variation in this expense among fee schedule areas.
(C) Employee Wage Analysis
Accurately evaluating the relative price that physicians pay for
labor inputs requires both a mechanism for selecting the occupations to
include in the employee wage index and identifying an accurate measure
of the wages for each occupation. We received comments during the CY
2011 rulemaking cycle noting that the current employee wage methodology
may omit key occupational categories for which cost varies
significantly across regions. Commenters suggested including
occupations such as accounting, legal, and information technology in
the employee wage component of the PE GPCI. To address these concerns,
we propose to revise the employee wage index framework within the
practice expense (PE) GPCI. Under this new methodology, we would only
select occupational categories relevant to a physician's practice. We
would use a comprehensive set of wage data from the Bureau of Labor
Statistics Occupational Employment Statistics (BLS OES) specific to the
offices of physicians industry. Utilizing wage and national cost share
weight data from the BLS OES would not only provide a more systematic
approach to determining which occupations should be included in the
non-physician employee wage category of the PE GPCI, but would also
enable us to determine how much weight each occupation should receive
within the index.
Due to its reliability, public availability, level of detail, and
national scope, we propose to use BLS OES data to estimate both
occupation cost shares and hourly wages for purposes of the non-
physician employee wage component of the PE GPCI. The OES panel data
are collected from approximately 200,000 establishments, and provide
employment and wage estimates for about 800 occupations. At the
national level, OES provides estimates for over 450 industry
classifications (using the 3, 4, and 5 digit North American Industry
Classification System (NAICS)), including the Offices of Physicians
industry (NAICS 621100). As described in the census, the Offices of
Physicians industry comprises establishments of health practitioners
having the degree of M.D. (Doctor of Medicine) or D.O. (Doctor of
Osteopathy) primarily engaged in the independent practice of general or
specialized medicine (except psychiatry or psychoanalysis) or surgery.
These practitioners operate private or group practices in their own
offices (such as, centers, clinics) or in the facilities of others,
such as hospitals or Health Maintenance Organization (HMO) medical
centers. The OES data provide significant detail on occupational
categories and offer national level cost share estimates for the
offices of physicians industry.
We also evaluated available ACS occupational data as a potential
data source for the non-physician employee wage PE GPCI subcomponent.
Based on the occupations currently used to calculate employee wages,
the BLS OES captures occupations with greater relevancy to physician
office practices and is a more appropriate data source than the
currently available ACS data. However, we intend to study an expanded
mix of occupations utilizing 5-year ACS data as that data become
available. We welcome comments on our proposal to use the BLS OES
specific to the office of physicians industry. In this proposed
methodology, we weight each occupation based on its share of total
labor cost within the offices of physician industry. Specifically, each
occupation's weight is proportional to the product of its occupation's
employment share and average hourly wage. In this calculation, we use
each occupation's employment level rather than hours worked, because
the BLS OES does not contain industry-specific information describing
the number of hours worked in each occupation (see: http://www.bls.gov/oes/current/naics4_621100.htm). This proposed methodology would
account for 90 percent of the total wage share in the office of
physicians industry. Additionally, this strategy produces 33 individual
occupations with the highest wage shares and would account for many of
the occupations commenters have stated were historically excluded from
the employee wage calculation (for example, accounting, auditors, and
medical transcriptionists), We also welcome public comments on the
potential use of the 5-year ACS data to calculate the employee wage
component of the PE GPCI.
(D) Purchased Services Analysis
For CY 2012, we are proposing to geographically adjust the labor-
related industries within the ``all other services'' and ``other
professional expenses'' categories of the MEI. In response to
commenters who stated that these purchased services were labor-related
and should be adjusted geographically, we agreed to examine this issue
further in the CY 2011 final rule with comment period and refrained
from making any changes. Based on our subsequent examination of this
issue, we believe it would be appropriate to geographically adjust for
the labor-related component of purchased services within the ``All
Other Services'' and ``Other Professional Expenses'' categories using
BLS wage data. In total, there are 63 industries, or cost categories,
accounted for within the ``all other services'' and ``other
professional services'' categories of the 2006-based MEI. As we
established for purposes of the hospital wage index in 74 FR 43845, we
define a cost category as labor-related if the cost category is defined
as being both labor intensive and its costs vary with, or are
influenced by the local labor market. The total proposed purchased
services component accounts for 8.095 percent of total practice cost.
However, only 5.011 percentage points (of the total 8.095 percentage
points assigned to purchased services) are defined as labor-related and
thus adjusted for locality cost differences. These 5.011 percentage
points represent

[[Page 42818]]

cost categories that we believe are labor intensive and have costs that
vary with, or are influenced by, the local labor market. The labor-
related cost categories include but are not limited to building
services (such as janitorial and landscaping), security services, and
advertising services. The remaining weight assigned to the non-labor-
related industries (3.084 percentage points) represent industries that
do not meet the criteria of being labor intensive or having their costs
vary with the local labor market.
In order to calculate the labor-related and non-labor-related
shares, we would use a similar methodology that is employed in
estimating the labor-related share of various CMS market baskets. A
more detailed explanation of this methodology can be found under the
supporting documents section of the CY 2012 PFS proposed rule web page
at http://www.cms.gov/PhysicianFeeSched/.
We believe our analysis, during 2010 and this year, of the current
methods of establishing PE GPCIs and our evaluation of data that fairly
and reliably establish distinctions in the cost of operating a medical
practice in the different fee schedule areas meet the statutory
requirements of section 1848(e)(1)(H)(iv) of the Act. A more detailed
discussion of our analysis of current methods of establishing PE GPCIs
and evaluation of data sources is included in Acumen's draft report
entitled, ``Proposed Revisions to the Sixth Update of the Geographic
Practice Cost Index.'' Acumen's draft report and associated analysis of
the proposed GPCI revisions, including the PE GPCIs, will be made
publicly available on the CMS Web site. The draft report may be
accessed from the PFS Web site at: http://www.cms.gov/PhysicianFeeSched/ under the ``Downloads'' section of the CY 2012 PFS
proposed rule web page.
Additionally, see section VII.B. of this proposed rule for Table
66, which reflects the GAF impacts resulting from these proposals. As
the table demonstrates, the primary driver of the CY 2012 impact is the
expiration of the work GPCI floor which had produced non-budget neutral
increases to the CY 2011 GPCIs for lower cost areas as authorized under
the Affordable Care Act the Medicare and Medicaid Extenders Act (MMEA).
(E) Determining the PE GPCI Cost Share Weights
To determine the cost share weights for the CY 2012 GPCIs, we are
proposing to use the weights established in the 2006-based MEI. The MEI
was rebased and revised in the CY 2011 final rule with comment period
to reflect the weighted-average annual price change for various inputs
needed to provide physicians' services. As discussed in detail in that
section (75 FR 73262 through 73277), the proposed expense categories in
the MEI, along with their respective weights, were primarily derived
from data collected in the 2006 AMA PPIS for self-employed physicians
and selected self-employed non-medical doctor specialties. Since we
have historically updated the GPCI cost share weights consistent with
the most recent update to the MEI, and because we have addressed
commenter concerns regarding the inclusion of the weight assigned to
utilities with office rent and geographically adjusted for the labor
intensive industries within the ``all other services'' and ``other
professional expenses'' MEI categories, we believe it is appropriate to
adopt the 2006-based MEI cost share weights.
(i) Practice Expense
For the cost share weight for the proposed CY 2012 PE GPCIs, we
would use the 2006-based MEI weight for the PE category of 51.734
percent minus the professional liability insurance category weight of
4.295 percent. Therefore, we propose a cost share weight for the PE
GPCIs of 47.439 percent.
(ii) Employee Compensation
For the employee compensation portion of the PE GPCIs, we would use
the non-physician employee compensation category weight of 19.153
percent reflected in the 2006-based MEI.
(iii) Office Rent
We are proposing that the weight for the office rent component be
revised from 12.209 percent to 10.223 percent. The 12.209 percent
office rent GPCI weight was set equal to the 2000-based MEI cost weight
for office expenses, which was calculated using the American Medical
Association's (AMA) Socioeconomic Monitoring Survey (SMS). The 12.209
percent reflected the expenses for rent, depreciation on medical
buildings, mortgage interest, telephone, and utilities. We are
proposing to set the GPCI office rent equal to 10.223 percent
reflecting the 2006-based MEI cost weights (75 FR 73263) for fixed
capital (reflecting the expenses for rent, depreciation on medical
buildings and mortgage interest) and utilities. We are no longer
including telephone costs in the GPCI office rent cost weight because
we believe these expenses do not vary by geographic area.
Consistent with the revised and rebased 2006-based MEI which was
adopted in the CY 2011 final rule with comment period (75 FR 73263), we
disaggregated the broader office expenses component for the PE GPCI
into 10 new cost categories. In this disaggregation, the fixed capital
component is the office expense category applicable to the office rent
component of the PE GPCI. As discussed in the section dealing with
office rent, we are proposing to use 2006-2008 ACS rental data as the
proxy for physician office rent. This data represents a gross rent
amount and includes data on utilities expenditures. Since it is not
possible to separate the utilities component of rent for all ACS survey
respondents, it was necessary to combine these two components to
calculate office rent and by extension, we propose combining those two
cost categories when assigning a weight to the office rent component.
(iv) Purchased Services
As discussed in the previous paragraphs, a new purchased services
index was created to geographically adjust the labor-related components
of the ``All Other Services'' and ``Other Professional Expenses''
categories of the MEI office expense. In order to calculate the
purchased services index, we are proposing to merge the corresponding
weights of these two categories to form a combined purchased services
weight of 8.095 percent. However, we are proposing to only adjust for
locality cost differences of the labor-related share of the industries
comprising the ``All Other Services'' and ``Other Professional
Expenses'' categories. We have determined that only 5.011 percentage
points of the 8.095 percentage points would be adjusted for locality
cost differences (5.011 adjusted purchased service + 3.084 non-adjusted
purchased services = 8.095 total cost share weight).
(v) Equipment, Supplies, and Other Misc Expenses
To calculate the proposed medical equipment, supplies, and other
miscellaneous expenses component, we removed professional liability
(4.295 percentage points), non-physician employee compensation (19.153
percentage points), fixed capital/utilities (10.223 percentage points),
and purchased services (8.095 percentage points) from the PE category
weight (51.734 percent). Therefore, we are proposing a cost share
weight for the medical equipment, supplies, and other miscellaneous
expenses component of 9.968 percent. Consistent with previous
methodology, this component of the PE

[[Page 42819]]

GPCI is not adjusted for geographical variation.
(vi) Physician Work and Malpractice GPCIs
Furthermore, we propose to use the physician compensation cost
category weight of 48.266 percent as the proposed work GPCI cost share
weight; and we propose to use the professional liability insurance
weight of 4.295 percent for the malpractice GPCI cost share weight. We
believe our analysis and evaluation of the weights assigned to each of
the categories within the PE GPCIs satisfies the statutory requirements
of section 1848(e)(1)(H)(iv) of the Act.
The proposed cost share weights for the CY 2012 GPCIs are displayed
in Table 12. For a detailed discussion regarding the GPCI cost share
weights and how the weights account for local and national adjustments,
see Acumen's ``Proposed Revisions to the Sixth Update of the Geographic
Practice Cost Index'' draft report at (http://www.cms.gov/PhysicianFeeSched/)

Table 12--Cost Share Weights for CY 2012 GPCI Update
------------------------------------------------------------------------
Current cost Proposed cost
Expense category share weights share weights
% %
------------------------------------------------------------------------
Physician Work.......................... 52.466 48.266
Practice Expense........................ 43.669 47.439
Employee Compensation................... 18.654 19.153
Office Rent............................. 12.209 \1\ 10.223
Purchased Services...................... N/A \2\ 8.095
Equipment, Supplies, and Other.......... 12.806 9.968
Malpractice Insurance................... 3.865 4.295
------------------------------------------------------------------------
\1\ ACS rental data is a measurement of gross rent and includes
utilities. In order to accurately capture the utility measurement
present in the ACS two bedroom gross rent data, the cost share weight
for utilities is combined with the fixed capital portion to form the
office rent index.
\2\ The cost share weight for purchased services contains both an
adjusted and non-adjusted portion. (5.011 percentage points
geographically adjusted purchased services + 3.084 percentage points
non-adjusted purchased services).

(F) PE GPCI Floor for Frontier States
Section 10324(c) of the Affordable Care Act added a new
subparagraph (I) under section 1848(e) (1) of the Act to establish a
1.0 PE GPCI floor for physicians' services furnished in frontier States
effective January 1, 2011. In accordance with section 1848(e)(1)(I) of
the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for
physicians' services furnished in States determined to be frontier
States. There are no proposed changes to those states identified as
``frontier States'' for the CY 2012 proposed rule. The qualifying
States are reflected in Table 13. In accordance with statute, we will
apply a 1.0 GPCI floor for these states in CY 2012.

Table 13--Frontier States Under Section 1848(E)(1)(I) of the Act
[As added by section 10324(c) of the Affordable Care Act]
----------------------------------------------------------------------------------------------------------------
Percent frontier
counties (relative
State Total counties Frontier counties to counties in the
State)
----------------------------------------------------------------------------------------------------------------
Montana....................................... 56 45 80
Wyoming....................................... 23 17 74
North Dakota.................................. 53 36 68
Nevada........................................ 17 11 65
South Dakota.................................. 66 34 52
----------------------------------------------------------------------------------------------------------------

(2) Summary of CY 2012 PE GPCI Proposal
The PE GPCIs include four components: Employee compensation, office
rent, purchased services, and medical equipment, supplies and
miscellaneous expenses. Our proposals relating to each of these
components are as follows:
Employee Compensation: We are proposing to geographically
adjust the employee compensation using the 2006 through 2008 BLS OES
data specific to the offices of physicians industry along with
nationwide wage data to determine the employee compensation component
of the PE GPCIs. The proposed employee compensation component accounts
for 19.153 percent of total practice costs or 40.4 percent of the total
PE GPCIs.
Office Rents: We are proposing to geographically adjust
office rent using the 2006-2008 ACS residential rental data for two
bedroom units as a proxy for the relative cost differences in physician
office rents. In addition, we are proposing to consolidate the
utilities into the office rent weight to account for the utility data
present in ACS gross rent data. The proposed office rent component
accounts for 10.223 percent of total practice cost or 21.5 percent of
the PE GPCIs.
Purchased Services: We are proposing to geographically
adjust the labor-related component of purchased services within the
``All Other Services'' and ``Other Professional Expenses ``categories
using BLS wage data. The methodology employed to estimate purchased
services expenses is based on the same data used to estimate the
employee wage index. Specifically, the proposed purchased services
framework relies on BLS OES wage data to estimate the price of labor in
industries that physician offices frequently rely upon for contracted
services. As previously mentioned, the labor-related share adjustment
for each industry was derived using a similar methodology as is
employed for estimating the labor-related shares of CMS' market
baskets.

[[Page 42820]]

Furthermore, the weight assigned to each industry within the purchased
services index was based on the 2006-based MEI. A more detailed
discussion regarding CMS market baskets, as well as the corresponding
definitions of a ``labor- related share'' and a ``non -labor-related
share'' can be viewed at (74 FR 43845). The total proposed purchased
services component accounts for 8.095 percent of total practice cost or
17.1 percent of the PE GPCI. However, the proportion of purchased
services that is geographically adjusted for locality cost difference
is 5.011 percentage points of the 8.095 percentage points or 10.6
percent of the PE GPCI.
Medical Equipment, Supplies, and other Miscellaneous
Expenses: We continue to believe that items such as medical equipment
and supplies have a national market and that input prices do not vary
appreciably among geographic areas. As discussed in previous GPCI
updates in the CY 2008 and CY 2011 PFS proposed rules, specifically the
fifth GPCI update (72 FR 38138) and sixth GPCI update (75 FR 73256),
respectively, some price differences may exist, but we believe these
differences are more likely to be based on volume discounts rather than
on geographic market differences. For example, large physicians'
practices may utilize more medical equipment and supplies and therefore
may or may not receive volume discounts on some of these items. To the
extent that such discounting may exist, it is a function of purchasing
volume and not geographic location. The proposed medical equipment,
supplies, and miscellaneous expenses component was factored into the PE
GPCIs with a component index of 1.000. The proposed medical equipment,
supplies, and other miscellaneous expense component account for 9.968
percent of total practice cost or 21.0 percent of the PE GPCI.
c. Malpractice GPCIs
The malpractice GPCIs are calculated based on insurer rate filings
of premium data for $1 million to $3 million mature ``claims-made''
policies (policies for claims made rather than services furnished
during the policy term). We chose claims-made policies because they are
the most commonly used malpractice insurance policies in the United
States. We used claims-made policy rates rather than occurrence
policies because a claims-made policy covers physicians for the policy
amount in effect when the claim is made, regardless of the date of
event in question; whereas an occurrence policy covers a physician for
the policy amount in effect at the time of the event in question, even
if the policy is expired. Based on the data we analyzed, we are
proposing to revise the cost share weight for the malpractice GPCI from
3.865 percent to 4.295 percent.
3. Payment Localities
The current PFS locality structure was developed and implemented in
1997. There are currently 89 total PFS localities; 34 localities are
Statewide areas (that is, only one locality for the entire State).
There are 52 localities in the other 18 States, with 10 States having 2
localities, 2 States having 3 localities, 1 State having 4 localities,
and 3 States having 5 or more localities. The District of Columbia,
Maryland, Virginia suburbs, Puerto Rico, and the Virgin Islands are
additional localities that make up the remainder of the total of 89
localities. The development of the current locality structure is
described in detail in the CY 1997 PFS proposed rule (61 FR 34615) and
the subsequent final rule with comment period (61 FR 59494).
As we have previously noted in the CYs 2008 and 2009 proposed rules
(72 FR 38139 and 73 FR 38513), any changes to the locality
configuration must be made in a budget neutral manner within a State
and can lead to significant redistributions in payments. For many
years, we have not considered making changes to localities without the
support of a State medical association in order to demonstrate
consensus for the change among the professionals whose payments would
be affected (since such changes would be redistributive, with some
increasing and some decreasing). However, we have recognized that, over
time, changes in demographics or local economic conditions may lead us
to conduct a more comprehensive examination of existing payment
localities.
For the past several years, we have been involved in discussions
with physician groups and their representatives about recent shifts in
relative demographics and economic conditions. We explained in the CY
2008 PFS final rule with comment period that we intended to conduct a
thorough analysis of potential approaches to reconfiguring localities
and would address this issue again in future rulemaking. For more
information, we refer readers to the CY 2008 PFS proposed rule (72 FR
38139) and subsequent final rule with comment period (72 FR 66245).
As a follow-up to the CY 2008 PFS final rule with comment period,
we contracted with Acumen to conduct a preliminary study of several
options for revising the payment localities on a nationwide basis. The
contractor's interim report was posted on the CMS Web site on August
21, 2008, and we requested comments from the public. The report
entitled, ``Review of Alternative GPCI Payment Locality Structures,''
remains accessible from the CMS PFS Web page under the heading
``Interim Study of Alternative Payment Localities under the PFS.'' The
report may also be accessed directly from the following link: http://www.cms.hhs.gov/PhysicianFeeSched/10_Interim_Study.asp#TopOfPage.
We note that the discussion of PFS payment localities and our
preliminary study of alternative payment locality configurations in the
CY 2011 PFS proposed rule was intended for informational purposes only.
We are not making any proposals regarding the PFS locality
configurations for CY 2012.
4. Report From the Institute of Medicine
At our request, the Institute of Medicine is conducting a study of
the geographic adjustment factors in Medicare payment. It is a
comprehensive empirical study of the geographic adjustment factors
established under sections 1848(e) (GPCI) and 1886(d)(3)(E) (hospital
wage index) of the Act. These adjustments are designed to ensure
Medicare payment fees and rates reflect differences in input costs
across geographic areas. The factors IOM is evaluating include the--
Accuracy of the adjustment factors;
Methodology used to determine the adjustment factors, and
Sources of data and the degree to which such data are
representative.
Within the context of the U.S. health care marketplace, the IOM is
also evaluating and considering the--
Effect of the adjustment factors on the level and
distribution of the health care workforce and resources, including--
++ Recruitment and retention taking into account mobility between
urban and rural areas;
++ Ability of hospitals and other facilities to maintain an
adequate and skilled workforce; and
++ Patient access to providers and needed medical technologies;
Effect of adjustment factors on population health and
quality of care; and
Effect of the adjustment factors on the ability of
providers to furnish efficient, high value care.
The first report ``Geographic Adjustment in Medicare Payment, Phase
I: Improving Accuracy'' is a ``Phase I report'' that was released June
1, 2011 and is available on the IOM Web site

[[Page 42821]]

http://www.iom.edu/Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx. It evaluates the accuracy of
geographic adjustment factors and the methodology and data used to
calculate them. The IOM is conducting further study on GPCI payment
issues, and a supplemental report is expected to be issued in the
summer of 2011 to address those issues. In its final report, scheduled
to be released in the spring of 2012, the IOM will consider the role of
Medicare payments in addressing matters such as the distribution of the
health care workforce, population health, and the ability of providers
to produce high-value, high-quality health care.
The recommendations specifically related to the GPCI included in
IOM'sfirst phase report are summarized below:
Recommendation 2-1: The same labor market definition
should be used for both the hospital wage index and the physician
geographic adjustment factor. Metropolitan statistical areas and
Statewide non-metropolitan statistical areas should serve as the basis
for defining these labor markets.
Recommendation 5-1: The IOM recommends constructing the
geographic practice cost indexes with the full range of occupations
employed in physicians' offices, each with a fixed national weight
based on the hours of each occupation employed in physicians' offices
nationwide.
Recommendation 5-2. The committee recommends that the
Centers for Medicare and Medicaid Services and the Bureau of Labor
Statistics develop an agreement allowing the Bureau of Labor Statistics
to analyze confidential data for the Centers for Medicare and Medicaid
Services.
Recommendation 5-3: The committee recommends that a new
source of information be identified to obtain data on commercial office
rent per square foot.
Because of the timeline related to the release of the PFS proposed
rule, we did not have adequate time to fully evaluate these
recommendations in the CY 2012 proposed rule. As previously discussed,
the IOM will be releasing a supplemental report in the summer of 2011
that will address additional analysis related to the physician work
GPCI. We will address the IOM recommendations once we are able to
assess the IOM's full recommendations and have given our stakeholders
an opportunity to evaluate them. Any changes to the GPCIs in response
to the aforementioned IOM recommendations will be proposed through the
rulemaking process to allow an opportunity for public notice comment
before making revisions.

III. Medicare Telehealth Services for the Physician Fee Schedule

A. Billing and Payment for Telehealth Services

1. History
Prior to January 1, 1999, Medicare coverage for services delivered
via a telecommunications system was limited to services that did not
require a face-to-face encounter under the traditional model of medical
care. Examples of these services included interpretation of an x-ray,
or electrocardiogram, or electroencephalogram tracing, and cardiac
pacemaker analysis.
Section 4206 of the BBA provided for coverage of, and payment for,
consultation services delivered via a telecommunications system to
Medicare beneficiaries residing in rural health professional shortage
areas (HPSAs) as defined by the Public Health Service Act.
Additionally, the BBA required that a Medicare practitioner
(telepresenter) be with the patient at the time of a teleconsultation.
Further, the BBA specified that payment for a teleconsultation had to
be shared between the consulting practitioner and the referring
practitioner and could not exceed the fee schedule payment which would
have been made to the consultant for the service provided. The BBA
prohibited payment for any telephone line charges or facility fees
associated with the teleconsultation. We implemented this provision in
the CY 1999 PFS final rule with comment period (63 FR 58814).
Effective October 1, 2001, section 223 of the Medicare, Medicaid
and SCHIP Benefits Improvement Protection Act of 2000 (Pub. L. 106-
554)(BIPA) added a new section 1834(m) to the Act which significantly
expanded Medicare telehealth services. Section 1834(m)(4)(F)(i) of the
Act defines Medicare telehealth services to include consultations,
office visits, office psychiatry services, and any additional service
specified by the Secretary, when delivered via a telecommunications
system. We first implemented this provision in the CY 2002 PFS final
rule with comment period (66 FR 55246). Section 1834(m)(4)(F)(ii) of
the Act required the Secretary to establish a process that provides for
annual updates to the list of Medicare telehealth services. We
established this process in the CY 2003 PFS final rule with comment
period (67 FR 79988).
As specified in regulations at Sec. 410.78(b), we generally
require that a telehealth service be furnished via an interactive
telecommunications system. Under Sec. 410.78(a)(3), an interactive
telecommunications system is defined as multimedia communications
equipment that includes, at a minimum, audio and video equipment
permitting two-way, real time interactive communication between the
patient and the practitioner at the distant site. Telephones, facsimile
machines, and electronic mail systems do not meet the definition of an
interactive telecommunications system. An interactive
telecommunications system is generally required as a condition of
payment; however, section 1834(m)(1) of the Act does allow the use of
asynchronous ``store-and-forward'' technology in delivering these
services when the originating site is a Federal telemedicine
demonstration program in Alaska or Hawaii. As specified in regulations
at Sec. 410.78(a)(1), store and forward means the asynchronous
transmission of medical information from an originating site to be
reviewed at a later time by the practitioner at the distant site.
Medicare telehealth services may be provided to an eligible
telehealth individual notwithstanding the fact that the individual
practitioner providing the telehealth service is not at the same
location as the beneficiary. An eligible telehealth individual means an
individual enrolled under Part B who receives a telehealth service
furnished at an originating site. As specified in BIPA, originating
sites are limited under section 1834(m)(3)(C) of the Act to specified
medical facilities located in specific geographic areas. The initial
list of telehealth originating sites included the office of a
practitioner, a critical access hospital (CAH), a rural health clinic
(RHC), a federally qualified health center (FQHC) and a hospital (as
defined in Section 1861(e)). More recently, section 149 of the Medicare
Improvements for Patients and Providers Act of 2008 (Pub. L. 110-275)
(MIPPA) expanded the list of telehealth originating sites to include
hospital-based renal dialysis centers, skilled nursing facilities
(SNFs), and community mental health centers (CMHCs). In order to serve
as a telehealth originating site, these sites must be located in an
area designated as a rural health professional shortage area (HPSA), in
a county that is not in a metropolitan statistical area (MSA), or must
be an entity that participates in a Federal telemedicine demonstration
project that has been approved by (or receives funding from) the
Secretary of Health and Human Services as of

[[Page 42822]]

December 31, 2000. Finally, section 1834(m) of the Act does not require
the eligible telehealth individual to be presented by a practitioner at
the originating site.
2. Current Telehealth Billing and Payment Policies
As noted above, Medicare telehealth services can only be furnished
to an eligible telehealth beneficiary in an originating site. An
originating site is defined as one of the specified sites where an
eligible telehealth individual is located at the time the service is
being furnished via a telecommunications system. In general,
originating sites must be located in a rural HPSA or in a county
outside of an MSA. The originating sites authorized by the statute are
as follows:
Offices of a physician or practitioner
Hospitals
CAHs
RHCs
FQHCs
Hospital-Based Or Critical Access Hospital-Based Renal
Dialysis Centers (including Satellites)
SNFs
CMHCs
Currently approved Medicare telehealth services include the
following:
Initial inpatient consultations
Follow-up inpatient consultations
Office or other outpatient visits
Individual psychotherapy
Pharmacologic management
Psychiatric diagnostic interview examination
End-stage renal disease (ESRD) related services
Individual and group medical nutrition therapy (MNT)
Neurobehavioral status exam
Individual and group health and behavior assessment and
intervention (HBAI)
Subsequent hospital care
Subsequent nursing facility care
Individual and group kidney disease education (KDE)
Individual and group diabetes self-management training
services (DSMT)
In general, the practitioner at the distant site may be any of the
following, provided that the practitioner is licensed under State law
to furnish the service being furnished via a telecommunications system:
Physician;
Physician assistant (PA);
Nurse practitioner (NP);
Clinical nurse specialist (CNS);
Nurse-midwife;
Clinical psychologist;
Clinical social worker; or a
Registered dietitian or nutrition professional.
Practitioners furnishing Medicare telehealth services are located
at a distant site, and they submit claims for telehealth services to
the Medicare contractors that process claims for the service area where
their distant site is located. Section 1834(m)(2)(A) of the Act
requires that a practitioner who furnishes a telehealth service to an
eligible telehealth individual be paid an amount equal to the amount
that the practitioner would have been paid if the service had been
furnished without the use of a telecommunications system. Distant site
practitioners must submit the appropriate HCPCS procedure code for a
covered professional telehealth service, appended with the -GT (Via
interactive audio and video telecommunications system) or -GQ (Via
asynchronous telecommunications system) modifier. By reporting the -GT
or -GQ modifier with a covered telehealth procedure code, the distant
site practitioner certifies that the beneficiary was present at a
telehealth originating site when the telehealth service was furnished.
The usual Medicare deductible and coinsurance policies apply to the
telehealth services reported by distant site practitioners.
Section 1834(m)(2)(B) of the Act provides for payment of a facility
fee to the originating site. To be paid the originating site facility
fee, the provider or supplier where the eligible telehealth individual
is located must submit a claim with HCPCS code Q3014 (Telehealth
originating site facility fee), and the provider or supplier is paid
according to the applicable payment methodology for that facility or
location. The usual Medicare deductible and coinsurance policies apply
to HCPCS code Q3014. By submitting HCPCS code Q3014, the originating
site authenticates that it is located in either a rural HPSA or non-MSA
county or is an entity that participates in a Federal telemedicine
demonstration project that has been approved by (or receives funding
from) the Secretary of Health and Human Services as of December 31,
2000 as specified in section 1834(m)(4)(C)(i)(III) of the Act.
As previously described, certain professional services that are
commonly furnished remotely using telecommunications technology, but
that do not require the patient to be present in-person with the
practitioner when they are furnished, are covered and paid in the same
way as services delivered without the use of telecommunications
technology when the practitioner is in-person at the medical facility
furnishing care to the patient. Such services typically involve
circumstances where a practitioner is able to visualize some aspect of
the patient's condition without the patient being present and without
the interposition of a third person's judgment. Visualization by the
practitioner can be possible by means of x-rays, electrocardiogram or
electroencephalogram tracings, tissue samples, etc. For example, the
interpretation by a physician of an actual electrocardiogram or
electroencephalogram tracing that has been transmitted via telephone
(that is, electronically, rather than by means of a verbal description)
is a covered physician's service. These remote services are not
Medicare telehealth services as defined under section 1834(m) of the
Act. Rather, these remote services that utilize telecommunications
technology are considered physicians' services in the same way as
services that are furnished in-person without the use of
telecommunications technology; they are paid under the same conditions
as in-person physicians' services (with no requirements regarding
permissible originating sites), and should be reported in the same way
(that is, without the -GT or -GQ modifier appended).

B. Requests for Adding Services to the List of Medicare Telehealth
Services

As noted above, in the December 31, 2002 Federal Register (67 FR
79988), we established a process for adding services to or deleting
services from the list of Medicare telehealth services. This process
provides the public with an ongoing opportunity to submit requests for
adding services. We assign any request to make additions to the list of
Medicare telehealth services to one of the following categories:
Category 1: Services that are similar to professional
consultations, office visits, and office psychiatry services that are
currently on the list of telehealth services. In reviewing these
requests, we look for similarities between the requested and existing
telehealth services for the roles of, and interactions among, the
beneficiary, the physician (or other practitioner) at the distant site
and, if necessary, the telepresenter. We also look for similarities in
the telecommunications system used to deliver the proposed service, for
example, the use of interactive audio and video equipment.
Category 2: Services that are not similar to the current
list of telehealth services. Our review of these requests includes an
assessment of whether the use of a telecommunications system to deliver
the service produces similar

[[Page 42823]]

diagnostic findings or therapeutic interventions as compared with the
in-person delivery of the same service. Requestors should submit
evidence showing that the use of a telecommunications system does not
affect the diagnosis or treatment plan as compared to in-person
delivery of the requested service.
Since establishing the process to add or remove services from the
list of approved telehealth services, we have added the following to
the list of Medicare telehealth services: individual and group HBAI
services; psychiatric diagnostic interview examination; ESRD services
with 2 to 3 visits per month and 4 or more visits per month (although
we require at least 1 visit a month to be furnished in-person by a
physician, CNS, NP, or PA in order to examine the vascular access
site); individual and group MNT; neurobehavioral status exam; initial
and follow-up inpatient telehealth consultations for beneficiaries in
hospitals and skilled nursing facilities (SNFs); subsequent hospital
care (with the limitation of one telehealth visit every 3 days);
subsequent nursing facility care (with the limitation of one telehealth
visit every 30 days); individual and group KDE; and individual and
group DSMT services (with a minimum of 1 hour of in-person instruction
to ensure effective injection training).
Requests to add services to the list of Medicare telehealth
services must be submitted and received no later than December 31 of
each calendar year to be considered for the next rulemaking cycle. For
example, requests submitted before the end of CY 2011 will be
considered for the CY 2013 proposed rule. Each request for adding a
service to the list of Medicare telehealth services must include any
supporting documentation the requester wishes us to consider as we
review the request. Because we use the annual PFS rulemaking process as
a vehicle for making changes to the list of Medicare telehealth
services, requestors should be advised that any information submitted
is subject to public disclosure for this purpose. For more information
on submitting a request for an addition to the list of Medicare
telehealth services, including where to mail these requests, we refer
readers to the CMS Web site at http://www.cms.gov/telehealth/.

C. Submitted Requests for Addition to the List of Telehealth Services
for CY 2012

We received requests in CY 2010 to add the following services as
Medicare telehealth services effective for CY 2012: (1) Smoking
cessation services; (2) critical care services; (3) domiciliary or rest
home evaluation and management services; (4) genetic counseling
services; (5) online evaluation and management services; (6) data
collection services; and (7) audiology services. The following presents
a discussion of these requests, including our proposals for additions
to the CY 2012 telehealth list.
1. Smoking Cessation Services
The American Telemedicine Association and the Marshfield Clinic
submitted requests to add smoking cessation services, reported by CPT
codes 99406 (Smoking and tobacco use cessation counseling visit;
intermediate, greater than 3 minutes up to 10 minutes) and 99407
(Smoking and tobacco use cessation counseling visit; intensive, greater
than 10 minutes) to the list of approved telehealth services for CY
2012 on a category 1 basis.
Smoking Cessation services are defined as face-to-face behavior
change interventions. We believe the interaction between a practitioner
and a beneficiary receiving smoking cessation services is similar to
the education, assessment, and counseling elements of individual KDE
reported by HCPCS code G0420 (Face-to-face educational services related
to the care of chronic kidney disease; individual, per session, per 1
hour), and individual MNT services, reported by HCPCS code G0270
(Medical nutrition therapy; reassessment and subsequent intervention(s)
following second referral in the same year for change in diagnosis,
medical condition or treatment regimen (including additional hours
needed for renal disease), individual, face-to-face with the patient,
each 15 minutes); CPT code 97802 (Medical nutrition therapy; initial
assessment and intervention, individual, face-to-face with the patient,
each 15 minutes); and CPT code 97803 (Medical nutrition therapy; re-
assessment and intervention, individual, face-to-face with the patient,
each 15 minutes), all services that are currently on the telehealth
list.
Therefore, we are proposing to add CPT codes 99406 and 99407 to the
list of telehealth services for CY 2012 on a category 1 basis.
Additionally, we are proposing to add HCPCS codes G0436 (Smoking and
tobacco cessation counseling visit for the asymptomatic patient;
intermediate, greater than 3 minutes, up to 10 minutes) and G0437
(Smoking and tobacco cessation counseling visit for the asymptomatic
patient; intensive, greater than 10 minutes) to the list of telehealth
services for CY 2012 since these related services are similar to the
codes for which we received formal public requests.
Consistent with this proposal, we are also proposing to revise our
regulations at Sec. 410.78(b) and Sec. 414.65(a)(1) to include these
smoking cessation services as Medicare telehealth services.
2. Critical Care Services
The American Telemedicine Association and the Marshfield Clinic
submitted requests to add critical care service CPT codes 99291
(Critical care, evaluation and management of the critically ill or
critically injured patient; first 30-74 minutes) and 99292 (Critical
care, evaluation and management of the critically ill or critically
injured patient; each additional 30 minutes) to the list of approved
telehealth services. We previously received this request for the CY
2009 and CY 2010 PFS rulemaking cycles (73 FR 38517, 73 FR 69744-5, 74
FR 33548, and 74 FR 61764) and did not add the codes on a category 1
basis due to the acute nature of the typical patient. We continue to
believe that patients requiring critical care services are more acutely
ill than those patients typically receiving any service currently on
the list of telehealth services. Therefore, we cannot consider critical
care services on a category 1 basis.
In the CY 2009 PFS proposed rule (73 FR 38517), we explained that
we had no evidence suggesting that the use of telehealth could be a
reasonable surrogate for the in-person delivery of critical care
services; therefore, we would not add the services on a category 2
basis. Requestors submitted new studies for CY 2012, but none
demonstrated that comparable outcomes to a face-to-face encounter can
be achieved using telehealth to deliver these services. The studies we
received primarily addressed other issues relating to telehealth
services. Some studies addressed the cost benefits and cost savings of
telehealth services. Others focused on the positive outcomes of
telehealth treatment when compared with no treatment at all. One
submitted study addressed the equivalency of patient outcomes for
telehealth services delivered to patients in emergency rooms, but the
study's authors specifically restricted their population to patients
whose complaints were not considered to be genuine emergencies. Given
that limitation, it seems unlikely that any of these patients would
have required critical care services as defined by CPT codes 99291 and
99292.
We note that consultations are included on the list of Medicare
telehealth services and may be billed by practitioners furnishing
services to critically ill patients. These services are described by
the following HCPCS codes: G0425 (Initial inpatient

[[Page 42824]]

telehealth consultation, typically 30 minutes communicating with the
patient via telehealth), G0426 (Initial inpatient telehealth
consultation, typically 50 minutes communicating with the patient via
telehealth), G0427 (Initial inpatient telehealth consultation,
typically 70 minutes or more communicating with the patient via
telehealth), G0406 (Follow-up inpatient telehealth consultation,
limited, physicians typically spend 15 minutes communicating with the
patient via telehealth), G0407 (Follow-up inpatient telehealth
consultation, intermediate, physicians typically spend 25 minutes
communicating with the patient via telehealth), and G0408 (Follow-up
inpatient telehealth consultation, complex, physicians typically spend
35 minutes or more communicating with the patient via telehealth).
Critical care services, as reported by the applicable CPT codes and
described in the introductory language in the CPT book, consist of
direct delivery by a physician of medical care for a critically ill or
injured patient, including high complexity decision-making to assess,
manipulate, and support vital system functions. Critical care requires
interpretation of multiple physiologic parameters and/or application of
advanced technologies, including temporary pacing, ventilation
management, and vascular access services. The payment rates under the
PFS reflect this full scope of physician work. To add the critical
services to the telehealth list would require the physician to be able
to deliver this full scope of services via telehealth. Based on the
code descriptions, we have previously believed that it is not possible
to deliver the full range of critical care services without a physical
physician presence with the patient.
We note that there are existing Category III CPT codes (temporary
codes for emerging services that allow data collection) for remote
real-time interactive video conferenced critical care services that,
consistent with our treatment of other Category III CPT codes, are not
nationally priced under the PFS. The fact that the CPT Editorial Panel
created these additional Category III CPT codes suggests to us that
these video-conferenced critical care services are not the same as the
in-person critical care services requested for addition to the
telehealth list.
Because we did not find evidence that use of a telecommunications
system to deliver critical care services produces similar diagnostic or
therapeutic outcomes as compared with the face-to-face deliver of the
services, we are not proposing to add critical care services (as
described by CPT codes 99291 and 99292) to the list of approved
telehealth services. We reiterate that our decision not to propose to
add critical care services to the list of approved telehealth services
does not preclude physicians from furnishing telehealth consultations
to critically ill patients using the consultation codes that are on the
list of Medicare telehealth services.
3. Domiciliary or Rest Home Evaluation and Management Services
The American Telemedicine Association and the Marshfield Clinic
submitted requests to add the following domiciliary or rest home
evaluation and management CPT codes to the telehealth list for CY 2012:
99334 (Domiciliary or rest home visit for the evaluation
and management of an established patient, which requires at least 2 of
these 3 key components: A problem focused interval history; a problem
focused examination; or straightforward medical decision making.
Counseling and/or coordination of care with other providers or agencies
are provided consistent with the nature of the problem(s) and the
patient's and/or family's needs. Usually, the presenting problem(s) are
self-limited or minor. Physicians typically spend 15 minutes with the
patient and/or family or caregiver).
99335 (Domiciliary or rest home visit for the evaluation
and management of an established patient, which requires at least 2 of
these 3 key components: An expanded problem focused interval history;
An expanded problem focused examination; Medical decision making of low
complexity. Counseling and/or coordination of care with other providers
or agencies are provided consistent with the nature of the problem(s)
and the patient's and/or family's needs. Usually, the presenting
problem(s) are of low to moderate severity. Physicians typically spend
25 minutes with the patient and/or family or caregiver).
99336 (Domiciliary or rest home visit for the evaluation
and management of an established patient, which requires at least 2 of
these 3 key components: a detailed interval history; a detailed
examination; medical decision making of moderate complexity. Counseling
and/or coordination of care with other providers or agencies are
provided consistent with the nature of the problem(s) and the patient's
and/or family's needs. Usually, the presenting problem(s) are of
moderate to high severity. Physicians typically spend 40 minutes with
the patient and/or family or caregiver).
99337 (Domiciliary or rest home visit for the evaluation
and management of an established patient, which requires at least 2 of
these 3 key components: A comprehensive interval history; a
comprehensive examination; medical decision making of moderate to high
complexity. Counseling and/or coordination of care with other providers
or agencies are provided consistent with the nature of the problem(s)
and the patient's and/or family's needs. Usually, the presenting
problem(s) are of moderate to high severity. The patient may be
unstable or may have developed a significant new problem requiring
immediate physician attention. Physicians typically spend 60 minutes
with the patient and/or family or caregiver).
A domiciliary or rest home is not permitted under current statute
to serve as an originating site for Medicare telehealth services.
Therefore, we are not proposing to add domiciliary or rest home
evaluation and management services to the list of Medicare telehealth
services for CY 2012.
4. Genetic Counseling Services
The American Telemedicine Association and the Marshfield Clinic
submitted requests to add CPT code 96040 (Medical genetics and genetic
counseling services, each 30 minutes face-to-face with patient/family)
to the telehealth list for CY 2012. We note that CPT guidance regarding
reporting genetic counseling and education furnished by a physician to
an individual directs physicians to evaluation and management (E/M) CPT
codes and that services described by CPT code 96040 are provided by
trained genetic counselors. Physicians and nonphysician practitioners
who may independently bill Medicare for their service and who are
counseling individuals would generally report office or other
outpatient evaluation and management (E/M) CPT codes for office visits
that involve significant counseling, including genetic counseling, and
these office visit CPT codes are already on the list of telehealth
services. CPT code 96040 would only be reported by genetic counselors
for genetic counseling services. These practitioners cannot bill
Medicare directly for their professional services and they are also not
on the list of practitioners who can furnish telehealth services
(specified in section 1834(m)(4)(E) of the Act). As such, we do not
believe that it would be necessary or appropriate to add CPT code 96040
to the list of Medicare telehealth services. Therefore, we are not
proposing to add genetic counseling

[[Page 42825]]

services to the list of Medicare telehealth services for CY 2012.
5. Online Evaluation and Management Services
The American Telemedicine Association and the Marshfield Clinic
submitted requests to add CPT code 99444 (Online evaluation and
management service provided by a physician to an established patient,
guardian, or health care provider not originating from a related E/M
service provided within the previous 7 days, using the Internet or
similar electronic communications network) to the list of Medicare
telehealth services.
As we explained in the CY 2008 PFS final rule with comment period
(72 FR 66371), we assigned a status indicator of ``N'' (Non-covered
service) to these services because: (1) These services are non-face-to-
face; and (2) the code descriptor includes language that recognizes the
provision of services to parties other than the beneficiary and for
whom Medicare does not provide coverage (for example, a guardian).
According to section 1834(m)(2)(A) of the Act, Medicare is required
to pay for telehealth services at an amount equal to the amount that a
practitioner would have been paid had such service been furnished
without the use of a telecommunications system. As such, we do not
believe it would be appropriate to make payment for services furnished
via telehealth when those services would not otherwise be covered under
Medicare. Because CPT code 99444 is currently noncovered, we are not
proposing to add online evaluation and management services to the list
of Medicare Telehealth Services for CY 2012.
6. Data Collection Services
The American Telemedicine Association and the Marshfield Clinic
submitted requests to add CPT codes 99090 (Analysis of clinical data
stored in computers (e.g., ECGs, blood pressures, hematologic data))
and 99091(Collection and interpretation of physiologic data (e.g., ECG,
blood pressure, glucose monitoring) digitally stored and/or transmitted
by the patient and/or caregiver to the physician or other qualified
health care professional, requiring a minimum of 30 minutes of time) to
the list of Medicare telehealth services.
As we explained in the CY 2002 PFS final rule with comment period
(66 FR 55309), we assigned a status indicator of ``B'' (Payment always
bundled into payment for other services not specified) to these
services because the associated work is considered part of the pre- and
post-service work of an E/M service. We note that many E/M codes are on
the list of Medicare telehealth services.
According to section 1834(m)(2)(A) of the Act, Medicare is required
to pay for telehealth services an amount equal to the amount that a
practitioner would have been paid had such service been furnished
without the use of a telecommunications system. Similar to the point
noted above for online E/M services, we do not believe it would be
appropriate to make separate payment for services furnished via
telehealth when Medicare would not otherwise make separate payment for
the services. Moreover, we believe the payment for these data
collection services should be bundled into the payment for E/M
services, many of which are already on the Medicare telehealth list.
Because CPT codes 99090 and 99091 are currently bundled, we are not
proposing to add data collection services to the list of Medicare
telehealth services for CY 2012.
7. Audiology Services
The American Academy of Audiology submitted a request that CMS add
services that audiologists provide for balance disorders and hearing
loss to the list of Medicare telehealth services. The request did not
include specific HCPCS codes. Nevertheless, it is not within our
administrative authority to pay audiologists for services furnished via
telehealth. The statute authorizes the Secretary to pay for telehealth
services only when furnished by a physician or a practitioner as
physician or practitioner are defined in sections 1834(m)(4)(D) and (E)
of the Act. Therefore, we are not proposing to add services that are
primarily provided by audiologists to the list of Medicare telehealth
services for CY2012.

D. The Process for Adding HCPCS Codes as Medicare Telehealth Services

Along with its submission of codes for consideration as additions
to the Medicare telehealth list for CY 2012, the American Telemedicine
Association (ATA) also requested that CMS consider revising the annual
process for adding to or deleting services from the list of telehealth
services. The existing process, adopted in the CY 2003 PFS rulemaking
cycle (67 FR 43862 through 43863 and 67 FR 79988 through 79989), is
described in section III.B. of this proposed rule. The following
discussion includes a summary of recent requests by the ATA and other
stakeholders for changes to the established process for adding services
to the telehealth list, an assessment of our historical experience with
the current process including the request review criteria, and our
proposed refinement to the process for adding services to the
telehealth list that would be used in our evaluation of candidate
telehealth services beginning for CY 2013.
The ATA asked CMS to consider two specific changes to the process,
including:
Broadening the factors for consideration to include
shortages of health professionals to provide in-person services, speed
of access to in-person services, and other barriers to care for
beneficiaries; and
Equalizing the standard for adding telehealth services
with the standard for deleting telehealth services by adopting a
standard that allows services that are safe, effective or medically
beneficial when furnished via telehealth to be added to the list of
Medicare telehealth services. Similarly, we have received
recommendations that CMS place all codes payable under the PFS on the
telehealth list and allow physicians and practitioners to make a
clinical determination in each case about whether a medically
reasonable and necessary service could be appropriately furnished to a
beneficiary through telehealth. Under this scenario, stakeholders have
argued that CMS would only remove services from the telehealth list
under its existing policy for service removal; specifically, that a
decision to remove a service from the list of telehealth services would
be made using evidence-based, peer-reviewed data which indicate that a
specific service is not safe, effective, or medically beneficial when
furnished via telehealth (67 FR 79988).
While we share the interests of stakeholders in reducing barriers
to health care access faced by some beneficiaries, given that section
1834(m)(2)(F)(ii) of the Act requires the Secretary to establish a
process that provides, on an annual basis, for the addition or deletion
of telehealth services (and HCPCS codes), as appropriate, we do not
believe it would be appropriate to add all services for which payment
is made under the PFS to the telehealth list without explicit
consideration as to whether the candidate service could be effectively
furnished through telehealth. For example, addition of all codes to the
telehealth list could result in a number of services on the list that
could never be furnished by a physician or nonphysician practitioner
who was not physically present with the beneficiary, such as major
surgical procedures and interventional radiology services. Furthermore,
we do not believe it would

[[Page 42826]]

be appropriate to add services to the telehealth list without explicit
consideration as to whether or not the nature of the service described
by a candidate code allows the service to be furnished as effectively
through telehealth as in a face-to-face encounter. Section
1834(m)(2)(A) of the Act requires that the distant site physician or
practitioner furnishing the telehealth service must be paid an amount
equal to the amount the physician or practitioner would have been paid
under the PFS has such service been furnished without the use of a
telecommunications system. Therefore, we believe that candidate
telehealth services must also be covered when furnished in-person; and
that any service that would only be furnished through a
telecommunications system would be a new service and, therefore, not a
candidate for addition to the telehealth list. In view of these
considerations, we will continue to consider candidate additions to the
telehealth list on a HCPCS code-specific basis based on requests from
the public and our own considerations.
We also believe it continues to be most appropriate to consider
candidate services for the telehealth list based on the two mutually
exclusive established categories into which all services fall--
specifically, services that are similar to services currently on the
telehealth list (category 1) and services that are not similar to
current telehealth services (category 2). Under our existing policy, we
add services to the telehealth list on a category 1 basis when we
determine that they are similar to services on the existing telehealth
list with respect to the roles of, and interactions among, the
beneficiary, physician (or other practitioner) at the distant site and,
if necessary, the telepresenter (67 FR 43862). Since CY 2003, we have
added 35 services to the telehealth list on a category 1 basis based on
public requests and our own identification of such services. We believe
it is efficient and valuable to maintain the existing policy that
allows us to consider requests for additions to the telehealth list on
a category 1 basis and propose to add them to the telehealth list if
the existing criteria are met. This procedure expedites our ability to
identify codes for the telehealth list that resemble those services
already on this list, streamlining our review process and the public
request and information-submission process for services that fall into
this category. Therefore, we believe that any changes to the process
for adding codes to the telehealth list should be considered with
respect to category 2 additions, rather than category 1 additions.
Our existing criteria for consideration of codes that would be
category 2 additions, specifically those candidate telehealth services
that are not similar to any current telehealth services, include an
assessment of whether the use of a telecommunications system to deliver
the services produces similar diagnostic findings or therapeutic
interventions as compared with a face-to-face in-person delivery of the
same service (67 FR 43682). In other words, the discrete outcome of the
interaction between the clinician and patient facilitated by a
telecommunications system should correlate well with the discrete
outcome of the clinician-patient interaction when performed face to-
face. In the CY 2003 PFS proposed rule (67 FR 43862), we explained that
requestors for category 2 additions to the telehealth list should
submit evidence that the use of a telecommunications system does not
affect the diagnosis or treatment plan as compared to in-person
delivery of the service. We indicated that if evidence shows that the
candidate telehealth service is equivalent when furnished in person or
through telehealth, we would add it to the list of telehealth services.
We refer to this criterion in further discussion in this proposed rule
as the ``comparability standard.'' We stated in the CY 2003 PFS
proposed rule (67 FR 43862) that if we determine that the use of a
telecommunications system changes the nature or outcome of the service,
for example, as compared with the in-person delivery of the service, we
would review the telehealth service addition request as a request for a
new service, rather than a different method of delivering an existing
Medicare service. For coverage and payment of most services, Medicare
requires that a new service must: (1) Fall into a Medicare benefit
category; (2) be reasonable and necessary in accordance with section
1862(a)(1)(A) of the Act; and (3) not be explicitly excluded from
coverage. In such a case, the requestor would have the option of
applying for a national coverage determination for the new service.
We believe it is most appropriate to address the ATA and other
stakeholder requests to broaden the current factors we consider when
deciding whether to add candidate services to the telehealth list--to
include factors such as the effects of barriers to in-person care and
the safety, effectiveness, or medical benefit of the service furnished
through telehealth, as potential refinements to our category 2
criteria. We initially established these category 2 criteria in the
interest of ensuring that the candidate services were safe, effective,
medically beneficial, and still accurately described by the
corresponding codes when delivered via telehealth, while also ensuring
that beneficiaries furnished telehealth services receive high quality
care that is comparable to in-person care. We believed that the
demonstration of comparable clinical outcomes (diagnostic findings and/
or therapeutic interventions) from telehealth and in-person services
would prove to be the best indicator that all of these conditions were
met. While we continue to believe that safety, effectiveness, and
medical benefit, as well as accurate description of the candidate
telehealth services by the CPT or HCPCS codes, are necessary conditions
for adding codes to the list of Medicare telehealth services, our
recent experience in reviewing public requests for telehealth list
additions and our discussions with stakeholders regarding contemporary
medical practice and potential barriers to care, have led us to
conclude that the comparability standard for category 2 requests should
be modified.
In our annual evaluation of category 2 requests since we adopted
the process for evaluating additions to the telehealth list almost 10
years ago, we have consistently observed that requestors have
difficulty demonstrating that clinical outcomes of a service delivered
via telehealth are comparable to the outcomes of the in-person service.
The medical literature frequently does not include studies of the
outcomes of many types of in-person services that allow for comparison
to the outcomes demonstrated for candidate telehealth services.
Furthermore, we know that in some cases the alternative to a telehealth
service may be no service rather than an in-person service. The
comparability standard may not sufficiently allow for the opportunity
to add candidate services to the telehealth list that may be safe,
effective, and medically beneficial when delivered via telehealth,
especially to beneficiaries who experience significant barriers to in-
person care. While we continue to believe that beneficiaries receiving
services through telehealth are deserving of high quality health care
and that in-person care may be very important and potentially
preferable for some services when in-person care is possible, we are
concerned that we have not added any services to the telehealth list on
a category 2 basis as a result of our reviews. While some candidate
services appear to have the potential for clinical benefit when
furnished through

[[Page 42827]]

telehealth, the requests have not met the comparability standard.
Therefore, we are proposing to refine our category 2 review
criteria for adding codes to the list of Medicare telehealth services
beginning in CY 2013 by modifying the current requirement to
demonstrate similar diagnostic findings or therapeutic interventions
with respect to a candidate service delivered through telehealth
compared to in-person delivery of the service (the comparability
standard). We propose to establish a revised standard of demonstrated
clinical benefit (the clinical benefit standard) when the service is
furnished via telehealth. To support our review using this revised
standard, we would ask requestors to specify in their request how the
candidate telehealth service is still accurately described by the
corresponding HCPCS or CPT code when delivered via telehealth as
opposed to in-person.
We are proposing that our refined criteria for category 2 additions
would be as follows:
Category 2: Services that are not similar to the current
list of telehealth services. Our review of these requests would include
an assessment of whether the service is accurately described by the
corresponding code when delivered via telehealth and whether the use of
a telecommunications system to deliver the service produces
demonstrated clinical benefit to the patient. Requestors should submit
evidence indicating that the use of a telecommunications system in
delivering the candidate telehealth service produces clinical benefit
to the patient.
The evidence submitted should include both a description of
relevant clinical studies that demonstrate the service furnished by
telehealth to a Medicare beneficiary improves the diagnosis or
treatment of an illness or injury or improves the functioning of a
malformed body part, including dates and findings and a list and copies
of published peer-reviewed articles relevant to the service when
furnished via telehealth. Some examples of clinical benefit include the
following:
Ability to diagnose a medical condition in a patient
population without access to clinically appropriate in-person
diagnostic services.
Treatment option for a patient population without access
to clinically appropriate in-person treatment options.
Reduced rate of complications.
Decreased rate of subsequent diagnostic or therapeutic
interventions (for example, due to reduced rate of recurrence of the
disease process).
Decreased number of future hospitalizations or physician
visits.
More rapid beneficial resolution of the disease process
treatment.
Decreased pain, bleeding, or other quantifiable symptom.
Reduced recovery time.
We believe the adoption of this clinical benefit standard for our
review of candidate telehealth services on a category 2 basis is
responsive to the requests of stakeholders that we broaden the factors
taken into consideration to include barriers to care for beneficiaries.
It allows us to consider the demonstrated clinical benefit of
telehealth services for beneficiaries who might otherwise have no
access to certain diagnostic or treatment services. Furthermore, we
believe the focus on demonstrated clinical benefit in our review of
category 2 requests for addition to the telehealth lists is equivalent
to our standard for deleting services from the telehealth list that
rests upon evidence that a service is not safe, not effective, or not
medically beneficial. Finally, we believe the proposed clinical benefit
standard for our review of candidate telehealth services on a category
2 basis is fully consistent with our responsibility to ensure that
telehealth services are safe, effective, medically beneficial, and
still accurately described by the corresponding codes that would be
used for the services when delivered in-person.
We are soliciting public comments on this proposed refinement to
our established process for adding codes to the telehealth list,
including the information that requestors should furnish to facilitate
our full review of requests in preparation for the next calendar year's
rulemaking cycle. We will respond to comments on our proposal and
finalize any changes to the process for addition codes to the
telehealth list in the CY 2012 PFS final rule with comment period. We
would use the revised category 2 review criteria to review requested
additions to the telehealth list submitted during CY 2011 and under
consideration for CY 2013.

E. Telehealth Consultations in Emergency Departments

We have recently been asked to clarify instructions regarding
appropriate reporting of telehealth services that, prior to our policy
change regarding consultation codes, would have been reported as
consultations furnished to patients in an emergency department. When we
eliminated the use of all consultation codes beginning in CY 2010, we
instructed practitioners, when furnishing a service that would have
been reported as a consultation service, to report the E/M code that is
most appropriate to the particular service for all office/outpatient or
inpatient visits. Since section 1834(m) of the Act includes
``professional consultations'' (including the initial inpatient
consultation codes ``as subsequently modified by the Secretary'') in
the definition of telehealth services, we established several HCPCS
codes to describe the telehealth delivery of initial inpatient
consultations. For inpatient hospital and skilled nursing facility care
telehealth services, we instructed practitioners to use the inpatient
telehealth consultation G-codes listed in table 14 to report those
telehealth services (74 FR 61763, 61774). However, we neglected to
account for the fact that E/M emergency department visit codes (99281-
99285) are not on the telehealth list. As such, there has not been a
clear means for practitioners to bill a telehealth consultation
furnished in an emergency department. In order to address this issue,
we are proposing to change the code descriptors for the inpatient
telehealth consultation G-codes to include emergency department
telehealth consultations effective January 1, 2012. However, we are
seeking public comment regarding other options, including creating G-
codes specific to these services when furnished to patients in the
emergency department.

Table 14--Inpatient Telehealth Consultation G-Codes
------------------------------------------------------------------------
HCPCS Code CY 2011 Long code descriptor
------------------------------------------------------------------------
G0425 Initial inpatient telehealth consultation,
typically 30 minutes communicating with the
patient via telehealth.
G0426 Initial inpatient telehealth consultation,
typically 50 minutes communicating with the
patient via telehealth.
G0427 Initial inpatient telehealth consultation,
typically 70 minutes or more communicating
with the patient via telehealth.
G0406 Follow[dash]up inpatient telehealth
consultation, limited, physicians typically
spend 15 minutes communicating with the
patient via telehealth.

[[Page 42828]]

G0407 Follow[dash]up inpatient telehealth
consultation, intermediate, physicians
typically spend 25 minutes communicating with
the patient via telehealth.
G0408 Follow[dash]up inpatient telehealth
consultation, complex, physicians typically
spend 35 minutes or more communicating with
the patient via telehealth.
------------------------------------------------------------------------

IV. Other Provisions of the Proposed Regulation

A. Part B Drug Payment: Average Sales Price (ASP) Issues

Section 1847A of the Act requires use of the average sales price
(ASP) payment methodology for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act furnished on or after
January 1, 2005. The ASP methodology applies to most drugs furnished
incident to a physician's service, drugs furnished under the DME
benefit, certain oral anti-cancer drugs, and oral immunosuppressive
drugs.
1. Widely Available Market Price (WAMP)/Average Manufacturer Price
(AMP)
Section 1847A(d)(1) of the Act states that ``The Inspector General
of HHS shall conduct studies, which may include surveys, to determine
the widely available market prices (WAMP) of drugs and biologicals to
which this section applies, as the Inspector General, in consultation
with the Secretary, determines to be appropriate.'' Section 1847A
(d)(2) of the Act states, ``Based upon such studies and other data for
drugs and biologicals, the Inspector General shall compare the ASP
under this section for drugs and biologicals with--
The widely available market price (WAMP) for these drugs
and biologicals, (if any); and
The average manufacturer price (AMP) (as determined under
section 1927(k) (1) of the Act) for such drugs and biologicals.''
Section 1847A(d)(3)(A) of the Act states that, ``The Secretary may
disregard the ASP for a drug or biological that exceeds the WAMP or the
AMP for such drug or biological by the applicable threshold percentage
(as defined in subparagraph (B)).'' Section 1847A(d)(3)(C) of the Act
states that if the Inspector General (OIG) finds that the ASP for a
drug or biological is found to have exceeded the WAMP or AMP by this
threshold percentage, the OIG ``shall inform the Secretary (at such
times as the Secretary may specify to carry out this subparagraph) and
the Secretary shall, effective as of the next quarter, substitute for
the amount of payment otherwise determined under this section for such
drug or biological, the lesser of--
the widely available market price for the drug or
biological (if any); or
103 percent of the average manufacturer price as
determined under section 1927(k)(1) of the Act for the drug or
biological.''
The applicable threshold percentage is specified in section
1847A(d)(3)(B)(i) of the Act as 5 percent for CY 2005. For CY 2006 and
subsequent years, section 1847A(d)(3)(B)(ii) of the Act establishes
that the applicable threshold percentage is ``the percentage applied
under this subparagraph subject to such adjustment as the Secretary may
specify for the WAMP or the AMP, or both.'' In the CY 2006 (70 FR
70222), CY 2007 (71 FR69680), CY 2008 (72 FR 66258), CY 2009 (73 FR
69752), and CY 2010 (74 FR 61904) PFS final rules with comment period,
we specified an applicable threshold percentage of 5 percent for both
the WAMP and AMP. We based this decision on the fact that data was too
limited to support an adjustment to the current applicable threshold
percentage.
For CY 2011, we proposed to specify two separate adjustments to the
applicable threshold percentages. When making comparisons to the WAMP,
we proposed the applicable threshold percentage to remain at 5 percent.
The applicable threshold percentage that we proposed for the AMP is
addressed below in this section of the preamble. The latest WAMP
comparison was published in 2008, and the OIG is continuing to perform
studies comparing ASP to WAMP. Based on available OIG reports that have
been published comparing WAMP to ASP, we did not have sufficient
information at the time to determine that the 5 percent threshold
percentage is inappropriate and should be changed. As a result, we
believed that continuing the 5 percent applicable threshold percentage
for the WAMP was appropriate for CY 2011. Therefore, we proposed to
revise Sec. 414.904(d)(3) to specify the 5 percent WAMP threshold for
CY 2011. After soliciting and reviewing comments, we finalized our
proposal to continue the 5 percent WAMP threshold for CY 2011 (75 FR
73469).
For CY 2012, we again propose to specify a separate adjustment to
the applicable threshold percentage for WAMP comparisons. When making
comparisons to the WAMP, we propose the applicable threshold percentage
to remain at 5 percent. We still do not have sufficient information to
determine that the 5 percent threshold percentage is inappropriate and,
as a result, we believe that continuing the 5 percent applicable
threshold percentage for the WAMP is appropriate for CY 2012. As we
noted in the CY 2011 PFS final rule with comment period (75 FR 73470),
we understand that there are complicated operational issues associated
with this policy. We continue to proceed cautiously in this area. We
remain committed to providing stakeholders, including providers and
manufacturers of drugs impacted by potential price substitutions with
adequate notice of our intentions regarding such, including the
opportunity to provide input with regard to the processes for
substituting the WAMP for the ASP.
2. AMP Threshold and Price Substitutions
As mentioned previously in section V.A.1. of this proposed rule,
when making comparisons of ASP to AMP, the applicable threshold
percentage for CY 2005 was specified in statute as 5 percent. Section
1847A(d)(3) of the Act allows the Secretary to specify adjustments to
this threshold percentage for years subsequent to 2005. For CY 2006 (70
FR 70222), CY 2007 (71 FR 69680), CY 2008 (72 FR 66258), CY 2009 (73 FR
69752), and CY 2010 (74 FR 61904), the Secretary made no adjustments to
the threshold percentage; it remained at 5 percent.
For CY 2011, we proposed, with respect to AMP substitution, to
apply the applicable percentage subject to certain adjustments such
that substitution of AMP for ASP will only be made when the ASP exceeds
the AMP by 5 percent in two consecutive quarters immediately prior to
the current pricing quarter, or three of the previous four quarters
immediately prior to the current quarter. We further proposed to apply
the applicable AMP

[[Page 42829]]

threshold percentage only for those situations where AMP and ASP
comparisons are based on the same set of National Drug Codes (NDCs) for
a billing code (that is, ``complete'' AMP data).
Furthermore, we proposed a price substitution policy to substitute
103 percent of AMP for 106 percent of ASP for both multiple and single
source drugs and biologicals as defined respectively at section
1847(A)(c)(6)(C) and (D) of the Act. Specifically, we proposed that
this substitution:
Would occur when the applicable threshold percentage has
been met for two consecutive quarters immediately prior to the current
pricing quarter, or three of the previous four quarters immediately
prior to the current quarter.
Would permit for a final comparison between the OIG's
volume-weighted 103 percent of AMP for a billing code (calculated from
the prior quarter's data) and the billing code's volume weighted 106
percent ASP (as calculated by CMS for the current quarter) to avoid a
situation in which the AMP-based price substitution would exceed that
quarter's ASP; and
That the duration of the price substitution would last for
only one quarter.
We also sought comment on other issues related to the comparison
between ASP and AMP, such as the following:
Any effect of definitional differences between AMP and
ASP, particularly in light of the definition of AMP as revised by
section 2503 of the Affordable Care Act.
The impact of any differences in AMP and ASP reporting by
manufacturers on price substitution comparisons.
Whether and/or how general differences and similarities
between AMP and manufacturer's ASP would affect comparisons between
these two.
In the CY 2011 PFS final rule with comment, we did not finalize our
proposed adjustments to the 5 percent AMP threshold or our price
substitution policy because of legislative changes, regulatory changes,
and litigation that affected this issue. Specifically--
A preliminary injunction issued by the United States
District Court for the District of Columbia in National Association of
Chain Drug Stores et al. v. Health and Human Services, Civil Action No.
1:07-cv-02017 (RCL) was still in effect;
We were continuing to expect to develop regulations to
implement section 2503 of the Affordable Care Act, which amended the
definition of AMP, and section 202 of the Federal Aviation
Administration Air Transportation Modernization and Safety Improvement
Act (Pub. L. 111-226) as enacted on August 10, 2010, which further
amended section 1927(k) of the Act;
We proposed to withdraw certain provisions of the AMP
final rule published on July 17, 2007 (75 FR 54073).
As a result, we finalized the portion of our proposal that sets the
AMP threshold at 5 percent for CY 2011 and revised the regulation text
accordingly (75 FR 73470).
The preliminary injunction was vacated by the United States
District Court for the District of Columbia on December 15, 2010.
Currently, we continue to expect to develop regulations to implement
section 2503 of the Affordable Care Act and section 202 of the Federal
Aviation Administration Air Transportation Modernization and Safety
Improvement Act. However, these statutory amendments became effective
on October 1, 2010 without regard to whether or not final regulations
to carry out such amendments have been promulgated by such date.
Moreover, our Medicaid final rule published on November 15, 2010
finalized regulations requiring manufacturers to calculate AMP in
accordance with section 1927(k)(1) of the Act (75 FR 69591). Since
statutory and regulatory provisions exist and are currently utilized by
manufacturers for the calculation and submission of AMP data, we are
revisiting the AMP threshold and price substitution issues.
a. AMP Threshold
Section 1847A(d)(3) of the Act allows the Secretary to specify
adjustments to this threshold percentage for years subsequent to 2005,
and to specify the timing for any price substitution. Therefore, for CY
2012, with respect to AMP substitution, we propose to apply the
applicable percentage subject to certain adjustments. Specifically, a
price substitution of AMP for ASP will be made only when the ASP
exceeds the AMP by 5 percent in two consecutive quarters immediately
prior to the current pricing quarter, or three of the previous four
quarters immediately prior to the current quarter.
In general, the ASP methodology reflects average market prices for
Part B drugs for a quarter. The ASP is based on the average sales price
to all purchasers for a calendar quarter; the AMP, in turn, represents
the average price paid by wholesalers for drugs distributed to retail
community pharmacies and by retail community pharmacies that purchase
drugs directly from the manufacturers. Accordingly, while the ASP
payment amount for a billing code may exceed its AMP for that billing
code for any given quarter, this may reflect only a temporary
fluctuation in market prices that would be corrected in a subsequent
quarter. We believe this fluctuation is demonstrated by how few billing
codes exceed the applicable threshold percentage over multiple
quarters. For example, in the Inspector General's report ``Comparison
of Average Sales Prices and Average Manufacturer Prices: An Overview of
2009,'' only 11 of 493 examined billing codes exceeded the applicable
threshold percentage over multiple quarters (OEI-03-10-00380). We are
concerned that substitutions based on a single quarter's ASP to AMP
comparison will not appropriately or accurately account for temporary
fluctuations. We believe that applying this threshold percentage
adjusted to reflect data from multiple quarters will account for
continuing differences between ASP and AMP, and allow us to more
accurately identify those drugs that consistently trigger the
substitution threshold and thus warrant price substitution.
We further propose to apply the applicable AMP threshold percentage
only for those situations where AMP and ASP comparisons are based on
the same set of NDCs for a billing code (that is, ``complete'' AMP
data). Prior to 2008, the OIG calculated a volume-weighted AMP and made
ASP and AMP comparisons only for billing codes with such ``complete''
AMP data. In such comparisons, a volume-weighted AMP for a billing code
was calculated when NDC-level AMP data was available for the same NDCs
used by us to calculate the volume-weighted ASP. Beginning in the first
quarter of 2008, the OIG also began to make ASP and AMP comparisons
based on ``partial'' AMP data (that is, AMP data for some, but not all,
NDCs in a billing code). For these comparisons, the volume-weighted AMP
for a billing code is calculated even when only such limited AMP data
is available. That is, the volume-weighted AMP calculated by the
Inspector General is based on fewer NDCs than the volume-weighted ASP
calculated by CMS. Moreover, volume-weighted ASPs are not adjusted by
the Inspector General to reflect the fewer number of NDCs in the
volume-weighted AMP.
Because the OIG's partial AMP data comparison did not reflect all
the NDCs used in our volume-weighted ASP calculations, we discussed our
concern about using the volume-weighted AMP in the CY 2011 PFS proposed
rule. We believed that such AMP data may not

[[Page 42830]]

adequately account for market-related drug price changes and may lead
to the substitution of incomplete and inaccurate volume-weighted
prices. Payment amount reductions that result from potentially
inaccurate substitutions may impact physician and beneficiary access to
drugs. Therefore, consistent with our authority as set forth in section
1847A(d)(1) and (3) of the Act, we proposed in the CY 2011 PFS proposed
rule that the substitution of 103 percent of AMP for 106 percent of ASP
should be limited to only those drugs with ASP and AMP comparisons
based on the same set of NDCs.
In response to our CY 2011 proposed rule, the OIG changed its
methodology for ``partial'' AMP data comparisons beginning with its
report titled ``Comparison of First-Quarter 2010 Average Sales Prices
and Average Manufacturer Prices: Impact on Medicare Reimbursement for
Third Quarter 2010.'' Specifically, in addition to calculating a
volume-weighted AMP based on ``partial'' data and identifying billing
codes that exceeded the price substitution threshold, the OIG began to
replace each missing NDC-level AMP with corresponding NDC-level ASP
data. The OIG then calculated a volume-weighted AMP for the billing
code. If the volume-weighted AMP continued to exceed the price
substitution threshold, the report attributed this to an actual
difference between ASPs and AMPs in the marketplace (OEI-03-10-00440).
We appreciate that the Inspector General has acknowledged the
importance of protecting beneficiary and physician access in its
methodology change. However, section 1847(A)(d)(2)(B) of the Act
specifically indicates that the comparison be made to AMP as determined
under section 1927(k)(1) of the Act. Moreover, we continue to be
concerned that comparisons based on partial AMP data may not adequately
account for market-related drug price changes and may lead to the
substitution of incomplete and inaccurate volume-weighted prices.
Therefore, for CY 2012, we propose to apply the applicable AMP
threshold percentage only for those situations where AMP and ASP
comparisons are based on the same set of NDCs for a billing code (that
is, ``complete'' AMP data). Furthermore, we are proposing to revise
Sec. 414.904(d)(3) to reflect corresponding regulatory text changes,
and we welcome comments on all aspects of this proposal.
b. AMP Price Substitution
(1) Inspector General Studies
Section 1847A(d) of the Act requires the Inspector General to
conduct studies of the widely available market price for drugs and
biologicals to which section 1847A of the Act applies. However, it does
not specify the frequency of when such studies should be conducted. The
Inspector General has conducted studies comparing AMP to ASP for
essentially each quarter since the ASP system has been implemented.
Since 2005, the OIG has published 23 reports pertaining to the price
substitution issue (see Table 15), of which 21 have identified billing
codes with volume-weighted ASPs that have exceeded their volume-
weighted AMPs by the applicable threshold percentage.

Table 15--Published OIG Reports on Price Substitutions
------------------------------------------------------------------------
Date Report title
------------------------------------------------------------------------
5/2011....................... Comparison of Third-Quarter 2010 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for First Quarter 2011 (OEI-03-11-
00160).
4/2011....................... Comparison of Average Sales Prices and
Average Manufacturer Prices: An overview
of 2009 (OEI-03-10-00380).
2/2011....................... Comparison of Second-Quarter 2010 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Fourth Quarter 2010 (OEI-03-11-
00030).
11/2010...................... Comparison of First-Quarter 2010 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Third Quarter 2010 (OEI-03-10-
00440).
7/2010....................... Comparison of Fourth-Quarter 2009 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Second Quarter 2010 (OEI-03-10-
00350).
4/2010....................... Comparison of Third-Quarter 2009 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for First Quarter 2010 (OEI-03-10-
00150).
2/2010....................... Comparison of Average Sales Prices and
Average Manufacturer Prices: An overview
of 2008 (OEI-03-09-00350).
1/2010....................... Comparison of Second-Quarter 2009 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Fourth Quarter 2009 (OEI-03-09-
00640).
8/2009....................... Comparison of First-Quarter 2009 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Third Quarter 2009 (OEI-03-09-
00490).
8/2009....................... Comparison of Fourth-Quarter 2008 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Second Quarter 2009 (OEI-03-09-
00340).
4/2009....................... Comparison of Third-Quarter 2008 Average
Sales Prices and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for first Quarter 2009 (OEI-03-09-
00150).
2/2009....................... Comparison of Second-Quarter 2008 Average
Sales Prices and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Fourth Quarter 2008 (OEI-03-09-
00050).
12/2008...................... Comparison of First-Quarter 2008 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Third Quarter 2008 (OEI-03-08-
00530).
12/2008...................... Comparison of Average Sales Prices and
Average Manufacturer Prices: An Overview
of 2007 (OEI-03-08-00450).
8/2008....................... Comparison of Fourth-Quarter 2007 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Second Quarter 2008 (OEI-03-08-
00340).
7/2008....................... A comparison of average sales price to
widely available market prices for
inhalation drugs (OEI-03-07-00190).
5/2008....................... Comparison of Third-Quarter 2007 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for First Quarter 2008 (OEI-03-08-
00130).
12/2007...................... Comparison of Second-Quarter 2007 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Fourth Quarter 2007 (OEI-03-08-
00010).
9/2007....................... Comparison of First-Quarter 2007 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Third Quarter 2007 (OEI-03-07-
00530).
7/2007....................... Comparison of Third-Quarter 2006 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for First Quarter 2007 (OEI-03-07-
00140).

[[Page 42831]]

7/2006....................... Comparison of Fourth-Quarter 2005 Average
Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement
for Second Quarter 2006 (OEI-03-06-
00370).
6/2006....................... A Comparison of Average Sales Price to
Widely Available Market Prices: Fourth
Quarter 2005 (OEI-03-05-00430).
4/2006....................... Monitoring Medicare Part B Drug Prices: A
Comparison of Average Sales Price to
Average Manufacturer Prices (OEI-03-04-
00430).
------------------------------------------------------------------------

In the latest quarterly report comparing AMP to ASP, titled
``Comparison of Third-Quarter 2010 Average Sales Price and Average
Manufacturer Prices: Impact on Medicare Reimbursement for First Quarter
2011'' (OEI-03-11-00160), the Inspector General found that of 365
billing codes with complete AMP data in the third quarter of 2010, only
14 met the 5 percent threshold; that is, ASP exceeded AMP by at least 5
percent. 8 of these 14 billing codes also exceeded the AMP by at least
5 percent in one or more of the previous four quarters; only two drugs
had ASPs that exceeded the 5 percent threshold in all four quarters
under review. This Inspector General report further indicates that,
``If reimbursement amounts for all 14 codes with complete AMP data had
been based on 103 percent of the AMPs during the first quarter of 2011,
we estimate that Medicare expenditures would have been reduced $10.3
million in that quarter alone.'' The savings found by the Inspector
General constitute potential savings for the Medicare program and
beneficiaries.
(2) Proposal
As discussed previously, section 1847A(d)(3) of the Act provides
authority for us to determine the applicable percentage subject to
``such adjustment as the Secretary may specify for the widely available
market price or the average manufacturer price, or both.'' We also have
authority to specify the timing of any ASP substitution. Consistent
with this authority, we are proposing a policy to substitute 103
percent of AMP for 106 percent of ASP where the applicable percentage
threshold has been satisfied for the two consecutive quarters
immediately prior to the current pricing quarter, or for three of the
previous four quarters immediately prior to the current pricing
quarter. This policy would apply to single source drugs and
biologicals, multiple source drugs, and biosimilar biological products
as defined at section 1847A(c)(6)(C), (D), and (H) of the Act.
Because of the lack of data regarding WAMP to ASP comparisons, we
are explicitly excluding WAMP from this price substitution proposal,
though we are proposing to maintain the WAMP threshold at 5 percent for
CY 2012 in section V.A.1. of this rule. We believe that the proposed
policy reflects market-related pricing changes and focuses on those
drugs that consistently exceed the applicable percentage threshold over
multiple quarters. Unlike the OIG's AMP studies, the published WAMP
studies do not show whether the prices for the examined groups of drugs
consistently exceed the applicable percentage threshold across multiple
quarters like the AMP studies. We will consider proposing a policy for
the substitution of WAMP at a later date.
(3) Timeframe for and Duration of Price Substitutions
As stated in Sec. 414.804(a)(5), a manufacturer's average sales
price must be submitted to CMS within 30 days of the close of the
quarter. We then calculate an ASP for each billing code in accordance
with the process outlined at Sec. 414.904. Then, as described in our
CY 2005 PFS final rule (69 FR 66300), we implement these new prices
through program instructions or otherwise at the first opportunity
after we receive the data, which is the calendar quarter after receipt.
Section 1847A(d)(3)(C) of the Act indicates that a price
substitution would be implemented ``effective as of the next quarter''
after the OIG has informed us that the ASP for a drug or biological
exceeds its AMP by the applicable percentage threshold. The OIG does
not receive new ASPs for a given quarter until after we have finalized
our calculations for the quarter. Also, the results of the OIG's
pricing comparisons are not available until after the ASPs for a given
quarter have gone into effect. Therefore, we anticipate that there will
be a three-quarter lag for substituted prices from the quarter in which
manufacturer sales occurred, though this will depend in great part upon
the timeframe in which we obtain comparison data from the OIG. Table 16
provides an example of this timeframe.

Table 16--Example Price Substitution Timeframe
----------------------------------------------------------------------------------------------------------------
Q2-11 Q3-11 Q4-11 Q1-12
----------------------------------------------------------------------------------------------------------------
ASP Process.................. Manufacturer Manufacturer submits Q4-11 payment limits Q1-12 payment limits
sells drug. Q2-11 pricing data. apply. apply, including
CMS calculates ASP CMS calculates ASP any adjusted
payment limits for payment limits for payment limit
Q4-11 and publishes Q1-12. Compares resulting from the
Q4-11 payment calculated payment price substitution.
limits. limits to OIG
substitute prices.
Publishes Q1-12
prices that may
include OIG
substitute prices.
OIG Process.................. ............... OIG receives Q4-11 OIG notifies CMS of
payment limits from HCPCS for which Q4-
CMS and compares 11 ASP exceeds Q2-
them to Q2-11 11 AMP by the
volume-weighted AMP applicable
data. percentage
threshold.
----------------------------------------------------------------------------------------------------------------

Given this lag in time, the ASP for a billing code may have
decreased since the OIG's comparison. Therefore, consistent with our
authorities in section 1847A(d)(3) of the Act and our desire to provide
accurate payments consistent with these provisions, we believe that the
timing of any substitution policy should permit a final

[[Page 42832]]

comparison between the OIG's volume-weighted 103 percent AMP for a
billing code (calculated from the data from sales three quarters prior)
and the billing code's volume-weighted 106 percent ASP (as calculated
by CMS for the upcoming quarter). In Table 16, for example, this
comparison would be done between the HCPCS payment limits calculated
for Q1-12, and the OIG's volume-weighted AMPs from their examination of
Q4-11 payment limits. This final comparison would assure the Secretary
that the 106 percent ASP payment limit for the current pricing quarter
continues to exceed 103 percent of the OIG's calculated AMP in order to
avoid a situation in which the Secretary would inadvertently raise the
Medicare payment limit through this price substitution policy. We
specifically request comments on this proposal.
ASP payment limits are calculated on a quarterly basis as per
section 1847A(c)(5)(A) of the Act, and we are particularly mindful that
the ASP-based payment allowance for a billing code may change from
quarter to quarter. As such, we propose that any price substitution
based on the comparison that triggered its application would last for
one quarter. We note that in a subsequent quarter, the OIG may identify
that a volume-weighted ASP continues to exceed the volume-weighted AMP
for a billing code that previously triggered a price substitution. In
this scenario, if the criteria for the price substitution policy are
met, we would substitute 103 percent of the OIG's updated volume-
weighted AMP for that billing code.
Overall, we believe that our proposal as previously outlined to
substitute 103 percent of AMP for 106 percent of ASP provides us with a
viable mechanism for generating savings for the Medicare program and
its beneficiaries because it will allow Medicare to pay based on lower
market prices for those drugs and biologicals that consistently exceed
the applicable threshold percentage. Moreover, it will enable us to
address a programmatic vulnerability identified by the OIG. We welcome
comments on all aspects of our proposal.
In the CY 2011 proposed rule, we sought comment on other issues
related to the comparison between ASP and AMP, specifically:
Any effect of definitional differences between AMP and
ASP, particularly in light of the definition of AMP as revised by
section 2503 of the Affordable Care Act.
The impact of any differences in AMP and ASP reporting by
manufacturers on price substitution comparisons.
Whether and/or how general differences and similarities
between AMP and manufacturer's ASP would affect comparisons between
these two.
For the CY 2012 proposed rule, we again seek comment on other
matters pertaining to this issue.
3. ASP Reporting Update
a. ASP Reporting Template Update
For purposes of this part, unless otherwise specified, the term
``drugs'' will hereafter refer to both drugs and biologicals. Sections
1847A and 1927(b) of the Act specify quarterly ASP data reporting
requirements for manufacturers. Specific ASP reporting requirements are
set forth in section 1927(b)(3) of the Act. For the purposes of
reporting under section 1847A of the Act, the term ``manufacturer'' is
defined in section 1927(k)(5) of the Act and means any entity engaged
in the following: Production; preparation, propagation, compounding,
conversion or processing of prescription drug products; either directly
or indirectly by extraction from substances of natural origin, or
independently by means of chemical synthesis, or by a combination of
extraction and chemical synthesis; or packaging, repackaging, labeling,
relabeling, or distribution of prescription drug products. The term
manufacturer does not include a wholesale distributor of drugs or a
retail pharmacy licensed under State law. However, manufacturers that
also engage in certain wholesaler activities are required to report ASP
data for those drugs that they manufacture. Note that the definition of
manufacturers for the purposes of ASP data reporting includes
repackagers.
Section 1927(b)(3)(A)(iii) of the Act specifies that manufacturers
must report their average sales price and the number of units by NDC.
As established by 42 CFR part 414 subpart J, manufacturers are required
to report data at the NDC level, which includes the following elements:
(1) The manufacturer ASP; (2) the Wholesale Acquisition Cost (WAC) in
effect on the last day of the reporting period; (3) the number of units
sold; and (4) the NDC. The reported ASP data are used to establish the
Medicare payment amounts.
Section 1927(b)(3)(A)(iii)(II) of the Act specifies that the
manufacturer must report the WAC, if it is required in order for
payment to be made under section 1847A of the Act. In the 2004 IFC that
implemented the ASP reporting requirements for Medicare Part B drugs
and biologicals (66 FR 17935), we specified that manufacturers must
report the ASP data to CMS using our Addendum A template. In 2005, we
expanded the template to include WAC and additional product description
details (70 FR 70221). We also initiated additional changes to the
template in 2008 (73 FR 76032).
In order to facilitate more accurate and consistent ASP data
reporting from manufacturers, we are now proposing additional revisions
to the Addendum A template. Specifically, we propose to revise existing
reporting fields and add new fields to the Addendum A template, as
follows:
To split the current NDC column into three separate
reporting fields, corresponding to the three segments of an NDC.
To add a new field to collect an Alternate ID for products
without an NDC.
To expand the current FDA approval number column to
account for multiple entries and supplemental numbers.
We have also added a macro to the Addendum A template that will
allow manufacturers to validate the format of their data prior to
submission. This will help verify that data are complete and submitted
to CMS in the correct format, thereby minimizing time and resources
spent on identifying mistakes or errors. We note that the use of this
macro does not preclude or supersede manufacturers' responsibility to
provide accurate and timely ASP data in accordance with the reporting
obligation under section 1927(b)(3) of the Act. We also note that
manufacturers who misrepresent or fail to report manufacturer ASP data
will remain subject to civil monetary penalties, as applicable and
described in sections 1847A and 1927(b) of the Act and codified in
regulations at Sec. 414.806.
b. Reporting of ASP Units and Sales Volume for Certain Products
As required by 42 CFR part 414 subpart J, manufacturers report ASP
price and volume data at the NDC level. This is appropriate for most
drug and biological products because an NDC is usually associated with
a consistent amount of product that is being sold. Our experience with
manufacturer reporting of ASPs has revealed that a limited number of
drug products, as defined by an NDC, might contain a variable amount of
active ingredient. This situation is common for plasma derived clotting
factors; for example, we are aware of one product where a vial
described as nominally containing 250 international units (IUs) of
clotting factor activity might actually contain

[[Page 42833]]

between 220 and 400 IUs. Although the exact factor activity is
specified on the label, the amount of IUs contained in an NDC might
vary between manufacturing lots. For these types of products, it is
possible that vials with the same NDC but different amounts of clotting
factor activity (as measured in IUs) might be sold during the same ASP
reporting period. For drugs paid under Medicare Part B, such
variability in the amount of drug product within an NDC appears to
apply mostly to clotting factors that are prepared from plasma sources;
it also applies to a few other products, including a plasma protein
product used to treat antitrypsin deficiency.
As stated in the Section 1847A(b)(2) of the Act, for years after
2004, the Secretary has the authority to ``establish the unit for a
manufacturer to report and methods for counting units as the Secretary
determines appropriate to implement.'' There are limited situations
when ASP price and volume reporting by product NDC may affect the
accuracy of subsequent pricing calculations done by us, for example,
when an NDC is associated with a variable amount of drug product as
described in the paragraph previously. We believe that in such cases it
is appropriate to amend the definition of the ASP unit associated with
the NDC that is reported to us by manufacturers for the purposes of
calculating ASP. Under the authority in the section 1847A(b)(2) of the
Act, we propose that we will maintain a list of HCPCS codes for which
manufacturers report ASPs for NDCs on the basis of a specified unit.
The specified unit will account for situations where labeling indicates
that the amount of drug product represented by an NDC varies. Our
initial list appears in Table 17 and is limited to items with variable
amounts of drug product per NDC as described previously. However, we
propose to update this list as appropriate through program instruction
or otherwise because we believe that the ability to make changes in a
subregulatory manner will provide us with the flexibility to quickly
and appropriately react to sales and marketing practices for specific
drug products, including the introduction of new drugs or drug
products. We plan to amend the list as necessary and to keep updates on
the CMS ASP Web site at: http://www.cms.gov/McrPartBDrugAvgSalesPrice/01_overview.asp. Our proposals would be effective for ASP reports
received on or after January 1, 2012 and would be reflected in our
April 1, 2012 quarterly update.
In conjunction with the proposals in the preceding paragraph and
the expectation that nearly all ASP price and sales volume reporting
will continue to be at the NDC level (that is, the reported ASP sales
and volume will be associated with a non-variable amount that is
represented by the NDC), we are also proposing a clarification to
existing regulation text at Sec. 414.802. Current regulation text
states that ``Unit means the product represented by the 11-digit
National Drug Code.'' We propose to update the definition to account
for situations when an alternative unit of reporting must be used; the
definition of the term unit will continue to be based on reporting of
ASP data per NDC unless otherwise specified by CMS to account for
situations where the amount of drug product represented by an NDC
varies.

Table 17--HCPCS Codes for Which ASP Reporting Is Done in Units of
Measure Other Than an NDC
------------------------------------------------------------------------
Proposed
2011 Code 2011 Long descriptor reporting unit
------------------------------------------------------------------------
J0256......................... INJECTION, ALPHA 1-- 1MG
PROTEINASE
INHIBITOR--HUMAN, 10
MG.
J1680......................... INJECTION, HUMAN 1MG
FIBRINOGEN
CONCENTRATE, 100 MG.
J7184......................... INJECTION, VON 1 IU VWF:RCO
WILLEBRAND FACTOR
COMPLEX (HUMAN),
WILATE, PER 100 IU
VWF:RCO.
J7185......................... INJECTION, FACTOR 1 IU
VIII (ANTIHEMOPHILIC
FACTOR, RECOMBINANT)
(XYNTHA), PER I.U.
J7186......................... INJECTION, 1 IU
ANTIHEMOPHILIC
FACTOR VIII/VON
WILLEBRAND FACTOR
COMPLEX (HUMAN), PER
FACTOR VIII I.U.
J7187......................... INJECTION, VON 1 IU VWF:RCO
WILLEBRAND FACTOR
COMPLEX (HUMATE-P),
PER IU VWF:RCO.
J7190......................... FACTOR VIII 1 IU
(ANTIHEMOPHILIC
FACTOR, HUMAN) PER
I.U.
J7192......................... FACTOR VIII 1 IU
(ANTIHEMOPHILIC
FACTOR, RECOMBINANT)
PER I.U., NOT
OTHERWISE SPECIFIED.
J7193......................... FACTOR IX 1 IU
(ANTIHEMOPHILIC
FACTOR, PURIFIED,
NON-RECOMBINANT) PER
I.U.
J7194......................... FACTOR IX, COMPLEX, 1 IU
PER I.U.
J7195......................... FACTOR IX 1 IU
(ANTIHEMOPHILIC
FACTOR, RECOMBINANT)
PER I.U.
J7197......................... ANTITHROMBIN III 1 IU
(HUMAN), PER I.U.
J7198......................... ANTI-INHIBITOR, PER 1 IU
I.U. INJECTION,
ANTITHROMBIN
RECOMBINANT, 50 I.U.
------------------------------------------------------------------------

The instructions for reporting products with variable amounts of
drug product, along with general instructions on completing the revised
ASP Data Form (Addendum A), will be delineated in a User Guide that
will be available on the ASP Web site. In the user guide, we will also
be revising our instructions for the reporting of dermal grafting
products as follows:
If an NDC is not associated with a dermal grafting
product, manufacturers should enter the UPC or other unique identifier
(such as an internal product number) in the alternate ID column.
Manufacturers should report ASP prices and sales volumes
for dermal grafting products in units of area by square centimeter. The
User Guide will be available on the CMS ASP Web site at: http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01_overview.asp. The Web
site will also contain the revised ASP Data Form (Addendum A) and
examples of how ASP data must be reported and formatted for submission.
We would also like to remind manufacturers that additional
information about reporting ASP data to us is available (for examples,
see the following: (69 FR 17936), (69 FR 66299), (70 FR 70215), (71 FR
69665), (72 FR 66256), (73 FR 69751), and (74 FR 61904)). Also, a link
to the ASP Frequently Asked Questions (FAQs) is posted in the ``Related
Links Inside CMS'' section of the ASP Overview Web page. We welcome
comments on the ASP reporting proposals that are described in this
section.

[[Page 42834]]

B. Discussion of Budget Neutrality for the Chiropractic Services
Demonstration

Section 651 of MMA requires the Secretary to conduct a
demonstration for up to 2 years to evaluate the feasibility and
advisability of expanding coverage for chiropractic services under
Medicare. Current Medicare coverage for chiropractic services is
limited to manual manipulation of the spine to correct a subluxation
described in section 1861(r)(5) of the Act. The demonstration expanded
Medicare coverage to include: ``(A) care for neuromusculoskeletal
conditions typical among eligible beneficiaries; and (B) diagnostic and
other services that a chiropractor is legally authorized to perform by
the State or jurisdiction in which such treatment is provided'' and was
conducted in four geographically diverse sites, two rural and two urban
regions, with each type including a Health Professional Shortage Area
(HPSA). The two urban sites were 26 counties in Illinois and Scott
County, Iowa, and 17 counties in Virginia. The two rural sites were the
States of Maine and New Mexico. The demonstration, which ended on March
31, 2007, was required to be budget neutral as section 651(f)(1)(B) of
MMA mandates the Secretary to ensure that ``the aggregate payments made
by the Secretary under the Medicare program do not exceed the amount
which the Secretary would have paid under the Medicare program if the
demonstration projects under this section were not implemented.''
In the CY 2006, 2007, and 2008 PFS final rules with comment period
(70 FR 70266, 71 FR 69707, 72 FR 66325, respectively), we included a
discussion of the strategy that would be used to assess budget
neutrality (BN) and the method for adjusting chiropractor fees in the
event the demonstration resulted in costs higher than those that would
occur in the absence of the demonstration. We stated BN would be
assessed by determining the change in costs based on a pre-post
comparison of total Medicare costs for beneficiaries in the
demonstration and their counterparts in the control groups and the rate
of change for specific diagnoses that are treated by chiropractors and
physicians in the demonstration sites and control sites. We also stated
that our analysis would not be limited to only review of chiropractor
claims because the costs of the expanded chiropractor services may have
an impact on other Medicare costs for other services.
In the CY 2010 PFS final rule with comment period (74 FR 61926), we
discussed the evaluation of this demonstration conducted by Brandeis
University and the two sets of analyses used to evaluate budget
neutrality. In the ``All Neuromusculoskeletal Analysis,'' which
compared the total Medicare costs of all beneficiaries who received
services for a neuromusculoskeletal condition in the demonstration
areas with those of beneficiaries with similar characteristics from
similar geographic areas that did not participate in the demonstration,
the total effect of the demonstration to Medicare was an $114 million
increase in costs. In the ``Chiropractic User Analysis,'' which
compared the Medicare costs of beneficiaries who used expanded
chiropractic services to treat a neuromusculoskeletal condition in the
demonstration areas, with those of beneficiaries with similar
characteristics who used chiropractic services as was currently covered
by Medicare to treat a neuromusculoskeletal condition from similar
geographic areas that did not participate in the demonstration, the
total effect of the demonstration to Medicare was a $50 million
increase in costs.
As explained in the CY 2010 PFS final rule, we based the BN
estimate on the ``Chiropractic User Analysis'' because of its focus on
users of chiropractic services rather than all Medicare beneficiaries
with neuromusculoskeletal conditions, including those who did not use
chiropractic services and who may not have become users of chiropractic
services even with expanded coverage for them (74 FR 61926 through
61927). Users of chiropractic services are most likely to have been
affected by the expanded coverage provided by this demonstration. Cost
increases and offsets, such as reductions in hospitalizations or other
types of ambulatory care, are more likely to be observed in this group.
As explained in the CY 2010 PFS final rule (74 FR 61927), because
the costs of this demonstration were higher than expected and we did
not anticipate a reduction to the PFS of greater than 2 percent per
year, we finalized a policy to recoup $50 million in expenditures from
this demonstration over a 5-year period, from CYs 2010 through 2014 (74
FR 61927). Specifically, we are recouping $10 million for each such
year through adjustments to the chiropractic CPT codes. Payment under
the PFS for these codes will be reduced by approximately 2 percent. We
believe that spreading this adjustment over a longer period of time
will minimize its potential negative impact on chiropractic practices.
We are continuing the implementation of the required budget
neutrality adjustment by recouping $10 million in CY 2012. Our Office
of the Actuary estimates chiropractic expenditures in CY 2012 to be
approximately $470 million based on actual Medicare spending for
chiropractic services for the most recent available year. To recoup $10
million in CY 2012, the payment amount under the PFS for the
chiropractic CPT codes (that is, CPT codes 98940, 98941, and 98942)
will be reduced by approximately 2 percent. We are reflecting this
reduction only in the payment files used by the Medicare contractors to
process Medicare claims rather than through adjusting the relative
value units (RVUs). Avoiding an adjustment to the RVUs would preserve
the integrity of the PFS, particularly since many private payers also
base payment on the RVUs.

C. Proposed Productivity Adjustment for the Ambulatory Surgical Center
Payment System, and the Ambulance, Clinical Laboratory and DMEPOS Fee
Schedules

Section 3401 of the Affordable Care Act requires that the update
factor under certain payment systems be annually adjusted by changes in
economy-wide productivity. The year that the productivity adjustment is
effective varies by payment system. Specifically, section 3401 of the
Affordable Care Act requires that in CY 2011 (and in subsequent years)
update factors under the ambulatory surgical center (ASC) payment
system, the ambulance fee schedule (AFS), the clinical laboratory fee
schedule (CLFS) and the DMEPOS fee schedule be adjusted by changes in
economy-wide productivity. Section 3401(a) of the Affordable Care Act
amends section 1886(b)(3)(B) of the Act to add clause (xi)(II) which
sets forth the definition of this productivity adjustment. The statute
defines the productivity adjustment to be equal to the 10-year moving
average of changes in annual economy-wide private nonfarm business
multifactor productivity (MFP) (as projected by the Secretary for the
10-year period ending with the applicable fiscal year, year, cost
reporting period, or other annual period). Historical published data on
the measure of MFP is available on the Bureau of Labor Statistics'
(BLS) Web site at http://www.bls.gov/mfp.
As stated in the CY 2011 PFS final rule with comment period (75 FR
73394), the projection of MFP is currently produced by IHS Global
Insight, Inc. (IGI). The methodology for calculating MFP for the ASC
payment system, and the Ambulance, CLFS, and DMEPOS fee schedules was
finalized in

[[Page 42835]]

the CY 2011 PFS final rule with comment period (75 FR 73394 through
73399). As described in the CY 2011 PFS final rule with comment period,
IGI replicates the MFP measure calculated by the BLS using a series of
proxy variables derived from the IGI U.S. macro-economic models. For CY
2012, we are proposing to revise the IGI series used to proxy the labor
index used in the MFP forecast calculation from man-hours in private
nonfarm establishments (billions of hours--annual rate) to hours of all
persons in private nonfarm establishments, (2005 = 100.00), adjusted
for labor composition effects. We are proposing this revision after
further analysis showed that the proposed series is a more suitable
proxy for the BLS Private nonfarm business sector labor input series
since it accounts for the changes in skill-mix of the workforce over
time (referred to above as labor composition effects). The BLS labor
input series includes labor composition effects. We are proposing no
additional changes to the IGI MFP forecast methodology or its
application to the CPI-U update factors for the ASC payment system, and
the Ambulance, CLFS, and DMEPOS fee schedules.

D. Section 105: Extension of Payment for Technical Component of Certain
Physician Pathology Services

1. Background and Statutory Authority
Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554), as
amended by section 732 of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173), section 104 of
division B of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
(Pub. L. 109-432), section 104 of the Medicare, Medicaid, and SCHIP
Extension Act of 2007 (MMSEA) (Pub. L. 110-173), section 136 of the
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)
(Pub. L. 110-275) and section 3104 of the Affordable Care Act (Pub. L.
111-148), is amended by section 105 of the Medicare and Medicaid
Extenders Act of 2010 (MMEA) (Pub. L. 111-309) to continue payment to
independent laboratories for the TC of physician pathology services for
fee-for-service Medicare beneficiaries who are inpatients or
outpatients of a covered hospital through CY 2011. The technical
component (TC) of physician pathology services refers to the
preparation of the slide involving tissue or cells that a pathologist
interprets. The professional component (PC) of physician pathology
services refers to the pathologist's interpretation of the slide.
When the hospital pathologist furnishes the PC service for a
hospital patient, the PC service is separately billable by the
pathologist. When an independent laboratory's pathologist furnishes the
PC service, the PC service is usually billed with the TC service as a
combined service.
Historically, any independent laboratory could bill the Medicare
contractor under the PFS for the TC of physician pathology services for
hospital patients even though the payment for the costs of furnishing
the pathology service (but not its interpretation) was already included
in the bundled inpatient stay payment to the hospital. In the CY 2000
PFS final rule with comment period (64 FR 59408 through 59409), we
stated that this policy has contributed to the Medicare program paying
twice for the TC service: (1) To the hospital, through the inpatient
prospective payment rate, when the patient is an inpatient; and (2) to
the independent laboratory that bills the Medicare contractor, instead
of the hospital, for the TC service. While the policy also permits the
independent laboratory to bill for the TC of physician pathology
services for hospital outpatients, in this case, there generally would
not be duplicate payment because we would expect the hospital to not
also bill for the pathology service, which would be paid separately to
the hospital only if the hospital were to specifically bill for it. We
further indicated that we would implement a policy to pay only the
hospital for the TC of physician pathology services furnished to its
inpatients.
Therefore, in the CY 2000 PFS final rule with comment period, we
revised Sec. 415.130(c) to state that for physician pathology services
furnished on or after January 1, 2001 by an independent laboratory,
payment is made only to the hospital for the TC of physician pathology
services furnished to a hospital inpatient. Ordinarily, the provisions
in the PFS final rule with comment period are implemented in the
following year. However, the change to Sec. 415.130 was delayed 1 year
(until January 1, 2001), at the request of the industry, to allow
independent laboratories and hospitals sufficient time to negotiate
arrangements.
Full implementation of Sec. 415.130 was further delayed by section
542 of BIPA and section 732 of the MMA, which directed us to continue
payment to independent laboratories for the TC of physician pathology
services for hospital patients for a 2-year period beginning on January
1, 2001 and for CYs 2005 and 2006, respectively. In the CY 2007 PFS
final rule with comment period (71 FR 69788), we amended Sec. 415.130
to provide that, for services furnished after December 31, 2006, an
independent laboratory may not bill the carrier for the TC of physician
pathology services furnished to a hospital inpatient or outpatient.
However, section 104 of the MIEA-TRHCA continued payment to independent
laboratories for the TC of physician pathology services for hospital
patients through CY 2007, and section 104 of the MMSEA further extended
such payment through the first 6 months of CY 2008.
Section 136 of the MIPPA extended the payment through CY 2009.
Section 3104 of the Affordable Care Act amended the prior legislation
to extend the payment through CY 2010. Subsequent to publication of the
CY 2011 PFS final rule with comment period, section 105 of the MMEA
extended the payment through CY 2011.
2. Proposed Revisions to Payment for TC of Certain Physician Pathology
Services
Consistent with this statutory change, we are proposing to revise
Sec. 415.130(d) to specify that for services furnished after December
31, 2011, an independent laboratory may not bill the Medicare
contractor for the TC of physician pathology services furnished to a
hospital inpatient or outpatient. We would implement this provision
effective for TC services furnished on or after January 1, 2012.

E. Section 4103 of the Affordable Care Act: Medicare Coverage and
Payment of the Annual Wellness Visit Providing a Personalized
Prevention Plan Covered Under Medicare Part B

1. Incorporation of a Health Risk Assessment as Part of the Annual
Wellness Visit
a. Background and Statutory Authority--Medicare Part B Coverage of an
Annual Wellness Visit Providing Personalized Prevention Plan Services
Preventive care and beneficiary wellness are important to the
Medicare program and have become an increasing focus. In section 4103
of the Affordable Care Act, the Congress expanded Medicare coverage
under Part B to include an annual wellness visit providing personalized
prevention plan services (hereinafter referred to as the annual
wellness visit or AWV). The AWV is described more fully in section
1861(hhh) of the Act, and coverage was effective for services furnished
on or after January 1, 2011. Regulations for Medicare coverage of the
AWV are

[[Page 42836]]

established at 42 CFR 410.15. The AWV may be performed by a physician,
nonphysician practitioner (physician assistant, nurse practitioner, or
clinical nurse specialist), or a medical professional (including a
health educator, a registered dietitian, or a nutrition professional,
or other licensed practitioner) or a team of such medical
professionals, working under the direct supervision of a physician. In
summary, for CY 2011, the first AWV includes--
Establishment of an individual's medical and family
history;
Establishment of a list of current medical providers and
suppliers involved in providing medical care to the individual;
Measurement of an individual's height, weight, body mass
index (or waist circumference, if appropriate), blood pressure, and
other routine measurements as deemed appropriate, based on the
beneficiary's medical and family history;
Detection of any cognitive impairment that the individual
may have;
Review of the individual's potential (risk factors) for
depression;
Review of the individual's functional ability and level of
safety;
Establishment of a written screening schedule for the
individual such as a checklist for the next 5 to 10 years, as
appropriate, based on recommendations of the United States Preventive
Services Task Force, the Advisory Committee on Immunization Practices,
and the individual's health status, screening history, and age-
appropriate preventive services covered by Medicare;
Establishment of a list of risk factors for which primary,
secondary or tertiary interventions are recommended or underway for the
individual, including any mental health conditions or any such risk
factors or conditions that have been identified through an initial
preventive physical examination, and a list of treatment options and
their associated risks and benefits;
Furnishing of personalized health advice to the individual
and a referral, as appropriate, to health education or preventive
counseling services or programs aimed at reducing identified risk
factors and improving self management; and
Any other element determined appropriate through the
national coverage determination process (NCD).
In summary, for CY 2011, subsequent AWVs include--
An update of the individual's medical and family history;
An update of the list of current providers and suppliers
that are regularly involved in providing medical care to the
individual;
Measurement of an individual's weight (or waist
circumference), blood pressure and other routine measurements as deemed
appropriate, based on the individual's medical and family history;
Detection of any cognitive impairment that the individual
may have;
An update to the written screening schedule for the
individual;
An update to the list of risk factors and conditions for
which primary, secondary, or tertiary interventions are recommended or
are underway for the individual;
Furnishing of personalized health advice to the individual
and a referral, as appropriate, to health education or preventive
counseling services;
Any other element determined appropriate through the NCD
process.
The AWV is specifically designed as a wellness visit that focuses
on identification of certain risk factors, personalized health advice,
and referral for additional preventive services and lifestyle
interventions (which may or may not be covered by Medicare). The
elements included in the AWV differ from comprehensive physical
examination protocols with which some providers may be familiar with
since it is a visit that is specifically designed to provide
personalized prevention plan services as defined in the Act.
Section 1861(hhh)(1)(A) of the Act specifies that a personalized
prevention plan for an individual includes a health risk assessment
(HRA) that meets the guidelines established by the Secretary. In
general, an HRA is an evaluation tool designed to provide a systematic
approach to obtaining accurate information about the patient's health
status, injury risks, modifiable risk factors, and urgent health needs.
This evaluation tool is completed prior to, or as part of, an AWV. The
information from the HRA is reflected in the personalized prevention
plan that is created for the individual.
Although the AWV was effective on January 1, 2011, section 4103 of
the Affordable Care Act provided the Secretary additional time to
establish guidelines for HRAs after consulting with relevant groups and
entities (see section 1861 (hhh)(4)(A) of the Act). A technology
assessment from the Agency for Healthcare Research and Quality (AHRQ)
was commissioned to describe key features of HRAs, to examine which
features were associated with successful HRAs, and to discuss the
applicability of HRAs to the Medicare population. A draft of the
technology assessment dated January 19, 2011 is publically available on
the CMS Web site at http://www.cms.gov/determinationprocess/downloads/id79ta.pdf.
We collaborated with the Centers for Disease Control and Prevention
(CDC), due to their in-depth knowledge of HRAs, and because the CDC was
directed by section 4004(f) of the Affordable Care Act to develop
guidelines for a personalized prevention plan tool. In the November 16,
2010 Federal Register (75 FR 70009), CDC issued a notice to solicit
feedback regarding HRA guidance development. Public comments were
received from numerous relevant groups and entities including: The
American Academy of Family Physicians; the American Dietetic
Association; the American Geriatrics Society; the American College of
Cardiology; Care Continuum Alliance, physician practices; public health
agencies; healthcare research groups; and the general public.
The CDC convened a public meeting in Atlanta, Georgia in February
2011 to facilitate the development of guidance for HRAs. (See the
December 30, 2010 Federal Register (75 FR 82400)--announcement for
``Development of Health Risk Assessment Guidance, Public Forum''). This
meeting allowed broad public input from stakeholders and the general
public into the development of guidelines for evidence-based HRAs. The
Interim Guidance for Health Risk Assessments developed by the CDC is
available on the CMS Web site at http://www.cms.gov/coveragegeninfo/downloads/healthriskassessmentsCDCfinal.pdf. The CDC guidance resulted
from a review and compilation of the current scientific evidence, the
technology assessment, expert advice from those working in the field of
HRA and wellness, and takes into account public feedback from the
request for information and the public meeting. The CDC guidance
includes questions and topics to be addressed as deemed appropriate for
the beneficiary's age. Additional information regarding the CDC
guidance development process is included as part of the guidance
document. The CDC plans to publish ``A Framework for Patient-Centered
Health Assessments, a Morbidity and Mortality Weekly Report (MMWR).''
The MMWR will include additional information applicable for the
successful implementation of the HRA, such as the CDC interim guidance
document, as well as information related to implementation, feedback,
and follow-up that evidence suggests is critical for improving health
outcomes using this process. We are interested in receiving feedback
regarding the availability of

[[Page 42837]]

HRAs that are available for use by the general public.
b. Implementation
Consistent with section 1861(hhh) of the Act and the initial CDC
guidance document, we propose to amend 42 CFR 410.15 by: (1) Adding the
term ``health risk assessment'' and its definition; (2) revising the
definitions of ``first annual wellness visit providing personalized
prevention plan services'' and ``subsequent annual wellness visit
providing personalized prevention plan services;'' and (3)
incorporating the use and results of an HRA into the provision of
personalized prevention plan services during the AWV. We believe that
incorporation of the HRA supports a systematic approach to patient
wellness and is integral to providing personalized prevention plan
services. The results of the HRA will provide the foundation for and
facilitate development of the personalized prevention plan. We believe
that the results of the HRA will aid in developing the personalized
prevention plan and, once fully implemented, will increase the
efficiency of the physician's effort during the AWV.
(1) Definition of a ``Health Risk Assessment''
We propose to revise Sec. 410.15 by adding the term ``health risk
assessment'' and defining such term as an evaluation tool that meets
the following requirements:
Collects self-reported information about the beneficiary.
Can be administered independently by the beneficiary or
administered by a health professional prior to or as part of the AWV
encounter.
Is appropriately tailored to and takes into account the
communication needs of underserved populations, persons with limited
English proficiency, and persons with health literacy needs,
Takes no more than 20 minutes to complete.
Addresses, at a minimum, the following topics:
++ Demographic data, including but not limited to age, gender,
race, and ethnicity.
++ Self assessment of health status, frailty, and physical
functioning.
++ Psychosocial risks, including but not limited to depression/life
satisfaction, stress, anger, loneliness/social isolation, pain, or
fatigue.
++ Behavioral risks, including but not limited to tobacco use,
physical activity, nutrition and oral health, alcohol consumption,
sexual practices, motor vehicle safety (seat belt use), and home
safety.
++ Activities of daily living (ADLs), including but not limited to
dressing, feeding, toileting, grooming, physical ambulation (including
balance/risk of falls), and bathing.
++ Instrumental activities of daily living (IADLs), including but
not limited to shopping, food preparation, using the telephone,
housekeeping, laundry, mode of transportation, responsibility for own
medications, and ability to handle finances.
The CDC guidance describes an HRA as ``a collection of health-
related data a medical provider can use to evaluate the health status
and the health risk of an individual. An HRA will identify health
behaviors and risk factors known only to the patient (such as, smoking,
physical activity and nutritional habits) for which the medical
provider can provide tailored feedback in an approach to reduce the
risk factors'' as well as the potential for diseases for which those
risk factors are related.
The CDC guidance further explains that the ``questions/topics to be
addressed in the HRA is a compilation of the current scientific
evidence and are intended for Medicare beneficiaries as appropriate for
their age.'' These include collection of demographic data; self
assessment of health status, frailty, and physical functioning;
biometric assessments obtained by the provider; psychosocial risks; and
behavioral risks. The guidance document suggests, based on current
evidence that the following domains specific to the greater than or
equal to a 65-year-old Medicare population be included in the HRA:
Memory, activities of daily living, and instrumental activities of
daily living.
With regard to memory, the CDC guidance states ``that cognition
assessment is not part of the HRA itself, but rather an additional
aspect of the AWV * * *''. We note that the definitions of both the
first and subsequent annual wellness visit include the detection of any
cognitive impairment. The CDC guidance, consistent with section
1861(hhh)(4)(A) of the Act, specifies that an HRA should be made
available to all Medicare beneficiaries who are eligible to receive an
AWV, as defined in Sec. 410.15; can be furnished in a number of ways,
including during an encounter with a health professional or through an
interactive telephonic or web-based program, while ensuring the privacy
of the beneficiary; be provided in a patient's preferred language; and
take no longer than 20 minutes to complete. We believe that the health
professional should consider the beneficiary's needs when determining
whether assistance would be needed for the beneficiary to complete the
HRA. Factors a health professional may wish to consider include vision,
hearing, or language limitations; the communication needs of
underserved populations; persons with limited English proficiency; and
persons with health literacy needs.
The completed HRA and results would be provided to the health
professional as that term is defined in Sec. 410.15(a), as a
foundation for completing the elements included in the definitions of
first and subsequent AWVs during the AWV encounter. The CDC guidance
document explains that ``during the visit, the HRA information, and
other biometrics available are utilized by the practitioner in a
thought process intended to develop a prevention plan for the patient
to improve health status and delay the onset of disease known to be
caused by the reported behavioral risks or the patient's current health
status. The practitioner can, in a shared decisionmaking process with
the patient provide feedback in the form of educational messages,
counseling or referrals related to changing high risk behaviors and
health habits. This feedback can potentially improve health behaviors
and/or alter one's risk of disease, improve chronic disease management
or likelihood of premature death.'' For instance, the HRA may collect
aspects of the beneficiary's medical and family history, such as
history of tobacco use, that would provide a foundation for
personalized health advice, and if deemed appropriate, referral for
additional preventive services after completion of the AWV. We note
that the standards outlined in the proposed definition of the term
health risk assessment represent a minimum set of topics that need to
be addressed as part of an HRA, while allowing the health professional
the flexibility to evaluate additional topics, as appropriate, to
provide a foundation for development of a personalized prevention plan.
(2) Proposed Changes to the Definitions of ``First Annual Wellness
Visit'' and ``Subsequent Annual Wellness Visit''
In Sec. 410.15, we adopted the components of the AWV, consistent
with the statutory elements described in section 1861(hhh)(2) of the
Act. The first and subsequent annual wellness visits, as defined in
Sec. 410.15(a), are meant to represent a beneficiary visit focused on
prevention. Among other things, the annual wellness visit encourages
beneficiaries to obtain the preventive services covered by Medicare

[[Page 42838]]

that are appropriate for them. First and subsequent AWVs also include
elements that focus on the furnishing of personalized health advice and
referral, as appropriate, to health education, preventive counseling
services, programs aimed at improving self-management, and community-
based lifestyle interventions.
We are proposing that the definitions of ``first annual wellness
visit providing personalized prevention plan services'' and
``subsequent annual wellness visit providing personalized prevention
plan services'' be revised to incorporate the use and results of an
HRA. The HRA is an integral part of the provision of personalized
prevention plan services, consistent with section 1861(hhh) of the Act.
We propose to incorporate the HRA by revising the definitions of first
and subsequent AWVs as follows:
Specify that the AWV take into account the results of an
HRA.
Add the review (and administration, if needed) of an HRA
as an element of both first and subsequent AWVs.
Specify that the establishment of a written screening
schedule for the individual, such as a checklist, includes and takes
into account the HRA.
The HRA facilitates a systematic method for identifying health
behaviors and risk factors known to the patient (such as: Smoking,
physical activity, and nutritional habits) for which the medical
provider can discuss and provide tailored feedback aimed at reducing
risk factors as well as reducing the potential for developing the
diseases to which they are related.
During the AWV encounter, the HRA information is utilized by the
health professional in a thought process intended to develop a
personalized prevention plan for the patient to improve health status
and delay the onset of disease. For instance, if the information
provided by the HRA indicated that the beneficiary had a current or
past history of tobacco use, the health professional may deem it
appropriate to perform those commonly used aspects of a clinical
evaluation (for instance, listening to (auscultation) the heart and
lungs) in order to provide the appropriate personalized health advice
and referrals for additional preventive services such as tobacco
cessation counseling.
The CDC guidance document provides a list of questions/topics to be
addressed in an HRA, including biometric assessments of height, weight,
body mass index (BMI), systolic/diastolic blood pressure, blood lipids
(HDL/LDL and total cholesterol, triglycerides), and blood glucose.
Additionally, the CDC guidance document suggested that the information
collected via the HRA would be reconciled with biometric assessments
obtained by the provider. Consistent with section 1861(hhh)(2) of the
Act, the definitions for first AWV and subsequent AWVs address most of
the biometric assessments suggested in the CDC guidance document. We
are requesting public comment on the applicability and impact of
including additional elements and biometric assessments to first and
subsequent AWVs, per the Secretary's authority under section
1861(hhh)(2)(G) of the Act.
We believe that the incorporation of the HRA would increase the
efficiency of the health professional's effort during the AWV. For
instance, during the AWV encounter, the health professional furnishing
the AWV would review the information reported in the HRA, which would
serve as the basis for a personalized prevention plan provided during
the AWV encounter. The beneficiary would leave the visit with
personalized health advice, appropriate referrals, and a written
individualized screening schedule, such as a check list. We would not
expect that the health professional would provide only general
recommendations during the AWV encounter and then mail a personalized
prevention plan that incorporates an HRA to the beneficiary outside of
the AWV encounter. While the AWV is a wellness visit that focuses on
wellness and disease prevention, a follow-up visit to treat an
identified illness may be needed to address an urgent health issue. For
example, if a beneficiary is determined to have high blood pressure, a
follow-up visit for further review of symptoms and evaluation and
management, along with determining whether additional interventions are
necessary, may be performed after the completion of the AWV as a
separate service.
We are requesting public comment on the overall impact and burden
of the AWV on health professional practices, including the impact that
incorporation of the use of an HRA will have on health professionals
and their practices. Specifically, we are seeking public comment on the
following:
The impact of use of an HRA on health professional
practices;
The burden on health professional practices of
incorporating an HRA into subsequent AWVs as well as the first AWV;
The impact of the elements included in the definitions of
first and subsequent AWV.
Modification of those AWV elements for which the Secretary
has authority to determine appropriateness.
We are also proposing changes to the definition of the term
``subsequent annual wellness visit providing personalized prevention
plan services'' to clarify that the health professional should furnish
personalized prevention plan services and updated information if there
have been changes since the beneficiary's last AWV, whether that was a
first AWV or a subsequent AWV. In the CY 2011 PFS final rule with
comment period, we stated in the definition of ``subsequent annual
wellness visit providing personalized prevention plan services'' that
certain elements should be updated based on information developed
during the first AWV (for example, lists of risk factors and screening
schedules). Since all AWVs that follow the first AWV are considered
subsequent AWVs, the health professional should update elements that
were developed during the previous AWV if there have been changes. The
proposed changes to the definition of the term ``subsequent annual
wellness visit providing personalized prevention plan services'' are as
follows:
We propose that newly redesignated paragraph (iii) state
``an update of the list of current providers and suppliers that are
regularly involved in providing medical care to the individual as that
list was developed for the first annual wellness visit providing
personalized prevention plan services or the previous subsequent annual
wellness visit providing personalized prevention plan services.''
We propose that newly redesignated paragraph (vi)(B),
state ``the list of risk factors and conditions for which primary,
secondary or tertiary interventions are recommended or are underway for
the individual as that list was developed at the first annual wellness
visit providing personalized prevention plan services or the previous
subsequent annual wellness visit providing personalized prevention plan
services.''
2. The Addition of a Health Risk Assessment as a Required Element for
the Annual Wellness Visit Beginning in 2012
Section 4103 of the Affordable Care Act created a new benefit for
an ``annual wellness visit'' (AWV) providing personalized prevention
plan services (PPPS). The Affordable Care Act amended section
1861(s)(2) of the Act by adding new subparagraph (FF) to provide for
coverage of the AWV beginning January 1, 2011. Section 4103

[[Page 42839]]

of the Affordable Care Act also added new subsection (hhh) to section
1861 of the Act to define ``personalized prevention plan services'' and
to specify who may furnish these services. Finally, section 4103 of the
Affordable Care Act amended section 1848(j)(3) of the Act and provided
for payment of AWVs under the PFS, and specifically excluded the AWV
from the hospital OPPS. As discussed in the CY 2011 PFS final rule with
comment period (75 FR 73401), a single Medicare payment is made when an
AWV is furnished by a physician, physician assistant, nurse
practitioner, or clinical nurse specialist, or by a medical
professional or team of medical professionals, under the direct
supervision of a physician.
In the CY 2011 PFS final rule with comment period (75 FR 73409), we
established two HCPCS G-codes for reporting the AWV beginning in CY
2011: G0438 (Annual wellness visit; includes a personalized prevention
plan of service (PPPS), first visit) and G0439 (Annual wellness visit;
includes a personalized prevention plan of service (PPPS), subsequent
visit).
A beneficiary is eligible for only one first AWV (HCPCS code G0438)
covered by Medicare that must include all of the required elements that
we adopted in our final policy for the CY 2011 PFS final rule with
comment period (75 FR 73399). All subsequent AWVs (HCPCS code G0439)
include the required elements for those visits as finalized in the CY
2011 PFS final rule with comment period (75 FR 73399). All AWVs other
than the beneficiary's first AWV shall be reported as subsequent
visits, even if a different practitioner furnished the subsequent AWV.
We expect there to be continuity and communication among the
practitioners caring for beneficiaries over time with respect to AWVs,
and this would include the case where a different practitioner
furnishing a subsequent AWV would update the information in the
patient's medical record based on the patient's interval history since
the previous AWV.
As we stated in the CY 2011 PFS final rule with comment period (75
FR 73409), we believe that the first AWV described by HCPCS code G0438
is similar to the IPPE that is currently reported with HCPCS code G0402
(Initial preventive physical examination; face-to-face visit, services
limited to new beneficiary during the first 12 months of Medicare
enrollment). We note that in the CY 2010 PFS final rule with comment
period discussion of payment for the IPPE (74 FR 61767), we stated that
in the context of physician work and intensity, HCPCS code G0402 was
most equivalent to CPT code 99204 (Level 4 new patient office or other
outpatient visit). In addition, in the CY 2011 PFS final rule with
comment period (75 FR 73410), we indicated that subsequent AWV's
described by HCPCS code G0439 are most similar, from the perspectives
of physician work and PE, to CPT code 99214 (Level 4 established
patient office or other outpatient visit). Therefore, we valued HCPCS
codes G0438 and G0439 for payment under the PFS using a crosswalk
methodology for the work RVUs and direct PE inputs from the level 4 new
and established patient office or other outpatient visit CPT codes,
respectively.
a. Payment for AWV services with the inclusion of an HRA element
In the CY 2011 PFS final rule with comment period (75 FR 73411), we
stated ``that when the HRA is incorporated in the AWV, we will
reevaluate the values for HCPCS codes G0438 and G0439''. As discussed
in the CY 2011 PFS final rule with comment period, the services
described by CPT codes 99204 and 99214 already include `preventive
assessment' forms. For CY 2012, we believe that the current payment
crosswalk for HCPCS codes G0438 and G0439 continue to be most
accurately equivalent to a level 4 E/M new or established patient
visit; and therefore, we are proposing to continue to crosswalk HCPCS
codes G0438 and G0439 to CPT codes 99204 and 99214, respectively.

F. Quality Reporting Initiatives

1. Physician Payment, Efficiency, and Quality Improvements--Physician
Quality Reporting System
a. Program Background and Statutory Authority
The Physician Quality Reporting System is a quality reporting
program that provides incentive payments and payment adjustments to
identified eligible professionals who satisfactorily report data on
quality measures for covered professional services furnished during a
specified reporting period. The Physician Quality Reporting System was
initially implemented in 2007 as a result of section 101 of Division B
of the Tax Relief and Health Care Act of 2006. The Physician Quality
Reporting System was extended and further enhanced as a result of the
Medicare Improvements for Patients and Providers Act of 2009 (MIPPA),
which was enacted on July 15, 2008, and the Affordable Care Act, which
was enacted on March 23, 2010.
Changes to the Physician Quality Reporting System as a result of
these laws, as well as information about the Physician Quality
Reporting System in 2007, 2008, 2009, 2010, and 2011 are discussed in
detail in the CY 2008 PFS proposed and final rules (72 FR 38196 through
38204 and 72 FR 66336 through 66353, respectively), CY 2009 PFS
proposed and final rules (73 FR 38558 through 38575 and 73 FR 69817
through 69847, respectively), CY 2010 PFS proposed and final rules (74
FR 33559 through 33600 and 74 FR 61788 through 61861, respectively),
and CY 2011 PFS proposed and final rules (75 FR 73487 through 73552).
Further detailed information, about the Physician Quality Reporting
System, related laws, and help desk resources, is available on the CMS
Web site at http://www.cms.gov/PQRS.
In the CY 2011 PFS final rule (75 FR 73618), we established 42 CFR
414.90 governing the Physician Quality Reporting System.
b. Methods of Participation
There are two ways an eligible professional may participate in the
Physician Quality Reporting System: (1) As an individual eligible
professional or (2) as part of a group practice under the Physician
Quality Reporting System group practice reporting option (GPRO). The
details of each proposed method of participation are described in this
section.
(1) Individual Eligible Professionals
As defined at 42 CFR 414.90(b) the term ``eligible professional''
means any of the following: (1) A physician; (2) a practitioner
described in section 1842(b)(18)(C) of the Act; (3) a physical or
occupational therapist or a qualified speech-language pathologist; or
(4) a qualified audiologist. For more information on which
professionals are eligible to participate in the Physician Quality
Reporting System, we refer readers to the ``List of Eligible
Professionals'' download located in the ``How to Get Started section of
the Physician Quality Reporting CMS Web site at: http://www.cms.gov/PQRS/03_How_To_Get_Started.asp#TopOfPage.
(2) Group Practices
(A) Background and Authority
As required by section 1848(m)(3)(C)(i) of the Act, we established
and have had in place since January 1, 2010, a process under which
eligible professionals in a group practice are treated as
satisfactorily submitting data on quality measures under the Physician
Quality Reporting System if, in lieu of reporting measures under the
Physician Quality Reporting System, the group practice reports measures

[[Page 42840]]

determined appropriate by the Secretary, for example measures that
target high-cost chronic conditions and preventive care, in a form and
manner, and at a time specified by the Secretary. Section
1848(m)(3)(C)(ii) of the Act requires that this process provide for the
use of a statistical sampling model to submit data on measures, for
example the model used under the Medicare Physician Group Practice
(PGP) demonstration project under section 1866A of the Act. We
established a group practice reporting option (GPRO) for the Physician
Quality Reporting System under 42 CFR 414.90(g).
(B) Proposed Definition of Group Practice
Under 42 CFR 414.90(b), a ``group practice'' means ``a single Tax
Identification Number (TIN) with two or more eligible professionals, as
identified by their individual National Provider Number (NPI), who have
reassigned their Medicare billing rights to the TIN''. We propose to
change the definition of ``group practice'' under 42 CFR 414.90(b).
Specifically, we propose that under the Physician Quality Reporting
System, a ``group practice'' would consist of a physician group
practice, as defined by a TIN, with 25 or more individual eligible
professionals (or, as identified by NPIs) who have reassigned their
billing rights to the TIN. This proposed definition of group practice
is different from the definition of group practice that was applicable
for the 2011 Physician Quality Reporting System, which defined a group
practice as two or more eligible professionals.
For the 2010 Physician Quality Reporting System, our definition of
``group practice'' was limited to practices with 200 or more eligible
professionals because our intent was to model the Physician Quality
Reporting System GPRO after a quality reporting program that group
practices may already be familiar with--the Physician Group Practice
(PGP) demonstration. Since participation in the PGP demonstration was
limited to large group practices, we wanted to initially limit
participation in the Physician Quality Reporting System GPRO to similar
large group practices. In 2011, we expanded this definition to include
practices with 2-199 eligible professionals because we developed a
second reporting option (GPRO II) specifically for smaller group
practices that was based largely on the Physician Quality Reporting
System reporting options for individual eligible professionals. We have
since observed that many of these smaller group practices that self-
nominated to participate in GPRO II for 2011 subsequently elected to
opt out of participation in the GPRO II for 2011 so that members of the
group practices can participate in the Physician Quality Reporting
System individually instead. Out of 107 total groups that self-
nominated for GPRO II, only 25 group practices comprised of 2-10
eligible professionals and 15 group practices comprised of 11-25
eligible professionals are still participating in GPRO II for 2011 at
this time.
Since the GPRO II seems to be a less attractive reporting option
than GPRO I, we are proposing in section IV.F.1.b.2 of this proposed
rule to consolidate GPRO I and II into a single GPRO. However, since
our experience with using the GPRO submission web interface under the
Physician Quality Reporting System has been limited to larger practices
or practices participating in demonstration projects, we hesitate to
expand what we referred to as GPRO I to all group practices until we
gain some experience with smaller practices on a larger scale. For
example, we believe that participation under the Physician Quality
Reporting System GPRO is a more effective method of participation for
larger as opposed to smaller group practices. As described in section
IV.F.1.e.6 of this proposed rule, a group practice must take extra
steps to participate in the Physician Quality Reporting System GPRO,
for example reporting on more measures overall than is required for
individual eligible professionals. In contrast, members of a group
practice who choose to participate in the Physician Quality Reporting
System as individual eligible professionals could satisfactorily report
by reporting as few as 3 measures. We believe the additional reporting
burden associated with participating under the Physician Quality
Reporting System GPRO may make the GPRO less attractive for smaller
practices. For these reasons, we propose to change the definition of
``group practice'' at 42 CFR 414.90(b) to groups with 25 or more
eligible professionals.
Our proposal to change the definition of group practice would not
preclude individual eligible professionals in group practices of less
than 25 eligible professionals from participating in the Physician
Quality Reporting System, since members of these group practices may
still participate as individual eligible professionals. We believe that
smaller group practices are more closely akin to individual eligible
professionals with respect to participation under the Physician Quality
Reporting System. We request comments on the proposed change to the
definition of ``group practice'' under 42 CFR 414.90(b) under the
Physician Quality Reporting System and also, whether we should retain
the existing definition under the regulation despite our proposal to
retain only the GPRO I for 2012.
We recognize that a group's size can fluctuate throughout the year
as professionals move from practice to practice. We allow for
fluctuation of the group practice's size throughout the reporting
period. However, the group practice's size after the group practice's
participation is approved by CMS must continue to meet the definition
of a group practice as proposed in 42 CFR 414.90(b) for the entire
reporting period.
We also note that under 42 CFR 414.90(g)(1), a group practice of
any size (including solo practitioners) or comprised of multiple TINs
participating in a Medicare approved demonstration project of other
programs would also be deemed to be participating in the Physician
Quality Reporting System GPRO. For example, the PGP demonstration, as
well as the Medicare Shared Savings Program (governing accountable care
organizations (ACOs)), Pioneer ACO, and EHR demonstrations have
incorporated or proposed to incorporate aspects of the Physician
Quality Reporting System reporting requirements and incentives under
those respective programs.
Our intention to recognize (deem) group practices participating in
such other programs or demonstration projects as having participated in
the Physician Quality Reporting System was to ensure that such groups
would not be barred from participating in the group practice reporting
option under the eRx Incentive program, since we previously required
that group practices interested in participating in the eRx Incentive
Program also participate in the Physician Quality Reporting System
GPRO. We are not proposing to change the eligibility for group
practices, including those participating in the programs mentioned
above, to participate in the eRx Incentive program. As discussed in the
proposed changes to the eRx Incentive Program in section IV.F.1.e.2
later in this proposed rule, however, we are proposing that a group
practice must self-nominate to participate under the eRx Incentive
Program's group practice reporting option. In addition, we are
proposing to make a technical change to 42 CFR 414.90(g)(1) to
eliminate the reference to group practices in demonstrations that are
deemed to have participated in the Physician Quality Reporting System.
We believe that this language is unnecessary given the regulation at 42
CFR

[[Page 42841]]

414.92(b). In addition, we believe that retaining the reference at 42
CFR 414.90(g)(1) may cause confusion with regard to participation under
the Physician Quality Reporting System or inappropriately suggest that
duplicate Physician Quality Reporting System incentive payments are
available to group practices under both the Physician Quality Reporting
System and the other types of programs mentioned previously. We also
propose to make a technical change to 42 CFR 414.92(b) to more broadly
address group practices in other types of programs that incorporate
Physician Quality Reporting System reporting requirements and
incentives, so that the regulation does not solely reference
demonstrations. We seek comments on these proposed technical changes to
the regulations.
Since the introduction of the Physician Quality Reporting System
GPRO in 2010, eligible professionals within a group practice were
required to assign their billing rights to a single TIN. For 2012, as
stated previously, we are proposing to retain this requirement.
However, in an effort to align the Physician Quality Reporting System
with other CMS quality reporting group programs, we considered amending
the definition of ``group practice'' to allow participation in the
Physician Quality Reporting System GPRO by groups with 25 or more
individual eligible professionals (or, as identified by NPIs) who
practice using multiple TINs. We believe that changing the definition
of group practice in the Physician Quality Reporting System for future
program years to align with other quality reporting group programs may
be beneficial to providers who wish to participate in multiple CMS
quality reporting programs that apply to group practices. Although we
are not proposing to do so at this time, we invite public comment on
possibly expanding the definition of group practice to be comprised of
multiple TINs in future years of the program.
We believe that to the extent we changed the definition of group
practice in future years to allow for participation by group practices
that use multiple TINs, it would require us to create additional
parameters related to the relationship between the various TINs. As
such, we also invite public comment on parameters that should be set to
ensure that these multiple TINs represent a single integrated practice,
such as but not limited to:
Must eligible professionals in a group practice share
certain common characteristics in order to be eligible for
participation under the Physician Quality Reporting System GPRO, such
as geographic location or specialty?
Should there be a limit to how many TINs may be comprised
in a single group practice?
We invite public comment on parameters that may be set should we
decide to amend the definition of group practice to include multiple
TINs in future program years.
(C) Proposed Process for Physician Group Practices to Participate as
Group Practices
In order to participate in the Physician Quality Reporting System
GPRO for 2012 and subsequent years, we propose to require group
practices to complete a self-nomination process and to meet certain
technical and other requirements described later in this section in
greater detail. As in prior years, we are proposing to require these
self-nomination and additional process requirements so that we may
identify which group practices are interested in participating in the
Physician Quality Reporting System as a GPRO as well as to ensure that
group practices participating in the GPRO understand the process for
satisfactorily reporting Physician Quality Reporting System quality
measures under the GPRO method of reporting.
We propose to require that group practices interested in
participating in the Physician Quality Reporting System GPRO for the
first time submit a self-nomination statement for the respective year
the group practice wishes to participate as a Physician Quality
Reporting System GPRO via a Web-based tool that includes the group
practice's TIN(s) and name of the group practice, the name and e-mail
address of a single point of contact for handling administrative
issues, as well as the name and e-mail address of a single point of
contact for technical support purposes. A group practice that submits
an incomplete self-nomination statement, such as a valid e-mail address
is not provided, would not be considered for inclusion in the Physician
Quality Reporting System GPRO. We would notify any group practice that
submits an incomplete self-nomination statement.
If it is not operationally feasible for us to collect self-
nomination statements via a Web-based tool for 2012, we propose to
require that group practices interested in participation in the
Physician Quality Reporting System GPRO submit a self-nomination
statement via a letter accompanied by an electronic file submitted in a
format specified by us (such as a Microsoft Excel file) that includes
the group practice's TIN(s) and name of the group practice, the name
and e-mail address of a single point of contact for handling
administrative issues, as well as the name and e-mail address of a
single point of contact for technical support purposes. Under this
proposed submission mechanism, a group practice that submits an
incomplete self-nomination statement (such as, a valid e-mail address
is not provided), would not be considered for inclusion in the 2012
Physician Quality Reporting System GPRO.
For the Physician Quality Reporting System GPRO, we propose that
the self-nomination statement must also indicate the group practice's
compliance with the following requirements:
Agree to attend and participate in all mandatory GPRO
training sessions.
Is an established Medicare provider that has billed
Medicare Part B on or after January 1 and prior to October 29 of the
year prior to the reporting period for the respective year. For
example, for purposes of participating in the 2012 Physician Quality
Reporting System GPRO, the group practice must have billed Medicare
Part B on or after January 1, 2011 and prior to October 29, 2011.
Agree to have the results on the performance of their
Physician Quality Reporting System measures publicly posted on the
Physician Compare Web site.
Obtain and/or have access to the identity management
system specified by CMS (such as, but not limited to, the Individuals
Authorized Access to CMS Computer Systems, or IACS) to submit Medicare
clinical quality data to a CMS clinical data warehouse.
Provide CMS access (upon request for validation purposes)
to review the Medicare beneficiary data on which Physician Quality
Reporting System GPRO submissions are founded or provide to CMS a copy
of the actual data (upon request).
Furthermore, to ensure that accurate data is being reported, we
reserve the right to validate the data submitted by GPROs.
We propose that, for 2012 and future years, a group practice that
wishes to participate in both the Physician Quality Reporting System
and eRx GPRO (see the eRx Incentive Program's section
IV.F.2.(b).(2).(B). of this proposed rule) must indicate its desire to
participate in both programs in its self-nomination statement.
In 2012, the GPRO is interested in testing the extraction of EHR
data submitted by group practices through the GPRO Web interface. We
propose that those group practices wishing to participate in this test
must state their

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interest to participate in the group practice's self-nomination letter.
We further propose that group practices that wish to self-nominate
must do so by January 31 of the calendar year in which the group
practice wishes to participate in the Physician Quality Reporting
System GPRO. For example, in order to participate in the GPRO for the
2012 Physician Quality Reporting System, the group practice would need
to self-nominate by January 31, 2012. Upon receipt of the self-
nomination statements, we would assess whether the participation
requirements for the respective reporting period were met by each group
practice using Medicare claims data from the year prior to the
respective reporting period. We would not preclude a group practice
from participating in the GPRO if we discover, from analysis of the
Medicare claims data, that there are some eligible professionals
(identified by NPIs) that are not established Medicare providers (that
is, have not billed Medicare Part B on or after January 1 and prior to
or on October 29 of the year prior to the respective reporting period)
as long as the group has at least the minimum proposed number (that is,
25) of established Medicare providers required to participate in the
Physician Quality Reporting System as a group practice. Eligible
professionals, as classified by their NPIs, who do not submit Medicare
Part B claims for PFS covered professional services during the
reporting period, however, would not be included in our incentive
payment calculations.
Furthermore, we propose to allow group practices who have
previously participated in the Physician Quality Reporting System GPRO
to automatically be qualified to participate in the GPRO in 2012 and
future program years. For example, group practices that were selected
to participate in the 2011 Physician Quality Reporting System GPRO I or
GPRO II (provided the group practice is still comprised of at least 25
eligible professionals) would automatically be qualified to participate
in the 2012 Physician Quality Reporting System GPRO and would not need
to complete the 2012 Physician Quality Reporting System GPRO
qualification process. These practices would, however, need to notify
CMS in writing of their desire to continue participation in the
Physician Quality Reporting System GPRO for the respective program
year.
We recognize that, for various reasons, there potentially could be
a discrepancy between the number of eligible professionals (that is,
NPIs) submitted by the practice during the self-nomination process and
the number of eligible professionals billing Medicare under the
practice's TIN as people move in and out of practices. Therefore, if we
find more NPIs in the Medicare claims than the number of NPIs submitted
by the practice during the self-nomination process and this would
result in the practice being subject to different criteria for
satisfactory reporting, we propose to notify the practice of this
finding as part of the self-nomination process. At this point, the
practice would have the option of either agreeing to be subject to the
different criteria for satisfactory reporting or opting out of
participation in the Physician Quality Reporting System GPRO to enable
the members of their practice to participate in the Physician Quality
Reporting System as individual eligible professionals.
We invite public comment on our proposals regarding the process for
physician group practices to participate in the Physician Quality
Reporting System GPRO.
c. Proposed Reporting Period
Since the implementation of the Physician Quality Reporting System
in 2007, depending on an eligible professional's chosen reporting
mechanism, we have offered up to two different reporting periods for
satisfactorily reporting Physician Quality Reporting System quality
measures: A 12-month reporting period (from January 1 through December
31 of the respective program year) and a 6-month reporting period (from
July 1 through December 31 of the respective program year). Section
1848(m)(5)(F) of the Act requires CMS to provide alternative reporting
periods and criteria for measures groups and registry reporting. To
comply with this provision, for 2012 and subsequent years, CMS is
proposing to retain the 6-month reporting period option for the
reporting of Physician Quality Reporting System measures groups via
registry.
In addition, for 2012 and subsequent years, we propose to modify 42
CFR 414.90(f)(1) to specify a 12-month reporting period (that is,
January 1 through December 31 of the respective program year),
consistent with section 1848(m)(6)(C)(i)(II) of the Act, for the
satisfactory reporting of Physician Quality Reporting System quality
measures for claims, registry, and EHR-Based reporting. Additionally,
we propose to modify 42 CFR 414.90(g)(1) to specify a 12-month
reporting period (that is, January 1 through December 31 of the
respective program year) for the Physician Quality Reporting System
GPRO. We understand that in proposing these modifications to 42 CFR
414.90, we are proposing to eliminate the 6-month reporting period for
claims and registry previously available under the Physician Quality
Reporting System (with the exception of reporting measures groups via
registry). Although we are not proposing a 6-month reporting period for
claims and registry reporting (for reporting individual measures via
registry), we note that the 12-month reporting period aligns with other
CMS quality reporting programs. In addition, the elimination of the 6-
month reporting period for claims and registry reporting (for reporting
individual measures via registry) will align the reporting periods of
these mechanisms with the EHR reporting mechanism. We further believe
that the elimination of the 6-month reporting period for claims and
registry reporting (for reporting individual measures via registry)
will help to streamline and simplify the reporting requirements for the
Physician Quality Reporting System without substantial burden to
eligible professionals who may still satisfactorily report using the
12-month reporting period.
d. Proposed Reporting Mechanisms--Individual Eligible Professionals
For the purpose of reporting quality measures under the Physician
Quality Reporting System, we propose to retain the claims-based,
registry-based, and EHR-Based reporting mechanism for 2012 and beyond.
Accordingly, we propose to modify 42 CFR 414.9(f) to reflect this
proposal. We are proposing to retain these reporting mechanisms in
order to provide eligible professionals with multiple mechanisms from
which to satisfactorily report Physician Quality Reporting System
quality measures. We hope that offering multiple reporting mechanisms
will aid in encouraging participation in the Physician Quality
Reporting System.
As in previous years, the individual quality measures or measures
groups an eligible professional selects will dictate the applicable
reporting mechanism(s). In addition, while eligible professionals can
attempt to qualify for a Physician Quality Reporting System incentive
under multiple reporting mechanisms, the eligible professional must
satisfy the criteria for satisfactory reporting proposed for the
respective program year, with respect to a single reporting mechanism
to qualify for an incentive. We further propose that we would not
combine data submitted via multiple reporting mechanisms to determine
incentive eligibility. We invite public comment concerning the general,
proposed reporting mechanisms for the

[[Page 42843]]

Physician Quality Reporting System for 2012 and beyond.
(1) Claims-Based Reporting
As we noted previously, we propose to retain the claims-based
reporting mechanism for the Physician Quality Reporting System for 2012
and beyond. For eligible professionals who choose to participate in the
Physician Quality Reporting System by submitting data on individual
quality measures or measures groups through the claims-based reporting
mechanism, we propose that the eligible professional be required to
submit the appropriate Physician Quality Reporting System quality data
codes (QDCs) on the professionals' Medicare Part B claims. QDCs for the
eligible professional's selected individual Physician Quality Reporting
System quality measures or measures group may be submitted to CMS at
any time during the reporting period for the respective program year.
However, as required by section 1848(m)(1)(A) of the Act, all claims
for services furnished during the reporting period would need to be
processed by no later than 2 months after the end of the reporting
period, to be included in the program year's Physician Quality
Reporting System analysis. For example, all claims for services
furnished for the 2012 Physician Quality Reporting System would need to
be processed by no later than 2 months after the end of the reporting
period for the 2012 Physician Quality Reporting System, that is,
processed by February 28, 2013 for the reporting period that ends
December 31, 2012. We invite public comment on our proposed
requirements for eligible professionals who choose the claims-based
reporting mechanism for 2012 and beyond.
(2) Registry-Based Reporting
(A) Proposed Requirements for the Registry-Based Reporting Mechanism--
Individual Eligible Professionals
As stated previously, we propose to retain the registry-based
reporting mechanism via a qualified registry (as defined in section
(2)(B) of this section) for the Physician Quality Reporting System for
2012 and beyond. With regard to specific requirements for registry-
based reporting for individual eligible professional reporters under
the Physician Quality Reporting System, we propose that in order to
report quality data on the Physician Quality Reporting System
individual quality measures or measures groups for the respective
program year through a qualified registry, an eligible professional or
group practice must enter into and maintain an appropriate legal
arrangement with a qualified Physician Quality Reporting System
registry. Such arrangements would provide for the registry's receipt of
patient-specific data from the eligible professional and the registry's
disclosure of quality measures results and numerator and denominator
data on Physician Quality Reporting System quality measures or measures
groups on behalf of the eligible professional to CMS. Thus, the
registry would act as a Health Insurance Portability and Accountability
Act of 1996 (Pub. L. 104-191) (HIPAA) Business Associate and agent of
the eligible professional. Such agents are referred to as ``data
submission vendors.'' The ``data submission vendors'' would have the
requisite legal authority to provide clinical quality measures results
and numerator and denominator data on individual quality measures or
measures groups on behalf of the eligible professional for the
Physician Quality Reporting System.
We propose that the registry, acting as a data submission vendor,
would submit CMS-defined registry-derived measures information to our
designated database for the Physician Quality Reporting System, using a
CMS-specified record layout, which would be provided to the registry by
CMS. Similarly, we propose that eligible professionals choosing to
participate in the Physician Quality Reporting System through the
registry-based reporting mechanism for the respective program year must
select a qualified Physician Quality Reporting System registry and
submit information on Physician Quality Reporting System individual
quality measures or measures groups to the selected registry in the
form and manner and by the deadline specified by the registry.
We propose to post a list of qualified registries for the Physician
Quality Reporting System for the respective program year on the
Physician Quality Reporting System section of the CMS Web site at
http://www.cms.gov/pqrs, which would include the registry name, contact
information, the measures and/or measures group (if qualified) for
which the registry is qualified and intends to report for the
respective program year, and information regarding the cost of the
registry to eligible professionals. However, we do not anticipate
making this list available prior to the start of the respective program
year. That is, we do not anticipate making the list of qualified
registries for the 2012 Physician Quality Reporting System available
prior to the start of the 2012 program year. We propose to post the
names of the Physician Quality Reporting System qualified registries
for the respective reporting period in the following 3 phases based on:
(1) The registry's success in submitting Physician Quality Reporting
System quality measures results and numerator and denominator data on
the quality measures in a prior Physician Quality Reporting System
program year (2008, 2009, 2010, 2011, etc.); (2) the registry's
submission of a letter indicating their continued interest in being a
Physician Quality Reporting System registry by October 31 of the year
prior to the program year (that is, by October 31, 2011 for the 2012
program year); and (3) the registry's compliance with the Physician
Quality Reporting System registry requirements for the respective
program year as indicated by CMS' registry vetting process. The listing
of a qualified registry will depend on which of the 3 proposed phases
is most applicable to the registry. The manner in which we post the
list of qualified registries is based on prior experience with
participation in the Physician Quality Reporting System as a registry
vendor.
(B) 2012 Proposed Qualification Requirements for Registries
Although we are proposing to establish the registry-based reporting
mechanism as a way to report Physician Quality Reporting System quality
measures for 2012 and beyond, we propose that the following proposed
qualification requirements only apply for the 2012 program year. For
the Physician Quality Reporting System in 2012, as in prior program
years, we propose to require a self-nomination process for registries
wishing to submit Physician Quality Reporting System quality measures
or measures groups on behalf of eligible professionals for services
furnished during the applicable reporting periods in 2012. This
qualification process allows us to ensure that registries are fully
informed of the Physician Quality Reporting System reporting process
and to ensure the registry is qualified, thereby improving the
likelihood of accurate reporting.
We note that third party intermediaries may participate in various
capacities under the Physician Quality Reporting System. In addition,
in an effort to encourage the electronic submission of quality measures
data from eligible professionals' EHRs, we are proposing EHR-Based
reporting, as discussed later in this section. As a result, we believe
it is important to distinguish entities that collect their data from an
EHR from those entities that collect their data from other sources. As
such, as discussed here and below, we propose, the following two

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categories of third party intermediaries that would be able to submit
Physician Quality Reporting System measures data on behalf of eligible
professional: (1) A registry, as defined at 42 CFR 414.90(b), which
would be any data submission vendor submitting data from a source other
than an EHR on behalf of eligible professionals that meets the proposed
registry qualification requirements later in this section; and (2) EHR
data submission vendors, which would be a data submission vendor that
obtains its data from an eligible professional's EHR and that meets the
2012 EHR qualification requirements. However, for operational reasons,
we may reserve the right to limit such entities to a single role such
that the entity would need to decide whether it wants to serve as a
registry or EHR data submission vendor but not both. We note that a
registry could serve as an ``EHR data submission vendor'' to the extent
that it obtains data from an eligible professional's EHR, but would
need to meet the proposed 2012 EHR qualification requirements. To be
considered a qualified registry for purposes of serving as a registry
under the program and submitting individual quality measures on behalf
of eligible professionals who choose the registry reporting mechanism
for 2012, we propose that both registries new to the Physician Quality
Reporting System and those previously qualified must:
Be in existence as of January 1, 2012.
Have at least 25 participants by January 1, 2012.
Provide at least 1 feedback report, based on the data
submitted to them for the 2012 Physician Quality Reporting System
incentive reporting period, and if technically feasible, provide at
least 2 feedback reports throughout the year to participating eligible
professionals. Although it is not a requirement that registries provide
interim feedback reports, we believe it is in the stakeholder's
interest to require early registry collection of data for purposes of
providing a feedback report to eligible professionals before the end of
the 2012 Physician Quality Reporting System incentive reporting period
to determine what steps, if any, an eligible professional should take
to meet the criteria for satisfactory reporting.
For purposes of distributing feedback reports to eligible
professionals, collect an eligible professional's e-mail addresses and
have documentation from the eligible professional authorizing the
release of his or her e-mail address.
Not be owned and managed by an individual locally-owned
single-specialty group (in other words, single-specialty practices with
only 1 practice location or solo practitioner practices would be
prohibited from self-nominating to become a qualified Physician Quality
Reporting System registry).
Participate in ongoing 2012 Physician Quality Reporting
System mandatory support conference calls hosted by CMS (approximately
1 call per month), including an in-person registry kick-off meeting to
be held at CMS headquarters in Baltimore, MD. Registries that miss more
than one meeting would be precluded from submitting Physician Quality
Reporting System data for the reporting year (2012).
Be able to collect all needed data elements and transmit
to CMS the data at the TIN/NPI level for at least 3 measures, which is
the minimum amount of measures on which an eligible professional is
required to report, in the 2012 Physician Quality Reporting System
(according to the posted 2012 Physician Quality Reporting System
Measure Specifications);
Be able to calculate and submit measure-level reporting
rates or, upon request, the data elements needed to calculate the
reporting rates by TIN/NPI.
Be able to calculate and submit, by TIN/NPI, a performance
rate (that is, the percentage of a defined population who receive a
particular process of care or achieve a particular outcome based on a
calculation of the measure's numerator and denominator specifications)
for each measure on which the TIN/NPI reports or, upon request the
Medicare beneficiary data elements needed to calculate the reporting
rates.
Be able to separate out and report on Medicare Part B FFS
patients.
Provide the name of the registry.
Provide the reporting period start date the registry will
cover.
Provide the reporting period end date the registry will
cover.
Provide the measure numbers for the Physician Quality
Reporting System quality measures on which the registry is reporting.
Provide the measure title for the Physician Quality
Reporting System quality measures on which the registry is reporting.
Report the number of eligible instances (reporting
denominator).
Report the number of instances a quality service is
performed (reporting numerator).
Report the number of performance exclusions, meaning the
quality action was not performed for a valid reason as defined by the
measure specification.
Report the number of reported instances, performance not
met (eligible professional receives credit for reporting, not for
performance), meaning the quality action was not performed for no valid
reason as defined by the measure specification.
Be able to transmit this data in a CMS-approved XML
format.
Comply with a CMS-specified secure method for data
submission, such as submitting the registry's data in an XML file
through an identity management system specified by CMS or another
approved method, such as use of appropriate NwHIN (Nationwide Health
Information Network) specifications, if technically feasible.
Submit an acceptable ``validation strategy'' to CMS by
March 31, 2012. A validation strategy ascertains whether eligible
professionals have submitted accurately and on at least the minimum
number (80 percent) of their eligible patients, visits, procedures, or
episodes for a given measure, which, as described in section (e)(2) of
this section, is the minimum percentage of patients on which an
eligible professional must report on any given measure. Acceptable
validation strategies often include such provisions as the registry
being able to conduct random sampling of their participant's data, but
may also be based on other credible means of verifying the accuracy of
data content and completeness of reporting or adherence to a required
sampling method.
Perform the validation outlined in the strategy and send
the results to CMS by June 30, 2013 for the 2012 reporting year's data.
Enter into and maintain with its participating
professionals an appropriate Business Associate agreement that provides
for the registry's receipt of patient-specific data from the eligible
professionals, as well as the registry's disclosure of quality measure
results and numerator and denominator data and/or patient-specific data
on Medicare beneficiaries on behalf of eligible professionals who wish
to participate in the Physician Quality Reporting System.
Obtain and keep on file signed documentation that each
holder of an NPI whose data are submitted to the registry has
authorized the registry to submit quality measure results and numerator
and denominator data and/or patient-specific data on Medicare
beneficiaries to CMS for the purpose of Physician Quality Reporting
System participation. This documentation must be obtained at the time
the eligible professional signs up with the registry to submit
Physician Quality Reporting

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System quality measures data to the registry and must meet any
applicable laws, regulations, and contractual business associate
agreements.
Provide CMS access (upon request for health oversight
purposes like validation) to review the Medicare beneficiary data on
which 2012 Physician Quality Reporting System registry-based
submissions are founded or provide to CMS a copy of the actual data
(upon request).
Provide CMS a signed, written attestation statement via
mail or e-mail which states that the quality measure results and any
and all data including numerator and denominator data provided to CMS
are accurate and complete.
Use Physician Quality Reporting System measure
specifications and the CMS provided measure calculation algorithm, or
logic, to calculate reporting rates or performance rates unless
otherwise stated. CMS would provide registries a standard set of logic
to calculate each measure and/or measures group they intend to report
in 2012.
Provide a calculated result using the CMS supplied measure
calculation logic and XML file for each measure that the data
submission vendor intends to calculate. The registries would be
required to show that they can calculate the proper measure results
(that is, reporting and performance rates) using the CMS-supplied logic
and send the calculated data back to CMS in the specified format.
Provide the individual data elements used to calculate the
measures upon request by CMS under its health oversight authority, if
aggregated data submission is still the selected method of data
collection. Registries that are subject to validation will be asked to
send discrete Medicare beneficiary data elements for a measure
(determined by CMS) in the required data format for us to recalculate
the registries' reported results. Validation would be conducted for
several measures at a randomly selected sample of registries in order
to validate their data submissions.
Provide CMS with beneficiary-level data provided to the
registry by the eligible professional in the CMS-approved format, upon
request by CMS. CMS intends to use the data to calculate the eligible
professional's measure results (that is, reporting and performance
rates).
In addition to meeting all the requirements specified previously
for the reporting of individual quality measures via registry, for
registries that intend to report on 2012 Physician Quality Reporting
System measures groups, we propose that both registries new to the
Physician Quality Reporting System and those previously qualified must:
Indicate the reporting period chosen for each eligible
professional who chooses to submit data on measures groups.
Base reported information on measures groups only on
patients to whom services were furnished during the 2012 reporting
period.
Agree that the registry's data may be inspected or a copy
requested by CMS and provided to CMS under our oversight authority.
Be able to report consistent with the proposed reporting
criteria requirements, as specified in section (e)(2) of this section.
We intend to post the final 2012 Physician Quality Reporting System
registry requirements on the Physician Quality Reporting System section
of the CMS Web site at http://www.cms.gov/pqrs by November 15, 2011 or
shortly thereafter. We anticipate that new registries that wish to
self-nominate for 2012 would be required to do so by January 31, 2012.
We propose that registries that were ``qualified'' for 2011 and
wish to continue to participate in 2012 will not need to be ``re-
qualified'' for 2012, but instead would only be required to demonstrate
that they can meet the new 2012 data submission requirements. For
technical reasons, however, we do not expect to be able to complete
this vetting process for the new 2012 data submission requirements
until mid-2012. Therefore, for 2012, we may not be able to post the
names of registries that are qualified for the 2012 Physician Quality
Reporting System until we have determined the previously qualified
registries that wish to be qualified for the 2012 Physician Quality
Reporting System are in compliance with the new registry requirements.
We propose that registries ``qualified'' for 2011, who are
successful in submitting 2011 Physician Quality Reporting System data,
and wish to continue to participate in 2012 would need to indicate
their desire to continue participation for 2012 by submitting a self-
nomination statement via a web-based tool to CMS indicating their
continued interest in being a Physician Quality Reporting System
registry for 2012 and their compliance with the 2012 Physician Quality
Reporting System registry requirements by no later than October 31,
2011. Additionally, registries that were qualified but unsuccessful in
submitting 2011 Physician Quality Reporting System data (that is, fail
to submit 2011 Physician Quality Reporting System data per the 2011
Physician Quality Reporting System registry requirements) would need to
go through a full self-nomination vetting process for 2012.
We further propose that by March 31, 2012, registries that are
unsuccessful at submitting registry data in the correct data format for
2011 would need to be able to meet the 2012 Physician Quality Reporting
System registry requirements and go through the full vetting process
again. This would include CMS receiving the registry's self-nomination
by March 31, 2012. We propose that the aforementioned registry
requirements will also apply for the purpose of a registry qualifying
to submit the electronic prescribing measure for the 2012 eRx Incentive
Program. We anticipate finalizing the list of 2012 Physician Quality
Reporting System registries by Summer 2012.
For eligible professionals considering this reporting mechanism, we
point out that even though a registry is listed as ``qualified,'' we
cannot guarantee or assume responsibility for the registry's successful
submission of the required Physician Quality Reporting System quality
measures results or measures group results or required data elements
submitted on behalf of a given eligible professional. We invite public
comment on our proposed 2012 requirements for the registry-based
reporting mechanism for individual eligible professional reporters.
Furthermore, in an effort to ensure that registries provide
accurate reporting of Physician Quality Reporting System data, in
program years after 2012, we seek to disallow previously-qualified
registries from submitting data on Physician Quality Reporting System
quality measures if it is found that the data registries provide are
significantly inaccurate. We believe this is important because we have
noticed many calculation and data submission errors in reporting from
registries in past program years. Alternatively, for years after 2012,
we may require registries to submit all the individual data elements
for CMS to calculate an eligible professional's reporting and
performance rates as well as require registries to submit patient-level
data on Medicare beneficiaries rather than aggregate data. We seek
public comment on disallowing previously-qualified registries to submit
data on Physician Quality Reporting System quality measures in future
program years if it is found that the data the registries provide are
significantly inaccurate.

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(3) EHR-Based Reporting
For 2012 and beyond, we propose that eligible professionals who
choose to participate in the Physician Quality Reporting System via the
EHR-Based reporting mechanism have the option of submitting quality
measure data obtained from their Physician Quality Reporting System
qualified EHR to CMS either: (1) Directly from his or her qualified
EHR, in the CMS-specified manner, or (2) indirectly from a qualified
EHR data submission vendor (on the eligible professional's behalf), in
the CMS-specified manner.
(A) Direct EHRs
(i) Proposed Requirements for the Direct EHR-Based Reporting
Mechanism--Individual Eligible Professionals
For 2012 and beyond, we propose to retain the EHR-Based reporting
mechanism via a qualified EHR (as defined in section (3)(b) of this
section) for the purpose of satisfactorily reporting Physician Quality
Reporting System quality measures. We propose the following
requirements for individual eligible professionals associated with EHR-
Based reporting: (1) Selection of a Physician Quality Reporting System
qualified EHR product and (2) submission of Medicare clinical quality
data extracted from the EHR directly to CMS, in the CMS-specified
manner.
We propose that, in addition to meeting the appropriate criteria
for satisfactory reporting of individual measures for the 2012
Physician Quality Reporting System EHR reporting option, eligible
professionals who choose the EHR-Based reporting mechanism for the 2012
Physician Quality Reporting System would be required to have a
Physician Quality Reporting System qualified EHR product. We understand
that eligible professionals may have purchased Certified EHR Technology
for purposes of reporting under the Medicare and Medicaid EHR Incentive
Programs. Such Certified EHR Technology may or may not be qualified for
purposes of the 2012 Physician Quality Reporting System. Eligible
professionals would need to ensure that their Certified EHR Technology
is also qualified for purposes of the 2012 Physician Quality Reporting
System to participate in the Physician Quality Reporting System via the
EHR-Based reporting mechanism for 2012. The certification process for
EHR technology does not test the EHR product's ability to output a file
that meets the Physician Quality Reporting System measures file
specifications. We are currently exploring ways to further align these
two programs' reporting requirements for future years so that Certified
EHR Technology may be used to satisfy both the Medicare EHR Incentive
Program and the Physician Quality Reporting System without any
additional testing. For 2012, we propose to modify the current list of
EHR vendors qualified under the Physician Quality Reporting System to
indicate which of the qualified vendors' products have also received a
certification for the purposes of the EHR Incentive Programs. We invite
public comment on the 2012 proposed qualifications for direct EHRs.
(ii) 2012 Proposed Qualification Requirements for Direct EHR Products
For direct EHR products who wish to report 2012 Physician Quality
Reporting System quality measures data on behalf of eligible
professionals, we propose that a test of quality data submission from
eligible professionals who wish to report 2012 quality measure data
directly from their qualified EHR product would be required and we
anticipate that this testing would occur in late 2012, immediately
followed by the submission of the eligible professional's actual 2012
Physician Quality Reporting System data in early 2013. This entire
final test/production data submission timeframe for 2012 is expected to
be December 2012 through February 2013. We are currently vetting newly
self-nominated EHR vendor products for possible qualification for the
2012 Physician Quality Reporting System program year. Similar to prior
years, we expect to list the 2012 Physician Quality Reporting System
qualified EHR products by January 2012. We will also be vetting those
self-nominated EHR data submission vendors for possible qualification
to submit 2012 Physician Quality Reporting System measures on eligible
professionals' behalf under the EHR-Based reporting mechanism. We
expect to list the entities that are EHR data submission vendors
qualified to submit 2012 Physician Quality Reporting System EHR
measures on eligible professionals' behalf by mid-2012.
For direct EHR vendors wishing to qualify for participation in the
2012 Physician Quality Reporting System-Medicare Incentive Pilot for
the Medicare EHR Incentive Program (discussed in section IV.H. of this
proposed rule), we propose a separate, accelerated vetting process for
EHR vendors and their products. This vetting process will be the same
process as the vetting process for EHR vendor products for the 2012
Physician Quality Reporting System that is currently underway. We will
begin the vetting process for these additional EHR data submission
vendors in the beginning of 2012 and anticipate that the vetting
process be completed by Summer/Fall 2012.
We further propose that any EHR direct vendor interested in being
``qualified'' to submit quality data extracted from an EHR to CMS on
eligible professionals' behalf for the 2012 Physician Quality Reporting
System would be required to self-nominate. We anticipate that the self-
nomination deadline will occur no later than December 31, 2011. We
expect to post instructions for self-nomination by the 4th quarter of
CY 2011 on the Physician Quality Reporting System section of CMS Web
site.
(B) EHR Data Submission Vendors
(i) Proposed Requirements for the EHR Data Submission Vendor-based
Reporting Mechanism--Individual Eligible Professionals
For 2012 and beyond, we propose to retain the EHR-Based reporting
mechanism via a qualified EHR (as defined in 42 CFR 414.90(b)) for the
purpose of satisfactorily reporting Physician Quality Reporting System
quality measures. We propose the following requirements for individual
eligible professionals associated with indirect EHR-Based reporting:
(1) Selection of a Physician Quality Reporting System qualified EHR
product and (2) submission of Medicare clinical quality data extracted
from the EHR to a qualified ``EHR data submission vendor'' (which may
include some current registries, EHR vendors, and other entities that
are able to receive and transmit clinical quality data extracted from
an EHR) to CMS, in the CMS-specified manner. For eligible professionals
who choose to electronically submit Medicare clinical quality data
extracted from their EHR to a qualified EHR data submission vendor, the
EHR data submission vendor would then submit the Physician Quality
Reporting System measures data to CMS in a CMS-specified manner on the
eligible professional's behalf for the respective program year.
For 2012, we propose that in order for an eligible professional to
submit Medicare clinical quality data extracted from his or her EHR to
CMS via an EHR data submission vender, the eligible professional must
enter into and maintain an appropriate legal arrangement with a
qualified 2012 EHR data submission vendor that is capable of receiving
and transmitting Medicare

[[Page 42847]]

clinical quality data extracted from an EHR. Such arrangements would
provide for the EHR data submission vendor's receipt of beneficiary-
specific data from the eligible professional and the EHR data
submission vendor's disclosure of the beneficiary-specific data on
behalf of the eligible professional to CMS. Thus, the EHR data
submission vendor would act as a Health Insurance Portability and
Accountability Act of 1996 (Pub. L. 104-191) (HIPAA) Business Associate
and agent of the eligible professional. Such agents are referred to as
``EHR data submission vendors.'' The ``EHR data submission vendors''
would have the requisite legal authority to provide beneficiary-
specific data on the 2012 Physician Quality Reporting System EHR
measures on behalf of the eligible professional to CMS for the
Physician Quality Reporting System.
We also propose that eligible professionals choosing to participate
in the 2012 Physician Quality Reporting System through the EHR-Based
reporting mechanism via an EHR data submission vendor for 2012 must
select a qualified Physician Quality Reporting System EHR data
submission vendor and submit information on Physician Quality Reporting
System EHR measures to the selected EHR data submission vendor in the
form and manner, and by the deadline specified by the EHR data
submission vendor. We invite public comment on the proposed
qualification requirements on the 2012 proposed qualification
requirements for individual eligible professionals using EHR data
submission vendors to submit Physician Quality Reporting System quality
measures data.
(i) 2012 Proposed Qualification Requirements for EHR Data Submission
Vendors
Similar to our 2012 qualification requirements for direct EHR
vendors, we propose that qualified EHR data submission vendors that
wish to submit 2012 quality measures data obtained from an eligible
professional's qualified EHR product to CMS on the eligible
professional's behalf would be required to submit test data in late
2012 followed by the submission of the eligible professional's actual
2012 Physician Quality Reporting System data in early 2013. For data
submission vendors wishing to qualify for participation in the 2012
Physician Quality Reporting System-Medicare Incentive Pilot for the
Medicare EHR Incentive Program (discussed in section IV.H. of this
proposed rule), we propose a separate, accelerated vetting process for
EHR vendors and their products. This vetting process will be the same
process as the vetting process for EHR vendor products for the 2012
Physician Quality Reporting System that is currently underway. We will
begin the vetting process for these additional EHR data submission
vendors in the beginning of 2012 and anticipate that the vetting
process be completed by Summer/Fall 2012.
We further propose that any EHR data submission vendor interested
in being ``qualified'' to submit quality data extracted from an EHR to
CMS on eligible professionals' behalf for the 2012 Physician Quality
Reporting System would be required to self-nominate. We anticipate that
the self-nomination deadline will occur no later than December 31,
2011. We expect to post instructions for self-nomination by the 4th
quarter of CY 2011 on the Physician Quality Reporting System section of
CMS Web site.
We propose the following qualification requirements for EHR data
submission vendors who wish to submit 2012 Physician Quality Reporting
System quality measure data:
Not be in a beta test form.
Be in existence as of January 1, 2012.
Have at least 25 active users.
Participate in ongoing Physician Quality Reporting
mandatory support conference calls hosted by CMS (approximately one
call per month). Failure to attend more than one call per year would
result in the removal of the EHR data submission vendor from the 2012
EHR qualification process.
Have access to the identity management system specified by
CMS (such as, but not limited to, the Individuals Authorized Access to
CMS Computer Systems, or IACS) to submit clinical quality data
extracted to a CMS clinical data warehouse.
Submit a test file containing dummy Medicare clinical
quality data to a CMS clinical data warehouse via an identity
management system specified by CMS during a timeframe specified by CMS.
In 2011, the requirement to submit a test file could have contained
real or dummy data. However, for privacy reasons, we have decided to
only provide for the submission of test files containing dummy data. We
have proposed revisions to 42 CFR 414.90 to reflect this change.
Submit a file containing the eligible professional's 2012
Physician Quality Reporting System Medicare clinical quality data
extracted from the EHR for the entire 12-month reporting period via the
CMS-specified identify management system during the timeframe specified
by us in early 2013.
Provide at least 1 feedback report, based on the data
submitted to them for the 2012 Physician Quality Reporting System
incentive reporting period, and if technically feasible, provide at
least 2 feedback reports throughout the year to participating eligible
professionals.
Be able to collect all needed data elements and transmit
to CMS the data at the beneficiary level.
Be able to separate out and report on Medicare Part B FFS
patients.
Provide the measure numbers for the quality measures on
which the data submission vendor is reporting.
Be able to transmit this data in a CMS-approved XML format
utilizing a Clinical Document Architecture (CDA) standard such as
Quality Reporting Data Architecture (QRDA).
Comply with a CMS-specified secure method for data
submission, such as submitting the EHR data submission vendor's data in
an XML file through an identity management system specified by CMS or
another approved method, such as use of appropriate NwHIN (Nationwide
Health Information Network) specifications, if technically feasible.
Enter into and maintain with its participating
professionals an appropriate Business Associate agreement that provides
for the data submission vendor's receipt of patient-specific data from
the eligible professionals, as well as the data submission vendor's
disclosure of patient-specific data on Medicare beneficiaries on behalf
of eligible professionals who wish to participate in the Physician
Quality Reporting System.
Obtain and keep on file signed documentation that each
holder of an NPI whose data are submitted to the data submission vendor
has authorized the data submission vendor to submit patient-specific
data on Medicare beneficiaries to CMS for the purpose of Physician
Quality Reporting System participation. This documentation must be
obtained at the time the eligible professional signs up with the data
submission vendor to submit Physician Quality Reporting System quality
measures data to the data submission vendor and must meet any
applicable laws, regulations, and contractual business associate
agreements.
Provide CMS access (upon request for health oversight
purposes like validation) to review the Medicare beneficiary data on
which 2012 Physician Quality Reporting System EHR-Based submissions are
founded or provide to CMS a copy of the actual data (upon request).
Provide CMS a signed, written attestation statement via
mail or e-mail

[[Page 42848]]

which states that the quality measure results and any and all data
including numerator and denominator data provided to CMS are accurate
and complete.
Use Physician Quality Reporting System measure
specifications and the CMS provided measure calculation algorithm, or
logic, to calculate reporting rates or performance rates unless
otherwise stated. CMS would provide EHR data submission vendors a
standard set of logic to calculate each measure and/or measures group
they intend to report in 2012.
Provide a calculated result using the CMS supplied measure
calculation logic and XML file for each measure that the EHR data
submission vendor intends to calculate. The data submission vendors
would be required to show that they can calculate the proper measure
results (that is, reporting and performance rates) using the CMS-
supplied logic and send the calculated data back to CMS in the
specified format.
For EHR data submission vendors participating in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot for 2012
(discussed in section IV.H. of this proposed rule) and wish to also
submit Medicare clinical quality data extracted from an EHR for the
purposes of the 2012 Physician Quality Reporting System incentive, we
propose that these EHR data submission vendors meet the following below
requirements in addition to the requirements stated above:
Be able to collect all needed data elements and transmit
to CMS the data at the TIN/NPI level.
Be able to calculate and submit measure-level reporting
rates or, upon request, the data elements needed to calculate the
reporting rates by TIN/NPI.
Be able to calculate and submit, by TIN/NPI, a performance
rate (that is, the percentage of a defined population who receive a
particular process of care or achieve a particular outcome based on a
calculation of the measure's numerator and denominator specifications)
for each measure on which the TIN/NPI reports or, upon request the
Medicare beneficiary data elements needed to calculate the reporting
rates.
Report the number of eligible instances (reporting
denominator).
Report the number of instances a quality service is
performed (reporting numerator).
Report the number of performance exclusions, meaning the
quality action was not performed for a valid reason as defined by the
measure specification.
Report the number of reported instances, performance not
met (eligible professional receives credit for reporting, not for
performance), meaning the quality action was not performed for no valid
reason as defined by the measure specification.
Be able to transmit this data in a CMS-approved XML
format.
Submit an acceptable ``validation strategy'' to CMS by
March 31, 2012. A validation strategy ascertains whether eligible
professionals have submitted accurately and on at least the minimum
number (80 percent) of their eligible patients, visits, procedures, or
episodes for a given measure, which, as described in section (e)(2) of
this section, is the minimum percentage of patients on which an
eligible professional must report on any given measure. Acceptable
validation strategies often include such provisions as the EHR data
submission vendor being able to conduct random sampling of their
participant's data, but may also be based on other credible means of
verifying the accuracy of data content and completeness of reporting or
adherence to a required sampling method.
Perform the validation outlined in the strategy and send
the results to CMS by June 30, 2013 for the 2012 reporting year's data.
Enter into and maintain with its participating
professionals an appropriate Business Associate agreement that provides
for the data submission vendor's receipt of patient-specific data from
the eligible professionals, as well as the data submission vendor's
disclosure of quality measure results and numerator and denominator
data on Medicare beneficiaries on behalf of eligible professionals who
wish to participate in the Physician Quality Reporting System.
Obtain and keep on file signed documentation that each
holder of an NPI whose data are submitted to the data submission vendor
has authorized the data submission vendor to submit quality measure
results and numerator and denominator data on Medicare beneficiaries to
CMS for the purpose of Physician Quality Reporting System
participation. This documentation must be obtained at the time the
eligible professional signs up with the data submission vendor to
submit Physician Quality Reporting System quality measures data to the
data submission vendor and must meet any applicable laws, regulations,
and contractual business associate agreements.
Use Physician Quality Reporting System measure
specifications and the CMS provided measure calculation algorithm, or
logic, to calculate reporting rates or performance rates unless
otherwise stated.
Provide a calculated result using the CMS supplied measure
calculation logic and XML file for each measure that the EHR data
submission vendor intends to calculate. The data submission vendors
would be required to show that they can calculate the proper measure
results (that is, reporting and performance rates) using the CMS-
supplied logic and send the calculated data back to CMS in the
specified format.
We cannot, however, assume responsibility for the successful
submission of data from eligible professionals' EHRs. In addition,
eligible professionals who decide to submit the Physician Quality
Reporting System measures directly from his or her EHR should begin
attempting submission soon after the opening of the clinical data
warehouse in order to assure the eligible professional has a reasonable
period of time to work with his or her EHR and/or its vendors to
correct any problems that may complicate or preclude successful quality
measures data submission through that EHR.
We propose that for 2012, the EHR data submission vendor would
submit clinical quality data on Medicare beneficiaries extracted from
eligible professionals' EHRs to our designated database for the
Physician Quality Reporting System using a CMS-specified record layout,
which would be provided to the EHR data submission vendor by CMS. In
addition, for purposes of also reporting 2012 Physician Quality
Reporting System quality measures, the EHR data submission vendor would
be required to submit patient level Medicare clinical quality data
extracted from the eligible professional's EHR using the same CMS-
specified record layout that qualified EHR products must be able to
produce for purposes of an eligible professional directly submitting
the 2012 Physician Quality Reporting System EHR measures to CMS.
We invite public comment on the proposed qualification requirements
for EHR data submission vendors.
(C) Proposed Qualification Requirements for EHR Direct and Data
Submission Vendors and Their Products for the 2013 Physician Quality
Reporting System
As in prior years, unlike the qualification process for registries,
EHR vendors, which include direct EHR vendors and EHR data submission
vendors, are tested for qualification a year ahead of the program year
in which the EHR vendor intends to submit Physician Quality Reporting
System quality measures on behalf of individual

[[Page 42849]]

eligible professionals or where its product(s) are available for use by
eligible professionals to submit Physician Quality Reporting System
measures directly to CMS.
We propose EHR vendor testing for the 2013 Physician Quality
Reporting System program year to qualify new EHR vendors and EHR data
submission vendors and their EHR products for submission of Medicare
beneficiary quality data extracted from EHR products to the CMS
Medicare clinical quality data warehouse for the 2013 Physician Quality
Reporting System. Specifically, we propose that in order for EHR
vendors to be qualified to report 2013 Physician Quality Reporting
System data to CMS, EHR vendors must meet the following requirements:
Not be in a beta test form.
Be in existence as of January 1, 2012.
Have at least 25 active users.
Participate in ongoing Physician Quality Reporting
mandatory support conference calls hosted by CMS (approximately one
call per month). Failure to attend more than one call per year would
result in the removal of the EHR data submission vendor from the 2012
EHR qualification process.
Indicate the reporting option the vendor seeks to qualify
for its users to submit in addition to individual measures.
Have access to the identity management system specified by
CMS (such as, but not limited to, the Individuals Authorized Access to
CMS Computer Systems, or IACS) to submit Medicare clinical quality data
extracted to a CMS clinical data warehouse.
Submit a test file containing dummy Medicare clinical
quality data to a CMS clinical data warehouse via an identity
management system specified by CMS during a timeframe specified by CMS.
In 2011, the requirement to submit a test file could have contained
real or dummy data. However, for privacy reasons, we have decided to
only provide for the submission of test files containing dummy data. We
have proposed revisions to 42 CFR 414.90 to reflect this change.
Submit a file containing the eligible professional's 2012
Physician Quality Reporting System Medicare clinical quality data
extracted from the EHR for the entire 12-month reporting period via the
CMS-specified identify management system during the timeframe specified
by us in early 2013.
Provide at least 1 feedback report, based on the data
submitted to them for the 2012 Physician Quality Reporting System
incentive reporting period, and if technically feasible, provide at
least two feedback reports throughout the year to participating
eligible professionals.
Be able to collect all needed data elements and transmit
to CMS the data at the beneficiary level.
Be able to separate out and report on Medicare Part B FFS
patients.
Provide the measure numbers for the quality measures on
which the data submission vendor is reporting.
Be able to transmit this data in a CMS-approved XML format
utilizing a Clinical Document Architecture (CDA) standard such as
Quality Reporting Data Architecture (QRDA).
Comply with a CMS-specified secure method for data
submission, such as submitting the EHR vendor's data in an XML file
through an identity management system specified by CMS or another
approved method, such as use of appropriate NwHIN (Nationwide Health
Information Network) specifications, if technically feasible.
Enter into and maintain with its participating
professionals an appropriate Business Associate agreement that provides
for the data submission vendor's receipt of patient-specific data from
the eligible professionals, as well as the data submission vendor's
disclosure of patient-specific data on Medicare beneficiaries on behalf
of eligible professionals who wish to participate in the Physician
Quality Reporting System.
Obtain and keep on file signed documentation that each
holder of an NPI whose data are submitted to the data submission vendor
has authorized the data submission vendor to submit patient-specific
data on Medicare beneficiaries to CMS for the purpose of Physician
Quality Reporting System participation. This documentation must be
obtained at the time the eligible professional signs up with the data
submission vendor to submit Physician Quality Reporting System quality
measures data to the data submission vendor and must meet any
applicable laws, regulations, and contractual business associate
agreements.
Provide CMS access (upon request for health oversight
purposes like validation) to review the Medicare beneficiary data on
which 2012 Physician Quality Reporting System EHR-Based submissions are
founded or provide to CMS a copy of the actual data (upon request).
Provide CMS a signed, written attestation statement via
mail or e-mail which states that the quality measure results and any
and all data including numerator and denominator data provided to CMS
are accurate and complete.
Use Physician Quality Reporting System measure
specifications and the CMS provided measure calculation algorithm, or
logic, to calculate reporting rates or performance rates unless
otherwise stated. CMS would provide EHR vendors a standard set of logic
to calculate each measure and/or measures group they intend to report
in 2012.
Provide a calculated result using the CMS supplied measure
calculation logic and XML file for each measure that the EHR vendor
intends to calculate. The data submission vendors would be required to
show that they can calculate the proper measure results (that is,
reporting and performance rates) using the CMS-supplied logic and send
the calculated data back to CMS in the specified format.
This is the same self-nomination process described in the
``Requirements for Electronic Health Record (EHR) Vendors to
Participate in the 2012 Physician Quality Reporting System EHR
Program,'' posted on the Physician Quality Reporting System section of
the CMS Web site at http://www.cms.gov/PQRS/20_AlternativeReportingMechanisms.asp#TopOfPage. For 2013, we propose that
these requirements would apply not only for the purpose of a vendor's
EHR product being qualified so that the product's users may submit 2013
Medicare beneficiary data extracted from the EHR for the 2013 Physician
Quality Reporting System in 2014, but also for the purpose of a
vendor's EHR product being qualified to electronically submit Medicare
beneficiary data extracted from the EHR for reporting the electronic
prescribing measure for the eRx Incentive Program 2013 incentive and
2014 payment adjustment. Similarly, we propose that requirements would
apply not only for the purposes of an EHR data submission vendor being
qualified to submit 2013 Medicare beneficiary data from eligible
professionals' EHRs for the 2013 Physician Quality Reporting System in
2014 but also for the purpose of an EHR data submission vendor being
qualified to electronically submit Medicare beneficiary data extracted
from the EHR for reporting the electronic prescribing measure for the
eRx Incentive Program 2013 incentive and 2014 payment adjustment.
We propose that if an EHR vendor misses more than one mandatory
support call or meeting, the vendor and their product and/or EHR data
submission vendor would be disqualified for the Physician Quality
Reporting System reporting year, which is covered by the call.

[[Page 42850]]

For the 2013 Physician Quality Reporting System, we propose that
previously qualified and new vendors and/or EHR data submission vendors
would need to incorporate any new EHR measures (that is,
electronically-specified measures), as well as update their electronic
measure specifications and data transmission schema should either or
both change, finalized for to the Physician Quality Reporting System
for 2013 if they wish to maintain their Physician Quality Reporting
System qualification.
We further propose that any EHR vendor interested in having one or
more of their EHR products ``qualified'' to submit quality data
extracted from their EHR products to the CMS Medicare clinical quality
data warehouse for the 2013 Physician Quality Reporting System would be
required to submit their self-nomination statement by January 31, 2012.
Whereas, in prior program years, EHR vendors have submitted self-
nomination statements via mail, we propose to have EHR vendors submit
self-nomination statements via a Web-based tool, if technically
feasible for us to develop such a tool. We believe use of a Web-based
tool to self-nominate is a more efficient method of collecting self-
nomination statements. However, if use of a Web-based tool is not
technically feasible, as in prior years, EHR vendors will submit self-
nomination statements via e-mail. We expect to post instructions for
submitting the self-nomination statement and the 2013 EHR vendor
requirements in the 4th quarter of CY 2011. Specifically, for the 2013
Physician Quality Reporting System, in order to ensure EHR vendors'
interest in participating in the 2013 Physician Quality Reporting
System, we propose that only EHR vendors that self-nominate to
participate in the EHR Program testing during calendar year 2012 would
be considered qualified EHR vendors for the 2013 Physician Quality
Reporting System.
We invite public comment on the proposed qualification requirements
for EHR vendors and their products for the 2013 Physician Quality
Reporting System.
e. Incentive Payments for the 2012 Physician Quality Reporting System
In accordance with 42 CFR 414.90(c)(3), eligible professionals that
satisfactorily report 2012 Physician Quality Reporting System measures
can qualify for an incentive equal to 0.5 percent of the total
estimated part B allowed charges for all covered professional services
furnished by the eligible professional (or, in the case of a group
practice participating in the GPRO, the group practice) during the
applicable reporting period. We are proposing to modify the incentive
payment language in 42 CFR 414.90 to provide language more consistent
with section 1848(k) of the Act.
(1) Proposed Criteria for Satisfactory Reporting of Individual Quality
Measures for Individual Eligible Professionals via Claims
Section 1848(m)(3)(A) of the Act established the criteria for
satisfactorily submitting data on individual quality measures as at
least three measures in at least 80 percent of the cases in which the
measure is applicable. For claims-based reporting, if fewer than three
measures are applicable to the services of the professional, the
professional may meet the criteria by submitting data on one or two
measures for at least 80 percent of applicable cases where the measures
are reportable. For years after 2009, section 1848(m)(3)(D) of the Act
authorizes the Secretary, in consultation with stakeholders and
experts, to revise the criteria for satisfactorily reporting data on
quality measures. Accordingly, we propose the following criteria for
satisfactory reporting via the claims-based reporting mechanism for
individual eligible professionals specializing in internal medicine,
family practice, general practice, or cardiology:
Report on at least one Physician Quality Reporting System
core measure as identified in Table 29.
Report on at least two additional measures that apply to
the services furnished by the professional.
Report each measure for at least 50 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
For all other eligible professionals, we propose the following
criteria for satisfactory reporting via the claims-based reporting
mechanism:
Report on at least three measures that apply to the
services furnished by the professional.
Report each measure for at least 50 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
We believe it would be easier for eligible professionals to find
applicable measures on which to report if measures were grouped
according its applicability to medical specialties. We then seek to
move towards having specialties report on certain measures that are
relevant to the respective specialty. We have recognized the promotion
of the prevention of cardiovascular conditions as a top priority and
therefore propose to start to group individual measures with measures
that promote cardiovascular care. As such, the Physician Quality
Reporting System core measures that we propose in Table 29 are aimed at
promoting the prevention of cardiovascular conditions. In an effort to
promote the prevention of cardiovascular conditions, we are proposing
that eligible professionals specializing in internal medicine, family
practice, general practice, or cardiology be required to report on at
least one proposed Physician Quality Reporting System core measure. We
chose the aforementioned specialties because we believe the Physician
Quality Reporting System core measures are most relevant to those
specialties. Since we believe that eligible professionals in those
specialties would likely report on the proposed Physician Quality
Reporting System core measures regardless of the proposed requirement
to report on at least one Physician Quality Reporting System core
measure, we believe that the this requirement would not result in an
increased burden to these specialties. In future years, we hope to
develop a similar reporting requirement and core set of measures for
other specialties.
We also considered including geriatricians in the proposed
Physician Quality Reporting System core measure reporting requirement
for 2012. However, we would like to ensure that the proposed 2012
Physician Quality Reporting System core measures would be sufficiently
applicable to geriatric physicians before making such a proposal. We
seek public comment as to whether geriatricians should be included as a
specialty required to report at least one proposed 2012 Physician
Quality Reporting System core measure. In addition, we invite public
comment on whether other specialties should be included in the 2012
Physician Quality Reporting System proposed core measure reporting
requirement.
As stated previously, we have proposed the requirement of the
reporting of Physician Quality Reporting System core measures for
certain specialties to introduce measures reporting according to
specialty for eligible professionals specializing in internal medicine,
family practice, general practice, or cardiology. However, we are not
proposing this core measure requirement for all other specialties.
Therefore, for all other specialties, we are proposing to retain
similar reporting criteria as finalized for the in the 2011 MPFS final
rule.

[[Page 42851]]

Specifically, under our authority under section 1848(m)(3)(D) of the
Act to revise the reporting criteria for satisfactory reporting, for
all other eligible professionals, we propose the following criteria for
satisfactory reporting via the claims-based reporting mechanism:
Report on at least three measures that apply to the
services furnished by the professional. Report each measure for at
least 50 percent of the eligible professional's Medicare Part B FFS
patients for whom services were furnished during the reporting period
to which the measure applies.
To the extent that an eligible professional has fewer than three
Physician Quality Reporting System measures that apply to the eligible
professional's services and the eligible professional is reporting via
the claims-based reporting mechanism, we propose that the eligible
professional would be able to meet the criteria for satisfactorily
reporting data on individual quality measures by meeting the following
two criteria--
Report on all measures that apply to the services
furnished by the professional (that is one to two measures); and
Report each measure for at least 50 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
As in prior years, we also propose that, for 2012, an eligible
professional may also report on fewer than three measures, if less than
three apply. However, an eligible professional who reports on fewer
than three measures through the claims-based reporting mechanism may be
subject to the Measure Applicability Validation (MAV) process, which
would allow us to determine whether an eligible professional should
have reported quality data codes for additional measures. This process
was applied in prior years, including the 2011 Physician Quality
Reporting System. Under the proposed MAV process, when an eligible
professional reports on fewer than 3 measures, we propose to review
whether there are other closely related measures (such as those that
share a common diagnosis or those that are representative of services
typically provided by a particular type of eligible professional). We
further propose that if an eligible professional who reports on fewer
than 3 measures in 2012 reports on a measure that is part of an
identified cluster of closely related measures and did not report on
any other measure that is part of that identified cluster of closely
related measures, then the eligible professional would not qualify as a
satisfactory reporter in the 2012 Physician Quality Reporting System or
earn an incentive payment. We propose that these criteria for
satisfactorily reporting data on fewer than three individual quality
measures would apply for the claims-based reporting mechanism only
because, unlike registry and EHR-Based reporting, the reporting of
Physician Quality Reporting System quality measures via claims is not
handled by an intermediary but rather directly by the eligible
professional.
For 2012, in order to encourage reporting on measures that are
applicable to the eligible professional's practice as well as encourage
eligible professionals to perform the clinical quality actions
specified in the measures, we propose not to count measures that are
reported through claims that have a 0 percent performance rate. That
is, if the recommended clinical quality action, as indicated in the
numerator of the quality measure, is not performed on at least one
patient for a particular measure or measures group reported by the
eligible professional via claims, we will not count the measure (or
measures group) as a measure (or measures group) reported by an
eligible professional. This requirement is also consistent with the
proposed registry and EHR-Based reporting (see the following section
(e)(3)) criteria for satisfactory reporting that are proposed in this
section.
The proposed 2012 criteria for satisfactory reporting of data on
individual Physician Quality Reporting System quality measures for
individual eligible professionals are summarized in the following
Tables 18 and 2, and are arranged by reporting mechanism and reporting
period.

Table 18--Proposed 2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting
System Quality Measures Via Claims for the Following Specialties: Internal Medicine Family Practice, General
Practice, and Cardiology
----------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
----------------------------------------------------------------------------------------------------------------
Claims[dash]based reporting........ Report at least three Physician January 1, 2012-December
Quality Reporting System measures, which 31, 2012.
consist of one Physician Quality Reporting
System core measure + 2 additional measures of
the eligible professional's choosing; OR.
If less than three measures apply to
the eligible professional, 1-2 measures, of
which at least 1 measure must consist of a
Physician Quality Reporting System core
measure; AND
Report each measure for at least 50%
of the eligible professional's Medicare Part B
FFS patients seen during the reporting period
to which the measure applies.
Measures with a 0% performance rate
will not be counted.
----------------------------------------------------------------------------------------------------------------

[[Page 42852]]

Table 19--Proposed 2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting
System Quality Measures Via Claims for All Other Eligible Professionals Not Identified in Table 18
----------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
----------------------------------------------------------------------------------------------------------------
Claims-based reporting............. Report at least three Physician January 1, 2012-December
Quality Reporting System measures; OR 31, 2012.
If less than three measures apply to
the eligible professional, 1-2 measures; AND.
Report each measure for at least 50%
of the eligible professional's Medicare Part B
FFS patients seen during the reporting period
to which the measure applies..
Measures with a 0% performance rate
will not be counted..
----------------------------------------------------------------------------------------------------------------

We invite public comment on the proposed criteria for satisfactory
reporting of individual measures by individual eligible professionals
via claims for the 2012 Physician Quality Reporting System.
(2) Proposed 2012 Criteria for Satisfactory Reporting of Individual
Quality Measures for Individual Eligible Professionals via Registry
Under our authority of section 1848(m)(3)(D) of the Act to revise
the reporting criteria for the satisfactory reporting of measures, we
propose the following criteria for satisfactory reporting via the
registry-based reporting mechanism: (1) Criteria for individual
eligible professionals practicing in internal medicine, family
practice, general practice, or cardiology and (2) criteria for all
other eligible professionals. For the reasons stated previously, we are
distinguishing eligible professionals in internal medicine, family
practice, general practice, or cardiology from all other eligible
professionals for the purposes of establishing criteria for
satisfactory reporting. Therefore, for eligible professionals
specializing in internal medicine, family practice, general practice,
or cardiology, we propose the following criteria for satisfactory
reporting:
Report on at least one Physician Quality Reporting System
core measure as identified in Table 29.
Report on at least two additional measures that apply to
the services furnished by the professional.
Report each measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
For the same reasons stated for establishing different reporting
criteria for all other eligible professionals under the claims-based
reporting mechanism, we propose the following criteria for satisfactory
reporting via the registry-based reporting mechanism:
Report on at least three measures that apply to the
services furnished by the professional.
Report each measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
We also considered including geriatricians in the proposed
Physician Quality Reporting System core measure reporting requirement
via the registry-based reporting mechanism for 2012. However, as stated
previously, we would like to ensure that the proposed 2012 Physician
Quality Reporting System core measures would be sufficiently applicable
to geriatric physicians before making such a proposal. We seek public
comment as to whether geriatricians should be included as a specialty
required to report at least one proposed 2012 Physician Quality
Reporting System core measure. In addition, we seek public comment on
whether other specialties should be included in the 2012 Physician
Quality Reporting System proposed core measure reporting requirement.
In addition, as in prior years, for 2012, we propose not to count
measures that are reported through registries that have a 0 percent
performance rate, calculated by dividing the measure's numerator by the
measure's denominator. That is, if the recommended clinical quality
action, that is the action denoted in the quality measure's numerator,
is not performed on at least one patient for a particular measure or
measures group reported by the eligible professional via registry, we
will not count the measure (or measures group) as a measure (or
measures group) reported by an eligible professional. We propose to
disregard measures (or measures groups) that are reported through a
registry that have a 0 percent performance rate in the 2012 Physician
Quality Reporting System, because we are assuming that the measure was
not applicable to the eligible professional and was likely reported
from EHR-derived data (or from data mining) and was unintentionally
submitted from the registry to us. We also seek to avoid the
possibility of intentional submission of spurious data solely for the
purpose of receiving an incentive payment for reporting.
The proposed 2012 criteria for satisfactory reporting of data on
individual Physician Quality Reporting System quality measures for
individual eligible professionals are summarized in the following
Tables 20 and 21, and are arranged by reporting mechanism and reporting
period.

[[Page 42853]]

Table 20--Proposed 2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting
System Quality Measures Via Registry for the Following Specialties: Internal Medicine Family Practice, General
Practice, and Cardiology
----------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
----------------------------------------------------------------------------------------------------------------
Registry[dash]based reporting...... Report at least three Physician January 1, 2012--December
Quality Reporting System measures, which 31, 2012.
consist of 1 Physician Quality Reporting
System core measure + 2 additional measures of
the eligible professional's choosing AND
Report each measure for at least 80%
of the eligible professional's Medicare Part B
FFS patients seen during the reporting period
to which the measure applies.
Measures with a 0% performance rate
will not be counted..
----------------------------------------------------------------------------------------------------------------

Table 21--Proposed 2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting
System Quality Measures Via Registry for All Other Eligible Professionals Not Identified in Table 20
----------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
----------------------------------------------------------------------------------------------------------------
Registry[dash]based reporting...... Report at least three Physician January 1, 2012--December
Quality Reporting System measures AND 31, 2012.
Report each measure for at least 80%
of the eligible professional's Medicare Part B
FFS patients seen during the reporting period
to which the measure applies.
Measures with a 0% performance rate
will not be counted.
----------------------------------------------------------------------------------------------------------------

We invite public comment on the proposed criteria for satisfactory
reporting of individual quality measures for individual eligible
professionals via registry.(3) Proposed Criteria for Satisfactory
Reporting of Individual Quality Measures for Individual Eligible
Professionals via EHR
Section 1848(m)(3)(A) of the Act established the criteria for
satisfactorily submitting data on individual quality measures as at
least three measures in at least 80 percent of the cases in which the
measure is applicable. For years after 2009, section 1848(m)(3)(D) of
the Act authorizes the Secretary, in consultation with stakeholders and
experts, to revise the criteria for satisfactorily reporting data on
quality measures. Accordingly, we propose the following options for
satisfactory reporting of individual quality measures by individual
eligible professionals participating in the 2012 Physician Quality
Reporting System via the EHR-Based reporting mechanism:
First, we propose that an eligible professional would meet the
criteria for satisfactory reporting under the Physician Quality
Reporting System if the eligible professional, using a Physician
Quality Reporting System ``qualified'' EHR product (if the eligible
professional is also participating in the EHR Incentive Program via the
proposed Physician Quality Reporting System-EHR Incentive Pilot
discussed in section IV.H. of this proposed rule, the eligible
professional's EHR product must also be Certified EHR Technology),
reports on three proposed core measures for 80 percent of the eligible
professional's Medicare Part B FFS patients seen during the reporting
period to which each measure applies as identified in Table 31 in this
section of this proposed rule, which are identical to the Medicare EHR
Incentive Program core measures included in Table 7 of the Medicare and
Medicaid EHR Incentive Program final rule (75 FR 44410). Insofar as the
denominator for one or more of the core measures is 0, implying that
the eligible professional's patient population is not addressed by
these measures, we propose that eligible professionals would be
required to report up to three proposed alternate core measures as
identified in Table 31 in this section of this proposed rule and which
are identical to the Medicare EHR Incentive Program alternate core
measures included in Table 7 of the Medicare and Medicaid EHR Incentive
Program final rule (75 FR 44410). In addition, we propose that the
eligible professional would be required to report on three additional
measures of their choosing that are available for the Medicare EHR
Incentive Program in Table 6 of the Medicare and Medicaid EHR Incentive
Program final rule (75 FR 44398 through 44408) (as identified in Table
31 in this section of this proposed rule).
With respect to reporting on the proposed measure titled
``Preventive Care and Screening: Body Mass Index (BMI) Screening and
Follow-up'', listed in Table 31 of this proposed rule, there are two
parameters in the measure denominator description: Age 65 and older BMI
and Age 18-64 BMI. For the purpose of reporting this measure under the
Physician Quality Reporting System, we propose to count the reporting
of this measure if at least one of the two parameters does not contain
a 0 percent performance rate. In addition, with respect to reporting on
the proposed measure titled ``Preventive Care and Screening: Tobacco
Use: Screening and Cessation Intervention'', also listed in Table 31 of
this proposed rule, the measure is divided into two pairs: a. Tobacco
Use Assessment and b. Tobacco Cessation Intervention. For the purpose
of reporting this measure under the Physician Quality Reporting System,
we propose to count the reporting of this measure if at least one of
the two pairs does not contain a 0 percent performance rate.
Section 1848(m)(7) of the Act (``Integration of Physician Quality
Reporting and EHR Reporting''), as added by section 3002(d) of the
Affordable Care Act, requires us to move towards the integration of EHR
measures with respect to the Physician Quality Reporting System.
Section 1848(m)(7) of the Act specifies that by no later than January
1, 2012, the Secretary shall develop a plan to integrate reporting on
quality measures under the Physician Quality Reporting System with
reporting requirements under subsection (o) of section 1848 of the Act
relating to the meaningful use of EHRs. Such integration shall consist
of the following:
(A) The selection of measures, the reporting of which would both
demonstrate--

[[Page 42854]]

(i) Meaningful use of an EHR for purposes of the Medicare EHR
Incentive Program; and
(ii) Quality of care furnished to an individual; and
(B) Such other activities as specified by the Secretary.
We propose the aforementioned criteria for satisfactory reporting
via an EHR, which is identical to the criteria for achieving meaningful
use for reporting clinical quality measures under the EHR Incentive
Program as finalized in the Medicare and Medicaid Electronic Health
Record Incentive Program final rule (75 FR 44409 through 44411), in an
effort to align the Physician Quality Reporting System with the
Medicare EHR Incentive Program.
In addition to the reporting criteria proposed previously, we
propose alternative reporting criteria for satisfactory reporting using
the EHR-Based reporting mechanism that is similar to the criteria
finalized in the CY 2011 MPFS Final Rule with comment period (75 FR
73497 through 73500). For the reasons set forth for establishing
different criteria for satisfactory reporting via claims and registry,
we are adopting two different criteria for satisfactory reporting,
depending on an eligible professional's specialty. For eligible
professionals specializing in internal medicine, family practice,
general practice, and cardiology, we propose the following criteria:
Report on ALL proposed Physician Quality Reporting System
core measure as identified in Table 29.
Report each measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
We understand that by proposing to require eligible professionals
specializing in internal medicine, family practice, general practice,
and cardiology to report all Physician Quality Reporting System core
measures, we would be requiring such professionals to report more
measures than eligible professionals who do not practice within those
specialties. We believe, however, that proposing to require these
specialists to report of all Physician Quality Reporting System core
measures would not add an additional burden to these eligible
professionals because the reporting of measures is done entirely
through the EHR. Furthermore, because we are proposing to require these
specialties to report on all Physician Quality Reporting System core
measures and recognize that some of the proposed Physician Quality
Reporting System core measures may not be applicable to all of these
eligible professionals' specialties, we propose to allow the reporting
of these proposed Physician Quality Reporting System core measures with
a 0 percent performance rate. That is, the reporting of a Physician
Quality Reporting System core measure that is not applicable to the
eligible professional's practice in this instance will not preclude an
eligible professional from meeting the criteria for satisfactory
reporting.
We also considered including geriatricians in the proposed
Physician Quality Reporting System core measure reporting requirement
for 2012. However, we would like to ensure that the proposed 2012
Physician Quality Reporting System core measures would be sufficiently
applicable to geriatric physicians before making such a proposal. We
seek public comment as to whether geriatricians should be included as a
specialty required to report at least one proposed 2012 Physician
Quality Reporting System core measure via EHR-Based reporting. In
addition, we invite public comment on whether other specialties should
be included in the 2012 Physician Quality Reporting System proposed
core measure reporting requirement.
For the reasons we stated previously for creating separate
reporting criteria all other eligible professionals for claims and
registry reporting, we propose the following criteria for satisfactory
reporting using the EHR-Based reporting mechanism:
Report on at least three Physician Quality Reporting
System EHR measures of the eligible professional's choosing; and
Report each measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
The proposed methods for satisfactory reporting via EHR for the
2012 Physician Quality Reporting System are described in the following
Tables 22 and 23.

Table 22--2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting System
Quality Measures via EHR for the Following Specialties: Internal Medicine, Family Practice, General Practice,
and Cardiology
----------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
----------------------------------------------------------------------------------------------------------------
EHR--Aligning with the Medicare EHR Reports on ALL three Medicare EHR January 1, 2012-December
Incentive Program. Incentive Program core measures (as identified 31, 2012.
in Table 31 of this proposed rule).
If the denominator for one or more of
the Medicare EHR Incentive Program core
measures is 0, report on up to three Medicare
EHR Incentive Program alternate core measures
(as identified in Table 31 of this proposed
rule); AND.
Report on three (of the 38 additional
measures available for the Medicare EHR
Incentive Program.
EHR................................ Report on ALL Physician Quality January 1, 2012-December
Reporting System core measures AND 31, 2012.
Report each measure for at least 80%
of the eligible professional's Medicare Part B
FFS patients seen during the reporting period
to which the measure applies.
Measures with a 0% performance rate
will not be counted, unless the measure is a
Physician Quality Reporting System core
measure.
----------------------------------------------------------------------------------------------------------------

[[Page 42855]]

Table 23--2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting System Quality Measures via EHR for All Other
Eligible Professionals Not Identified in Table 22
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
EHR--Aligning with the Medicare EHR Reports on ALL three Medicare EHR January 1, 2012-December 31, 2012.
Incentive Program. Incentive Program core measures (as identified in
Table 31 of this proposed rule).
If the denominator for one or more of the
Medicare EHR Incentive Program core measures is 0,
report on up to three Medicare EHR Incentive
Program alternate core measures (as identified in
Table 31 of this proposed rule); AND
Report on three (of the 38) additional
measures available for the Medicare EHR Incentive
Program.
EHR..................................... Report at least three Physician Quality January 1, 2012-December 31, 2012.
Reporting System measures AND
Report each measure for at least 80% of
the eligible professional's Medicare Part B FFS
patients seen during the reporting period to which
the measure applies.
Measures with a 0% performance rate will
not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------

We invite public comment on the proposed criteria for satisfactory
reporting of individual quality measures by individual eligible
professionals via an EHR-Based reporting mechanism in the 2012
Physician Quality Reporting System. (4) Proposed Criteria for
Satisfactory Reporting of Measures Groups via Claims--Individual
Eligible Professionals
At Sec. 414.90(b) ``measures group'' is defined as ``a subset of
four or more Physician Quality Reporting System measures that have a
particular clinical condition or focus in common.'' For 2012 and
beyond, we propose that individual eligible professionals have the
option to report measures groups in addition to individual quality
measures to qualify for the Physician Quality Reporting System
incentive, using claims or registries.
For the reasons we are proposing different criteria for
satisfactorily reporting individual quality measures depending on
specialty, specifically our desire to introduce core measures
applicable to certain specialties and promote cardiovascular care, we
are proposing two different criteria for satisfactorily reporting
measures groups. We propose the following criteria for satisfactory
reporting of 2012 Physician Quality Reporting System measures groups:
We propose that eligible professionals specializing in internal
medicine, family practice, general practice, and cardiology may meet
the criteria for satisfactory reporting of Physician Quality Reporting
System measures groups via claims by reporting in the following manner:
Report at least one Physician Quality Reporting System
measures group; and
If the measures group does not contain at least one
Physician Quality core measure, then one Physician Quality core
measure; and
For each measures group and, if applicable, Physician
Quality Reporting System core measure reported, report on at least 30
Medicare Part B FFS patients for each measures group that is reported.
Measures groups containing a measure with a 0 percent
performance rate will not be counted.
We also propose that eligible professionals specializing in
internal medicine, family practice, general practice, and cardiology
may meet the criteria for satisfactorily reporting Physician Quality
Reporting System measures groups via claims by reporting in the
following manner:
Report at least one Physician Quality Reporting System
measures group; but
If the measures group does not contain at least one
Physician Quality Reporting System core measure, then one Physician
Quality core measure.
For each measures group and, if applicable, Physician
Quality Reporting System core measure reported, report on at least 50
percent of the eligible professional's Medicare Part B FFS patients
seen during the reporting period to whom the measures group applies;
but report no less than 15 Medicare Part B PFS patients for each
measures group reported.
Measures groups containing a measure with a 0 percent
performance rate will not be counted.
For all other eligible professionals, in order to meet the criteria
for satisfactory reporting of Physician Quality Reporting measures
groups via claims, we propose that the eligible professional must:
Report at least one Physician Quality Reporting System
measures group.
Report on at least 30 Medicare Part B FFS patients for
each measures group that is reported.
Measures groups containing a measure with a 0 percent
performance rate will not be counted.
Alternatively, eligible professionals not specializing in internal
medicine, family practice, general practice, and cardiology may meet
the criteria for satisfactorily reporting Physician Quality Reporting
System measures groups via claims by reporting in the following manner:
Report at least one Physician Quality Reporting System
measures group.
For each measures group reported, report each on at least
50 percent of the eligible professional's Medicare Part B FFS patients
seen during the reporting period to whom the measures group applies;
but
Report no less than 15 Medicare Part B PFS patients for
each measures group reported.
Measures groups containing a measure with a 0 percent
performance rate will not be counted.
Aside from the Physician Quality Reporting System core measure
reporting requirement for eligible professionals specializing in
internal medicine, family practice, general practice, or cardiology, we
are proposing to retain the same criteria for satisfactory reporting of
measures groups via claims as the 2011 criteria for satisfactory
reporting of measures groups via claims for the 12-month reporting
period that was finalized in the 2011 MPFS Final Rule with comment
period. Therefore, as in 2011, an eligible professional must
satisfactorily report on all individual measures within the measures
group in order to meet the criteria for satisfactory reporting via
measures groups. We are retaining the same criteria because

[[Page 42856]]

eligible professionals are already familiar with these reporting
criteria, which we believe will in turn lead to a greater chance that
eligible professionals meet the criteria for satisfactory reporting.
As with the reporting of Physician Quality Reporting System
individual measures, we also considered including geriatricians as one
of specialties we proposed previously with regard to the proposed
Physician Quality Reporting System core measure reporting requirement
for measures groups. However, we would like to ensure that the proposed
2012 Physician Quality Reporting System core measures are sufficiently
applicable to geriatric physicians before proposing to include them
under the proposed requirement. We seek public comment as to whether
geriatricians should be included as a specialty required to report at
least 1 proposed 2012 Physician Quality Reporting System core measure
for measures group reporting. In addition, we seek public comment on
whether other specialties should be included in the 2012 Physician
Quality Reporting System core measure reporting requirement for
measures groups.
For 2012, in order to ensure that the Physician Quality Reporting
System measures on which eligible professionals report are applicable
to their respective practices, we propose not to count measures within
measures groups that are reported through claims or registry that have
a 0 percent performance rate. That is, if the recommended clinical
quality action is not performed on at least one patient for a
particular measure reported by the eligible professional via claims or
registry, we will not count the measures groups as a measures group
reported by an eligible professional. Furthermore, this proposed
requirement is consistent with the proposed reporting options for
individual quality measures, which are discussed previously. Since we
are proposing to retain the requirement that an eligible professional
must satisfactorily report on all individual measures contained within
a measures group in order to meet the criteria for satisfactory
reporting via measures groups, if an eligible professional reports a
measure contained within a measures group with a 0 percent performance
rate, the eligible professional will fail to meet the criteria for the
satisfactory reporting of measures groups.
The 2012 proposed criteria for satisfactory reporting of measures
groups via claims for individual eligible professionals are described
in the following Tables 24 and 25.

Table 24--Proposed 2012 Criteria for Satisfactory Reporting on Measures Groups via Claims for the Following Specialties: Internal Medicine, Family
Practice, General Practice, and Cardiology
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
Claims.................................. Report at least 1 Physician Quality January 1, 2012-December 31, 2012.
Reporting System measures group; AND
If the measures group does not contain at
least 1 Physician Quality core measure, then
report 1 Physician Quality core measure; AND.
Report each measures group and, if
applicable, Physician Quality Reporting System
core measure for at least 30 Medicare Part B FFS
patients.
Measures groups containing a measure with
a 0% performance rate will not be counted.
Claims.................................. Report at least 1 Physician Quality January 1, 2012-December 31, 2012.
Reporting System measures group; AND
If the measures group does not contain at
least 1 Physician Quality core measure, then
report 1 Physician Quality core measure; AND.
Report each measures group and, if
applicable, Physician Quality Reporting System
core measure for at least 50% of the eligible
professional's Medicare Part B FFS patients seen
during the reporting period to whom the measures
group applies; BUT
Report each measures group on no less than
15 Medicare Part B FFS patients seen during the
reporting period to which the measures group
applies.
Measures groups containing a measure with
a 0% performance rate will not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 25--Proposed 2012 Criteria for Satisfactory Reporting on Measures Groups via Claims for All Other Eligible Professionals Not Identified in Table
24
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
Claims.................................. Report at least 1 Physician Quality January 1, 2012-December 31, 2012.
Reporting System measures group; AND
Report each measures group for at least 30
Medicare Part B FFS patients.
Measures groups containing a measure with
a 0% performance rate will not be counted.
Claims.................................. Report at least 1 Physician Quality January 1, 2012-December 31, 2012.
Reporting System measures group;
Report each measures group for at least
50% of the eligible professional's Medicare Part B
FFS patients seen during the reporting period to
whom the measures group applies; BUT.

[[Page 42857]]

Report each measures group on no less than
15 Medicare Part B FFS patients seen during the
reporting period to which the measures group
applies.
Measures groups containing a measure with
a 0% performance rate will not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------

An eligible professional could also potentially qualify for the
Physician Quality Reporting System incentive payment by satisfactorily
reporting both individual measures and measures groups. However, only
one incentive payment will be made to the eligible professional. We
invite public comment on the proposed 2012 criteria for satisfactory
reporting of measures groups via claims for individual eligible
professionals.
(5) Proposed 2012 Criteria for Satisfactory Reporting of Measures
Groups via Registry--Individual Eligible Professionals
As with the reporting of measures groups via claims, we are
proposing different criteria for the satisfactory reporting of
Physician Quality Reporting System measures groups via registry
depending on the eligible professional's specialty. For eligible
professionals specializing in internal medicine, family practice,
general practice, or cardiology, in order to meet the criteria for the
satisfactory reporting of Physician Quality Reporting measures groups
via registry, during the proposed 12-month reporting period, we propose
that the eligible professional must--
Report at least 1 Physician Quality Reporting System
measures group; AND
If the measures group does not contain at least 1
Physician Quality core measure, then 1 Physician Quality core measure;
AND
Report on at least 30 Medicare Part B FFS patients for
each measures group and, if applicable, Physician Quality Reporting
System core measure reported.
Measures groups containing a measure with a 0% performance
rate will not be counted.
Alternatively, we propose that the eligible professional
specializing in internal medicine, family practice, general practice,
or cardiology may meet the criteria for the satisfactory reporting of
Physician Quality measures groups via registry by doing the following
during the proposed 12-month reporting period:
Report at least one Physician Quality Reporting System
measures group; AND
If the measures group does not contain at least 1
Physician Quality core measure, then 1 Physician Quality core measure;
AND
Report each measures group and, if applicable, Physician
Quality Reporting System core measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients seen during the
reporting period to whom the measures group applies; BUT
Report each measures group on no less than 15 Medicare
Part B FFS patients seen during the reporting period to which the
measures group applies.
Measures groups containing a measure with a 0% performance
rate will not be counted.
In order to meet the criteria for the satisfactory reporting of
Physician Quality Reporting measures groups via registry, during the
proposed 6-month reporting period, we propose that theeligible
professional must--
Report at least one Physician Quality Reporting System
measures group; AND
If the measures group does not contain at least 1
Physician Quality core measure, then 1 Physician Quality core measure;
AND
Report each measures group and, if applicable, Physician
Quality Reporting System core measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients seen during the
reporting period to whom the measures group applies; BUT
Report each measures group on no less than 8 Medicare Part
B FFS patients seen during the reporting period to which the measures
group applies.
Measures groups containing a measure with a 0% performance
rate will not be counted.
For all other eligible professionals, in order to meet the criteria
for the satisfactory reporting of Physician Quality Reporting System
measures groups via registry, we propose that, during the proposed 12-
month reporting period, the eligible professional must--
Report at least 1 Physician Quality Reporting System
measures group; AND
Report each measures group for at least 30 Medicare Part B
FFS patients.
Measures groups containing a measure with a 0% performance
rate will not be counted.
Alternatively, we propose that an eligible professional not
specializing in internal medicine, family practice, general practice,
or cardiology may meet the criteria for the satisfactory reporting of
Physician Quality Reporting System measures groups via registry by
doing the following during the proposed 12-month reporting period:
Report at least one Physician Quality Reporting System
measures group; AND
For each measures group reported, report on at least 80
percent of the eligible professional's Medicare Part B FFS patients
seen during the reporting period to whom the measures group applies;
BUT
Report no less than 15 patients for each measures group
reported.
For all other eligible professionals, in order to meet the criteria
for the satisfactory reporting of Physician Quality Reporting System
measures groups via registry during the proposed 6-month reporting
period, we propose that, during the proposed 6-month reporting period,
the eligible professional must--
Report at least 1 Physician Quality Reporting System
measures group; AND
For each measures group reported, report on at least 80
percent of the eligible professional's Medicare Part B FFS patients
seen during the reporting period to whom the measures group applies;
BUT
Report each measures group on no less than least 8
Medicare Part B FFS patients for each measures group reported.
Measures groups containing a measure with a 0% performance
rate will not be counted.
Aside from the Physician Quality Reporting System core measure
reporting requirement for eligible professionals specializing in
internal medicine, family practice, general

[[Page 42858]]

practice, or cardiology, we are proposing to retain the same criteria
for satisfactory reporting of measures groups via registry as the 2011
criteria for satisfactory reporting of measures groups via registry
finalized in the 2011 MPFS Final Rule with comment period. Therefore,
as in 2011, an eligible professional must satisfactorily report on all
individual measures within the measures group in order to meet the
criteria for satisfactory reporting via measures groups. We are
retaining the same criteria because we eligible professionals are
already familiar with this reporting criteria, which we believe will in
turn lead to a greater chance that eligible professionals meet the
criteria for satisfactory reporting.
As with the reporting of Physician Quality Reporting System
individual measures, we also considered including geriatricians as one
of specialties we proposed previously with regard to the proposed
Physician Quality Reporting System core measure reporting requirement
for measures groups. However, we would like to ensure that the proposed
2012 Physician Quality Reporting System core measures are sufficiently
applicable to geriatric physicians before proposing to include them
under the proposed requirement. We seek public comment as to whether
geriatricians should be included as a specialty required to report at
least 1 proposed 2012 Physician Quality Reporting System core measure
for measures group reporting. In addition, we seek public comment on
whether other specialties should be included in the 2012 Physician
Quality Reporting System core measure reporting requirement for
measures groups.
For 2012, in order to ensure that the Physician Quality Reporting
System measures on which eligible professionals report are applicable
to their respective practices, we propose not to count measures within
measures groups that are reported through claims or registry that have
a 0 percent performance rate. That is, if the recommended clinical
quality action is not performed on at least one patient for a
particular measure reported by the eligible professional via claims or
registry, we will not count the measures groups as a measures group
reported by an eligible professional. Furthermore, this proposed
requirement is consistent with the proposed reporting options for
individual quality measures, which are discussed previously. Since we
are proposing to retain the requirement that an eligible professional
must satisfactorily report on all individual measures contained within
a measures group in order to meet the criteria for satisfactory
reporting via measures groups, if an eligible professional reports a
measure contained within a measures group with a 0 percent performance
rate, the eligible professional will fail to meet the criteria for the
satisfactory reporting of measures groups.
The proposed 2012 criteria for satisfactory reporting of data on
measures groups are summarized in the following Tables 26 through 27
and are arranged by reporting mechanism and reporting period.

Table 26--Proposed 2012 Criteria for Satisfactory Reporting on Measures Groups via Registry for the Following Specialties: Internal Medicine, Family
Practice, General Practice and Cardiology
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
Registry................................ Report at least 1 Physician Quality January 1, 2012-December 31, 2012.
Reporting System measures group; AND
If the measures group does not contain at
least 1 Physician Quality core measure, then 1
Physician Quality core measure; AND
Report each measures group and, if
applicable, Physician Quality Reporting System
core measure for at least 30 Medicare Part B FFS
patients.
Measures groups containing a measure with
a 0% performance rate will not be counted.
Registry................................ Report at least 1 Physician Quality January 1, 2012-December 31, 2012.
Reporting System measures group;
If the measures group does not contain at
least 1 Physician Quality core measure, then 1
Physician Quality core measure; AND
Report each measures group and, if
applicable, Physician Quality Reporting System
core measure for at least 80% of the eligible
professional's Medicare Part B FFS patients seen
during the reporting period to whom the measures
group applies; BUT
Report each measures group on no less than
15 Medicare Part B FFS patients seen during the
reporting period to which the measures group
applies.
Measures groups containing a measure with
a 0% performance rate will not be counted.
Registry................................ Report at least 1 Physician Quality July 1, 2012-December 31, 2012.
Reporting System measures group;
If the measures group does not contain at
least 1 Physician Quality core measure, then 1
Physician Quality core measure; AND
Report each measures group and, if
applicable, Physician Quality Reporting System
core measure for at least 80% of the eligible
professional's Medicare Part B FFS patients seen
during the reporting period to whom the measures
group applies; BUT
Report each measures group on at least 8
Medicare Part B FFS patients seen during the
reporting period to which the measures group
applies.
Measures groups containing a measure with
a 0% performance rate will not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 42859]]

Table 27--Proposed 2012 Criteria for Satisfactory Reporting on Measures Groups via Registry for All Other Eligible Professionals Not Identified in Table
26
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting mechanism Reporting criteria Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
Registry................................ Report at least 1 Physician Quality January 1, 2012-December 31, 2012.
Reporting System measures group; AND
Report each measures group for at least 30
Medicare Part B FFS patients.
Measures groups containing a measure with
a 0% performance rate will not be counted.
Registry................................ Report at least 1 Physician Quality January 1, 2012-December 31, 2012.
Reporting System measures group; AND
Report each measures group for at least
80% of the eligible professional's Medicare Part B
FFS patients seen during the reporting period to
whom the measures group applies; BUT
Report each measures group on at least 15
Medicare Part B FFS patients seen during the
reporting period to which the measures group
applies.
Measures groups containing a measure with
a 0% performance rate will not be counted.
Registry................................ Report at least 1 Physician Quality July 1, 2012-December 31, 2012.
Reporting System measures group; AND
Report each measures group for at least
80% of the eligible professional's Medicare Part B
FFS patients seen during the reporting period to
whom the measures group applies; BUT
Report each measures group on no less than
8 Medicare Part B FFS patients seen during the
reporting period to which the measures group
applies.
Measures groups containing a measure with
a 0% performance rate will not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------

An eligible professional could also potentially qualify for the
Physician Quality Reporting System incentive payment by satisfactorily
reporting both individual measures and measures groups. However, only
one incentive payment will be made to the eligible professional. We
invite public comment on the proposed criteria for satisfactory
reporting of measures groups for individual eligible professionals.
(6) Proposed 2012 Criteria for Satisfactory Reporting on Physician
Quality Reporting System Measures by Group Practices Under the GPRO
As stated previously, instead of participating as an individual
eligible professional, an eligible professional in a group practice may
participate in the Physician Quality Reporting System under the
Physician Quality Reporting System GPRO. However, an individual
eligible professional who is affiliated with a group practice
participating in the Physician Quality Reporting System GPRO that
satisfactorily submits Physician Quality Reporting System quality
measures will only be able to earn an incentive as part of the group
practice and not as an individual eligible professional.
As stated previously, we propose that group practices interested in
participating in GPRO must self-nominate. As stated in the ``Proposed
Reporting Period'' in section IV.F.2.c. of this proposed rule, for
group practices selected to participate in the Physician Quality
Reporting System GPRO for 2012, we propose a 12-month reporting period
beginning January 1, 2012. For 2012, we propose to use the same GPRO
reporting methods that we have used in prior years. Specifically, we
propose that group practices participating in GPRO submit information
on measures within a proposed common set of 40 NQF-endorsed quality
measures using a web interface based on the GPRO Tool used in the 2011
Physician Quality Reporting System GPRO. As part of the data submission
process for 2012 GPRO, we propose that during 2012, each group practice
would be required to report quality measures with respect to services
furnished during the 2012 reporting period (that is, January 1, 2012,
through December 31, 2012) on an assigned sample of Medicare
beneficiaries. Once the beneficiary assignment has been made for each
group practice, which we anticipate will be done during the fourth
quarter of 2012, we propose to provide each group practice selected to
participate in the Physician Quality Reporting System GPRO with access
to a web interface that would include the group's assigned beneficiary
samples and the final GPRO quality measures. We propose to pre-populate
the web interface with the assigned beneficiaries' demographic and
utilization information based on all of their Medicare claims data. The
group practice would be required to populate the remaining data fields
necessary for capturing quality measure information on each of the
assigned beneficiaries.
As specified in section IV.F.(b).(2).(B). of this proposed rule, we
propose to change the definition of the group practices to those
practices consisting of 25 or more eligible professionals. In 2011, to
distinguish the criteria in GPRO I and II for satisfactory reporting
between small vs. large groups, we established different reporting
criteria dependent on the group's size. Although we are consolidating
the GPRO for 2012, we still recognize the need to equalize the
reporting burden by establishing different reporting criteria for small
vs. large groups. Therefore, we propose to establish the following two
criteria for the satisfactory reporting of Physician Quality Reporting
System quality measures under the 2012 GPRO, based on the size of the
group practice:
For group practices comprised of 25-99 eligible
professionals participating in the GPRO, we propose that the group
practice must report on all GPRO measures included in the web interface
(listed in Table 56 of this proposed rule). During the submission
period, the group practice will need to access the web interface and
populate the data fields necessary for capturing quality measure
information on each of the assigned beneficiaries up to 218
beneficiaries (with an over-sample of 327 beneficiaries) for each
disease

[[Page 42860]]

module and preventive care measure. We further propose that if the pool
of eligible assigned beneficiaries for any disease module or preventive
care measure is less than 218, then the group practice would need to
populate the remaining data files for 100 percent of eligible assigned
beneficiaries for that disease module or preventive care measure. For
each disease module or preventive care measure, we propose that the
group practice must report information on the assigned patients in the
order in which they appear in the group's sample (that is,
consecutively). We propose these criteria because they mirror the
criteria for CMS' Medicare Care Management Performance (MCMP)
demonstration. In determining the appropriate reporting criteria for
group practices comprised of 25-99 eligible professionals, we sought to
align the criteria for satisfactory reporting under the Physician
Quality Reporting System with CMS' MCMP demonstration, which uses small
to medium-sized group practices to analyze data aimed at improving the
quality of care for beneficiaries with chronic conditions. We have an
interest in aligning the reporting criteria for these two programs
particularly as the MCMP demonstration also required its participants
to report on measures similar to the PGP demonstration and using the
same data collection vehicle. However, the statistical sampling
methodology used in the MCMP demonstration also took into account that
the group practices that participated in this demonstration were
significantly smaller than those that participate in the PGP
demonstration.
For group practices comprised of 100 or more eligible
professionals, we propose that the group practices must report on all
Physician Quality Reporting System GPRO quality measures. During the
submission period, the group practice would need to populate the
remaining data fields in the web interface necessary for capturing
quality measure information on each of the assigned beneficiaries up to
411 beneficiaries (with an over-sample of 616 beneficiaries) for each
disease module and preventive care measure. We further propose that if
the pool of eligible assigned beneficiaries for any disease module or
preventive care measure is less than 411, then the group practice must
populate the remaining data fields for 100 percent of eligible assigned
beneficiaries for that disease module or preventive care measure. For
each disease module or preventive care measure, we propose that the
group practice must report information on the assigned patients in the
order in which they appear in the group's sample (that is,
consecutively).
Furthermore, although we are requiring that the group practices
participating as GPROs report on a certain number of consecutive
patients, such as either 218 or 411 beneficiaries depending on the
group's size, we propose to allow the ``skipping'' of patients for
valid reasons, such as a beneficiary's medical records not being found
or not being able to confirm a diagnosis. However, excessive skipping
of patients may cause us to question the accuracy or validity of the
data being reported to us by the group practices. Due to the variance
in group patterns, measures, and disease modules, however, it is
difficult to establish a ``skip threshold'' for the satisfactory
reporting of GPRO measures. Therefore, it is our intent to examine each
group practice's skip patterns. We may request the group to provide
additional information to help explain or support the skips to help
better inform us on what levels of skipping could potentially be
considered excessive skipping in a future year.
In determining the appropriate reporting criteria for group
practices comprised of 100 or more eligible professionals, we sought to
use the same criteria as we finalized in the 2011 MPFS Final Rule with
comment period for GPRO I (75 FR 73506) because group practices are
already familiar with this reporting process. We hope that establishing
the same process for reporting under the GPRO as proposed in prior
years will provide a likelier chance for meeting the criteria for
satisfactory reporting under the GPRO. In addition, we sought to align
the criteria for satisfactory reporting under the Physician Quality
Reporting System with CMS' Physician Group Practice (PGP)
demonstration, which collects data from large group practices in an
effort to coordinate the overall care delivered to Medicare patients.
As we discussed previously with our proposed definition of group
practice, we allow for fluctuation of the group practice's size
throughout the reporting period, provided that the group size contains
at least 25 eligible professionals, which is the proposed minimum group
practice size for participation in the Physician Quality Reporting
System GPRO. However, as we established in 2011, for purposes of
determining which reporting criteria the group must satisfy, a group
practice's size will be the size of the group at the time the group's
participation is approved by CMS (75 FR 73504). For example, if a group
practice is comprised of 100 eligible professionals at the time it
self-nominates for participation as a GPRO in 2012, and the group
practice's size then drops to 99 eligible professionals at the time the
group practice's participation is approved by CMS, the group practice
would need to meet the proposed reporting criteria for a group size of
99.
Table 28 summarizes the proposed criteria for the satisfactory
reporting of data on quality measures by group practice under the
proposed 2012 Physician Quality Reporting GPRO. We propose that group
practices participating in the 2012 Physician Quality Reporting System
GPRO, regardless of size, would be required to report on all of the
proposed measures listed in Table 56 of this proposed rule. These
quality measures are grouped into preventive care measures and five
disease modules: heart failure, diabetes, coronary artery disease,
hypertension, and chronic obstructive pulmonary disease (COPD).

TABLE 28--Proposed 2012 Criteria for Satisfactory Reporting for Group Practices Participating in the Physician
Quality Reporting System Group Practice Reporting Option (GPRO)
----------------------------------------------------------------------------------------------------------------
Reporting
Group practice size mechanism Reporting criteria Reporting period
----------------------------------------------------------------------------------------------------------------
25-99 Eligible Professionals.. A submission web Report on all measures January 1, 2012-December
interface included in the web interface; 31, 2012.
provided by CMS. and
Populate data fields
for the first 218 consecutively
ranked and assigned
beneficiaries in the order in
which they appear in the
group's sample (with an
over[dash]sample of 327) for
each disease module or
preventive care measure. If the
pool of eligible assigned
beneficiaries is less than 218,
then report on 100% of assigned
beneficiaries.

[[Page 42861]]

100+ Eligible Professionals... A submission web Report on all measures January 1, 2012-December
interface included in the web interface; 31, 2012.
provided by CMS. and
Populate data fields
for the first 411 consecutively
ranked and assigned
beneficiaries in the order in
which they appear in the
group's sample (with an
over[dash]sample of 616) for
each disease module or
preventive care measure. If the
pool of eligible assigned
beneficiaries is less than 411,
then report on 100% of assigned
beneficiaries.
----------------------------------------------------------------------------------------------------------------

We intend to post the final 2012 Physician Quality Reporting System
GPRO participation requirements for group practices, including
instructions for submitting the self-nomination statement and other
requested information, on the Physician Quality Reporting System
section of the CMS Web site at http://www.cms.gov/PQRS by November 15,
2011 or shortly thereafter.
The Physician Quality Reporting System GPRO web interface will be
updated as needed to include the 2012 Physician Quality Reporting
System GPRO measures (i.e. to eliminate measures that have been retired
as well as add additional measures that will be finalized for 2012). We
believe that use of the GPRO web interface allows group practices the
opportunity to calculate their own performance rates on the quality
measures.
We intend to provide the selected physician groups with access to
this pre-populated database by no later than the first quarter of 2013.
For purposes of pre-populating this GPRO web interface, we propose to
assign beneficiaries to each group practice using a patient assignment
methodology modeled after the patient assignment methodology used in
the PGP & MCMP demonstrations. Based on our desire to model the
Physician Quality Reporting System GPRO after the PGP & MCMP
demonstrations, we will also consider incorporating any methodologies
used in the PGP demonstration prior to January 1, 2012 to the 2012
Physician Quality Reporting System. We propose using Medicare Part B
claims data for dates of service on or after January 1, 2011 and
submitted and processed by approximately October 31, 2011 to assign
Medicare beneficiaries to each group practice. Assigned beneficiaries
would be limited to those Medicare Part B FFS beneficiaries with
Medicare Parts A and B claims for whom Medicare is the primary payer.
Assigned beneficiaries would not include Medicare Advantage enrollees.
A beneficiary would be assigned to the group practice that provides the
plurality of a beneficiary's office or other outpatient office
evaluation and management allowed charges. Beneficiaries with only one
office visit to the group practice would be eliminated from the group
practice's assigned patient sample for purposes of the 2012 Physician
Quality Reporting System GPRO. We would pre-populate the GPRO web
interface with the assigned beneficiaries' demographic and utilization
information based on their Medicare claims data.
We invite public comment on the proposed requirements for
satisfactory reporting via the Physician Quality Reporting System GPRO
reporting option.
f. 2012 Physician Quality Reporting System Measures
(1) Statutory Requirements for the Selection of Proposed 2012 Physician
Quality Reporting System Measures
Under section 1848(k)(2)(C)(i) of the Act, the Physician Quality
Reporting System quality measures shall be such measures selected by
the Secretary from measures that have been endorsed by the entity with
a contract with the Secretary under subsection 1890(a) of the Act
(currently, that is the National Quality Forum, or NQF). However, in
the case of a specified area or medical topic determined appropriate by
the Secretary for which a feasible and practical measure has not been
endorsed by the NQF, section 1848(k)(2)(C)(ii) of the Act authorizes
the Secretary to specify a measure that is not so endorsed as long as
due consideration is given to measures that have been endorsed or
adopted by a consensus organization identified by the Secretary, such
as the AQA alliance. In light of these statutory requirements, we
believe that, except in the circumstances specified in the statute,
each proposed 2012 Physician Quality Reporting System quality measure
would need to be endorsed by the NQF. Additionally, section
1848(k)(2)(D) of the Act requires that for each 2012 Physician Quality
Reporting System quality measure, ``the Secretary shall ensure that
eligible professionals have the opportunity to provide input during the
development, endorsement, or selection of measures applicable to
services they furnish.''
The statutory requirements under section 1848(k)(2)(C) of the Act,
subject to the exception noted previously, require only that the
measures be selected from measures that have been endorsed by the
entity with a contract with the Secretary under section 1890(a) (that
is, the NQF) and are silent with respect to how the measures that are
submitted to the NQF for endorsement were developed. The basic steps
for developing measures applicable to physicians and other eligible
professionals prior to submission of the measures for endorsement may
be carried out by a variety of different organizations. We do not
believe there needs to be any special restrictions on the type or make-
up of the organizations carrying out this basic process of development
of physician measures, such as restricting the initial development to
physician-controlled organizations. Any such restriction would unduly
limit the basic development of quality measures and the scope and
utility of measures that may be considered for endorsement as voluntary
consensus standards for purposes of the Physician Quality Reporting
System.
(2) Other Considerations for the Selection of Proposed 2012 Physician
Quality Reporting System Measures
In addition to reviewing the 2011 Physician Quality Reporting
System measures for purposes of developing the proposed 2012 Physician
Quality Reporting System measures, we reviewed and considered measure
suggestions for the 2012 Physician Quality Reporting System.
With respect to the selection of new measures, we applied the
following

[[Page 42862]]

considerations, which include many of the same considerations applied
to the selection of 2009, 2010 and 2011 Physician Quality Reporting
System quality measures proposed for inclusion in the 2012 Physician
Quality Reporting System quality measure set previously described:
High Impact on Healthcare.
++ Measures that are high impact and support CMS and HHS priorities
for improved quality and efficiency of care for Medicare beneficiaries.
These current and long term priority topics include the following:
Prevention; chronic conditions; high cost and high volume conditions;
elimination of health disparities; healthcare-associated infections and
other conditions; improved care coordination; improved outcomes;
improved efficiency; improved patient and family experience of care;
effective management of acute and chronic episodes of care; reduced
unwarranted geographic variation in quality and efficiency; and
adoption and use of interoperable HIT.
++ Measures that are included in, or facilitate alignment with,
other Medicare, Medicaid, and CHIP programs in furtherance of
overarching healthcare goals.
++ NQF Endorsement.
++ Measures must be NQF-endorsed by August 15, 2011, in order to be
considered for inclusion in the 2012 Physician Quality Reporting System
quality measure set except as provided under section 1848(k)(2)(C)(ii)
of the Act.
++ Section 1848(k)(2)(C)(ii) of the Act provides an exception to
the requirement that the Secretary select measures that have been
endorsed by the entity with a contract under section 1890(a) of the Act
(that is, the NQF).
Address Gaps in the Physician Quality Reporting System
Measure Set.
++ Measures that increase the scope of applicability of the
Physician Quality Reporting System measures to services furnished to
Medicare beneficiaries and expand opportunities for eligible
professionals to participate in the Physician Quality Reporting System.
Measures of various aspects of clinical quality including
outcome measures, where appropriate and feasible, process measures,
structural measures, efficiency measures, and measures of patient
experience of care.
Other considerations that we applied to the selection of proposed
measures for 2012, regardless of whether the measure was a 2011
Physician Quality Reporting System measure or not, were--
Measures that are functional, which is to say measures
that can be technically implemented within the capacity of the CMS
infrastructure for data collection, analysis, and calculation of
reporting and performance rates.
Measures that address gaps in the quality of care
delivered to Medicare beneficiaries;
Measures impacting chronic conditions (chronic kidney
disease, diabetes mellitus, heart failure, hypertension and
musculoskeletal);
Measures involving care coordination;
Measures applicable across care settings (such as,
outpatient, nursing facilities, domiciliary, etc.)
Measures conducive to leveraging capabilities of an
electronic health record (EHR)
Measures whose detailed specifications will be completed
and ready for implementation in the 2012 Physician Quality Reporting
System
Broadly applicable measures that could be used to create a
core measure set required of all participating eligible professionals
Measures groups that reflect the services furnished to
beneficiaries by a particular specialty.
In the 2012 Physician Quality Reporting System, as in the 2011
Physician Quality Reporting System, for some measures that are useful,
but where data submission is not feasible through all otherwise
available Physician Quality Reporting System reporting mechanisms, we
are proposing that a measure may be included for reporting solely
through specific reporting mechanism(s) in which its submission is
feasible.
As discussed previously, section 1848(k)(2)(D) of the Act requires
that the public have the opportunity to provide input during the
selection of measures. We also are required by other applicable
statutes to provide opportunity for public comment on provisions of
policy or regulation that are established via notice and comment
rulemaking. Measures that are not included in the proposed rule for
inclusion in the 2012 Physician Quality Reporting System that are
recommended to us via comments on the proposed rule have not been
placed before the public to comment on the selection of those measures
within the rulemaking process. Even when measures have been published
in the Federal Register, but in other contexts and not specifically
proposed as Physician Quality Reporting System measures, such
publication does not provide true opportunity for public comment on
those measures' potential inclusion in the Physician Quality Reporting
System. Thus, such additional measures recommended for selection for
the 2012 Physician Quality Reporting System via comments on the CY 2012
PFS proposed rule cannot be included in the 2012 measure set. As such,
while we welcome all constructive comments and suggestions, and may
consider such recommended measures for inclusion in future measure sets
for the Physician Quality Reporting System and other programs to which
such measures may be relevant, we are not able to consider such
additional measures for inclusion in the final 2012 Physician Quality
Reporting System measure set.
In addition, as in prior years, we again note that we do not use
notice and comment rulemaking as a means to update or modify measure
specifications. Quality measures that have completed the consensus
process have a designated party (usually, the measure developer/owner)
who has accepted responsibility for maintaining the measure. In
general, it is the role of the measure owner, developer, or maintainer
to make changes to a measure. Therefore, comments requesting changes to
a specific proposed Physician Quality Reporting System measure's title,
definition, and detailed specifications or coding should be directed to
the measure developer identified in Tables 29 through 55. Contact
information for the 2011 Physician Quality Reporting System measure
developers is listed in the ``2011 Physician Quality Reporting System
Quality Measures List,'' which is available on the CMS Web site at
http://www.cms.gov/PQRS/15_MeasuresCodes.asp#TopOfPage.
However, we stress that inclusion of measures that are not NQF
endorsed or AQA adopted is an exception to the requirement under
section 1848(k)(2)(C)(i) of the Act that measures be endorsed by the
NQF. We may exercise this exception authority in a specified area or
medical topic for which a feasible and practical measure has not been
endorsed by NQF, so long as due consideration is given to measures that
have been endorsed by the NQF.
Based on the criteria previously discussed, we propose to include
the individual measures listed in Tables 29 through 31 in the 2012
Physician Quality Reporting System individual quality measure set. We
believe that each measure we are proposing for reporting under the 2012
Physician Quality Reporting System meets at least one criterion for the
selection of Physician Quality Reporting System measures described
previously. We are also proposing to include 24 measures

[[Page 42863]]

groups in the 2012 Physician Quality Reporting System quality measure
set, which are listed in Tables 29 through 31. The individual measures
selected for the 2012 Physician Quality Reporting System can be
categorized as follows--
Proposed 2012 Physician Quality Reporting System Core
Measures Available for Either Claims, Registry, and/or EHR-Based
Reporting;
Proposed 2012 Physician Quality Reporting System
Individual Quality Measures Available for Either Claims-based Reporting
and/or Registry-based Reporting; AND
Proposed 2012 Physician Quality Reporting System Measures
Available for EHR-Based Reporting.
Please note that some individual measures we are proposing in
Tables 29 through 31 for reporting for the 2012 Physician Quality
Reporting System may be available for reporting in other CMS programs,
such as the Medicare and Medicaid EHR Incentive Program as well as the
Medicare Shared Savings Program. We note that measure titles, in some
instances, may vary from program to program. If an eligible
professional intends to report the same measures for multiple CMS
programs, it is important to check the full measure specifications, NQF
measure number (if applicable), as well as any other identifying
measure features to determine whether the measures are the same. We
invite comments on our proposed approach in selecting measures.
(3) Proposed 2012 Physician Quality Reporting System Individual
Measures
This section focuses on the proposed 2012 Physician Quality
Reporting System Individual Measures available for reporting via claims
and/or registry. For the proposed 2012 Physician Quality Reporting
System measures that were selected for reporting in 2011, please note
that detailed measure specifications, including the measure's title,
for the proposed 2012 individual Physician Quality Reporting System
quality measures may have been updated or modified during the NQF
endorsement process or for other reasons prior to 2012. The 2012
Physician Quality Reporting System quality measure specifications for
any given individual quality measure may, therefore, be different from
specifications for the same quality measure used in prior years.
Specifications for all 2012 individual Physician Quality Reporting
System quality measures, whether or not included in the 2011 Physician
Quality Reporting System program, must be obtained from the
specifications document for 2012 individual Physician Quality Reporting
System quality measures, which will be available on the Physician
Quality Reporting System section of the CMS Web site on or before
December 31, 2011.
(A) Proposed 2012 Physician Quality Reporting System Core Measures
Available for Claims, Registry, and/or EHR-Based Reporting
The prevention of cardiovascular conditions is a top priority for
CMS. Therefore, in an effort to encourage eligible professionals to
monitor their performance with respect to the prevention of
cardiovascular conditions, we propose to adopt a Physician Quality
Reporting System set of core measures for CY 2012, which are specified
later in this section in Table 29, which focuses on the prevention of
cardiovascular conditions.
While we encourage reporting of these measures by all eligible
professionals, as previously discussed in section IV.F.1.f. of this
proposed rule, we are proposing that only certain specialties be
required to report on the proposed 2012 Physician Quality Reporting
System core measures.

Table 29--Proposed 2012 Physician Quality Reporting System Core Measures Available for Either Claims, Registry,
and/or EHR[dash]Based Reporting
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system Measure title NQF measure No. Measure developer Reporting mechanism
measure No.
----------------------------------------------------------------------------------------------------------------
204................. Ischemic Vascular 0068 NCQA.............. Claims, Registry, EHR.
Disease (IVD): Use of
Aspirin or another
Antithrombotic.
236................. Controlling High Blood 0018 NCQA.............. Claims, Registry, EHR.
Pressure.
2................... Diabetes Mellitus: Low 0064 NCQA.............. Claims, Registry, EHR.
Density Lipoprotein
(LDL[dash]C) Control
in Diabetes Mellitus.
226................. Measure pair: a. 0028 AMA[dash]PCPI..... Claims, Registry, EHR.
Tobacco Use
Assessment, b. Tobacco
Cessation Intervention.
TBD................. Ischemic Vascular 0075 NCQA.............. Claims, Registry, EHR.
Disease (IVD):
Complete Lipid Profile
and LDL Control < 100.
TBD................. Proportion of adults 18 N/A CMS............... Claims, Registry, EHR.
years and older who
have had their BP
measured within the
preceding 2 years.
TBD................. Preventative Care: N/A CMS............... EHR.
Cholesterol[dash]LDL
test performed.
----------------------------------------------------------------------------------------------------------------

We invite public comment on the proposed 2012 Physician Quality
Reporting System core measures.
(B) Proposed 2012 Physician Quality Reporting System Individual
Measures for Claims and Registry Reporting
For 2012, we propose to retain all measures currently used in the
2011 Physician Quality Reporting System. We believe these 2011
Physician Quality Reporting System measures meet the statutory
considerations as well as other factors we used in determining which
measures to include for reporting under the 2012 Physician Quality
Reporting System. The retention of these measures also promotes program
consistency. These proposed measures include 55 registry-only measures
currently used in the 2011 Physician Quality Reporting System, and 144
individual quality measures for either claims-based reporting or
registry-based reporting (75 FR 40186 through 40190 and 52489 through
52490). These proposed measures do not include any measures that are
proposed to be included as part of the Back Pain measures group. For
2012, we propose that any 2012 Physician Quality Reporting System
measures that are included in the Back Pain measures group would not be
reportable as individual measures through claims-based reporting or
registry-based reporting.

[[Page 42864]]

In 2011, Physician Quality Reporting System measure 197
was titled ``Coronary Artery Disease (CAD): Drug Therapy for Lowering
LDL-Cholesterol''. For 2012, we are changing the title of measure
197 to ``Coronary Artery Disease: Lipid Control'', because
the measure owner, AMA-PCPI, has changed the title of the measure.
Aside from the title change, measure 197's NQF number as well
as its NQF-endorsement status has not changed. However, as noted
previously, please check the measure specifications for measure
197, as the specifications on how to report on measure
197 for the 2012 Physician Quality Reporting System may
change from 2011.
In addition, we propose the 26 new individual measures below for
inclusion in the 2012 Physician Quality Reporting System in order to
provide eligible professionals with more Physician Quality Reporting
System quality measures on which they can select from to report. The
following 2 proposed measures are NQF-endorsed:
Anticoagulation for Acute Pulmonary Embolus Patients.
Pregnancy Test for Female Abdominal Pain Patients.
The remaining 24 measures are either pending NQF endorsement or
would have to be adopted under the exception to NQF endorsement
provided under section 1848(k)(2)(C)(ii) of the Act. In selecting these
measures, we took into account other considerations listed in section
IV.F.1.(f).(2). of this proposed rule. Specifically, we are proposing
the following measures because the measures impact chronic conditions:
Chronic Wound Care: Use of Wound Surface Culture Technique
in Patients with Chronic Skin Ulcers.
Chronic Wound Care: Use of Wet to Dry Dressings in
Patients with Chronic Skin Ulcers.
Hypertension: Blood Pressure Control.
We are proposing the following measures because these measures
involve care coordination:
Coronary Artery Disease (CAD): Symptom Management.
We are proposing the following measures because these measures are
applicable across care settings:
Substance Use Disorders: Counseling Regarding Psychosocial
and Pharmacologic Treatment Options for Alcohol Dependence.
Substance Use Disorders: Screening for Depression Among
Patients with Substance Abuse or Dependence.
Cardiac Rehabilitation Patient Referral From an Outpatient
Setting.
We are proposing the following measures because we believe the
measures address gaps in the Physician Quality Reporting System measure
set:
Barrett's Esophagus.
Ultrasound Determination of Pregnancy Location for
Pregnant Patients with Abdominal Pain.
Rh Immunoglobulin (Rhogam) for Rh Negative Pregnant Women
at Risk of Fetal Blood Exposure.
Surveillance after Endovascular Abdominal Aortic Aneurysm
Repair (EVAR).
Referral for Otology Evaluation for Patients with Acute or
Chronic Dizziness.
Image Confirmation of Successful Excision of Image--
Localized Breast Lesion.
Improvement in Patient's Visual Function within 90-Days
Following Cataract Surgery.
Patient Satisfaction within 90-Days Following Cataract
Surgery.
We are proposing the following measures because we believe the
measures increase the scope of applicability of the Physician Quality
Reporting System measures to services furnished to Medicare
beneficiaries and expand opportunities for eligible professionals to
participate in the Physician Quality Reporting System:
Radical Prostatectomy Pathology Reporting.
Immunohistochemical (IHC) Evaluation of HER2 for Breast
Cancer Patients.
We are proposing the following measures because the measures are
high impact and support CMS and HHS priorities for improved quality and
efficiency of care for Medicare beneficiaries.
Statin Therapy at Discharge after Lower Extremity Bypass
(LEB).
Rate of Open AAA Repair without Major Complications
(discharged to home no later than post-operative day 7).
Rate of EVAR without Major Complications (discharged to
home no later than POD 2).
Rate of Carotid Endarterectomy for Asymptomatic Patients,
without Major Complications (discharged to home no later than post-
operative day 2).
We are proposing the following measures because the measures have a
high impact on health care:
Preoperative Diagnosis of Breast Cancer.
Sentinel Lymph Node Biopsy for Invasive Breast Cancer.
Biopsy Follow-up.
We believe that the addition of Physician Quality Reporting System
quality measures will encourage eligible professionals to participate
in the Physician Quality Reporting System, as there are more measures
that may be applicable to eligible professionals.
Of these measures, 13 would be reportable via registry-only. The
remaining 13 measures would be available for claims and registry
reporting. Although we are proposing to designate certain measures as
registry-only measures, we cannot guarantee that there will be a
registry qualified to submit each registry-only measure for 2012. We
rely on registries to self-nominate and identify the measures for which
they would like to be qualified to submit quality measures results and
numerator and denominator data on quality measures. If no registry
self-nominates to submit measure results and numerator and denominator
data on a particular measure for 2012, then an eligible professional
would not be able to report that particular measure.
Table 30 identifies the list of measures we propose to include for
claims and/or registry-based reporting in the 2012 Physician Quality
Reporting System. The proposed 2012 Physician Quality Reporting System
individual measures for either claims-based reporting or registry-based
reporting are listed by their Physician Quality Reporting System
Measure Number (to the extent the measure is part of the 2011 Physician
Quality Reporting System measure set) and Title in Table 30, along with
the name of the measure's developer/owner and NQF measure number, if
applicable. The Physician Quality Reporting System Measure Number is a
unique identifier assigned by CMS to all measures in the Physician
Quality Reporting System measure set. Once a Physician Quality
Reporting System Measure Number is assigned to a measure, it will not
be used again to identify a different measure, even if the original
measure to which the number was assigned is subsequently retired from
the Physician Quality Reporting System measure set. A description of
the measures listed in Table 30 can be found in the ``2011 Physician
Quality Reporting System Quality Measures List,'' which is available on
the Measures and Codes page of the Physician Quality Reporting System
section of the CMS Web site at http://www.cms.hhs.gov/PQRS to the
extent the measure is part of the 2011 Physician Quality Reporting
System measure set. New measures that we are proposing to add to the
Physician Quality Reporting System measure set for 2012 are designated
with a Physician Quality Reporting System Measure Number of ``TBD.''

[[Page 42865]]

Table 30--Proposed 2012 Physician Quality Reporting System Individual Quality Measures Available for Either
Claims-Based Reporting and/or Registry-Based Reporting
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system Measure title NQF measure No. Measure developer Reporting mechanism
measure No.
----------------------------------------------------------------------------------------------------------------
1................... Diabetes Mellitus: 0059 NCQA.............. Claims, Registry.
Hemoglobin A1c Poor
Control in Diabetes
Mellitus.
2................... Diabetes Mellitus: Low 0064 NCQA.............. Claims, Registry.
Density Lipoprotein
(LDL-C) Control in
Diabetes Mellitus.
3................... Diabetes Mellitus: High 0061 NCQA.............. Claims, Registry.
Blood Pressure Control
in Diabetes Mellitus.
5................... Heart Failure: 0081 AMA-PCPI.......... Registry.
Angiotensin-Converting
Enzyme (ACE) Inhibitor
or Angiotensin
Receptor Blocker (ARB)
Therapy for Left
Ventricular Systolic
Dysfunction (LVSD).
6................... Coronary Artery Disease 0067 AMA-PCPI.......... Claims, Registry.
(CAD): Oral
Antiplatelet Therapy
Prescribed for
Patients with CAD.
7................... Coronary Artery Disease 0070 AMA-PCPI.......... Registry.
(CAD): Beta-Blocker
Therapy for CAD
Patients with Prior
Myocardial Infarction
(MI).
8................... Heart Failure: Beta- 0083 AMA-PCPI.......... Registry.
Blocker Therapy for
Left Ventricular
Systolic Dysfunction
(LVSD).
9................... Major Depressive 0105 NCQA.............. Claims, Registry.
Disorder (MDD):
Antidepressant
Medication During
Acute Phase for
Patients with MDD.
10.................. Stroke and Stroke 00246 AMA-PCPI/NCQA..... Claims, Registry.
Rehabilitation:
Computed Tomography
(CT) or Magnetic
Resonance Imaging
(MRI) Reports.
12.................. Primary Open Angle 0086 AMA-PCPI.......... Claims, Registry.
Glaucoma (POAG): Optic
Nerve Evaluation.
14.................. Age-Related Macular 0087 AMA-PCPI/NCQA..... Claims, Registry.
Degeneration (AMD):
Dilated Macular
Examination.
18.................. Diabetic Retinopathy... 0088 AMA-PCPI.......... Claims, Registry.
19.................. Diabetic Retinopathy: 0089 AMA-PCPI.......... Claims, Registry.
Communication with the
Physician Managing On-
going Diabetes Care.
20.................. Perioperative Care: 0270 AMA-PCPI/NCQA..... Claims, Registry.
Timing of Antibiotic
Prophylaxis--Ordering
Physician.
21.................. Perioperative Care: 0268 AMA-PCPI/NCQA..... Claims, Registry.
Selection of
Prophylactic
Antibiotic.
22.................. Perioperative Care: 0271 AMA-PCPI/NCQA..... Claims, Registry.
Discontinuation of
Prophylactic
Antibiotics (Non-
Cardiac Procedures).
23.................. Perioperative Care: 0239 AMA-PCPI/NCQA..... Claims, Registry.
Venous Thromboembolism
(VTE) Prophylaxis
(When Indicated in ALL
Patients).
24.................. Osteoporosis: 0045 AMA-PCPI/NCQA..... Claims, Registry.
Communication with the
Physician Managing On-
going Care Post-
Fracture of Hip, Spine
or Distal Radius for
Men and Women Aged 50
Years and Older.
28.................. Aspirin at Arrival for 0092 AMA-PCPI/NCQA..... Claims, Registry.
Acute Myocardial
Infarction (AMI).
30.................. Perioperative Care: 0270 AMA-PCPI/NCQA..... Claims, Registry.
Timely Administration
of Prophylactic
Parenteral Antibiotics.
31.................. Stroke and Stroke 0240 AMA-PCPI/NCQA..... Claims, Registry.
Rehabilitation: Deep
Vein Thrombosis
Prophylaxis (DVT) for
Ischemic Stroke or
Intracranial
Hemorrhage.
32.................. Stroke and Stroke 0325 AMA-PCPI/NCQA..... Claims, Registry.
Rehabilitation:
Discharged on
Antiplatelet Therapy.
33.................. Stroke and Stroke 0241 AMA-PCPI/NCQA..... Registry.
Rehabilitation:
Anticoagulant Therapy
Prescribed for Atrial
Fibrillation at
Discharge.
35.................. Stroke and Stroke 0243 AMA-PCPI/NCQA..... Claims, Registry.
Rehabilitation:
Screening for
Dysphagia.
36.................. Stroke and Stroke 0244 AMA-PCPI/NCQA..... Claims, Registry.
Rehabilitation:
Consideration of
Rehabilitation
Services.
39.................. Screening or Therapy 0046 AMA-PCPI/NCQA..... Claims, Registry.
for Osteoporosis for
Women Aged 65 Years
and Older.
40.................. Osteoporosis: 0045 AMA-PCPI/NCQA..... Claims, Registry.
Management Following
Fracture of Hip, Spine
or Distal Radius for
Men and Women Aged 50
Years and Older.
41.................. Osteoporosis: 0049 AMA-PCPI/NCQA..... Claims, Registry.
Pharmacologic Therapy
for Men and Women Aged
50 Years and Older.
43.................. Coronary Artery Bypass 0516 STS............... Claims, Registry.
Graft (CABG): Use of
Internal Mammary
Artery (IMA) in
Patients with Isolated
CABG Surgery.
44.................. Coronary Artery Bypass 0235 STS............... Claims, Registry.
Graft (CABG):
Preoperative Beta-
Blocker in Patients
with Isolated CABG
Surgery.
45.................. Perioperative Care: 0637 AMA-PCPI/NCQA..... Claims, Registry.
Discontinuation of
Prophylactic
Antibiotics (Cardiac
Procedures).

[[Page 42866]]

46.................. Medication 0097 AMA-PCPI/NCQA..... Claims, Registry.
Reconciliation:
Reconciliation After
Discharge from an
Inpatient Facility.
47.................. Advance Care Plan...... 0326 AMA-PCPI/NCQA..... Claims, Registry.
48.................. Urinary Incontinence: 0098 AMA-PCPI/NCQA..... Claims, Registry.
Assessment of Presence
or Absence of Urinary
Incontinence in Women
Aged 65 Years and
Older.
49.................. Urinary Incontinence: 0099 AMA-PCPI/NCQA..... Claims, Registry.
Characterization of
Urinary Incontinence
in Women Aged 65 Years
and Older.
50.................. Urinary Incontinence: 0100 AMA-PCPI/NCQA..... Claims, Registry.
Plan of Care for
Urinary Incontinence
in Women Aged 65 Years
and Older.
51.................. Chronic Obstructive 0091 AMA-PCPI.......... Claims, Registry.
Pulmonary Disease
(COPD): Spirometry
Evaluation.
52.................. Chronic Obstructive 0102 AMA-PCPI.......... Claims, Registry.
Pulmonary Disease
(COPD): Bronchodilator
Therapy.
53.................. Asthma: Pharmacologic 0047 AMA-PCPI.......... Claims, Registry.
Therapy.
54.................. 12-Lead 0090 AMA-PCPI/NCQA..... Claims, Registry.
Electrocardiogram
(ECG) Performed for
Non-Traumatic Chest
Pain.
55.................. 12-Lead 0093 AMA-PCPI/NCQA..... Claims, Registry.
Electrocardiogram
(ECG) Performed for
Syncope.
56.................. Community-Acquired 0232 AMA-PCPI/NCQA..... Claims, Registry.
Pneumonia (CAP): Vital
Signs.
57.................. Community-Acquired 0094 AMA-PCPI/NCQA..... Claims, Registry.
Pneumonia (CAP):
Assessment of Oxygen
Saturation.
58.................. Community-Acquired 0234 AMA-PCPI/NCQA..... Claims, Registry.
Pneumonia (CAP):
Assessment of Mental
Status.
59.................. Community-Acquired 0096 AMA-PCPI/NCQA..... Claims, Registry.
Pneumonia (CAP):
Empiric Antibiotic.
64.................. Asthma: Asthma 0001 AMA-PCPI.......... Claims, Registry.
Assessment.
65.................. Treatment for Children 0069 NCQA.............. Claims, Registry.
with Upper Respiratory
Infection (URI):
Avoidance of
Inappropriate Use.
66.................. Appropriate Testing for 0002 NCQA.............. Claims, Registry.
Children with
Pharyngitis.
67.................. Myelodysplastic 0377 AMA-PCPI/ASH...... Claims, Registry.
Syndrome (MDS) and
Acute Leukemias:
Baseline Cytogenetic
Testing Performed on
Bone Marrow.
68.................. Myelodysplastic 0378 AMA-PCPI/ASH...... Claims, Registry.
Syndrome (MDS):
Documentation of Iron
Stores in Patients
Receiving
Erythropoietin Therapy.
69.................. Multiple Myeloma: 0380 AMA-PCPI/ASH...... Claims, Registry.
Treatment with
Bisphosphonates.
70.................. Chronic Lymphocytic 0379 AMA-PCPI/ASH...... Claims, Registry.
Leukemia (CLL):
Baseline Flow
Cytometry.
71.................. Breast Cancer: Hormonal 0387 AMA-PCPI/ASCO/NCCN Claims, Registry.
Therapy for Stage IC-
IIIC Estrogen Receptor/
Progesterone Receptor
(ER/PR) Positive
Breast Cancer.
72.................. Colon Cancer: 0385 AMA-PCPI/ASCO/NCCN Claims, Registry.
Chemotherapy for Stage
III Colon Cancer
Patients.
76.................. Prevention of Catheter- 0464 AMA-PCPI.......... Claims, Registry.
Related Bloodstream
Infections (CRBSI):
Central Venous
Catheter (CVC)
Insertion Protocol.
79.................. End Stage Renal Disease 0227 AMA-PCPI.......... Claims, Registry.
(ESRD): Influenza
Immunization in
Patients with ESRD.
81.................. End Stage Renal Disease 0323 AMA-PCPI.......... Registry.
(ESRD): Plan of Care
for Inadequate
Hemodialysis in ESRD
Patients.
82.................. End Stage Renal Disease 0321 AMA-PCPI.......... Registry.
(ESRD): Plan of Care
for Inadequate
Peritoneal Dialysis.
83.................. Hepatitis C: Testing 0393 AMA-PCPI.......... Registry.
for Chronic Hepatitis
C--Confirmation of
Hepatitis C Viremia.
84.................. Hepatitis C: 0395 AMA-PCPI.......... Claims, Registry.
Ribonucleic Acid (RNA)
Testing Before
Initiating Treatment.
85.................. Hepatitis C: HCV 0396 AMA-PCPI.......... Claims, Registry.
Genotype Testing Prior
to Treatment.
86.................. Hepatitis C: Antiviral 0397 AMA-PCPI.......... Claims, Registry.
Treatment Prescribed.
87.................. Hepatitis C: HCV 0398 AMA-PCPI.......... Claims, Registry.
Ribonucleic Acid (RNA)
Testing at Week 12 of
Treatment.
89.................. Hepatitis C: Counseling 0401 AMA-PCPI.......... Claims, Registry.
Regarding Risk of
Alcohol Consumption.
90.................. Hepatitis C: Counseling 0394 AMA-PCPI.......... Claims, Registry.
Regarding Use of
Contraception Prior to
Antiviral Therapy.
91.................. Acute Otitis Externa 0653 AMA-PCPI.......... Claims, Registry.
(AOE): Topical Therapy.
92.................. Acute Otitis Externa N/A AMA-PCPI.......... Claims, Registry.
(AOE): Pain Assessment.

[[Page 42867]]

93.................. Acute Otitis Externa 0654 AMA-PCPI.......... Claims, Registry.
(AOE): Systemic
Antimicrobial Therapy--
Avoidance of
Inappropriate Use.
94.................. Otitis Media with N/A AMA-PCPI.......... Claims, Registry.
Effusion (OME):
Diagnostic Evaluation--
Assessment of Tympanic
Membrane Mobility.
99.................. Breast Cancer Resection 0391 AMA-PCPI/CAP...... Claims, Registry.
Pathology Reporting:
pT Category (Primary
Tumor) and pN Category
(Regional Lymph Nodes)
with Histologic Grade.
100................. Colorectal Cancer 0392 AMA-PCPI/CAP...... Claims, Registry.
Resection Pathology
Reporting: pT Category
(Primary Tumor) and pN
Category (Regional
Lymph Nodes) with
Histologic Grade.
102................. Prostate Cancer: 0389 AMA-PCPI.......... Claims, Registry.
Avoidance of Overuse
of Bone Scan for
Staging Low-Risk
Prostate Cancer
Patients.
104................. Prostate Cancer: 0390 AMA-PCPI.......... Claims, Registry.
Adjuvant Hormonal
Therapy for High-Risk
Prostate Cancer
Patients.
105................. Prostate Cancer: Three- 0388 AMA-PCPI.......... Claims, Registry.
Dimensional (3D)
Radiotherapy.
106................. Major Depressive 0103 AMA-PCPI.......... Claims, Registry.
Disorder (MDD):
Diagnostic Evaluation.
107................. Major Depressive 0104 AMA-PCPI.......... Claims, Registry.
Disorder (MDD):
Suicide Risk
Assessment.
108................. Rheumatoid Arthritis 0054 NCQA.............. Claims, Registry.
(RA): Disease
Modifying Anti-
Rheumatic Drug (DMARD)
Therapy.
109................. Osteoarthritis (OA): 0050 AMA-PCPI.......... Claims, Registry.
Function and Pain
Assessment.
110................. Preventive Care and 0041 AMA-PCPI.......... Claims, Registry.
Screening: Influenza
Immunization for
Patients >= 50 Years
Old.
111................. Preventive Care and 0043 NCQA.............. Claims, Registry.
Screening: Pneumonia
Vaccination for
Patients 65 Years and
Older.
112................. Preventive Care and 0031 NCQA.............. Claims, Registry.
Screening: Screening
Mammography.
113................. Preventive Care and 0034 NCQA.............. Claims, Registry.
Screening: Colorectal
Cancer Screening.
116................. Antibiotic Treatment 0058 NCQA.............. Claims, Registry.
for Adults with Acute
Bronchitis: Avoidance
of Inappropriate Use.
117................. Diabetes Mellitus: 0055 NCQA.............. Claims, Registry.
Dilated Eye Exam in
Diabetic Patient.
118................. Coronary Artery Disease 0066 AMA-PCPI.......... Registry.
(CAD): Angiotensin-
Converting Enzyme
(ACE) Inhibitor or
Angiotensin Receptor
Blocker (ARB) Therapy
for Patients with CAD
and Diabetes and/or
Left Ventricular
Systolic Dysfunction
(LVSD).
119................. Diabetes Mellitus: 0062 NCQA.............. Claims, Registry.
Urine Screening for
Microalbumin or
Medical Attention for
Nephropathy in
Diabetic Patients.
121................. Chronic Kidney Disease N/A AMA-PCPI.......... Claims, Registry.
(CKD): Laboratory
Testing (Calcium,
Phosphorus, Intact
Parathyroid Hormone
(iPTH) and Lipid
Profile).
122................. Chronic Kidney Disease AQA adopted AMA-PCPI.......... Claims, Registry.
(CKD): Blood Pressure
Management.
123................. Chronic Kidney Disease AQA adopted AMA-PCPI.......... Claims, Registry.
(CKD): Plan of Care--
Elevated Hemoglobin
for Patients Receiving
Erythropoiesis-
Stimulating Agents
(ESA).
124................. Health Information 0488 CMS/QIP........... Claims, Registry.
Technology (HIT):
Adoption/Use of
Electronic Health
Records (EHR).
126................. Diabetes Mellitus: 0417 APMA.............. Claims, Registry.
Diabetic Foot and
Ankle Care, Peripheral
Neuropathy--Neurologic
al Evaluation.
127................. Diabetes Mellitus: 0416 APMA.............. Claims, Registry.
Diabetic Foot and
Ankle Care, Ulcer
Prevention--Evaluation
of Footwear.
128................. Preventive Care and 0421 CMS/QIP........... Claims, Registry.
Screening: Body Mass
Index (BMI) Screening
and Follow-Up.
130................. Documentation of 0419 CMS/QIP........... Claims, Registry.
Current Medications in
the Medical Record.
131................. Pain Assessment Prior 0420 CMS/QIP........... Claims, Registry.
to Initiation of
Patient Therapy and
Follow-Up.
134................. Screening for Clinical 0418 CMS/QIP........... Claims, Registry.
Depression and Follow-
Up Plan.
135................. Chronic Kidney Disease AQA adopted AMA-PCPI.......... Claims, Registry.
(CKD): Influenza
Immunization.
137................. Melanoma: Continuity of 0650 AMA-PCPI/NCQA..... Registry.
Care--Recall System.
138................. Melanoma: Coordination 0561 AMA-PCPI/NCQA..... Registry.
of Care.
140................. Age-Related Macular 0566 AMA-PCPI/NCQA..... Claims, Registry.
Degeneration (AMD):
Counseling on
Antioxidant Supplement.

[[Page 42868]]

141................. Primary Open-Angle 0563 AMA-PCPI/NCQA..... Claims, Registry.
Glaucoma (POAG):
Reduction of
Intraocular Pressure
(IOP) by 15% OR
Documentation of a
Plan of Care.
142................. Osteoarthritis (OA): 0051 AMA-PCPI.......... Claims, Registry.
Assessment for Use of
Anti-Inflammatory or
Analgesic Over-the-
Counter (OTC)
Medications.
143................. Oncology: Medical and 0384 AMA-PCPI.......... Registry.
Radiation--Pain
Intensity Quantified.
144................. Oncology: Medical and 0383 AMA-PCPI.......... Registry.
Radiation--Plan of
Care for Pain.
145................. Radiology: Exposure 0510 AMA-PCPI/NCQA..... Claims, Registry.
Time Reported for
Procedures Using
Fluoroscopy.
146................. Radiology: 0508 AMA-PCPI/NCQA..... Claims, Registry.
Inappropriate Use of
``Probably Benign''
Assessment Category in
Mammography Screening.
147................. Nuclear Medicine: 0511 AMA-PCPI.......... Claims, Registry.
Correlation with
Existing Imaging
Studies for All
Patients Undergoing
Bone Scintigraphy.
153................. Chronic Kidney Disease AQA adopted AMA-PCPI.......... Claims, Registry.
(CKD): Referral for
Arteriovenous (AV)
Fistula.
154................. Falls: Risk Assessment. AQA adopted AMA-PCPI/NCQA..... Claims, Registry.
155................. Falls: Plan of Care.... AQA adopted AMA-PCPI/NCQA..... Claims, Registry.
156................. Oncology: Radiation 0382 AMA-PCPI.......... Claims, Registry.
Dose Limits to Normal
Tissues.
157................. Thoracic Surgery: 0455 STS............... Claims, Registry.
Recording of Clinical
Stage for Lung Cancer
and Esophageal Cancer
Resection.
158................. Carotid Endarterectomy: 0466 SVS............... Claims, Registry.
Use of Patch During
Conventional Carotid
Endarterectomy.
159................. HIV/AIDS: CD4+ Cell 0404 AMA-PCPI/NCQA..... Registry.
Count or CD4+
Percentage.
160................. HIV/AIDS: Pneumocystis 0405 AMA-PCPI/NCQA..... Registry.
Jiroveci Pneumonia
(PCP) Prophylaxis.
161................. HIV/AIDS: Adolescent 0406 AMA-PCPI/NCQA..... Registry.
and Adult Patients
with HIV/AIDS Who Are
Prescribed Potent
Antiretroviral Therapy.
162................. HIV/AIDS: HIV RNA 0407 AMA-PCPI/NCQA..... Registry.
Control After Six
Months of Potent
Antiretroviral Therapy.
163................. Diabetes Mellitus: Foot 0056 NCQA.............. Claims, Registry.
Exam.
164................. Coronary Artery Bypass 0129 STS............... Registry.
Graft (CABG):
Prolonged Intubation
(Ventilation).
165................. Coronary Artery Bypass 0130 STS............... Registry.
Graft (CABG): Deep
Sternal Wound
Infection Rate.
166................. Coronary Artery Bypass 0131 STS............... Registry.
Graft (CABG): Stroke/
Cerebrovascular
Accident (CVA).
167................. Coronary Artery Bypass 0114 STS............... Registry.
Graft (CABG):
Postoperative Renal
Insufficiency.
168................. Coronary Artery Bypass 0115 STS............... Registry.
Graft (CABG): Surgical
Re-exploration.
169................. Coronary Artery Bypass 0237 STS............... Registry.
Graft (CABG):
Antiplatelet
Medications at
Discharge.
170................. Coronary Artery Bypass 0238 STS............... Registry.
Graft (CABG): Beta-
Blockers Administered
at Discharge.
171................. Coronary Artery Bypass 0118 STS............... Registry.
Graft (CABG): Lipid
Management and
Counseling.
172................. Hemodialysis Vascular 0259 SVS............... Claims, Registry.
Access Decision-Making
by Surgeon to Maximize
Placement of
Autogenous Arterial
Venous (AV) Fistula.
173................. Preventive Care and AQA adopted AMA-PCPI.......... Claims, Registry.
Screening: Unhealthy
Alcohol Use--Screening.
175................. Pediatric End Stage AQA adopted AMA-PCPI.......... Claims, Registry.
Renal Disease (ESRD):
Influenza Immunization.
176................. Rheumatoid Arthritis AQA adopted AMA-PCPI/NCQA..... Claims, Registry.
(RA): Tuberculosis
Screening.
177................. Rheumatoid Arthritis AQA adopted AMA-PCPI/NCQA..... Claims, Registry.
(RA): Periodic
Assessment of Disease
Activity.
178................. Rheumatoid Arthritis AQA adopted AMA-PCPI/NCQA..... Claims, Registry.
(RA): Functional
Status Assessment.
179................. Rheumatoid Arthritis AQA adopted AMA-PCPI/NCQA..... Claims, Registry.
(RA): Assessment and
Classification of
Disease Prognosis.
180................. Rheumatoid Arthritis AQA adopted AMA-PCPI/NCQA..... Claims, Registry.
(RA): Glucocorticoid
Management.
181................. Elder Maltreatment AQA adopted CMS/QIP........... Claims, Registry.
Screen and Follow-Up
Plan.
182................. Functional Outcome AQA adopted CMS/QIP........... Claims, Registry.
Assessment in
Chiropractic Care.

[[Page 42869]]

183................. Hepatitis C: Hepatitis 0399 AMA-PCPI.......... Claims, Registry.
A Vaccination in
Patients with HCV.
184................. Hepatitis C: Hepatitis 0400 AMA-PCPI.......... Claims, Registry.
B Vaccination in
Patients with HCV.
185................. Endoscopy & Polyp 0659 AMA-PCPI/NCQA..... Claims, Registry.
Surveillance:
Colonoscopy Interval
for Patients with a
History of Adenomatous
Polyps--Avoidance of
Inappropriate Use.
186................. Wound Care: Use of AQA adopted AMA-PCPI/NCQA..... Claims, Registry.
Compression System in
Patients with Venous
Ulcers.
187................. Stroke and Stroke 0437 AHA/ASA/TJC....... Registry.
Rehabilitation:
Thrombolytic Therapy.
188................. Referral for Otologic N/A AQC............... Claims, Registry.
Evaluation for
Patients with
Congenital or
Traumatic Deformity of
the Ear.
189................. Referral for Otologic N/A AQC............... Claims, Registry.
Evaluation for
Patients with History
of Active Drainage
From the Ear Within
the Previous 90 Days.
190................. Referral for Otologic N/A AQC............... Claims, Registry.
Evaluation for
Patients with a
History of Sudden or
Rapidly Progressive
Hearing Loss.
191................. Cataracts: 20/40 or 0565 AMA-PCPI/NCQA..... Registry.
Better Visual Acuity
Within 90 Days
Following Cataract
Surgery.
192................. Cataracts: 0564 AMA-PCPI/NCQA..... Registry.
Complications within
30 Days Following
Cataract Surgery
Requiring Additional
Surgical Procedures.
193................. Perioperative 0454 AMA-PCPI.......... Claims, Registry.
Temperature Management.
194................. Oncology: Cancer Stage 0386 AMA-PCPI/ASCO..... Claims, Registry.
Documented.
195................. Radiology: Stenosis 0507 AMA-PCPI/NCQA..... Claims, Registry.
Measurement in Carotid
Imaging Studies.
196................. Coronary Artery Disease 0065 AMA-PCPI.......... Registry.
(CAD): Symptom and
Activity Assessment.
197................. Coronary Artery Disease 0074 AMA-PCPI.......... Registry.
(CAD): Lipid Control.
198................. Heart Failure: Left 0079 AMA-PCPI.......... Registry.
Ventricular Function
(LVF) Assessment.
199................. Heart Failure: Patient 0082 AMA-PCPI.......... Registry.
Education.
200................. Heart Failure: Warfarin 0084 AMA-PCPI.......... Registry.
Therapy for Patients
with Atrial
Fibrillation.
201................. Ischemic Vascular 0073 NCQA.............. Claims, Registry.
Disease (IVD): Blood
Pressure Management
Control.
202................. Ischemic Vascular 0075 NCQA.............. Claims, Registry.
Disease (IVD):
Complete Lipid Profile.
203................. Ischemic Vascular 0075 NCQA.............. Claims, Registry.
Disease (IVD): Low
Density Lipoprotein
(LDL-C) Control.
204................. Ischemic Vascular 0068 NCQA.............. Claims, Registry.
Disease (IVD): Use of
Aspirin or Another
Antithrombotic.
205................. HIV/AIDS: Sexually 0409 AMA-PCPI/NCQA..... Registry.
Transmitted Disease
Screening for
Chlamydia and
Gonorrhea.
206................. HIV/AIDS: Screening for 0413 AMA-PCPI/NCQA..... Registry.
High Risk Sexual
Behaviors.
207................. HIV/AIDS: Screening for 0415 AMA-PCPI/NCQA..... Registry.
Injection Drug Use.
208................. HIV/AIDS: Sexually 0410 AMA-PCPI/NCQA..... Registry.
Transmitted Disease
Screening for Syphilis.
209................. Functional 0445 ASHA.............. Registry.
Communication Measure-
Spoken Language
Comprehension.
210................. Functional 0449 ASHA.............. Registry.
Communication Measure-
Attention.
211................. Functional 0448 ASHA.............. Registry.
Communication Measure-
Memory.
212................. Functional 0447 ASHA.............. Registry.
Communication Measure-
Motor Speech.
213................. Functional 0446 ASHA.............. Registry.
Communication Measure-
Reading.
214................. Functional 0444 ASHA.............. Registry.
Communication Measure-
Spoken Language
Expression.
215................. Functional 0442 ASHA.............. Registry.
Communication Measure-
Writing.
216................. Functional 0443 ASHA.............. Registry.
Communication Measure-
Swallowing.
217................. Functional Deficit: 0422 FOTO.............. Registry.
Change in Risk-
Adjusted Functional
Status for Patients
with Knee Impairments.
218................. Functional Deficit: 0423 FOTO.............. Registry.
Change in Risk-
Adjusted Functional
Status for Patients
with Hip Impairments.
219................. Functional Deficit: 0424 FOTO.............. Registry.
Change in Risk-
Adjusted Functional
Status for Patients
with Lower Leg, Foot
or Ankle Impairments.
220................. Functional Deficit: 0425 FOTO.............. Registry.
Change in Risk-
Adjusted Functional
Status for Patients
with Lumbar Spine
Impairments.

[[Page 42870]]

221................. Functional Deficit: 0426 FOTO.............. Registry.
Change in Risk-
Adjusted Functional
Status for Patients
with Shoulder
Impairments.
222................. Functional Deficit: 0427 FOTO.............. Registry.
Change in Risk-
Adjusted Functional
Status for Patients
with Elbow, Wrist or
Hand Impairments.
223................. Functional Deficit: 0428 FOTO.............. Registry.
Change in Risk-
Adjusted Functional
Status for Patients
with Neck, Cranium,
Mandible, Thoracic
Spine, Ribs, or Other
General Orthopedic
Impairments.
224................. Melanoma: 0562 AMA-PCPI.......... Registry.
Overutilization of
Imaging Studies in
Stage 0-IA Melanoma.
225................. Radiology: Reminder 0509 AMA-PCPI.......... Claims, Registry.
System for Mammograms.
226................. Preventive Care and 0028 AMA-PCPI.......... Claims, Registry.
Screening: Tobacco
Use: Screening and
Cessation Intervention.
228................. Heart Failure (HF): 0079 CMS............... Registry.
Left Ventricular
Function (LVF) Testing.
231................. Asthma: Tobacco Use: N/A AMA-PCPI.......... Claims, Registry.
Screening-Ambulatory
Care Setting.
232................. Asthma: Tobacco Use: N/A AMA-PCPI.......... Claims, Registry.
Intervention-
Ambulatory Care
Setting.
233................. Thoracic Surgery: 0457 STS............... Registry.
Recording of
Performance Status
Prior to Lung or
Esophageal Cancer
Resection.
234................. Thoracic Surgery: 0458 STS............... Registry.
Pulmonary Function
Tests Before Major
Anatomic Lung
Resection
(Pneumonectomy,
Lobectomy, or Formal
Segmentectomy).
235................. Hypertension (HTN): 0017 AMA-PCPI.......... Claims, Registry.
Plan of Care.
TBD................. Chronic Wound Care: Use N/A ASPS-PCPI-NCQA.... Claims, Registry.
of Wound Surface
Culture Technique in
Patients with Chronic
Skin Ulcers.
TBD................. Chronic Wound Care: Use N/A ASPS-PCPI-NCQA.... Claims, Registry.
of Wet to Dry
Dressings in Patients
with Chronic Skin
Ulcers.
TBD................. Substance Use AQA adopted ASPS-PCPI-NCQA.... Claims, Registry.
Disorders: Counseling
Regarding Psychosocial
and Pharmacologic
Treatment Options for
Alcohol Dependence.
TBD................. Substance Use AQA adopted ASPS-PCPI-NCQA.... Claims, Registry.
Disorders: Screening
for Depression Among
Patients with
Substance Abuse or
Dependence.
TBD................. Coronary Artery Disease N/A ASPS-PCPI-NCQA.... Registry.
(CAD): Symptom
Management.
TBD................. Cardiac Rehabilitation N/A ACCF-AHA.......... Registry.
Patient Referral From
an Outpatient Setting.
TBD................. Hypertension: Blood N/A ACC-AHA-PCPI...... Registry.
Pressure Control.
TBD................. Barrett's Esophagus.... N/A CAP............... Claims, Registry.
TBD................. Radical Prostatectomy N/A CAP............... Claims, Registry.
Pathology Reporting.
TBD................. Immunohistochemical N/A College of Claims, Registry.
(IHC) Evaluation of American
HER2 for Breast Cancer Pathologists.
Patients.
TBD................. Anticoagulation for 0503 ACEP.............. Claims, Registry.
Acute Pulmonary
Embolus Patients.
TBD................. Pregnancy Test for 0502 ACEP.............. Claims, Registry.
Female Abdominal Pain
Patients.
TBD................. Ultrasound N/A ACEP.............. Claims, Registry.
Determination of
Pregnancy Location for
Pregnant Patients with
Abdominal Pain.
TBD................. Rh Immunoglobulin N/A ACEP.............. Registry.
(Rhogam) for Rh
Negative Pregnant
Women at Risk of Fetal
Blood Exposure.
TBD................. Surveillance after N/A SVS............... Registry.
Endovascular Abdominal
Aortic Aneurysm Repair
(EVAR).
TBD................. Statin Therapy at N/A SVS............... Registry.
Discharge after Lower
Extremity Bypass (LEB).
TBD................. Rate of Open AAA Repair N/A SVS............... Registry.
without Major
Complications
(discharged to home no
later than post-
operative day 7).
TBD................. Rate of EVAR without N/A SVS............... Registry.
Major Complications
(discharged to home no
later than POD 2).
TBD................. Rate of Carotid N/A SVS............... Registry.
Endarterectomy for
Asymptomatic Patients,
without Major
Complications
(discharged to home no
later than post-
operative day 2).
TBD................. Referral for Otology N/A AQC............... Claims, Registry.
Evaluation for
Patients with Acute or
Chronic Dizziness.
TBD................. Image Confirmation of N/A ASBS.............. Claims, Registry.
Successful Excision of
Image-Localized Breast
Lesion.
TBD................. Preoperative Diagnosis N/A ASBS.............. Claims, Registry.
of Breast Cancer.

[[Page 42871]]

TBD................. Sentinel Lymph Node N/A ASBS.............. Registry.
Biopsy for Invasive
Breast Cancer.
TBD................. Biopsy Follow-up....... N/A AAD............... Registry.
TBD................. Improvement in N/A AAO............... Registry.
Patient's Visual
Function within 90
Days Following
Cataract Surgery.
TBD................. Patient Satisfaction N/A AAO............... Registry.
within 90 Days
Following Cataract
Surgery.
----------------------------------------------------------------------------------------------------------------

(C) Proposed 2012 Measures Available for EHR-Based Reporting
For 2012, we propose to again accept Physician Quality Reporting
System data from EHRs for a limited subset of 2012 Physician Quality
Reporting System quality measures.
Section 1848(m)(7) of the Act (``Integration of Physician Quality
Reporting and EHR Reporting''), as added by section 3002(d) of the
Affordable Care Act, requires that by no later than January 1, 2012,
the Secretary shall develop a plan to integrate reporting on quality
measures under the Physician Quality Reporting System with reporting
requirements under the EHR Incentive Program under section 1848(o) of
the Act relating to the meaningful use of EHRs. Such integration shall
consist of the following:
(A) The selection of measures, the reporting of which would both
demonstrate--
(i) Meaningful use of an EHR for purposes of the Medicare EHR
Incentive Program; and
(ii) Quality of care furnished to an individual; and
(B) Such other activities as specified by the Secretary.
To align the Physician Quality Reporting System with the Medicare
EHR Incentive Program, we propose to include all clinical quality
measures available for reporting under the Medicare EHR Incentive
Program (75 FR 44398 through 44408) in the EHR-Based reporting option
in the 2012 Physician Quality Reporting System for purposes of
reporting data on quality measures under the EHR-reporting option. In
2011, we included 14 of the 44 EHR Incentive Program measures under the
2011 Physician Quality Reporting System EHR reporting mechanism. In
order to better align Physician Quality Reporting System measures with
those under the EHR Incentive Program, for 2012, we propose to have the
rest of the 44 clinical quality measures in the Medicare EHR Incentive
Program available for EHR-Based reporting under the 2012 Physician
Quality Reporting System.
Furthermore, for 2012, we propose to retain the following 6
additional measures that were available for reporting under the EHR-
Based reporting mechanism under the 2011 Physician Quality Reporting
System:
Measure 39: Screening or Therapy for
Osteoporosis for Women Aged 65 Years and Older.
Measure 47: Advance Care Plan.
Measure 48: Urinary Incontinence: Assessment of
Presence or Absence of Urinary Incontinence in Women Aged 65 Years and
Older.
Measure 124: Health Information Technology
(HIT): Adoption/Use of Electronic Health Records (EHR).
Measure 173: Preventive Care and Screening:
Unhealthy Alcohol Use--Screening.
Measure 238: Drugs to be Avoided in the Elderly.
We believe these measures meet the criteria listed previously for
inclusion for reporting under the Physician Quality Reporting System.
Table 31 identifies the list of measures we propose to include for
EHR-Based reporting under the 2012 Physician Quality Reporting System.

Table 31--Proposed 2012 Physician Quality Reporting System Measures Available for EHR-Based Reporting
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM CORE MEASURES
----------------------------------------------------------------------------------------------------------------
128....................... Preventive Care and Screening: 0421 CMS/QIP
Body Mass Index (BMI)
Screening and Follow-up *.
237....................... Hypertension (HTN): Blood 0013 AMA-PCPI
Pressure Measurement.
226....................... Preventive Care and Screening: 0028 AMA-PCPI
Tobacco Use: Screening and
Cessation Intervention **.
----------------------------------------------------------------------------------------------------------------
MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM ALTERNATE CORE MEASURES
----------------------------------------------------------------------------------------------------------------
110....................... Preventative Care and 0041 AMA-PCPI
Screening: Influenza
Immunization for Patients >=
50 Years Old.
239....................... Weight Assessment and 0024 NCQA
Counseling for Children and
Adolescents.
TBD....................... Childhood Immunization Status. 0038 NCQA
----------------------------------------------------------------------------------------------------------------
MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM MEASURES
----------------------------------------------------------------------------------------------------------------
1......................... Diabetes Mellitus: Hemoglobin 0059 NCQA
A1c Poor Control in Diabetes
Mellitus.
2......................... Diabetes Mellitus: Low Density 0064 NCQA
Lipoprotein (LDL-C) Control
in Diabetes Mellitus.
3......................... Diabetes Mellitus: High Blood 0061 NCQA
Pressure Control in Diabetes
Mellitus.

[[Page 42872]]

5......................... Heart Failure: Angiotensin 0081 AMA-PCPI
Receptor Blocker (ARB)
Therapy for Left Ventricular
Systolic Dysfunction (LVSD).
6......................... Coronary Artery Disease (CAD): 0067 AMA-PCPI
Oral Antiplatelet Therapy
Prescribed for Patients with
CAD.
7......................... Coronary Artery Disease (CAD): 0070 AMA-PCPI
Beta-Blocker Therapy for CAD
Patients with Prior
Myocardial Infarction (MI).
8......................... Heart Failure (HF): Beta- 0083 AMA-PCPI
Blocker Therapy for Left
Ventricular Systolic
Dysfunction (LVSD).
9......................... Anti-depressant medication 0105 NCQA
management: (a) Effective
Acute Phase Treatment, (b)
Effective Continuation Phase
Treatment.
12........................ Primary Open Angle Glaucoma 0086 AMA-PCPI
(POAG): Optic Nerve
Evaluation.
18........................ Diabetic Retinopathy: 0088 AMA-PCPI
Documentation of Presence or
Absence of Macular Edema and
Level of Severity of
Retinopathy.
19........................ Diabetic Retinopathy: 0089 AMA-PCPI
Communication with the
Physician Managing Ongoing
Diabetes Care.
53........................ Asthma Pharmacologic.......... 0047 AMA-PCPI
64........................ Asthma Assessment............. 0001 AMA-PCPI
66........................ Appropriate Testing for 0002 NCQA
Children with Pharyngitis.
71........................ Oncology Breast Cancer: 0387 AMA-PCPI
Hormonal Therapy for Stage IC-
IIIC Estrogen Receptor/
Progesterone Receptor (ER/PR)
Positive Breast Cancer.
72........................ Oncology Colon Cancer: 0385 AMA-PCPI
Chemotherapy for Stage III
Colon Cancer Patients.
102....................... Prostate Cancer: Avoidance of 0389 AMA-PCPI
Overuse of Bone Scan for
Staging Low Risk Prostate
Cancer Patients.
111....................... Preventive Care and Screening: 0043 NCQA
Screening Mammography.
112....................... Preventive Care and Screening: 0031 NCQA
Colorectal Cancer Screening.
113....................... Colorectal Cancer Screening... 0034 NCQA
114 & 115................. Smoking and Tobacco Use 0027 NCQA
Cessation, Medical
Assistance: a. Advising
Smokers to Quit, b.
Discussing Smoking and
Tobacco Use Cessation
Medications, c. Discussing
Smoking and Tobacco Use
Cessation Strategies.
117....................... Diabetes: Eye Exam............ 0055 AMA-PCPI
119....................... Diabetes: Urine Screening..... 0062 NCQA
163....................... Diabetes: Foot Exam........... 0056 NCQA
197....................... Coronary Artery Disease (CAD): 0074 AMA-PCPI
Lipid Control.
200....................... Heart Failure: Warfarin 0084 AMA-PCPI
Therapy Patients with Atrial
Fibrillation.
201....................... Ischemic Vascular Disease 0073 NCQA
(IVD): Blood Pressure
Management.
204....................... Ischemic Vascular Disease 0068 NCQA
(IVD): Use of Aspirin or
Another Antithrombotic.
TBD....................... Initiation and Engagement of 0004 NCQA
Alcohol and Other Drug
Dependence Treatment: (a)
Initiation, (b) Engagement.
TBD....................... Prenatal Care: Screening for 0012 AMA-PCPI
Human Immunodeficiency Virus
(HIV).
TBD....................... Prenatal Care: Anti-D Immune 0014 AMA-PCPI
Globulin.
236....................... Controlling High Blood 0018 NCQA
Pressure.
TBD....................... Cervical Cancer Screening..... 0032 NCQA
TBD....................... Chlamydia Screening for Women. 0033 NCQA
240....................... Use of Appropriate Medications 0036 NCQA
for Asthma.
TBD....................... Low Back Pain: Use of Imaging 0052 NCQA
Studies.
202 & 203................. Ischemic Vascular Disease 0075 NCQA
(IVD): Complete Lipid Panel
and LDL Control.
TBD....................... Diabetes: Hemoglobin A1c 0575 NCQA
Control (< 8.0%).
----------------------------------------------------------------------------------------------------------------
OTHER PHYSICIAN QUALITY REPORTING SYSTEM EHR MEASURES
----------------------------------------------------------------------------------------------------------------
39........................ Screening or Therapy for 0046 AMA-PCPI/NCQA
Osteoporosis for Women Aged
65 Years and Older.
47........................ Advance Care Plan............. 0326 AMA-PCPI/NCQA
48........................ Urinary Incontinence: 0098 AMA-PCPI/NCQA
Assessment of Presence or
Absence of Urinary
Incontinence in Women Aged 65
Years and Older.
124....................... Health Information Technology 0488 CMS/QIP
(HIT): Adoption/Use of
Electronic Health Records
(EHR).
173....................... Preventive Care and Screening: AQA Adopted AMA-PCPI
Unhealthy Alcohol Use--
Screening.
238....................... Drugs to be Avoided in the 0022 NCQA
Elderly.
----------------------------------------------------------------------------------------------------------------
* For the purpose of reporting this measure under the Physician Quality Reporting System, the reporting of this
measure will count if at least one of the two parameters does not contain a 0 percent performance rate.
** For the purpose of reporting this measure under the Physician Quality Reporting System, the reporting of this
measure will count if at least one of the two pairs does not contain a 0 percent performance rate.

[[Page 42873]]

(4) 2012 Physician Quality Reporting System Measures Groups
We propose to retain the following 14 2011 Physician Quality
Reporting System measures groups for the 2012 Physician Quality
Reporting System: (1) Diabetes Mellitus; (2) CKD; (3) Preventive Care;
(4) CABG; (5) Rheumatoid Arthritis; (6) Perioperative Care; (7) Back
Pain; (8) CAD; (9) Heart Failure; (10) IVD; (11) Hepatitis C; (12) HIV/
AIDS; (13) CAP, and (14) Asthma. For 2012, we propose that the CABG,
CAD, Heart Failure, and HIV/AIDS measures groups would continue to be
reportable through the registry-based reporting mechanism only, while
the remaining Diabetes Mellitus, CKD, Preventive Care, Rheumatoid
Arthritis, Perioperative Care, Back Pain, IVD, Hepatitis C, CAP, and
Asthma measures groups would continue to be reportable through either
claims-based reporting or registry-based reporting for the 2012
Physician Quality Reporting System. We are retaining these measures
groups for the 2012 Physician Quality Reporting System particularly
because we believe the measures groups reflect the services furnished
to beneficiaries by a particular specialty. We also believe that
retaining these measures groups will provide consistency from program
year to program year.
In addition to the 14 measures groups previously, we propose the
following 10 new measures groups for 2012 to provide eligible
professionals with more measures groups on which to report:
Chronic Obstructive Pulmonary Disease (COPD).
Inflammatory Bowel Disease.
Sleep Apnea.
Epilepsy.
Dementia.
Parkinson's.
Elevated Blood Pressure.
Radiology.
Cardiovascular Prevention, which contains individual
measures from the proposed Physician Quality Reporting System core
measure set previously discussed.
Cataracts.
These are the measures groups that were presented to us for
inclusion for reporting under the 2012 Physician Quality Reporting
System. Section 1848(k)(2)(C)(ii) of the Act provides an exception to
the requirement that measures be endorsed by the NQF. We may exercise
this exception authority in a specified area or medical topic for which
a feasible and practical measure has not been endorsed by NQF, so long
as due consideration is given to measures that have been endorsed by
the NQF. For the measures contained within these measures groups that
are not currently NQF-endorsed, we are proposing to exercise this
authority due to our interest in all of the proposed 10 measures
group's topics. We believe that each of the proposed additional
measures groups address gaps in the Physician Quality Reporting System
measures groups and will also allow for greater reporting options for
individual eligible professionals, thereby increasing participation in
the Physician Quality Reporting System.
Finally, as in previous program years, for 2012, we propose that
the measures included in any proposed 2012 measures group be reportable
either as individual measures or as part of a measures group, except
for the Back Pain measures group, which would continue to be reportable
only as part of a measures group and not as individual measures in
2012.
As with measures group reporting in prior program years, we propose
that each eligible professional electing to report a group of measures
for 2012 must report all measures in the group that are applicable to
each patient or encounter to which the measures group applies at least
up to the minimum number of patients required by the applicable
reporting criteria.
The measures proposed for inclusion in each of the 2012 measures
groups are identified in Tables 32 through 55 of this proposed rule.
Some measures proposed for inclusion in the 2012 measures groups are
also 2011 individual Physician Quality Reporting System measures. The
title of each such measure is preceded with its Physician Quality
Reporting System Measure Number in Tables 32 through 55. As stated
previously, the Physician Quality Reporting System Measure Number is a
unique identifier assigned by us to all measures in the Physician
Quality Reporting System measure set. Once a Physician Quality
Reporting System Measure Number is assigned to a measure, it will not
be used again, even if the measure is subsequently retired from the
Physician Quality Reporting System measure set. Measures that are not
preceded by a number (in other words, those preceded by ``TBD'') in
Tables 32 through 55 were never part of a Physician Quality Reporting
System measure set prior to 2012. A number will be assigned to such
measures for 2012.

Table 32--Proposed Measures Included in the Proposed 2012 Diabetes Mellitus Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
1......................... Diabetes Mellitus: Hemoglobin 0059 NCQA
A1c Poor Control in Diabetes
Mellitus.
2......................... Diabetes Mellitus: Low Density 0064 NCQA
Lipoprotein (LDL-C) Control
in Diabetes Mellitus.
3......................... Diabetes Mellitus: High Blood 0061 NCQA
Pressure Control in Diabetes
Mellitus.
117....................... Diabetes Mellitus: Dilated Eye 0055 NCQA
Exam in Diabetic Patient.
119....................... Diabetes Mellitus: Urine 0062 NCQA
Screening for Microalbumin or
Medical Attention for
Nephropathy in Diabetic
Patients.
163....................... Diabetes Mellitus: Foot Exam.. 0056 NCQA
----------------------------------------------------------------------------------------------------------------

Table 33--Proposed Measures Included in the Proposed 2012 CKD Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
121....................... Chronic Kidney Disease (CKD): Not applicable AMA-PCPI
Laboratory Testing (Calcium,
Phosphorus, Intact
Parathyroid Hormone (iPTH)
and Lipid Profile).
122....................... Chronic Kidney Disease (CKD): AQA adopted AMA-PCPI
Blood Pressure Management.

[[Page 42874]]

123....................... Chronic Kidney Disease (CKD): AQA adopted AMA-PCPI
Plan of Care--Elevated
Hemoglobin for Patients
Receiving Erythropoiesis-
Stimulating Agents (ESA).
153....................... Chronic Kidney Disease (CKD): AQA adopted AMA-PCPI
Referral for Arteriovenous
(AV) Fistula.
----------------------------------------------------------------------------------------------------------------

Table 34--Proposed Measures Included in the Proposed 2012 Preventative Care Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
39........................ Screening or Therapy for 0046 AMA-PCPI/NCQA
Osteoporosis for Women Aged
65 Years and Older.
48........................ Urinary Incontinence: 0098 AMA-PCPI/NCQA
Assessment of Presence or
Absence of Urinary
Incontinence in Women Aged 65
Years and Older.
110....................... Preventive Care and Screening: 0041 AMA-PCPI
Influenza Immunization for
Patients >= 50 Years Old.
111....................... Preventive Care and Screening: 0043 NCQA
Pneumonia Vaccination for
Patients 65 Years and Older.
112....................... Preventive Care and Screening: 0031 NCQA
Screening Mammography.
113....................... Preventive Care and Screening: 0034 NCQA
Colorectal Cancer Screening.
128....................... Preventive Care and Screening: 0421 CMS/QIP
Body Mass Index (BMI)
Screening and Follow-Up.
173....................... Preventive Care and Screening: AQA adopted AMA-PCPI
Unhealthy Alcohol Use--
Screening.
226....................... Preventive Care and Screening: 0028 AMA-PCPI
Tobacco Use: Screening and
Cessation Intervention.
----------------------------------------------------------------------------------------------------------------

Table 35--Proposed Measures Included in the Proposed 2012 CABG Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
43........................ Coronary Artery Bypass Graft 0516 STS
(CABG): Use of Internal
Mammary Artery (IMA) in
Patients with Isolated CABG
Surgery.
44........................ Coronary Artery Bypass Graft 0235 STS
(CABG): Preoperative Beta-
Blocker in Patients with
Isolated CABG Surgery.
164....................... Coronary Artery Bypass Graft 0129 STS
(CABG): Prolonged Intubation
(Ventilation).
165....................... Coronary Artery Bypass Graft 0130 STS
(CABG): Deep Sternal Wound
Infection Rate.
166....................... Coronary Artery Bypass Graft 0131 STS
(CABG): Stroke/
Cerebrovascular Accident
(CVA).
167....................... Coronary Artery Bypass Graft 0114 STS
(CABG): Postoperative Renal
Insufficiency.
168....................... Coronary Artery Bypass Graft 0115 STS
(CABG): Surgical Re-
exploration.
169....................... Coronary Artery Bypass Graft 0237 STS
(CABG): Antiplatelet
Medications at Discharge.
170....................... Coronary Artery Bypass Graft 0238 STS
(CABG): Beta-Blockers
Administered at Discharge.
171....................... Coronary Artery Bypass Graft 0118 STS
(CABG): Lipid Management and
Counseling.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable through registry-based reporting only.

Table 36--Proposed Measures Included in the Proposed 2012 Rheumatoid Arthritis Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
108....................... Rheumatoid Arthritis (RA): 0054 NCQA
Disease Modifying Anti-
Rheumatic Drug (DMARD)
Therapy.
176....................... Rheumatoid Arthritis (RA): AQA adopted AMA-PCPI/NCQA
Tuberculosis Screening.
177....................... Rheumatoid Arthritis (RA): AQA adopted AMA-PCPI/NCQA
Periodic Assessment of
Disease Activity.
178....................... Rheumatoid Arthritis (RA): AQA adopted AMA-PCPI/NCQA
Functional Status Assessment.
179....................... Rheumatoid Arthritis (RA): AQA adopted AMA-PCPI/NCQA
Assessment and Classification
of Disease Prognosis.
180....................... Rheumatoid Arthritis (RA): AQA adopted AMA-PCPI/NCQA
Glucocorticoid Management.
----------------------------------------------------------------------------------------------------------------

Table 37--Proposed Measures Included in the Proposed 2012 Perioperative Care Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF Measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
20........................ Perioperative Care: Timing of 0270 AMA-PCPI/NCQA
Antibiotic Prophylaxis--
Ordering Physician.

[[Page 42875]]

21........................ Perioperative Care: Selection 0268 AMA-PCPI/NCQA
of Prophylactic Antibiotic--
First OR Second Generation
Cephalosporin.
22........................ Perioperative Care: 0271 AMA-PCPI/NCQA
Discontinuation of
Prophylactic Antibiotics (Non-
Cardiac Procedures).
23........................ Perioperative Care: Venous 0239 AMA-PCPI/NCQA
Thromboembolism (VTE)
Prophylaxis (When Indicated
in ALL Patients).
----------------------------------------------------------------------------------------------------------------

Table 38--Proposed Measures Included in the 2012 Proposed Back Pain Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
148....................... Back Pain: Initial Visit...... 0322 NCQA
149....................... Back Pain: Physical Exam...... 0319 NCQA
150....................... Back Pain: Advice for Normal 0315 NCQA
Activities.
151....................... Back Pain: Advice Against Bed 0313 NCQA
Rest.
----------------------------------------------------------------------------------------------------------------

Table 39--Proposed Measures Included in the Proposed 2012 CAD Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
6......................... Coronary Artery Disease (CAD): 0067 AMA-PCPI
Oral Antiplatelet Therapy
Prescribed for Patients with
CAD.
196....................... Coronary Artery Disease (CAD): 0065 AMA-PCPI
Symptom and Activity
Assessment.
197....................... Coronary Artery Disease (CAD): 0074 AMA-PCPI
Lipid Control.
226....................... Preventive Care and Screening: 0028 AMA-PCPI
Tobacco Use: Screening and
Cessation Intervention.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable through registry-based reporting only.

Table 40--Proposed Measures Included in the Proposed 2012 Heart Failure Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
5......................... Heart Failure: 0081 AMA-PCPI
Angiotensin[dash]Converting
Enzyme (ACE) Inhibitor or
Angiotensin Receptor Blocker
(ARB) Therapy for Left
Ventricular Systolic
Dysfunction (LVSD).
8......................... Heart Failure: Beta-Blocker 0083 AMA-PCPI
Therapy for Left Ventricular
Systolic Dysfunction (LVSD).
198....................... Heart Failure: Left 0079 AMA-PCPI
Ventricular Function (LVF)
Assessment.
199....................... Heart Failure: Patient 0082 AMA-PCPI
Education.
226....................... Preventive Care and Screening: 0028 AMA-PCPI
Tobacco Use: Screening and
Cessation Intervention.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable through registry-based reporting only.

Table 41--Proposed Measures Included in the Proposed 2012 IVD Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
201....................... Ischemic Vascular Disease 0073 NCQA
(IVD): Blood Pressure
Management Control.
202....................... Ischemic Vascular Disease 0075 NCQA
(IVD): Complete Lipid Profile.
203....................... Ischemic Vascular Disease 0075 NCQA
(IVD): Low Density
Lipoprotein (LDL-C) Control.
204....................... Ischemic Vascular Disease 0068 NCQA
(IVD): Use of Aspirin or
Another Antithrombotic.
226....................... Preventive Care and Screening: 0028 AMA-PCPI
Tobacco Use: Screening and
Cessation Intervention.
----------------------------------------------------------------------------------------------------------------

[[Page 42876]]

Table 42--Proposed Measures Included in the Proposed 2012 Hepatitis C Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
84........................ Hepatitis C: Ribonucleic Acid 0395 AMA-PCPI
(RNA) Testing Before
Initiating Treatment.
85........................ Hepatitis C: HCV Genotype 0396 AMA-PCPI
Testing Prior to Treatment.
86........................ Hepatitis C: Antiviral 0397 AMA-PCPI
Treatment Prescribed.
87........................ Hepatitis C: HCV Ribonucleic 0398 AMA-PCPI
Acid (RNA) Testing at Week 12
of Treatment.
89........................ Hepatitis C: Counseling 0401 AMA-PCPI
Regarding Risk of Alcohol
Consumption.
90........................ Hepatitis C: Counseling 0394 AMA-PCPI
Regarding Use of
Contraception Prior to
Antiviral Therapy.
183....................... Hepatitis C: Hepatitis A 0399 AMA-PCPI
Vaccination in Patients with
HCV.
184....................... Hepatitis C: Hepatitis B 0400 AMA-PCPI
Vaccination in Patients with
HCV.
----------------------------------------------------------------------------------------------------------------

Table 43--Proposed Measures Included in the Proposed 2012 HIV/AIDS Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
159....................... HIV/AIDS: CD4+ Cell Count or 0404 AMA-PCPI/NCQA
CD4+ Percentage.
160....................... HIV/AIDS: Pneumocystis 0405 AMA-PCPI/NCQA
Jiroveci Pneumonia (PCP)
Prophylaxis.
161....................... HIV/AIDS: Adolescent and Adult 0406 AMA-PCPI/NCQA
Patients with HIV/AIDS Who
Are Prescribed Potent
Antiretroviral Therapy.
162....................... HIV/AIDS: HIV RNA Control 0407 AMA-PCPI/NCQA
After Six Months of Potent
Antiretroviral Therapy.
205....................... HIV/AIDS: Sexually Transmitted 0409 AMA-PCPI/NCQA
Disease Screening for
Chlamydia and Gonorrhea.
206....................... HIV/AIDS: Screening for High 0413 AMA-PCPI/NCQA
Risk Sexual Behaviors.
207....................... HIV/AIDS: Screening for 0415 AMA-PCPI/NCQA
Injection Drug Use.
208....................... HIV/AIDS: Sexually Transmitted 0410 AMA-PCPI/NCQA
Disease Screening for
Syphilis.
----------------------------------------------------------------------------------------------------------------
* This measures group is selected to be reportable through registry-based reporting only.

Table 44--Proposed Measures Included in the Proposed 2012 Cap Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
56........................ Community-Acquired Pneumonia 0232 AMA-PCPI/NCQA
(CAP): Vital Signs.
57........................ Community-Acquired Pneumonia 0094 AMA-PCPI/NCQA
(CAP): Assessment of Oxygen
Saturation.
58........................ Community-Acquired Pneumonia 0234 AMA-PCPI/NCQA
(CAP): Assessment of Mental
Status.
59........................ Community-Acquired Pneumonia 0096 AMA-PCPI/NCQA
(CAP): Empiric Antibiotic.
----------------------------------------------------------------------------------------------------------------

Table 45--Proposed Measures Included in the Proposed 2012 Asthma Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
53........................ Asthma: Pharmacologic Therapy. 0047 AMA-PCPI
64........................ Asthma: Asthma Assessment..... 0001 AMA-PCPI
231....................... Asthma: Tobacco Use: N/A AMA-PCPI
Screening--Ambulatory Setting.
232....................... Asthma: Tobacco Use: N/A AMA-PCPI
Intervention--Ambulatory
Screening.
----------------------------------------------------------------------------------------------------------------

Table 46--Proposed Measures Included in the Proposed 2012 COPD Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
110....................... Preventive Care and Screening: 0041 AMA-PCPI
Influenza Immunization for
Patients >= 50 Years Old.
111....................... Preventive Care and Screening: 0043 AMA-PCPI
Pneumonia Vaccination for
Patients 65 Years and Older.
51........................ Chronic Obstructive Pulmonary 0091 AMA-PCPI
Disease (COPD): Spirometry
Evaluation.
52........................ Chronic Obstructive Pulmonary 0102 AMA-PCPI
Disease (COPD):
Bronchodilator Therapy.
226....................... Preventive Care and Screening: 0028 AMA-PCPI
Tobacco Use: Screening and
Cessation Intervention.
----------------------------------------------------------------------------------------------------------------

[[Page 42877]]

Table 47--Proposed Measures Included in the Proposed 2012 IBD Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
TBD....................... Inflammatory Bowel Disease N/A AGA/AMA-PCPI
(IBD): Assessment of
Inflammatory Bowel Disease
Activity and Severity.
TBD....................... Inflammatory Bowel Disease N/A AGA/AMA-PCPI
(IBD): Preventive Care:
Steroid Sparing Therapy.
TBD....................... Inflammatory Bowel Disease N/A AGA/AMA-PCPI
(IBD): Preventive Care:
Steroid Related Iatrogenic
Injury--Bone Loss Assessment.
TBD....................... Inflammatory Bowel Disease N/A AGA/AMA-PCPI
(IBD): Preventive Care:
Influenza Immunization.
TBD....................... Inflammatory Bowel Disease N/A AGA/AMA-PCPI
(IBD): Preventive Care:
Pneumococcal Immunization.
TBD....................... Inflammatory Bowel Disease N/A AGA/AMA-PCPI
(IBD): Screening for Latent
TB Before Initiating Anti-TNF
Therapy.
TBD....................... Inflammatory Bowel Disease N/A AGA/AMA-PCPI
(IBD): Hepatitis B Assessment
Before Initiating Anti-TNF
Therapy.
226....................... Preventative Care and 0028 AMA-PCPI
Screening: Tobacco Use:
Screening and Cessation
Intervention.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.

Table 48--Proposed Measures Included in the Proposed 2012 Sleep Apnea Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
TBD....................... Assessment of Sleep Symptoms.. N/A AMA/PCPI/AASM
TBD....................... Severity Assessment at Initial N/A AMA/PCPI/AASM
Diagnosis.
TBD....................... Positive Airway Pressure N/A AMA/PCPI/AASM
Therapy Prescribed.
TBD....................... Assessment of Adherence to N/A AMA/PCPI/AASM
Positive Airway Pressure
Therapy.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.

Table 49--Proposed Measures in the Proposed 2012 Epilepsy Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
TBD....................... Seizure Type(s) and Current N/A AAN/AMA-PCPI
Seizure Frequency(ies).
TBD....................... Documentation of Etiology of N/A AAN/AMA-PCPI
Epilepsy or Epilepsy Syndrome.
TBD....................... Querying and Counseling about N/A AAN/AMA-PCPI
Anti-Epileptic Drug (AED)
Side-Effects.
TBD....................... Counseling about Epilepsy N/A AAN/AMA-PCPI
Specific Safety Issues.
TBD....................... Counseling for Women of N/A AAN/AMA-PCPI
Childbearing Potential with
Epilepsy.
----------------------------------------------------------------------------------------------------------------

Table 50--Proposed Measures Included in the Proposed 2012 Dementia Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
TBD....................... Dementia: Staging of Dementia. N/A AAN/AGS/AMDA/APA/AMA-PCPI
TBD....................... Dementia: Cognitive Assessment N/A AAN/AGS/AMDA/APA/AMA-PCPI
TBD....................... Dementia: Functional Status N/A AAN/AGS/AMDA/APA/AMA-PCPI
Assessment.
TBD....................... Dementia: Neuropsychiatric N/A AAN/AGS/AMDA/APA/AMA-PCPI
Symptom Assessment.
TBD....................... Dementia: Management of N/A AAN/AGS/AMDA/APA/AMA-PCPI
Neuropsychiatric Symptoms.
TBD....................... Dementia: Screening for N/A AAN/AGS/AMDA/APA/AMA-PCPI
Depressive Symptoms.
TBD....................... Dementia: Counseling Regarding N/A AAN/AGS/AMDA/APA/AMA-PCPI
Safety Concerns.
TBD....................... Dementia: Counseling Regarding N/A AAN/AGS/AMDA/APA/AMA-PCPI
Risks of Driving.
TBD....................... Dementia: Caregiver Education N/A AAN/AGS/AMDA/APA/AMA-PCPI
and Support.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.

[[Page 42878]]

Table 51--Proposed Measures Included in the Proposed 2012 Parkinson's Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
TBD....................... Annual Parkinson's Disease N/A AAN
Diagnosis Review.
TBD....................... Psychiatric Disorders or N/A AAN
Disturbances Assessment.
TBD....................... Cognitive Impairment or N/A AAN
Dysfunction Assessment.
TBD....................... Querying about Sleep N/A AAN
Disturbances.
TBD....................... Parkinson's Disease N/A AAN
Rehabilitative Therapy
Options.
TBD....................... Parkinson's Disease Related N/A AAN
Safety Issues Counseling.
TBD....................... Parkinson's Disease Medical N/A AAN
and Surgical Treatment
Options Reviewed.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.

Table 52--Proposed Measures Included in the Proposed 2012 Elevated Blood
Pressure Measures Group *
------------------------------------------------------------------------
Physician quality
reporting system Measure title NQF measure Measure
No. No. developer
------------------------------------------------------------------------
TBD.............. Aspirin or Other Anti- N/A........... ABIM
Platelet or Anti-
Coagulant Therapy
TBD.............. Complete Lipid N/A........... ABIM
Profile.
TBD.............. Urine Protein Test... N/A........... ABIM
TBD.............. Annual Serum N/A........... ABIM
Creatinine Test.
TBD.............. Diabetes N/A........... ABIM
Documentation or
Screen Test.
TBD.............. Counseling for Diet N/A........... ABIM
and Physical
Activity.
TBD.............. Blood Pressure N/A........... ABIM
Control.
TBD.............. LDL Control.......... N/A........... ABIM
TBD.............. Overall Hypertension N/A........... ABIM
Care Satisfaction.
TBD.............. Patient Self-care N/A........... ABIM
Support.
------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting
only.

TABLE 53--Proposed Measures Included in the Proposed 2012 Radiology Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
TBD....................... Reporting to a Radiation Dose N/A ..................................
Index Registry.
TBD....................... Cumulative Count of Potential N/A ABMS/ABR/ACR/PCPI
High Dose Radiation Imaging
Studies: CT Scans and Cardiac
Nuclear Medicine Scans
TBD....................... Utilization of a Standardized N/A ABR
Nomenclature for CT Imaging
Description.
TBD....................... Appropriateness: N/A ABR
Follow[dash]up CT Imaging for
Incidental Pulmonary Nodules
According to Recommended
Guidelines.
TBD....................... Overuse: Abdomen, Pelvis or N/A ABR
Combined Abdomen/Pelvis CT
Studies.
TBD....................... Equipment Evaluation for N/A ABR
Pediatric CT Imaging
Protocols.
TBD....................... Utilization of Pediatric CT N/A ABR
Imaging Protocols.
TBD....................... Search for Prior Imaging N/A ABR
Studies through a Secure,
Authorized Media[dash]Free
Shared Archive.
TBD....................... Images Available for Patient N/A ABR
Follow[dash]up and Comparison
Purposes.
TBD....................... Exposure Time Reported for N/A PCPI/ACR/NCQA
Procedures Using Fluoroscopy.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.

Table 54--Proposed Measures Included in the Proposed 2012 Cardiovascular Prevention Measures Group
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
204....................... Ischemic Vascular Disease 0068 NCQA
(IVD): Use of Aspirin or
Another Antithrombotic.
236....................... Controlling High Blood 0018 NCQA
Pressure.
2......................... Diabetes Mellitus: Low Density 0064 NCQA
Lipoprotein (LDL-C) Control
in Diabetes Mellitus.
226....................... Measure pair: a. Tobacco Use 0028 AMA-PCPI
Assessment, b. Tobacco
Cessation Intervention.
TBD....................... Ischemic Vascular Disease 0075 NCQA
(IVD): Complete Lipid Profile
and LDL Control < 100.
TBD....................... Proportion of adults 18 years N/A CMS
and older who have had their
BP measured within the
preceding 2 years.
----------------------------------------------------------------------------------------------------------------

[[Page 42879]]

Table 55--Proposed Measures Included in the Proposed 2012 Cataracts Measures Group *
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
TBD....................... Cataracts: Improvement in N/A.............. AAO
Patient's Visual Function
within 90 Days Following
Cataract Surgery.
TBD....................... Cataracts: Improvement in N/A.............. AAO
Patient's Visual Function
within 90 Days Following
Cataract Surgery.
191....................... Cataracts: 20/40 or Better 0565............. AMA-PCPI/NCQA
Visual Acuity within 90 Days
Following Cataract Surgery.
192....................... Cataracts: Complications 0564............. AMA-PCPI/NCQA
within 30 Days Following
Cataract Surgery Requiring
Additional Surgical
Procedures.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.

As with measures group reporting in the 2008, 2009, 2010, and 2011
Physician Quality Reporting System, we propose that each eligible
professional electing to report a group of measures for 2012 must
report all measures in the group that are applicable to each patient or
encounter to which the measures group applies at least up to the
minimum number of patients required by the applicable reporting
criteria. We proposed that the measures proposed for the 2012 Back Pain
Measures Group would continue to be reportable only as part of a
measures group and not as individual measures for the 2012 Physician
Quality Reporting System. Measures selected for inclusion in all other
2012 Physician Quality Reporting System measures groups would be
reportable either as individual measures or as part of a measures
group.
We note that the specifications for measures groups do not
necessarily contain all the specification elements of each individual
measure making up the measures group. This is based on the need for a
common set of denominator specifications for all the measures making up
a measures group in order to define the applicability of the measures
group. Therefore, the specifications and instructions for measures
groups would be provided separately from the specifications and
instructions for the individual 2012 Physician Quality Reporting System
measures. We will post the detailed specifications and specific
instructions for reporting measures groups on the Physician Quality
Reporting System section of the CMS Web site at http://www.cms.hhs.gov/PQRS by no later than December 31, 2011.
Additionally, the detailed measure specifications and instructions
for submitting data on those 2012 measures groups that were also
included as 2011 Physician Quality Reporting System measures groups may
be updated or modified by the measure developer prior to 2012.
Therefore, the 2012 Physician Quality Reporting System measure
specifications for any given measures group could be different from
specifications and submission instructions for the same measures group
used for 2011. For example, the measure developer may change the codes
contained in the measure's denominator. These measure specification
changes do not materially impact the intended meaning of the measures
or the strength of the measures. We invite public comment on our
proposed retention of all 2011 Physician Quality Reporting System
measures groups, as well as our newly proposed measures groups for the
2012 Physician Quality Reporting System.
(5) Proposed 2012 Physician Quality Reporting System Quality Measures
for Group Practices Selected To Participate in the GPRO (GPRO)
For 2012, we propose that group practices selected to participate
in the 2012 Physician Quality Reporting System GPRO would be required
to report on 40 proposed measures listed in Table 55. Specifically, for
the 2012 Physician Quality Reporting System, we propose to retain most
of the measures available for reporting under the 2011 Physician
Quality Reporting System GPRO because of our continued interest in the
reporting of those measures as well as to maintain program consistency
from year to year. However, for 2012, we propose to retire the
following measures that were required under the 2010 and 2011 GPRO
(that is, GPRO I for 2011):
Diabetes Mellitus: Hemoglobin A1c Testing.
Diabetes Mellitus: Lipid Profile.
Hypertension (HTN): Blood Pressure Measurement.
Furthermore, we propose to add the following Physician Quality core
measures that were not available for reporting via the GPRO for the
2011 Physician Quality Reporting System:
Ischemic Vascular Disease (IVD): Use of Aspirin or another
Antithrombotic.
Measure pair: a. Tobacco Use Assessment, b. Tobacco
Cessation Intervention.
Ischemic Vascular Disease (IVD): Complete Lipid Profile
and LDL Control < 100.
Proportion of adults 18 years and older who have had their
blood pressure measured within the preceding 2 years.
In addition to adding the Physician Quality Reporting System core
measures that were not available for reporting under the GPRO for the
2011 Physician Quality Reporting System, we propose to add the
following measures for reporting under the 2012 Physician Quality
Reporting System GPRO:
Chronic Obstructive Pulmonary Disease (COPD):
Bronchodilator Therapy.
Adult Weight Screening and Follow-up.
Ischemic Vascular Disease (IVD): Blood Pressure Management
Control.
Chronic Obstructive Pulmonary Disease (COPD): Spirometry
Evaluation.
30 Day Post Discharge Physician Visit.
Medication Reconciliation: Reconciliation After Discharge
from an Inpatient Facility.
Diabetes: Aspirin Use.
Falls: Screening for Fall Risk.
Osteoporosis: Management Following Fracture of Hip, Spine
or Distal Radius for Men and Women Aged 50 Years and Older.
Diabetes Mellitus: Tobacco Non Use.
Coronary Artery Disease (CAD): LDL-level < 100 mg/dl.
Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes
Mellitus (less than 8 percent).
Chronic Obstructive Pulmonary Disease (COPD): Smoking
Cessation Counseling Received.
Monthly International Normalized Ratio (INR) for
Beneficiaries on Warfarin.
We propose these new measures because they are NQF-endorsed
measures that are consistent with other CMS quality reporting
initiatives. We believe it is in the stakeholders' interest to align
measures in different initiatives. As stated previously in section
(e)(6) of this proposed rule, we propose that

[[Page 42880]]

group practices selected to participate in the Physician Quality
Reporting System GPRO would be required to report on all measures
listed in Table 56.

Table 56--Proposed Measures for Physician Groups Participating in the 2012 Physician Quality Reporting System
Group Practice Reporting Option (GPRO)
----------------------------------------------------------------------------------------------------------------
Physician quality
reporting system No. Measure title NQF measure No. Measure developer
----------------------------------------------------------------------------------------------------------------
1......................... Diabetes Mellitus: Hemoglobin 0059 NCQA
A1c Poor Control in Diabetes
Mellitus (> 9%).
2......................... Diabetes Mellitus: Low Density 0064 NCQA
Lipoprotein (LDL-C) Control
in Diabetes Mellitus.
3......................... Diabetes Mellitus: High Blood 0061 NCQA
Pressure Control in Diabetes
Mellitus.
5......................... Heart Failure: Angiotensin- 0081 AMA-PCPI
Converting Enzyme (ACE)
Inhibitor or Angiotensin
Receptor Blocker (ARB)
Therapy for Left Ventricular
Systolic Dysfunction (LVSD).
6......................... Coronary Artery Disease (CAD): 0067 AMA-PCPI
Oral Antiplatelet Therapy
Prescribed for Patients with
CAD.
7......................... Coronary Artery Disease (CAD): 0070 AMA-PCPI
Beta-Blocker Therapy for CAD
Patients with Prior
Myocardial Infarction (MI).
8......................... Heart Failure: Beta-Blocker 0083 AMA-PCPI
Therapy for Left Ventricular
Systolic Dysfunction (LVSD).
110....................... Preventive Care and Screening: 0041 AMA-PCPI
Influenza Immunization for
Patients >= 50 Years Old.
111....................... Preventive Care and Screening: 0043 NCQA
Pneumonia Vaccination for
Patients 65 Years and Older.
112....................... Preventive Care and Screening: 0031 NCQA
Screening Mammography.
113....................... Preventive Care and Screening: 0034 NCQA
Colorectal Cancer Screening.
117....................... Diabetes Mellitus: Dilated Eye 0055 NCQA
Exam in Diabetic Patient.
118....................... Coronary Artery Disease (CAD): 0066 AMA-PCPI
Angiotensin-Converting Enzyme
(ACE) Inhibitor or
Angiotensin Receptor Blocker
(ARB) Therapy for Patients
with CAD and Diabetes and/or
Left Ventricular Systolic
Dysfunction (LVSD).
119....................... Diabetes Mellitus: Urine 0062 NCQA
Screening for Microalbumin or
Medical Attention for
Nephropathy in Diabetic
Patients.
163....................... Diabetes Mellitus: Foot Exam.. 0056 NCQA
228....................... Heart Failure: Left ................ CMS
Ventricular Function (LVF)
Testing.
198....................... Heart Failure: Left 0079 AMA-PCPI
Ventricular Function (LVF)
Assessment.
227....................... Heart Failure: Weight 0085 AMA-PCPI
Measurement.
199....................... Heart Failure: Patient 0082 AMA-PCPI
Education.
236....................... Hypertension (HTN): Blood 0018 NCQA
Pressure Control.
235....................... Hypertension (HTN): Plan of 0017 AMA-PCPI
Care.
201....................... Ischemic Vascular Disease 0073 NCQA
(IVD): Blood Pressure
Management Control.
51........................ Chronic Obstructive Pulmonary 0091 AMA-PCPI
Disease (COPD): Spirometry
Evaluation.
226....................... Measure pair: a. Tobacco Use 0028 AMA-PCPI
Assessment, b. Tobacco
Cessation Intervention.
52........................ Chronic Obstructive Pulmonary 0102 AMA-PCPI
Disease (COPD):
Bronchodilator Therapy.
204....................... Ischemic Vascular Disease 0068 NCQA
(IVD): Use of Aspirin or
another Antithrombotic.
TBD....................... Ischemic Vascular Disease 0075 NCQA
(IVD): Complete Lipid Profile
and LDL Control < 100.
TBD....................... Proportion of adults 18 years N/A CMS
and older who have had their
BP measured within the
preceding 2 years.
TBD....................... 30-Day Post Discharge N/A CFMC
Physician Visit.
46........................ Medication Reconciliation: 0097 AMA-PCPI/NCQA
Reconciliation After
Discharge from an Inpatient
Facility.
197....................... Coronary Artery Disease (CAD): 0074 AMA-PCPI
Lipid Control.
200....................... Heart Failure: Warfarin 0084 AMA-PCPI
Therapy for Patients with
Atrial Fibrillation.
TBD....................... Diabetes: Aspirin Use......... 0076 MN Community Measurement
TBD....................... Falls: Screening for Fall Risk 0101 NCQA
40........................ Osteoporosis: Management 0045 AMA-PCPI/NCQA
Following Fracture of Hip,
Spine or Distal Radius for
Men and Women Aged 50 Years
and Older.
128....................... Adult Weigh Screening and 421 CMS/QIP
Follow-up.
TBD....................... Diabetes Mellitus: Tobacco Non- 0729 MN Community Management
Use.
TBD....................... Coronary Artery Disease (CAD): N/A CMS
LDL-level < 100 mg/dl.
TBD....................... Diabetes Mellitus: Hemoglobin 575 NCQA
A1c Poor Control in Diabetes
Mellitus (< 8%).
TBD....................... Chronic Obstructive Pulmonary N/A CMS
Disease (COPD): Smoking
Cessation Counseling Received.
TBD....................... Monthly INR for Beneficiaries 555 CMS
on Warfarin.
----------------------------------------------------------------------------------------------------------------

We intend to provide a separate measures specifications document
and other supporting documents for group practices participating in the
2012 Physician Quality Reporting System GPRO. We anticipate that the
group practice measures specifications document will be available by
November 15, 2011 or shortly thereafter on the Physician Quality
Reporting System section of the CMS Web site at http://www.cms.hhs.gov/PQRS. We invite public comment on the proposed 2012 Physician Quality
Reporting System measures for group practices selected to participate
in the 2012 Physician Quality Reporting System GPRO.
g. Maintenance of Certification Program Incentive
Section 3002(c) of the Affordable Care Act amends section
1848(k)(4) of the Act, as amended by section 3002(c) of

[[Page 42881]]

the Affordable Care Act, requires the Secretary to address a mechanism
whereby an eligible professional may provide data on quality measures
through a maintenance of certification program (Maintenance of
Certification Program) operated by a specialty body of the American
Board of Medical Specialties (ABMS). In addition, section 1848(m)(7) of
the Act (``Additional Incentive Payment''), as added by section
10327(a) of the Affordable Care Act, provides for an additional 0.5
percent incentive payment for years 2011 through 2014 if certain
requirements are met. In accordance with section 1848(m)(7)(B) of the
Act governing the ``Additional Incentive Payment,'' in order to qualify
for the additional incentive payment, an eligible professional must--
Satisfactorily submit data on quality measures under the
Physician Quality Reporting System for a year and have such data
submitted--
++ On their behalf through a Maintenance of Certification Program
that meets the criteria for a registry under the Physician Quality
Reporting System; or
++ In an alternative form and manner determined appropriate by the
Secretary; and
++ More frequently than is required to qualify for or maintain
board certification status:
++ Participate in such a Maintenance of Certification Program for a
year; and
++ Successfully complete a qualified Maintenance of Certification
Program practice assessment for such year.
Section 1848(m)(7)(C)(i) of the Act defines ``Maintenance of
Certification Program'' as a continuous assessment program, such as a
qualified ABMS Maintenance of Certification Program, or an equivalent
program (as determined by the Secretary), that advances quality and the
lifelong learning and self-assessment of board certified specialty
physicians by focusing on the competencies of patient care, medical
knowledge, practice-based learning, interpersonal and communications
skills and professionalism. Such a program shall require a physician to
do the following:
Maintain a valid, unrestricted medical license in the
United States.
Participate in educational and self-assessment programs
that require an assessment of what was learned.
Demonstrate, through a formalized, secure examination,
that the physician has the fundamental diagnostic skills, medical
knowledge, and clinical judgment to provide quality care in their
respective specialty.
Successful completion of a qualified Maintenance of
Certification Program practice assessment.
As defined in section 1848(m)(7)(C)(ii) of the Act, a ``qualified
Maintenance of Certification Program practice assessment'' means an
assessment of a physician's practice that--
Includes an initial assessment of an eligible
professional's practice that is designed to demonstrate the physician's
use of evidence-based medicine;
Includes a survey of patient experience with care; and
Requires a physician to implement a quality improvement
intervention to address a practice weakness identified in the initial
assessment and then to remeasure to assess performance after such
intervention.
To qualify for the additional incentive payment, section
1848(m)(7)(B)(iii) of the Act also requires the Maintenance of
Certification Program to submit to CMS, on behalf of the eligible
professional, information:
In a form and manner specified by the Secretary, that the
eligible professional more frequently than is required to qualify for
or maintain board certification status, participates in the Maintenance
of Certification Program for a year and successfully completes a
qualified Maintenance of Certification Program practice assessment for
such year;
Upon request by the Secretary, information on the survey
of patient experience with care; and
As the Secretary may require, on the methods, measures,
and data used under the Maintenance of Certification Program and the
qualified Maintenance of Certification Program practice assessment.
In order to qualify for the additional 0.5 percent incentive
payment in 2011, eligible professionals were required to participate
more frequently in each of the following four parts of the Maintenance
of Certification Program:
Maintain a valid unrestricted license in the United
States. For 2011, physicians simply needed to maintain a valid
unrestricted license in the United States to meet the requirement for
``more frequent'' participation with respect to this part (75 FR 73541
through 73546).
Participate in educational and self-assessment programs
that require an assessment of what was learned.
Demonstrate, through a formalized secure examination, that
the physician has the fundamental diagnostic skills, medical knowledge,
and clinical judgment to provide quality care in their respective
specialty.
Successfully complete a qualified maintenance of
certification program practice assessment.
We have received requests from the American Board of Medical
Specialties, as well as various specialty organizations, to revise the
criteria for satisfying the Maintenance of Certification Program
additional incentive, because these entities believe that more frequent
participation in all four parts of the Maintenance of Certification
Program is too narrow. We have further considered the language under
section 1848(m)(7)(B)(ii)(I) of the Act and we believe it can be
interpreted more broadly. In particular, we note that the requirement
that a professional ``more frequently than is required to qualify for
or maintain board certification status participates in such a
Maintenance of Certification Program'' could refer to the program as a
whole, such that any element performed more frequently than is required
satisfies the general requirement. The nature of the various components
of a maintenance of certification program also suggest that it is not
necessary that each of the four elements of the program be performed
more frequently. We previously stated we believe that the ``more
frequently'' requirement does not apply to the first part, which states
that a physician maintain a valid unrestricted license, as there is no
way a physician may maintain a valid unrestricted license ``more
frequently.'' As such, we believe that the more frequently requirement
could be satisfied based on any of the other elements of the program
(that is, educational and self-assessment program; secure examination;
or practice assessment). Specifically, we believe that if a
professional more frequently than is required satisfies one or more of
those parts of a program, the more frequently requirement would be met.
Accordingly, we propose that in order to earn an additional 0.5 percent
incentive for 2012 through 2014, an eligible professional must
participate more frequently than is required in at least one of the
following four parts of the Maintenance of Certification Program, as
well as ``more frequent'' participation in the practice assessment
component. With respect to how to assess whether a professional
completes one of the elements of a program ``more frequently,'' we
believe that this would be tied to the specific requirements of Board
certification for the professional. Given that different specialties
have different certification requirements (physician examination
requirements to maintain Board certification varies widely depending on
specialty), we do

[[Page 42882]]

not believe it is appropriate to impose a uniform requirement for all
professionals and therefore, we believe that the board could determine
for a particular program element the more frequent requirement for the
professional. However, we believe that a minimum threshold would need
to be met such that the professional would have to do something more
frequently or more than what is ordinarily required for a particular
part of the program, as well as ``more frequent'' participation in the
practice assessment component.
Accordingly, we propose for 2012, 2013, and 2014 the following for
each year:
An eligible professional wishing to be eligible for the
additional Physician Quality Reporting System incentive payment of 0.5
percent would be required to meet the proposed requirements for
satisfactory Physician Quality Reporting System reporting, for the
applicable program year (that is, to qualify for the additional 0.5
percent incentive payment for 2012, meet the 2012 requirements for
satisfactory reporting), based on the 12-month reporting period
(January 1 through December 31 of the respective program year).
For purposes of satisfactory reporting under the Physician
Quality Reporting System, we propose that the eligible professional may
participate as an individual eligible professional using either
individual Physician Quality Reporting System measures or measures
groups and submitting the Physician Quality Reporting System data via
claims, a registry, or an EHR or participate under the GPRO option. As
an alternative to this reporting option, we propose that eligible
professionals may satisfactorily report under the Physician Quality
Reporting System based on submission of Physician Quality Reporting
System data by a Maintenance of Certification Program, provided that
the Maintenance of Certification Program has qualified as a Physician
Quality Reporting System registry for 2012. As indicated previously, an
eligible professional would not necessarily have to qualify for the
Physician Quality Reporting System through a Maintenance of
Certification Program serving as a registry. Rather, we propose that an
eligible professional may qualify for the additional incentive, without
regard to the method by which the eligible professional has met the
basic requirement of satisfactory reporting under the Physician Quality
Reporting System.
In addition to meeting the proposed requirements for
satisfactory reporting for the Physician Quality Reporting System for a
program year, the eligible professional must have data with respect to
the eligible professional's participation in a Maintenance of
Certification Program submitted on his or her behalf by a qualified
medical specialty board or other entity sponsoring a Maintenance of
Certification Program. For each eligible professional that wishes to
qualify for the Maintenance of Certification Program Incentive, the
qualified medical specialty board or other entity sponsoring a
Maintenance of Certification Program must submit data to CMS with
respect to the following:
An eligible professional must, more frequently than is
required to qualify for or maintain board certification, participate in
a Maintenance of Certification Program for a year and successfully
complete a qualified Maintenance of Certification Program practice
assessment for such year. With regard to the ``more frequently''
requirement as it applies to the elements of a Maintenance of
Certification Program itself (other than completing a qualified
Maintenance of Certification Program practice assessment), we propose
to require that the Maintenance of Certification Program certify that
the eligible professional has ``more frequently'' than is required to
qualify for or maintain board certification ``participated in a
Maintenance of Certification Program for a year.'' We do not propose to
specify with respect to participation how a physician must meet the
more frequently requirement, but rather that the Maintenance of
Certification Program determine what a physician must do to more
frequently participate in a Maintenance of Certification Program and so
certify that the eligible professional has met this requirement. While
we do not believe that the ``more frequently'' requirement is
applicable to the licensure requirement, given that one cannot be
licensed ``more frequently'' than is required, we propose to leave it
up to the Maintenance of Certification Program to determine which
element(s) of a Maintenance of Certification Program must be completed
more frequently. We believe that making this change will reduce burden
on physicians and will increase participation while being consistent
with the requirement to ``more frequently'' participate in a
Maintenance of Certification Program.
With respect to the Maintenance of Certification Program
practice assessment, which is specifically delineated in section
1848(m)(7)(B)(ii) of the Act as being required more often than is
necessary to qualify for or maintain board certification, we believe we
need to be more specific regarding our interpretation of the phrase
``more frequently.'' Additionally, we are aware that some specialty
boards have varying Maintenance of Certification Program requirements
for physicians to maintain board certification, based on the date of
original certification. Some, we believe, may not be required to
participate in a Maintenance of Certification Program at all in order
to maintain board certification. Accordingly, we recognize that ``more
often'' may vary among physicians certified by the same specialty
board. We interpret the statutory provisions as requiring participation
in and successful completion of at least one Maintenance of
Certification Program practice assessment per year. Therefore, we
propose, as a basic requirement, participation in and successful
completion in at least one Maintenance of Certification Program
practice assessment for each year the physician participates in the
Maintenance of Certification Program Incentive, regardless of whether
or how often the physician is required to participate in a Maintenance
of Certification Program to maintain board certification.
We are also aware that ABMS boards are at various stages in
implementing the practice assessment modules, and some may not have
such assessment modules in place. However, inasmuch as we interpret the
statute to require a Maintenance of Certification Program practice
assessment at least once per program year as part of the Maintenance of
Certification Program, eligible professionals who do not have
available, through their boards or otherwise, a Maintenance of
Certification Program practice assessment are not eligible for the 0.5
percent incentive.
We believe that the experience of care survey provides particularly
valuable information and proposed that a qualified Maintenance of
Certification Program practice assessment must include a survey of
patient experience with care. The Secretary may request information on
the survey of patient experience with care, under section
1848(m)(7)(B)(iii) of the Act. In view of the importance of this
information, and the lack of readily available alternative sources, we
propose to require that Maintenance of Certification Programs submit
information about the patient experience with care survey(s) used by
physicians to fulfill the Maintenance of Certification Program practice
assessment. We are not, at this time, requesting the results of the
survey for the eligible professionals for whom

[[Page 42883]]

information is being submitted by the Maintenance of Certification
Program. We may, however, request such information for appropriate
validation purposes and may propose to request such data for future
years of the Maintenance of Certification Program Incentive.
Some Maintenance of Certification Programs underwent a self-
nomination process in 2011 to enable their members to be eligible for
this Physician Quality Reporting System Maintenance of Certification
Program Incentive for 2011 Physician Quality Reporting System. We
propose that a Maintenance of Certification Program that was approved
after undergoing the self-nomination process in 2011 must submit a self
nomination statement for each year the Maintenance of Certification
Program intends to participate in the Physician Quality Reporting
System Maintenance of Certification Program. In the self-nomination
statement, we propose that the previously approved program must provide
us with updates to its program in its self-nomination statement. We
propose that this self-nomination statement be submitted to CMS via a
web-based tool.
For Maintenance of Certification Programs new for 2012, we propose
that Maintenance of Certification Programs wishing to enable their
diplomates to be eligible for an additional Physician Quality Reporting
System incentive payment for the 2012 Physician Quality Reporting
System will need to go through a self-nomination process by January 31,
2012. We proposed the board would need to include all of the following
information in their self-nomination statement to us:
Provide detailed information regarding the Maintenance of
Certification Program with reference to the statutory requirements for
such program.
Indicate the organization sponsoring the Maintenance of
Certification Program, and whether the Maintenance of Certification
Program is sponsored by an ABMS board. If not an ABMS board, indicate
whether and how the program is substantially equivalent to the ABMS
Maintenance of Certification Program process.
Indicate that the program is in existence as of January 1,
2012.
Indicate that the program has at least 1 active
participant.
The frequency of a cycle of Maintenance of Certification
Program for the specific Maintenance of Certification Program of the
sponsoring organization; including what constitutes ``more frequently''
for the Maintenance of Certification Program itself and for the
practice assessment for the specific Maintenance of Certification
Program of the sponsoring organization.
Confirmation from the board that the practice assessment
will occur and be completed in the year the physician is participating
in the Maintenance of Certification Program Incentive.
What was, is, or will be the first year of availability of
the Maintenance of Certification Program practice assessment for
completion by an eligible professional.
What data is collected under the patient experience of
care survey and how this information would be provided to CMS.
How the Maintenance of Certification Program monitors that
an eligible professional has implemented a quality improvement process
for their practice.
Describe the methods, and data used under the Maintenance
of Certification Program, and provide a list of all measures used in
the Maintenance of Certification Program for 2011 and to be used for
2012, including the title and descriptions of each measure, the owner
of the measure, whether the measure is NQF endorsed, and a link to a
Web site containing the detailed specifications of the measures, or an
electronic file containing the detailed specifications of the measures.
We propose that sponsoring organizations who desire to participate
as a Maintenance of Certification Program would need to be able to
provide CMS the following information in a CMS-specified file format by
no later than the end of the first quarter of 2012:
The name, NPI and applicable TIN(s) of the eligible
professional who would like to participate in this process.
Attestation from the board that the information provided
to CMS is accurate and complete.
The board has signed documentation from the eligible
professional that the eligible professional wishes to have the
information released to us.
Information from the patient experience of care survey.
Information certifying that the eligible professional has
participated in a Maintenance of Certification Program for a year, more
frequently than is required to qualify for or maintain board
certification status, including the year that the physician met the
board certification requirements for the Maintenance of Certification
Program, and the year the eligible professional participated in a
Maintenance of Certification Program ``more frequently'' than is
required to maintain or qualify for board certification.
Information certifying that the eligible professional has
completed the Maintenance of Certification Program practice assessment
at least one time each year the eligible professional participates in
the Maintenance of Certification Program Incentive.
We propose that specialty boards that also desire to send Physician
Quality Reporting System information to us on behalf of eligible
professionals should be able to meet the proposed requirements for
registry data submission and should follow the directions for self-
nomination to become a qualified registry. Boards may also participate
as registries for Physician Quality Reporting System data provided that
they meet the registry requirements. As an alternative to requiring
boards to either operate a qualified Physician Quality Reporting System
registry or to self-nominate to submit Maintenance of Certification
Program data to us on behalf of their members, we propose to continue
to allow the various boards to submit the Maintenance of Certification
Program data to the ABMS and having ABMS submit the information on
behalf of the various boards and their member eligible professionals to
CMS.
To the extent an eligible professional participates in multiple
Maintenance of Certification Programs and meets the requirements under
section 1848(m)(7) of the Act (Additional Incentive Payment) under
multiple programs, we note that the eligible professional can qualify
for only one additional 0.5 percent incentive per year. We invite
public comment on our proposals for the Physician Quality Maintenance
of Certification Program Incentive for 2012 through 2014.
h. Feedback Reports
Section 1848(m)(5)(H) of the Act requires the Secretary to provide
timely feedback to eligible professionals on the performance of the
eligible professional with respect to satisfactorily submitting data on
quality measures. Since the inception of the program in 2007, the
Physician Quality Reporting System has provided eligible professionals
who have reported Physician Quality Reporting System data on quality
measures feedback reports at the TIN/NPI level detailing participation
in the Physician Quality Reporting System, including reporting rate and
performance rate information. For 2008, we improved the format and
content of feedback reports based on stakeholder input. We also
developed an alternate report distribution method whereby each eligible
professional can directly

[[Page 42884]]

request and receive a feedback report. In accordance with Section
1848(m)(5)(H) of the Act, we will continue to provide feedback reports
to individuals and group practices that attempt to report on at least
one Physician Quality Reporting System quality measure. We propose to
provide feedback reports for 2012 and beyond on or about the time of
issuance of the incentive payments, consistent with our current
practice.
We believe it will be beneficial for eligible professionals to also
receive interim feedback reports. In the 2011 MPFS Final Rule with
comment period, we stated that we intended to provide interim feedback
reports to eligible professionals in 2012 (75 FR 73549). Therefore, we
propose to provide interim feedback reports for eligible professionals
reporting individual measures and measures groups through the claims-
based reporting mechanism for 2012 and beyond. These reports would be a
simplified version of annual feedback reports that we currently provide
for such eligible professionals and would be based on claims for dates
of service occurring on or after January 1 and processed by March 31 of
the respective program year (that is, January 1, 2012 and processed by
March 31, 2012 for the 2012 program year). We expect that we would be
able to make these interim feedback reports available to eligible
professionals in the summer of the respective program year (that is
summer 2012 for the 2012 program year). We believe interim feedback
reports would be particularly valuable to eligible professionals
reporting measures groups, because it would let an eligible
professional know how many more cases he or she needs to report to
satisfy the criteria for satisfactory reporting for claims-based
reporting of measures groups. We invite public comment on our proposal
to continue to provide annual feedback reports as well as our intention
to provide interim feedback reports.
i. Informal Review
Under 42 CFR 414.90(i), eligible professionals or group practices
may seek an informal review of the determination that the eligible
professional or group practice did not satisfactorily submit data on
quality measures under the Physician Quality Reporting System.
To maintain program consistency until we have further experience
with the informal review process that we implemented for the 2011
Physician Quality Reporting System, we propose to largely retain the
same informal review process that was finalized in the 2011 MPFS final
rule with comment period (75 FR 73549 through 73551) for 2012 and
beyond. Specifically, we propose to base the informal process on our
current inquiry process whereby an eligible professional can contact
the Quality Net Help Desk (via phone or e-mail) for general Physician
Quality Reporting System and eRx Incentive Program information,
information on Physician Quality Reporting System feedback report
availability and access, and/or information on Physician Quality
Reporting System Portal password issues. For purposes of the informal
process required under section 1848(m)(5)(E) of the Act, we propose the
following inquiry process:
An eligible professional electing to utilize the informal
process must request an informal review within 90 days of the release
of his or her feedback report, irrespective of when an eligible
professional actually accesses his/her feedback report.
An eligible professional may request an informal review
through use of a web-based tool, if technically feasible. We believe
use of the web-based tool will provide a more efficient way to record
informal review requests, as web-based tool will guide the eligible
professional through the creation of an informal review requests. For
example, the web-based tool will prompt an eligible professional of any
necessary information s/he must provide. If not technically feasible,
we propose that an eligible professional may request the informal
review by notifying the Quality Net Help Desk via e-mail at
qnetsupport@sdps.org. The e-mail requesting the initiation of the
informal review process should summarize the concern(s) of the eligible
professional and the reason(s) for requesting an informal review.
We further propose that CMS will provide the eligible
professional with a response to his or her request for an informal
review within 90 days of receiving the original request. In 2011, we
proposed to provide the eligible professional with a response to his or
her request for an informal review within 60 days of receiving the
original request. However, we anticipate that the volume of informal
review requests will grow as participation in the Physician Quality
Reporting System grows, particularly as we move towards the
implementation of the 2015 payment adjustment. Furthermore, we believe
that the time it takes for CMS to calculate data on Physician Quality
Reporting System quality measures will be greater than in 2011, since
we are proposing additional individual measures and measures groups.
For these reasons, we are proposing to amend 42 CFR 414.90(i)(2) to
indicate that CMS will provide a written response within 90 days of the
receipt of the original request for an informal review.
As this process is informal and the statute does not
require a formal appeals process, we will not include a hearing or
evidence submission process, although the eligible professional may
submit information to assist in the review.
Based on our informal review, we will provide a written
response. Where we find that the eligible professional did
satisfactorily report, we propose to provide the applicable incentive
payment.
Given that this is an informal review process and given
the limitations on review under section 1848(m)(5)(E) of the Act,
decisions based on the informal review will be final, and there will be
no further review or appeal.
We invite public comment on our proposal for the Physician Quality
Reporting System informal review process.
j. Future Payment Adjustments for the Physician Quality Reporting
System
Beginning in 2015, a payment adjustment will apply under the
Physician Quality Reporting System. Specifically, under section
1848(a)(8) of the Act, as added by section 3002(b) of the Affordable
Care Act, with respect to covered professional services furnished by an
eligible professional during 2015 or any subsequent year, if the
eligible professional does not satisfactorily submit data on quality
measures for covered professional services for the quality reporting
period for the year, the fee schedule amount for services furnished by
such professionals during the year shall be equal to the applicable
percent of the fee schedule amount that would otherwise apply to such
services. The applicable percent is--
98.5 percent for 2015; and
98.0 percent for 2016 and each subsequent year.
Section 1848(8)(A)(i) of the Act provides that, for purposes of the
payment adjustment, the ``quality reporting period'' with the respect
to a year, is a period specified by the Secretary. In order to maintain
consistency and program continuity, similar to the 12-month reporting
period we are proposing for 2012, we are also proposing a 12-month
reporting period for the 2015 payment adjustment. Specifically, we
propose that the reporting period for purposes of the 2015 payment
adjustment to be the 2013 calendar year, that is, January 1, 2013
through December 31, 2013. We believe

[[Page 42885]]

that this proposed reporting period will allow a full calendar year for
eligible professionals to meet the criteria for satisfactory reporting
for purposes of the 2015 payment adjustment (that will be proposed in
future rulemaking) while still providing us with enough time to collect
and analyze the data submitted by eligible professionals for the 2015
payment adjustment without having to make retroactive payment
adjustments in 2015. If we determine that an eligible professional or
group practice has not satisfactorily reported data on quality measures
for the January 1, 2013 through December 31, 2013 reporting period for
purposes of the 2015 payment adjustment, then the eligible professional
or group practice would be subject to the 1.5 percent adjustment in
their fee schedule amount in 2015. We invite public comment on the
proposed reporting period for purposes of the 2015 Physician Quality
Reporting System payment adjustment.
We intend to address the remaining requirements for satisfactory
reporting for purposes of the 2015 payment adjustment in future
rulemaking. We welcome suggestions for what the criteria for
satisfactory reporting for purposes of the 2015 payment adjustment we
might consider in the future with regard to the proposed reporting
period described previously.
2. Incentives and Payment Adjustments for Electronic Prescribing
(eRx)--The Electronic Prescribing Incentive Program
a. Program Background and Statutory Authority
Electronic prescribing is the transmission using electronic media,
of prescription or prescription-related information between the
prescriber, dispenser, pharmacy benefit manager (PBM), or health plan,
either directly or through an intermediary, including an electronic
prescribing network. To encourage the use of electronic prescribing
among eligible professionals, section 132 of the Medicare Improvements
for Patients and Providers Act of 2008 (MIPPA) amended section 1848(m)
of the Act to establish the eRx Incentive Program. The eRx Incentive
Program provides a combination of incentive payments and payment
adjustments through 2014 to eligible professionals who are successful
electronic prescribers. No eRx incentive payments or payment
adjustments are authorized beyond 2014.
From 2009 through 2013, the Secretary is authorized to provide
eligible professionals who are successful electronic prescribers an
incentive payment equal to a percentage of the eligible professional's
total estimated Medicare Part B PFS allowed charges (based on claims
submitted not later than 2 months after the end of the reporting
period) for all covered professional services furnished by the eligible
professional during the respective reporting period. However, section
1848(m)(2)(D) of the Act, as added by section 4101(f)(2)(B) of Title IV
of Division B of the American Recovery and Reinvestment Act of 2009
(Pub. L. 111-5) (ARRA), which also authorized the Medicare EHR
Incentive Program, specifies that the eRx incentive does not apply to
an eligible professional, if, for the EHR reporting period, the
eligible professional earns an incentive payment under the Medicare EHR
Incentive Program beginning in 2011.
The applicable electronic prescribing percent for incentive
payments under the eRx Incentive Program are as follows:
2.0 percent for 2009.
2.0 percent for 2010.
1.0 percent for 2011.
1.0 percent for 2012.
0.5 percent for 2013.
In addition, for years 2012 through 2014, under section
1848(a)(5)(A) of the Act, a PFS payment adjustment applies to eligible
professionals who are not successful electronic prescribers at an
increasing rate through 2014. Specifically, if the eligible
professional is not a successful electronic prescriber for the
respective reporting period for the year, the PFS amount for covered
professional services during the year shall be a percentage less than
the PFS amount that would otherwise apply. The applicable electronic
prescribing percent for payment adjustments under the eRx Incentive
Program are as follows:
1.0 percent in 2012.
1.5 percent in 2013.
2.0 percent in 2014.
We believe the purpose of the eRx Incentive Program for 2012 and
beyond is to continue to encourage significant expansion of the use of
electronic prescribing by authorizing a combination of financial
incentives and payment adjustments. We are proposing to modify the
incentive and payment adjustment language in 42 CFR 414.92 to provide
language more consistent with section 1848(k) of the Act.
We believe that the criteria used to determine who is a successful
electronic prescriber for purposes of the eRx incentive are not
required to be identical to the criteria used to determine the
applicability of the eRx payment adjustment. In general, we believe
that an incentive should be broadly available to encourage the widest
possible adoption of electronic prescribing, even for low volume
prescribers. On the other hand, we believe that a payment adjustment
should be applied primarily to assure that those who have a large
volume of prescribing do so electronically, without penalizing those
for whom the adoption and use of an electronic prescribing system may
be impractical given the low volume of prescribing. We also believe
that eligible professionals who have met the requirements for receiving
an incentive payment under the eRx Incentive Program for a particular
year have sufficiently demonstrated their adoption and use of
electronic prescribing technology and thus should not be subject to the
payment adjustment in a future year.
Individual eligible professionals do not have to participate in the
Physician Quality Reporting System in order to participate in the eRx
Incentive Program (and vice versa). The provisions of the eRx Incentive
Program are codified at 42 CFR 414.92.
In prior years, we have proposed and finalized the details of the
eRx Incentive Program for each program year through an annual
rulemaking process. Through this annual rulemaking process, we have
previously established the criteria for avoiding the 2012 eRx payment
adjustment in the 2011 PFS Final Rule with comment period (75 FR 73562
through 73565) as well as issued a proposed rule entitled ``Proposed
Changes to the Electronic Prescribing (eRx) Incentive Program'' (76 FR
31547), in which we proposed additional changes to the 2012 payment
adjustment, as well as the electronic prescribing quality measure for
certain reporting periods in 2011. We also established requirements for
the 2013 eRx payment adjustment in the 2011 PFS Final Rule with comment
period (75 FR 7356).
In this rule, we are setting forth our comprehensive proposals for
the 2012 and 2013 incentive payments, additional requirements for the
2013 payment adjustment, and 2014 payment adjustment. We believe that
proposing criteria for the eRx Incentive Program for 2012 and beyond
will provide eligible professionals with more time to familiarize
themselves with the details of the eRx Incentive Program. We hope this
will lead to increased, successful participation in the eRx Incentive
Program. Details regarding our proposals for the eRx Incentive Program
for 2012 and 2013 incentive payments, additional requirements for the
2013 payment adjustment, and the 2014

[[Page 42886]]

payment adjustment, including our rationale for such proposals, are
described in the following section.
b. Eligibility
For the 2012 and 2013 incentive payments and 2013 and 2014 payment
adjustments, we propose the following two ways eligible professionals
may participate in the eRx Incentive Program: (1) As an individual
eligible professional; or (2) as part of a group practice reporting
option (GPRO) for the eRx Incentive Program (eRx GPRO). Eligible
professionals eligible to participate in the eRx Incentive Program are
defined at 42 CFR 414.92(b). For more information on which
professionals are eligible to participate in the eRx Incentive Program,
we refer readers to the Eligible Professionals page of the eRx
Incentive Program section of the CMS Web site at: http://www.cms.gov/ERxIncentive/05_Eligible%20Professionals.asp#TopOfPage.
(1) Individual Eligible Professionals
(A) Definition of Eligible Professional
As in the 2011 eRx Incentive Program, we propose that, for
individual eligible professionals participating in the eRx Incentive
Program for purposes of the 2012 and 2013 incentive payments and 2013
and 2014 payment adjustments, the determination of whether an eligible
professional is a successful electronic prescriber will be made at the
individual professional level, based on the National Provider
Identifier (NPI) number. Inasmuch as some individuals (identified by
NPIs) may be associated with more than one practice or Tax
Identification Number (TIN), for the 2012 and 2013 incentive payments
and 2013 and 2014 payment adjustments, we propose that the
determination of whether an eligible professional is a successful
electronic prescriber will continue to be made for each unique TIN/NPI
combination. Then, as in previous years, incentive payments would be
made to the applicable holder of the TIN. We propose continuing to use
the TIN/NPI combination as the unit of analysis to maintain program
continuity, as individual eligible professionals are already familiar
with this level of analysis and payment. We invite public comment on
our proposal to continue analyzing data using the TIN/NPI combination
while providing payment to the applicable holder of the TIN.
As in prior program years, we propose that individual eligible
professionals who wish to participate in the eRx Incentive Program for
purposes of the 2012 and 2013 incentive payments and 2013 and 2014
payment adjustments may simply start participating. Individual eligible
professionals are not required to register or notify CMS they intend to
participate; rather, they may simply begin to report the eRx measure.
We invite public comment on the proposed process for individual
eligible professionals to participate in the eRx Incentive Program.
(2) Group Practices
As required under section 1848(m)(3)(C) of the Act, we established
a process under which eligible professionals in a group practice (as
defined by the Secretary) would be treated as meeting the requirements
for submitting data on electronic prescribing quality measures for
covered professional services for a reporting period (or, for purposes
of the payment adjustment under section 1848(a)(5) of the Act, for a
reporting period for a year) if, in lieu of reporting the electronic
prescribing measure, the group practice reports measures determined
appropriate by the Secretary, such as measures that target high-cost
chronic conditions and preventive care, in a form and manner, and at a
time specified by the Secretary. Specifically, we first established the
eRx GPRO in 2010, which was further modified in the 2011 PFS Final Rule
(75 FR 73502). The eRx GPRO was further modified in 2011. In addition
to determining whether an eligible professional is a successful
electronic prescriber for incentive payment and payment adjustment
purposes based on separately analyzing whether the individual eligible
professionals are successful electronic prescribers, we propose to also
make the determination that the group practice, as a whole, is a
successful electronic prescriber in accordance with section
1848(m)(3)(C) of the Act for those group practices that wish to
participate in the eRx GPRO.
(A) Proposed Definition of ``Group Practice''
Section 1848(m)(3)(C)(i) of the Act authorizes the Secretary to
define ``group practice,'' which CMS defined by referencing our
regulation at Sec. 414.92(b). For the 2011 eRx Incentive Program, a
group practice is--
(1) Defined at Sec. 414.90(b), that is participating in the
Physician Quality Reporting System; or
(2)(a) In a Medicare approved demonstration project that is deemed
to be participating in the Physician Quality Reporting System group
practice reporting option; and
(b) Has indicated its desire to participate in the electronic
prescribing group practice option.
However, for purposes of determining whether an eRx GPRO is a
successful electronic prescriber for CYs 2012 through 2014, we propose
to modify the definition of the ``group practice'' at 42 CFR 414.92(b)
to be consistent with modifications being proposed to the definition of
``group practice'' at 42 CFR 414.90(b) for the 2012 Physician Quality
Reporting System.
Specifically, we propose to modify the language that references
Medicare demonstrations to more broadly recognize other similar
Medicare programs that group practices may be participating in so that
such practices may be eligible to participate in the eRx Incentive
Program. In addition, we are making clear that all group practices must
indicate their desire to participate in the eRx group practice option.
Also, as we noted above, we are proposing to modify the definition of
group practice under the Physician Quality Reporting System definition
at 42 CFR 414.90(b) by defining a group practice as a single TIN with
at least 25 or more eligible professionals, as identified by their
individual NPI, who have reassigned their Medicare billing rights to
the TIN. Given that the definition of ``group practice'' at 42 CFR
414.92(b) follows the Physician Quality Reporting System definition, if
the proposed changes to 414.90(b) are finalized, it would apply to the
definition for group practice under the eRx Incentive Program.
Although this proposal would eliminate group practices comprised of
2 to 24 eligible professionals for the purpose of the eRx Incentive
Program, we believe this proposal to change the definition of ``group
practice'' would not be a significant burden to these small group
practices as they may still participate as individual eligible
professionals. For 2010, out of 107 group practices that self-nominated
to participate in GPRO II for the Physician Quality Reporting System,
68 of these group practices qualified to participate in the eRx
Incentive Program under GPRO II. However, during the opt-out period
which ended on May 12, 2011, 6 of these 68 group practices dropped out
of GPRO II participation, leaving only 62 group practices to
participate in GPRO II for 2010. Due to the low participation of only
62 groups, we believe participation in the eRx Incentive GPRO should be
limited to only those group practices with 25 or more eligible
professionals. Indeed, we believe participating under GPRO II may be
more burdensome for very small group practices than participating as

[[Page 42887]]

eligible professionals. For example, with respect to the payment
adjustment, additional limitations may apply to eligible professionals
as individuals that are not applied to group practices, which presents
an additional burden to the group practice.
(B) Proposed Process to Participate in the eRx Incentive Program--eRx
GPRO
We propose that if a group practice wishes to participate in the
eRx Incentive Program under the eRx GPRO, the group practice must self-
nominate to do so. To self-nominate, we propose that the group practice
follow the requirements for self-nomination under the Physician Quality
Reporting System as well as specifically indicate its intent to
participate in the eRx Incentive Program as a group practice. A group
practice must self-nominate for each calendar year the group wishes to
participate in the eRx GPRO. If a group practice self-nominates to
participate in the eRx GPRO for a calendar year, then we propose to
consider that the group practice is participating in the eRx GPRO for
purposes of both the incentive payment (with respect to any incentive
payment reporting period that occurs during the calendar year) and the
payment adjustment (with respect to any payment adjustment reporting
period that occurs during any calendar year). For example, the 2013
payment adjustment reporting period occurs during calendar year 2012
(January 1, 2012 through June 30, 2012). Therefore, any group practice
participating in the eRx GPRO during calendar year 2012 would be
considered to be participating in the eRx GPRO for both the 2012
incentive and 2013 payment adjustment. Please note that a group
practice that is deemed to be participating in the Physician Quality
Reporting System, such as an ACO participating under the Medicare
Shared Savings Program, will not be deemed participating as a group
practice in the eRx Incentive Program. Therefore, the group practice
must self-nominate to participate in the eRx Incentive Program under
the eRx GPRO. Instructions for submitting the self-nomination statement
are the same as the instructions for submitting a self-nomination
statement for the Physician Quality Reporting System. Each year, we
expect to notify a group practice of the selection decision with
respect to participation in the eRx GPRO during the first quarter of
the year. We invite public comment on the requirements for eligible
professionals to participate as an eRx GPRO for purposes of the eRx
Incentive Program.
c. Proposed Reporting Periods
Section 1848(m)(6)(C)(ii) of the Act also authorizes the Secretary
to revise the reporting period if the Secretary determines such
revision is appropriate, produces valid results on measures reported,
and are consistent with the goals of maximizing scientific validity and
reducing administrative burden.
(1) Proposed Reporting Periods for the 2012 and 2013 eRx Incentives
Section 1848(m)(6)(C)(i)(II) of the Act defines ``reporting
period'' under the eRx Incentive Program for years after 2008 to be the
entire year. We also have authority under section 1848(m)(6)(C)(ii) of
the Act to revise the reporting period. We propose, however, entire
calendar year reporting periods for the reporting period for purposes
of the 2012 and 2013 incentive payment (January 1, 2012 through
December 31, 2012 for the 2012 incentive and January 1, 2013 through
December 31, 2013 for the 2013 incentive, respectively). Accordingly,
we propose to modify 42 CFR 414.92(d)(1).
(2) Proposed Reporting Periods for the 2013 and 2014 eRx Payment
Adjustments
As we indicated, using our authority under Section
1848(m)(6)(C)(ii) of the Act, in the 2011 PFS Final Rule with comment
period, we finalized two different reporting periods: A 6-month
reporting period (between January 1, 2011 and June 30, 2011) for
purposes of the 2012 payment adjustment for both individual eligible
professionals and group practices participating in the eRx GPRO (75 FR
73562 through 73563) and a 12-month reporting period (between January
1, 2011 and December 31, 2011) for purposes of the 2013 payment
adjustment for individual eligible professionals and group practices
participating in the eRx GPRO (75 FR 73565).
In addition to the 12-month reporting period finalized in the 2011
PFS Final Rule with comment period, we propose an additional 6-month
reporting period for purposes of the 2013 payment adjustment. As stated
in the CY 2011 PFS final rule with comment period (75 FR 73565), we
indicated that we might consider in future rulemaking additional
reporting periods for purposes of the 2013 payment adjustment to
maximize the opportunities for eligible professionals to become
successful electronic prescribers.
As such, we propose for both individual eligible professionals and
group practices participating in the eRx GPRO a 6-month reporting
period (between January 1, 2012 and June 30, 2012) for purposes of the
2013 payment adjustment.
For similar reasons, we propose a 12-month reporting period
(between January 1, 2012 and December 31, 2012) that would apply to
individual eligible professionals and a 6-month reporting period
(between January 1, 2013 and June 30, 2013) that would apply to both
individual eligible professionals and group practices with regard to
the 2014 payment adjustment.. (Please note that we are not proposing
the 12-month reporting period for group practices for purposes of the
2014 payment adjustment because it is the same proposed reporting
period for the 2013 incentive.) Providing two different reporting
periods will provide eligible professionals with two opportunities to
become successful electronic prescribers. We invite public comment on
the proposed reporting periods for the 2013 and 2014 payment
adjustments.
d. Proposed Criterion for Determining Successful Electronic Prescribers
Section 1848(m)(3)(B) of the Act governs the requirements for
``successful electronic prescriber,'' for purposes of the incentive
payment under section 1848(m)(2) of the Act and the payment adjustment
under section 1848(a)(5) of the Act. The Secretary is authorized to use
one of two possible criteria for determining whether an eligible
professional is a successful electronic prescriber. One criterion,
under section 1848(m)(3)(B)(ii) of the Act, is based on the eligible
professional's reporting, in at least 50 percent of the reportable
cases, on any electronic prescribing measures that have been
established under the Physician Quality Reporting System, and are
applicable to services furnished by the eligible professional for the
reporting period. However, for years after 2009, section 1848(m)(3)(D)
of the Act permits the Secretary in consultation with stakeholders and
experts to revise the criteria for submitting data on electronic
prescribing measures under section 1848(m)(3)(B)(ii) of the Act.
The second criterion, under section 1848(m)(3)(B)(iii) of the Act,
is based on the electronic submission by the eligible professional of a
sufficient number (as determined by the Secretary) of prescriptions
under Part D during the reporting period. If the Secretary decides to
use this standard, then, in accordance with section 1848(m)(3)(B)(iv)
of the Act, the Secretary is authorized to use Part D

[[Page 42888]]

drug claims data to assess whether a sufficient number of prescriptions
have been submitted by eligible professionals. However, under section
1848(m)(3)(B)(i) of the Act, if the standard based on a sufficient
number (as determined by the Secretary) of electronic Part D
prescriptions is applied for a particular reporting period, then the
standard specified in law, based on the reporting on electronic
prescribing measures would no longer apply.
We considered use of the second criterion for determining
successful prescribing under the eRx Incentive Program. While we
recognize the benefits of using Part D data as the standard for
determining successful electronic prescribers, we believe use of Part D
prescriptions for analysis may be premature. For example, as the use of
Part D data is fairly new, there is uncertainty as to the accuracies of
reporting electronic prescribing activities. For example, if an
electronic prescription is converted to a facsimile when reaching the
pharmacy, under reporting of Part D data, the transmission is still
reported as a pure, electronic prescribing event. Furthermore, use of
Part D data would require a complete overhaul of the current
requirements for the eRx Incentive Program. For instance, if we choose
to shift to the use of Part D data, the program would have to adopt a
new form of measurement, a new form of analysis other than use of an
eligible professionals' TIN/NPI (as no TIN is populated under Part D
data), and new criteria for eligible professionals and eRx GPROs to
become successful electronic prescribers. Therefore, we are not
proposing to use the second criterion.
For the reasons stated previously, we propose to continue to
require eligible professionals to report on the electronic prescribing
measure used in 2011 to determine whether an eligible professional is a
successful electronic prescriber for the remainder of the eRx Incentive
Program. Please note, however, we also are proposing in section
IV.F.2.(d).(1). of this proposed rule to modify the electronic quality
measure's specifications and to use modified reporting criteria based
on the authority provided under section 1848(m)(3)(D) of the Act. We
invite public comment on the continued use of reporting the electronic
prescribing quality measure for purposes of the ``successful electronic
prescriber'' determination under the program.
(1) Reporting the Electronic Prescribing Quality Measure
The proposed electronic prescribing quality measure, similar to the
Physician Quality Reporting System measures, has two basic elements,
which include: (1) A reporting denominator that defines the patient
population on which the eligible professional's performance is being
measured; and (2) a reporting numerator, which identifies whether or
not a clinical quality action was performed. Our proposals specified
later in this section apply to the following eRx Incentive Program
years: The 2012 eRx incentive payment; the 2013 eRx incentive payment;
the 2013 eRx payment adjustment; and the 2014 eRx payment adjustment.
Under section 1848(k)(2)(C)(i) of the Act, the electronic
prescribing measure, which was initially introduced under the Physician
Quality Reporting System, shall be a measure selected by the Secretary
that has been endorsed by the entity with a contract with the Secretary
under section 1890(a) of the Act. Currently, that entity is the
National Quality Forum (NQF). The electronic prescribing measure we
propose to retain, NQF Measure 0486: Adoption of Medication e-
Prescribing, is currently endorsed by the NQF.
(2) The Denominator for the Electronic Prescribing Measure
The denominator for the electronic prescribing quality measure
consists of specific billing codes for covered professional services.
As initially required under section 1848(k)(2)(A)(ii) of the Act,
and further established through rulemaking and under section
1848(m)(2)(B) of the Act, we may modify the codes making up the
denominator of the electronic prescribing measure. As such, we expanded
the scope of the denominator codes for 2010 to covered professional
services outside the professional office and outpatient setting, such
as professional services furnished in skilled nursing facilities or the
home care setting. For 2011, we finalized the following CPT and HCPCS
codes in the denominator of the electronic prescribing measure: 90801,
90802, 90804, 90805, 90806, 90807, 90808, 90809, 90862, 92002, 92004,
92012, 92014, 96150, 96151, 96152, 99201, 99202, 99203, 99204, 99205,
99211, 99212, 99213, 99214, 99215, 99304, 99305, 99306, 99307, 99308,
99309, 99310, 99315, 99316, 99324, 99325, 99326, 99327, 99328, 99334,
99335, 99336, 99337, 99341, 99342, 99343, 99344, 99345, 99347, 99348,
99349, 99350, G0101, G0108, and G0109 (75 FR 73555). For purposes of
reporting periods during CYs 2012 and 2013, we propose to retain these
CPT and HCPCS codes in the denominator of the electronic prescribing
measure because we believe that these codes represent the types of
services for which prescriptions are likely to be generated. Therefore,
if we were to measure an eligible professional's performance on the
electronic prescribing measure, we would want to do so only for
patients who saw the professional for such services. For purposes of
the 2012 and 2013 incentives and 2013 and 2014 payment adjustment, we
propose to retain the denominator codes contained in the 2011
electronic prescribing measure. Whereas in prior years we only
permitted eligible professionals to report the electronic prescribing
measure's numerator in connection with a service in the measure's
denominator, as discussed in section IV.F.2.i. of this proposed rule,
we are proposing to depart from this requirement for purposes of the
2013 and 2014 payment adjustments.
(3) The Reporting Numerator for the Electronic Prescribing Measure
Currently, the electronic prescribing measure's numerator consists
of a single code, G8553, which indicates that at least 1 prescription
created during the encounter was generated and transmitted
electronically using a qualified electronic prescribing system.
For purposes of reporting the measure for the 2012 and 2013
incentives or the 2013 and 2014 payment adjustment, as in prior years,
we propose that an eligible professional or group practice
participating in the eRx GPRO can report the code associated with the
measure's numerator whenever a prescription is generated and
transmitted electronically.
We propose to post the final electronic prescribing measure
specifications on the ``eRx Measure'' page of the eRx Incentive Program
section of the CMS Web site at http://www.cms.gov/ERXIncentive by no
later than--
December 31, 2011 for the reporting periods that occur
during calendar year 2012.
December 31, 2012 for the reporting periods that occur
during calendar year 2013.
In the event that additional changes are needed to the measure
specifications for years after 2012, we would do so via notice and
comment rulemaking prior to posting the final measure specifications
for that year. We invite public comment on the proposed numerator for
the

[[Page 42889]]

electronic prescribing measure for CYs 2012 through 2013.
e. Required Functionalities and Part D Electronic Prescribing Standards
As previously stated, to report the electronic prescribing measure,
we propose that the eligible professional or group practice must report
the measure's numerator G-code. When reporting this G-code for
incentive payment or payment adjustment purposes, we propose, for
purposes of the 2012 and 2013 incentive and 2013 and 2014 payment
adjustment that the eligible professional or eRx GPRO must have and
regularly use a ``qualified'' electronic prescribing system, which we
further propose to define as either a system with functionalities
identified in the electronic prescribing measure specifications, or
Certified EHR Technology as defined at 42 CFR 495.4 and 45 CFR 170.102.
This proposal is consistent with our June 1, 2011 proposed rule for the
2011 eRx Incentive Program (76 FR 31549).
We are aware that there are significant numbers of eligible
professionals who are interested in participating in the eRx Incentive
Program but currently do not have an electronic prescribing system or
Certified EHR Technology. The electronic prescribing measure does not
require the use of any particular system or transmission network; only
that the system be a ``qualified'' system.
If the professional does not have general access to an electronic
prescribing system or Certified EHR Technology in the practice setting,
the eligible professional would not be able to report the electronic
prescribing measure. In addition to not being eligible for an incentive
payment, an eligible professional who does not report the electronic
prescribing measure for 2012 or 2013 would be subject to the 2013 or
2014 eRx payment adjustment, unless an exception applied. We invite
public comment on the proposed technological requirements of the
electronic prescribing quality measure.
(1) ``Qualified'' Electronic Prescribing System
We propose to retain what constitutes a ``qualified'' electronic
prescribing system as a system based upon certain required
functionalities that the system can perform. We propose to retain the
same functionalities that were required in 2010 and 2011. Therefore,
for 2012 through 2014, we propose that a ``qualified'' electronic
prescribing system is one that can do the following:
Generate a complete active medication list incorporating
electronic data received from applicable pharmacies and PBMs, if
available.
Enable eligible professionals to select medications, print
prescriptions, electronically transmit prescriptions, as well as
provide notifications (that is, signals to warn the prescriber of
possible undesirable or unsafe situations including potentially
inappropriate dose or route of administration of a drug, drug-drug
interactions, allergy concerns, or warnings and cautions). This
functionality must be enabled.
Provide information related to lower cost, therapeutically
appropriate alternatives (if any). The ability of an electronic
prescribing system to receive tiered formulary information, if
available, would again suffice for this requirement for reporting the
electronic prescribing measure during the reporting periods occurring
in CYs 2012 and 2013 until this function is more widely available in
the marketplace.
Provide information on formulary or tiered formulary
medications, patient eligibility, and authorization requirements
received electronically from the patient's drug plan (if available).
We invite public comment on the proposed definition of a
``qualified electronic prescribing system,'' for systems that have
these four functionalities.
Furthermore, we are proposing to expand the definition of a
``qualified electronic prescribing system'' in the electronic
prescribing measure that would be used for reporting periods that occur
during CY 2012 and 2013 to include Certified EHR Technology as defined
at 42 CFR 495.4 and 45 CFR 170.102 because we believe the technological
requirements for eRx in the EHR Incentive Program are similar to the
technological requirements for the eRx Incentive Program. We also
desire to align the requirements of the eRx and the Medicare EHR
Incentive Program in order to potentially reduce unnecessary investment
in multiple technologies for purposes of meeting the requirements for
each program. This proposal is consistent with our June 1, 2011
proposed rule for the 2011 eRx incentive and the 2013 eRx payment
adjustment (76 FR 31549).
(2) Part D Electronic Prescribing Standards
Section 1848(m)(3)(B)(v) of the Act specifies that to the extent
practicable, in determining whether an eligible professional is a
successful electronic prescriber, ``the Secretary shall ensure that
eligible professionals utilize electronic prescribing systems in
compliance with standards established for such systems pursuant to the
Part D Electronic Prescribing Program under section 1860D-4(e) of the
Act''. The Part D standards for electronic prescribing systems
establish which electronic standards Part D sponsors, providers, and
dispensers must use when they electronically transmit prescriptions and
certain prescription related information for Part D covered drugs that
are prescribed for Part D eligible individuals.
To be a qualified electronic prescribing system under the eRx
Incentive Program, electronic systems must convey the information
listed previously using the standards currently in effect for the Part
D electronic prescribing program. Additional Part D electronic
prescribing standards were implemented April 1, 2009. On July 1, 2010,
we published an Interim Final Rule providing additional updates to Part
D electronic prescribing standards. These latest Part D electronic
prescribing standards, and those that had previously been adopted, can
be found on the CMS Web site at http://www.cms.gov/eprescribing.
To ensure that eligible professionals utilize electronic
prescribing systems that meet these requirements, the electronic
prescribing measure requires that those functionalities required for a
``qualified'' electronic prescribing system utilize the adopted Part D
electronic prescribing standards. We propose to modify the Part D
electronic prescribing standards required for a ``qualified''
electronic prescribing system under the eRx Incentive Program to have
these standards consistent with current, CMS Part D electronic
prescribing standards. The Part D electronic prescribing standards
relevant to the four functionalities described previously are as
follows:
Generate medication list--Use the National Council for
Prescription Drug Programs (NCPDP) Prescriber/Pharmacist Interface
SCRIPT Standard, Implementation Guide, Version 8 or 10.6, Release 1,
October 2005 (hereinafter ``NCPDP SCRIPT 8.1 or 10.6'') Medication
History Standard. Use of NCPDP SCRIPT 10.6 is a new option for use in
the eRx Incentive Program.
Transmit prescriptions electronically--Use the NCPDP
SCRIPT 8.1or 10.6 for the transactions listed at Sec. 423.160(b)(2).
Provide information on lower cost alternatives--Use the
NCPDP Formulary and Benefits Standard, Implementation Guide, Version 1,
Release 0 (Version 1.0), October 2005 (hereinafter ``NCPDP Formulary
and Benefits 1.0'').

[[Page 42890]]

Provide information on formulary or tiered formulary
medications, patient eligibility, and authorization requirements
received electronically from the patient's drug plan use:
++ NCPDP Formulary and Benefits 1.0 for communicating formulary and
benefits information between prescribers and plans.
++ Accredited Standards Committee (ASC) X12N 270/271-Health Care
Eligibility Benefit Inquiry and Response, Version 4010, May 2000,
Washington Publishing Company, 004010X092 and Addenda to Health Care
Eligibility Benefit Inquiry and Response, Version 4010A1, October 2002,
Washington Publishing Company, 004010X092A1 for communicating
eligibility information between the plan and prescribers.
++ NCPDP Telecommunication Standard Specification, Version 5,
Release 1 (Version 5.1), September 1999, and equivalent NCPDP Batch
Standard Batch Implementation Guide, Version 1, Release 1 (Version
1.1), January 2000 for communicating eligibility information between
the plan and dispensers.
However, there are Part D electronic prescribing standards that are
in effect for functionalities that are not commonly utilized at this
time. One example is Rx Fill Notification, which is discussed in the
Part D electronic prescribing final rule (73 FR 18926). For purposes of
the eRx Incentive Program for CYs 2012 through 2014, we again are not
requiring that an electronic prescribing system contain all
functionalities for which there are available Part D electronic
prescribing standards since many of these functionalities are not
commonly available. For those required functionalities previously
described, we propose that a ``qualified'' system must use the adopted
Part D electronic prescribing standards listed previously for
electronic messaging only.
There are other aspects of the functionalities for a ``qualified''
system that are not dependent on electronic messaging and are part of
the software of the electronic prescribing system, for which Part D
standards for electronic prescribing do not pertain and are not
required for purposes of the eRx Incentive Program. For example, the
requirements in the second functionality that require the system to
allow professionals to select medications, print prescriptions, and
conduct alerts are functions included in the particular software, for
which Part D standards for electronic messaging do not apply.
As stated previously, we are proposing to expand the definition of
what constitutes a ``qualified'' electronic prescribing system under
the electronic prescribing system to also recognize as ``qualified''
Certified EHR Technology. Among other requirements, Certified EHR
Technology must be able to electronically generate and transmit
prescriptions and prescription-related information in accordance with
certain standards, some of which have been adopted for purposes of
electronic prescribing under Part D. Similar to the four
functionalities previously noted with regard to a qualified eRx system,
Certified EHR Technology also must be able to check for drug-drug
interactions and check whether drugs are in a formulary or a preferred
drug list, although the certification criteria do not specify any
standards for the performance of those functions. We believe that it is
acceptable that not all of the Part D eRx standards are required for
Certified EHR Technology in light of our desire to better align the
requirements of the eRx and the Medicare EHR Incentive Program and
potentially reduce unnecessary investment in multiple technologies for
purposes of meeting the requirements for each program. Furthermore, to
the extent that an eligible professional uses Certified EHR Technology
to electronically prescribe under Part D, he or she would still be
required to comply with the Part D standards to do so.
f. Proposed Reporting Mechanisms for the 2012 and 2013 Reporting
Periods
For purposes of the 2011 incentive payment and 2013 payment
adjustment, an eligible professional (and eRx GPRO, for purposes of the
2011 incentive) may report on the electronic prescribing measure to
meet the criteria for being a successful electronic prescriber via
three reporting mechanisms--claims, qualified registry, and qualified
EHR product. However, for purposes of the 2012 payment adjustment, due
to operational limitations, only the claims-based reporting mechanism
is available for purposes of reporting on the electronic prescribing
measure for the 2012 payment adjustment (75 FR 73563).
For reporting periods that occur during CY 2012 and 2013, to
provide eligible professionals and groups practices with multiple
mechanisms to report on the electronic prescribing measure for purposes
of reporting the electronic prescribing measure for the 2012 and 2013
incentive payments and 2013 and 2014 payment adjustments, we propose
the following three reporting mechanisms--claims, qualified registry,
and qualified EHR. However, as in the past, we would not combine data
on the electronic prescribing measure submitted via multiple reporting
mechanisms. Combining data received via multiple reporting mechanisms
would add significant complexity to our analytics and potentially delay
incentive payments. Therefore, we are proposing that an eligible
professional or eRx GPRO would need to meet the relevant reporting
criteria for the incentive or payment adjustment using a single
reporting mechanism.
For reporting periods that occur during CYs 2012 and 2013, we also
propose that a group practice that wishes to participate in the eRx
Incentive Program as an eRx GPRO for a particular calendar year will
have to indicate which reporting mechanism the group practice intends
to use to report the electronic prescribing measure. That is, the group
practice will need to indicate at the time it self-nominates which
reporting mechanism (claims, qualified registry, or qualified EHR) the
group practice intends to use for purposes of participating in the eRx
GPRO.
The proposed requirements for each reporting mechanism with respect
to the 2012 and 2013 incentives and 2013 and 2014 payment adjustments
are described below.
(1) Claims-Based Reporting
First, for purposes of reporting the electronic measure for the
2012 and 2013 incentives as well as the 2013 and 2014 payment
adjustments, we propose to again retain the claims-based reporting
mechanism that has been used since the implementation of the eRx
Incentive Program in 2009 for all remaining incentive and payment
adjustment years. We are not proposing any prerequisites, such as
registration, to begin reporting on the electronic prescribing measure
via claims. Retaining the claims-based mechanism allows eligible
professionals and group practices to begin to report on the electronic
prescribing measure without the added cost of submitting data to a
registry or purchasing an EHR system (if the eligible professional is
using a standalone eRx system) as eligible professionals already report
PFS charges via claims.
If an eligible professional or group practice chooses the claims-
based reporting mechanism, we propose that the eligible professional or
group practice must directly submit data on the electronic prescribing
measure. For eligible professionals and group practices participating
in the eRx GPRO using the proposed claims-based reporting mechanism for
purposes of

[[Page 42891]]

reporting the electronic prescribing measure during a 12-month
incentive or payment adjustment reporting period, we propose that all
claims for services must be processed by us no later than two months
after the respective reporting period, for the claim to be included in
our data analysis. (For example, for an eligible professional using the
12-month, 2014 payment adjustment reporting period, all claims for
services between January 1, 2012 and December 31, 2012 must be
processed no later than February 28, 2013 to be included in our data
analysis.) For eligible professionals and group practices using the
proposed claims-based reporting mechanism for purposes of reporting the
electronic prescribing measure during a 6-month payment adjustment
reporting period, we propose that all claims for services must be
processed by us by no later than one month after the respective
reporting period, for the claim to be included in our data analysis
(for example, for an eligible professional using the 6-month, 2013
payment adjustment reporting period, all claims for services between
January 1, 2012 and June 30, 2012 must be processed no later than July
31, 2012, for the claims to be included in our data analysis.) We
believe that these proposed reporting periods will allow sufficient
time for eligible professionals to report the electronic prescribing
measure, allow us to collect and analyze the data submitted by eligible
professionals, and avoid retroactive adjustments of payments. We invite
public comment on our proposal to retain claims-based reporting as a
reporting mechanism for the eRx Incentive Program.
(2) Registry-Based Reporting
In addition, for purposes of reporting for the 2012 and 2013
incentives as well as the 2013 and 2014 payment adjustments, to provide
an opportunity for individual eligible professionals and group
practices who choose to participate in the Physician Quality Reporting
System via registry to use the same reporting mechanism for reporting
the electronic prescribing measure, we propose to continue the
registry-based reporting mechanism introduced under the 2010 eRx
Incentive Program. Retaining the registry-based reporting option
provides eligible professionals and group practices with another
alternative to reporting. In addition, unlike claims-based reporting,
although there may be a cost associated with submitting data to a
registry, reporting of the electronic prescribing measure to CMS is
done entirely by the registry.
We note that there may be a cost associated with submitting data to
a registry. As in prior program years, we propose that only registries
qualified to submit quality measure results and numerator and
denominator data on quality measures on behalf of eligible
professionals for the Physician Quality Reporting System for the
applicable calendar year would be qualified to submit measure results
and numerator and denominator data on the electronic prescribing
measure on behalf of eligible professionals for the eRx Incentive
Program.
Some registries that self-nominate to become a qualified registry
for the Physician Quality Reporting System may not choose to self-
nominate to become a qualified registry for purposes for the eRx
Incentive Program. Registries need to indicate their desire to qualify
to submit measure results and numerator and denominator data on the
electronic prescribing measure for reporting periods that occur during
CYs 2012 and 2013 at the time that they submit their self-nomination
letter for the 2012 and 2013 Physician Quality Reporting System
respectively. The self-nomination process and requirements for
registries for the Physician Quality Reporting System, which also will
apply to the registries for the eRx Incentive Program, are discussed in
the Physician Quality Reporting System section IV.F.1.(d).(2). of this
proposed rule. We would post a final list of qualified registries for
the eRx Incentive Program for CYs 2012 and 2013 on the eRx Incentive
Program section of the CMS Web site at http://www.cms.gov/ERXIncentive
when we post the final list of qualified registries for the Physician
Quality Reporting System for 2012 and 2013 respectively on the
Physician Quality Reporting System section of the CMS Web site.
Since we are proposing a 12-month reporting period for purposes of
the 2012 and 2013 incentive and 6 and 12-month reporting periods for
purposes of the 2013 and 2014 payment adjustments (as described in the
section previously), we further propose that qualified registries would
need to submit the electronic prescribing measure for the eRx Incentive
Program to us in two separate transmissions, based on the proposed
reporting periods for the 2012 and 2013 incentive payments and 2013 and
2014 payment adjustments. Specifically, we propose that qualified
registries would need to submit 2012 and 2013 data on the electronic
prescribing measure in two separate submissions:
Following the end of the respective 6-month payment
adjustment reporting period (between July 1, 2012 and August 19, 2012,
for purposes of the 2013 eRx payment adjustment, and between July 1,
2013 and August 19, 2013, for purposes of the 2014 eRx payment
adjustment); and
Following the end of the 12-month reporting period for the
2012 and 2013 incentives and 2014 payment adjustment.
We invite public comment on our proposals regarding registry-based
reporting for the 2012, 2013, and 2014 eRx Incentive Program.
(3) EHR-Based Reporting
For purposes of reporting for the 2013 incentive as well as the
2013 and 2014 payment adjustments, in order to provide an opportunity
for eligible professionals and group practices who choose to
participate in the Physician Quality Reporting System via EHR as well
as eligible professionals who participate in the Medicaid or Medicare
EHR Incentive Program to use the same reporting mechanism for reporting
the electronic prescribing measure, we propose to retain the EHR-Based
reporting mechanism to encourage the use of EHR technology as well as
provide eligible professionals and group practices with a third
reporting option.
Similar to registry-based reporting, we propose that direct EHR
technology as well as EHR data submission vendors (as described in our
proposals to the Physician Quality Reporting System) ``qualified'' to
submit extracted Medicare clinical quality data to us for the Physician
Quality Reporting System would be able to be used by an eligible
professional or group practice to submit data on the electronic
prescribing measure for the 2012 and 2013 incentives and 2013 and 2014
payment adjustments. The self-nomination process and requirements for
direct EHR products and EHR data submission vendors for the Physician
Quality Reporting System as discussed previously in section
IV.F.1.d.(3). of this proposed rule in our 2012 proposals for the
Physician Quality Reporting System, would continue to apply to the EHR
products and EHR data submission vendors for the eRx Incentive Program.
We hope this third reporting option for eligible professionals and
group practices will encourage the use of EHR technology.
We propose that direct EHR products and EHR data submission vendors
be required to indicate their desire to have one or more of their EHR
products approved for the purpose of an eligible professional
potentially being able to submit data on the electronic prescribing
measure for the eRx

[[Page 42892]]

Incentive Program for reporting periods that occur in CYs 2012 and 2013
at the time they self-nominate for the respective 2012 and 2013
Physician Quality Reporting System. A list of approved EHR technology,
their vendors (including the technology's version that is approved) for
the eRx Incentive Program would be posted on the eRx Incentive Program
section of the CMS Web site at http://www.cms.gov/ERXIncentive when we
post the list of approved EHR technology for the Physician Quality
Reporting System on the Physician Quality Reporting System section of
the CMS Web site.
Since we are proposing two reporting periods with respect to the
2013 and 2014 payment adjustments (described in section (c)(2)
previously), we further propose that eligible professionals using their
approved EHR systems would need to submit the electronic prescribing
measure for the eRx Incentive Program to us in two separate
transmissions, based on the proposed reporting periods for the 2012 and
2013 incentive payments and 2013 and 2014 payment adjustments.
Specifically, we propose that eligible professionals would need to
submit 2012 and 2013 data on the electronic prescribing measure in two
separate submissions:
Following the end of the respective 6-month payment
adjustment reporting period (between July 1, 2012 and August 19, 2012,
for purposes of the 2013 eRx payment adjustment, and between July 1,
2013 and August 19, 2013, for purposes of the 2014 eRx payment
adjustment); and
Following the end of the 12-month reporting period for the
2012 and 2013 incentives and 2014 payment adjustment.
We invite public comment on our proposals with regard to EHR-Based
reporting.
g. The 2012 and 2013 eRx Incentives
42 CFR 414.92(d) states the requirements for individual eligible
professionals to qualify to receive an incentive payment. We are
proposing to modify 42 CFR 414.92(d) to add ``being a,'' so that the
provision reads:

In order to be considered a successful electronic prescriber and
qualify to earn an electronic prescribing incentive payment (subject
to paragraph (c)(3) of this section), an individual eligible
professional, as identified by a unique TIN/NPI combination, must
meet the criteria for being a successful electronic prescriber under
section 1848(m)(3)(B) of the Act and as specified by CMS during the
reporting period specified in paragraph (d)(1) of this section and
using one of the reporting mechanisms specified in paragraph (d)(2)
of this section. Although an eligible professional may attempt to
qualify for the electronic prescribing incentive payment using more
than one reporting mechanism (as specified in paragraph (d)(2) of
this section), the eligible professional will receive only one
electronic prescribing incentive payment per TIN/NPI combination for
a program year.

We believe this change provides more clarity to the provision.
(1) Applicability of 2012 and 2013 eRx Incentives for Eligible
Professionals and eRx GPROs
Section 1848(m)(2)(B) of the Act imposes a limitation on the eRx
incentive payment. The Secretary is authorized to choose 1 of 2
possible criteria for determining whether or not the limitation applies
to a successful electronic prescriber:
Whether Medicare Part B allowed charges for covered
professional services to which the electronic prescribing quality
measure applies are less than 10 percent of the total Medicare Part B
PFS allowed charges for all covered professional services furnished by
the eligible professional during the reporting period; OR
The second criterion, under section 1848(m)(3)(B)(iii) of
the Act, is based on whether the eligible professional submits (both
electronically and non-electronically) a sufficient number (as
determined by the Secretary) of prescriptions under Part D (which can,
again, be assessed using Part D drug claims data). If the Secretary
decides to use this criterion, the criterion based on the reporting on
electronic prescribing measures would no longer apply.
Based on our proposal to make the determination of whether an
eligible professional or group practice is a ``successful electronic
prescriber'' based on submission of the electronic prescribing measure
(the first criterion), we propose to apply the criterion under section
1848(m)(2)(B)(i) of the Act for the limitation for both the 2012 and
2013 incentives. Specifically, a successful electronic prescriber is
eligible for the 2012 and/or 2013 incentive only if the Medicare Part B
allowed charges for covered professional services to which the
electronic prescribing quality measure applies comprise at least 10
percent of the total Medicare Part B PFS allowed charges for all
covered professional services furnished by the eligible professional or
group practice during the reporting period.
For purposes of the 2012 and 2013 incentives, this analysis would
be performed during the first quarters of 2013 and 2014 respectively by
dividing the eligible professional's or group practice's (for those
group practices participation in the eRx GPRO for that year) total 2012
and 2013 respective Medicare Part B PFS allowed charges for all such
covered professional services submitted for the measure's denominator
codes by the eligible professional's or group practices' total Medicare
Part B PFS allowed charges for all covered professional services. If
the result is 10 percent or more, then the statutory limitation would
not apply and a successful electronic prescriber would qualify to earn
the electronic prescribing incentive payment. If the result is less
than 10 percent, then the statutory limitation would apply and the
eligible professional or group practice would not earn an electronic
prescribing incentive payment even if he or she meets the reporting
criteria for being a successful electronic prescriber. Although an
individual eligible professional or group practice may decide to
conduct his or her own assessment of how likely this statutory
limitation is expected to apply to him or her before deciding whether
or not to report the electronic prescribing measure, an individual
eligible professional or group practice may report the electronic
prescribing measure without regard to the statutory limitation for the
incentive payment. We invite public comment on our proposed use of the
10 percent limitation with respect to the 2012 and 2013 incentive
payments.
(2) Proposed Reporting Criteria for Being a Successful Electronic for
the 2012 and 2013 eRx Incentives--Individual Eligible Professionals
As discussed previously, section 1848(m)(3)(D) of the Act
authorizes the Secretary to revise the criteria for submitting data on
the electronic prescribing measure under section 1848(m)(3)(B)(ii) of
the Act, which requires the measure to be reported in at least 50
percent of the cases in which the measure is reportable. For 2010 and
2011, we revised that criterion, such that an eligible professional is
a successful electronic prescriber by reporting the electronic
prescribing quality measure for a minimum of 25 unique visits per year
of applicable cases in the denominator.
For the 2012 and 2013 incentives, to maintain program consistency
form year to year, we propose to make the determination of whether an
eligible professional is a successful electronic prescriber for
purposes of the incentive based on a count of the number of times
(minimum threshold of 25) an eligible professional reports that at
least one prescription created during the denominator-eligible
encounter is generated using a qualified electronic

[[Page 42893]]

prescribing system, which would include Certified EHR Technology (that
is, reports the G8553 code when the eligible professional bills for one
of the services included in the measure's denominator). We believe this
criterion adequately addresses the goal of the eRx Incentive Program,
specifically to promote the use of electronic prescribing systems. We
invite public comment on the proposed criteria for successful
electronic prescriber with regard to reporting the electronic
prescribing quality measure by individual eligible professionals for
purposes of qualifying for the 2012 and 2013 eRx incentive payments.
(3) Proposed Criteria for Being a Successful Electronic Prescriber 2012
and 2013 eRx Incentives--Group Practices
Under section 1848(m)(3)(B) of the Act, in order to qualify for the
incentive payment, an eligible professional or group practice must be a
``successful electronic prescriber.''
For a group practice to be a successful electronic prescriber for
purposes of the 2011 incentive payment, depending on the group's size,
a group practice was required to report the electronic prescribing
measure for a minimum of 75 to 2,500 unique visits per year of
applicable cases in the electronic prescribing measure's denominator.
Specifically, 2011 eRx GPRO comprised of 26 to 50 eligible
professionals are required to report the electronic prescribing measure
for at least 475 unique visits. 2011 group practices comprised of 51 to
100 eligible professionals are required to report the electronic
prescribing measure for at least 925 unique visits, and 2011 group
practices comprised of 101 to 199 eligible professionals are required
to report the electronic prescribing measure for at least 1,875 unique
visits.
Because we seek to simplify the reporting criteria for group
practices using the eRx GPRO, we propose that, for the 2012 and 2013
incentive payments and 2013 and 2014 payment adjustments, for a group
practice using the eRx GPRO to be a successful prescriber, a group
practice using the eRx GPRO must report the electronic prescribing
measure's numerator for at least 625 unique visits (for group practices
comprised of 25-99 eligible professionals) or 2,500 unique visits (for
group practices comprised of 100 or more eligible professionals). To
obtain these reporting criteria, we multiplied the smallest group
practice size for each respective threshold (that is, 25 for the first
threshold and 100 for the second threshold) by the number of unique
visits (25) an individual eligible professional must report on the
electronic prescribing measure in order to qualify for an incentive
payment. Although this may be a higher reporting threshold for group
practices using the eRx GPRO comprised of 25-50 eligible professionals
and group practices using the eRx GPRO comprised of 101-199 eligible
professionals than in 2011, we believe it is still quite feasible for
these group practices to meet the respective reporting threshold as
this would be the reporting threshold should the members of the group
practice choose to participate in the eRx Incentive Program as
individual eligible professionals.
We invite public comment on the proposed criteria for determining
successful electronic prescribers for eRx GPROs reporting for purposes
of earning the 2012 and 2013 incentives.
(4) No Double Payments
We are prohibited from making double payments under section
1848(m)(3)(C)(iii) of the Act, which requires that payments to a group
practice shall be in lieu of the payments that would otherwise be made
under the eRx Incentive Program to eligible professionals in the group
practice for being a successful electronic prescriber. Accordingly,
consistent with 2010 and 2011, we propose to make incentive payments to
group practices based on the determination that the eRx GPRO, as a
whole, is a successful electronic prescriber for the respective program
year. An individual eligible professional who is affiliated with a
group practice participating in the eRx GPRO reporting option that
meets the requirements of being a successful electronic prescriber
under a group practice would not be eligible to earn a separate eRx
incentive payment on the basis of the individual eligible professional
meeting the criteria for successful electronic reporter at the
individual level. We invite public comment on the proposed
determination of the 2012 and 2013 incentive payment amount for group
practices that are successful electronic prescribers.
Furthermore, we propose to make a technical change 42 CFR
414.92(g)(5)(ii) to modify ``another'' to ``a'' to clarify the
provision.
h. The 2013 and 2014 Electronic Prescribing Payment Adjustments
As previously stated, for 2012, 2013, and 2014, if the eligible
professional is not a successful electronic prescriber for the
reporting period for the year, the PFS amount for covered professional
services furnished by such professionals during the year shall be less
than the PFS amount that would otherwise apply by--
1.0 percent for 2012;
1.5 percent for 2013; and
2.0 percent for 2014.
We propose to modify 42 CFR 414.92 to provide further explanation
of the requirements for individual eligible professionals and group
practices for the 2013 and 2014 payment adjustment, which we will
propose below.
(1) Proposed Limitations to the 2013 and 2014 eRx Payment Adjustments--
Individual Eligible Professionals
Whereas we believe that an incentive should be broadly available to
encourage the widest possible adoption of electronic prescribing, even
for low volume prescribers, we believe that a payment adjustment should
be applied primarily to assure that those who have a large volume of
prescribing do so electronically, without penalizing those for whom the
adoption and use of an electronic prescribing system may be impractical
given the low volume of prescribing. We propose that the 2013 and 2014
payment adjustments would not apply if:
An eligible professional is not an MD, DO, podiatrist,
nurse practitioner, or physician assistant as of June 30, 2012, for
purposes of the 2013 payment adjustment and June 30, 2013, for purposes
of the 2014 payment adjustment. Since these eligible professionals do
not generally prescribe, we have excluded these eligible professionals
from the eRx Incentive Program.
For purposes of determining whether an eligible professional is an
MD, DO, podiatrist, nurse practitioner, or physician assistant we would
use National Plan and Provider Enumeration System (NPPES) data. It is
an eligible professional's responsibility to ensure that his or her
primary taxonomy code in NPPES is accurate. However, in 2011, we also
established a G-code, (G8644) that eligible professionals can use to
report to us that they do not have prescribing privileges. We propose
to retain the reporting of this G-code for purposes of the 2013 and
2014 payment adjustments. For purposes of the 2013 payment adjustment,
we propose that eligible professionals who report this G-code must do
so on a claim with dates of services during the 6-month reporting
period (January 1, 2012 and June 30, 2012). For purposes of the 2014
payment adjustment, we propose that eligible professionals who report
this G-code must do so on a claim with dates of services during the 6-
month reporting period (January 1, 2013 and June 30,

[[Page 42894]]

2013) so that we are able to distinguish whether a professional is
reporting this G-code for the 2013 payment adjustment or the 2014
payment adjustment.
The eligible professional's Medicare Part B allowed
charges for covered professional services to which the electronic
prescribing quality measure applies are less than 10 percent of the
total Medicare Part B PFS allowed charges for all covered professional
services furnished by the eligible professional during the respective
payment adjustment reporting period. This is a required limitation
under section 1848(m)(2)(B) of the Act. This calculation will be
performed by dividing the eligible professional's total 2011 Medicare
Part B PFS allowed charges for all such covered professional services
submitted for the measure's denominator codes by the eligible
professional's total Medicare Part B PFS allowed charges for all
covered professional services (as assessed at the TIN/NPI level). If
the result is 10 percent or more, then the statutory limitation will
not apply. If the result is less than 10 percent, then the statutory
limitation will apply. For the 12-month incentive and payment
adjustment reporting periods, this calculation is expected to take
place in the first quarter of the year following the reporting period
(for example, in the first quarter of 2013 for the 12-month reporting
period for the 2012 incentive). For the 6-month payment adjustment
reporting period, this calculation is expected to take place within the
calendar year for that 6-month reporting period (for example. within
2012 for the 6-month reporting period for the 2013 payment adjustment).
An eligible professional who does not have at least 100
cases (that is, claims for patient services) containing an encounter
code that falls within the denominator of the electronic prescribing
measure for dates of service during: The 6-month, 2013 payment
adjustment reporting period (January 1, 2012 through June 30, 2012) for
purposes of the 2013 payment adjustment or the 6-month, 2014 payment
adjustment reporting period (January 1, 2013 through June 30, 2013) for
purposes of the 2014 payment adjustment. If an eligible professional
has less than 100 denominator-eligible instances in a 6-month period,
this would be an indicator to us that the professional likely has a
small Medicare patient population.
We invite public comment on the proposed limitations of the 2013
and 2014 payment adjustments.
(2) Proposed Requirements for the 2013 and 2014 eRx Payment
Adjustments--Individual Eligible Professionals
As we explained previously, section 1848(a)(5) of the Act requires
a payment adjustment be applied with respect to covered professional
services furnished by an eligible professional in 2013 and 2014, if the
eligible professional is not a successful electronic prescriber for the
reporting period for the year. Section 1848(m)(3)(B) of the Act sets
forth the requirements for being a successful electronic prescriber.
However, section 1848(m)(3)(D) of the Act authorizes the Secretary to
revise the criteria for submitting data on the electronic prescribing
quality measure. In the 2011 PFS Final Rule with comment period, we
established the same reporting criteria for being a successful
electronic prescriber for purposes of the 2011 incentive and the 2013
payment adjustment, based on a 12-month reporting period in 2011 (75 FR
73565). In order to create another opportunity for an eligible
professional to become a successful electronic prescriber for purposes
of the 2013 payment adjustment, we propose the following criteria,
based on the proposed 6-month reporting period, for being a successful
electronic prescriber: An eligible professional will be deemed a
successful electronic prescriber if he/she reports the electronic
prescribing measure's numerator, that is, at least 1 prescription for
Medicare Part B PFS patients created during an encounter was generated
and transmitted electronically using a qualified electronic prescribing
system at least 10 times during the 6-month payment adjustment
reporting period (that is, January 1, 2012 through June 30, 2012).
Unlike the reporting criteria for the incentive payments where the
numerator must be reported in connection with a denominator-eligible
visit, for purposes of the 2013 and 2014 payment adjustments, we
propose an eligible professional would be able to report the measure's
numerator for any Medicare Part B PFS service provided during the
reporting period, regardless of whether the code for such service
appears in the denominator, because we recognize that eligible
professionals may generate prescriptions during encounters that are not
necessarily included in the measure's denominator.
For purposes of avoiding the 2014 payment adjustment, we also seek
to provide more than one opportunity for eligible professionals to
avoid the 2014 payment adjustment by becoming a successful electronic
prescriber. Therefore, consistent with the finalized and proposed
criteria for successful electronic prescribing for purposes of the 2013
payment adjustment, we propose that an eligible professional the
following criteria for an eligible professional to be a successful
electronic prescriber for purposes of the 2014 payment adjustment: (1)
An eligible professional meets the criteria for the 2013 incentive,
that is, reports that at least one prescription for Medicare Part B PFS
patients created during an encounter was generated and transmitted
electronically using a qualified electronic prescribing system at least
25 times during the 12-month payment adjustment reporting period (that
is, January 1, 2012 through December 31, 2012) or (2) An eligible
professional reports the electronic prescribing measure's numerator
(that is, that at least 1 prescription for Medicare Part B PFS patients
created during an encounter was generated and transmitted
electronically using a qualified electronic prescribing system) at
least 10 times during the 6-month payment adjustment reporting period
(that is, January 1, 2013 through June 30, 2013).
As with the 2012 and 2013 incentive payments, we propose that the
determination of whether an eligible professional is subject to the
payment adjustment will be made at the individual professional level,
based on the NPI and for each unique TIN/NPI combination. Tables 57 and
58 reflect the proposed criteria for being a successful electronic
prescriber for an individual eligible professional for purposes of the
2013 and 2014 payment adjustment respectively.

[[Page 42895]]

Table 57--Proposed Criteria for Being a Successful Electronic Prescriber
for the 2013 ERX Payment Adjustment for the Proposed 6-Month Reporting
Period--Individual Eligible Professionals *
------------------------------------------------------------------------
Reporting period Criteria
------------------------------------------------------------------------
6-month................................ Report the electronic
(Jan 1, 2012-Jun 30, 2012)............. prescribing measure's
numerator code at least 10
times.
------------------------------------------------------------------------
* In the CY 2011 PFS final rule with comment period, we finalized a
reporting criterion based on a 12-month reporting period (January 1,
2011 through December 31, 2011) for being a successful electronic
prescriber for the 2013 payment adjustment. That is, the eligible
professional becomes a successful electronic prescriber for the 2013
payment adjustment if, between January 1, 2011 and December 31, 2011 s/
he reports on the 2011 electronic prescribing measure at least 25
times.

Table 58--Proposed Criteria for Being a Successful Electronic Prescriber
for the 2014 ERX Payment Adjustment--Individual Eligible Professionals
------------------------------------------------------------------------
Reporting period Criteria
------------------------------------------------------------------------
12[dash]month.......................... Report the electronic
(Jan 1, 2012-Dec 31, 2012)............. prescribing measure's
numerator code at least 25
times for encounters
associated with at least 1 of
the denominator codes (the
same criteria as the 2013 eRx
incentive).
6[dash]month........................... Report the electronic
(Jan 1, 2013-Jun 30, 2013)............. prescribing measure's
numerator code at least 10
times.
------------------------------------------------------------------------

We proposed the previous criteria for being a successful electronic
prescriber for purposes of the 2013 and 2014 payment adjustments
because they are consistent with the criteria for being a successful
electronic prescriber for purposes of the 2012 and 2013 payment
adjustment that were finalized in the CY 2011 PFS final rule with
comment period (75 FR 73562 through 73565). We invite public comment on
the proposed criteria for becoming a successful electronic prescriber
for the 2013 and 2014 payment adjustments for individual eligible
professionals.
(3) Proposed Requirements for the 2013 and 2014 eRx Payment
Adjustments--Group Practices
As required by section 1848(m)(3)(C) of the Act, we are also
required to establish and have in place a process under which eligible
professionals in a group practice shall be treated as a successful
electronic prescriber for purposes of the payment adjustment. For
purposes of the 2013 and 2014 payment adjustments, we propose that if a
group practice chooses to participate in the eRx GPRO during CYs 2012
and 2013, respectively, then the group practice would be evaluated for
applicability of the 2013 and 2014 payment adjustment as a group
practice.
We propose an eRx GPRO will be deemed a successful electronic
prescriber for purposes of the 2013 payment adjustment if, during the
6-month, 2013 payment adjustment reporting period (January 1, 2012
through June 30, 2012), a group practice reports the electronic
prescribing measure's numerator (that is, that at least 1 prescription
for Medicare Part B PFS patients created during an encounter was
generated and transmitted electronically using a qualified electronic
prescribing system) at least 625 times (for group practices comprised
of 25 to 99 eligible professionals) or 2,500 times (for group practices
comprised of 100+ eligible professionals).
Similarly, for the 2014 payment adjustment, we propose the
following: A group practice would be a successful electronic prescriber
for purposes of the 2014 payment adjustment if the group practice meets
the 2012 criteria for being a successful electronic prescriber for
purposes of the 2012 incentive payment. In other words, the group
practice would need to report the electronic prescribing measure's
numerator for at least 625 (for group practices comprised of 25 to 99
eligible professionals) or 2,500 (for group practices comprised of 100
or more eligible professionals) times for encounters associated with at
least 1 of the denominator codes that occur between January 1, 2012 and
December 31, 2012. In addition, we propose that a group practice would
also be a successful electronic prescriber for purposes of the 2014
payment adjustment if, during the 6-month, 2014 payment adjustment
reporting period (January 1, 2013 through June 30, 2013), a group
practice reports the electronic prescribing measure's numerator (that
is, that at least 1 prescription for Medicare Part B PFS patients
created during an encounter was generated and transmitted
electronically using a qualified electronic prescribing system at least
625 times (for group practices with 25 to 99 eligible professionals) or
2,500 times (for group practices with 100+ eligible professionals)).
In addition, in accordance with the limitation under section
1848(m)(2)(B)(i) of the Act, the 2013 or 2014 payment adjustment would
not apply to a group practice in which less than 10 percent of the
group practice's estimated total allowed charges for the respective 6-
month or 12-month payment adjustment reporting period are comprised of
services which appear in the denominator of the 2012 or 2013 electronic
prescribing measure. To be consistent with how this limitation is
applied to group practices for purposes of the incentive, we propose to
determine whether this limitation applies to a group practice for the
payment adjustment at the TIN level. Tables 59 and 60 reflect the
proposed criteria for being a successful electronic prescriber for a
group practice for purposes of the 2013 and 2014 payment adjustments,
respectively.

[[Page 42896]]

Table 59--Proposed Criteria for Being a Successful Electronic Prescriber
for the 2013 ERX Payment Adjustment for the Proposed 6-Month Reporting
Period--Group Practices
------------------------------------------------------------------------
eRx GPRO Size Reporting period Criteria
------------------------------------------------------------------------
25-99 Eligible Professionals.. 6[dash]month..... Report the electronic
(Jan 1, 2012-Jun prescribing
30, 2012). measure's numerator
code at least 625
times.
100+ Eligible Professionals... 6[dash]month..... Report the electronic
(Jan 1, 2012-Jun prescribing
30, 2012). measure's numerator
code at least 2,500
times.
------------------------------------------------------------------------

Table 60--Proposed Criteria for Being a Successful Electronic Prescriber
for the 2014 ERX Payment Adjustment--Group Practices Using the ERX GPROS
------------------------------------------------------------------------
eRx GPRO Size Reporting period Criteria
------------------------------------------------------------------------
25-99 Eligible Professionals.. 12[dash]month.... Report the electronic
(Jan 1, 2012-Dec prescribing
31, 2012). measure's numerator
for at least 625
times for encounters
associated with at
least 1 of the
denominator codes
(the same criteria
as the 2012 eRx
incentive).
100+ Eligible Professionals... 12[dash]month.... Report the electronic
(Jan 1, 2012-Dec prescribing
31, 2012). measure's numerator
for at least 2,500
times for encounters
associated with at
least 1 of the
denominator codes
(the same criteria
as the 2012
incentive).
25-99 Eligible Professionals.. 6[dash]month..... Report the electronic
(Jan 1, 2013-Jun prescribing
30, 2013). measure's numerator
code at least 625
times.
100+ Eligible Professionals... 6[dash]month..... Report the electronic
(Jan 1, 2013-Jun prescribing
30, 2013). measure's numerator
code at least 2,500
times.
------------------------------------------------------------------------

We invite public comment on the proposed requirements for 2013 and
2014 electronic prescribing payment adjustment for eRx GPROs.
(4) Significant Hardship Exemptions
Section 1848(a)(5)(B) of the Act provides that the Secretary may,
on a case-by-case basis, exempt an eligible professional from the
application of the payment adjustment, if the Secretary determines,
subject to annual renewal, that compliance with the requirement for
being a successful electronic prescriber would result in a significant
hardship.
(A) Proposed Significant Hardship Exemptions
In the CY 2011 PFS Final Rule with comment period (75 FR 73564
through 75 FR 73565), we finalized two circumstances under which an
eligible professional or eRx GPRO can request consideration for a
significant hardship exemption for the 2012 eRx payment adjustment:
The eligible professional or eRx GPRO practices in a rural
area with limited high speed internet access.
The eligible professional or eRx GPRO practices in an area
with limited available pharmacies for electronic prescribing.
For the 2013 and 2014 payment adjustments, we propose to retain
these two significant hardship exemption categories. We propose that
eligible professionals and eRx GPROs wishing to request applicability
of these significant hardship exemption categories may do so via a web-
based tool. Alternatively, since we created a G-code for each of the
previous categories, we propose that eligible professionals and eRx
GPROs may use the G-codes to request consideration for a significant
hardship exemption for the 2013 and 2014 payment adjustment by
reporting the appropriate G-code at least once on claims for services
rendered during the respective 2013 and 2014 6-month reporting periods.
Since publication of the CY 2011 PFS Final Rule with comment
period, we have received numerous requests to expand the categories
under the significant hardship exemption for the payment adjustment.
Some stakeholders have recommended specific circumstances of
significant hardship for our consideration (for example, eligible
professionals who have prescribing privileges but do not prescribe
under their NPI, eligible professionals who prescribe a high volume of
narcotics, and eligible professionals who electronically prescribe but
typically do not do so for any of the services included in the
electronic prescribing measure's denominator), while others strongly
suggested we consider increasing the number of specific hardship
exemption categories. We believe that many of the circumstances raised
by stakeholders may pose a significant hardship and limit eligible
professionals and group practices in their ability to meet the
requirements for being successful electronic prescribers either because
of the nature of their practice or because of the limitations of the
electronic prescribing measure itself, and as a result, such
professionals might be unfairly penalized. Therefore, in 2011, in the
proposed rule entitled ``Proposed Changes to the Electronic Prescribing
(eRx) Incentive'' (76 FR 31547), we proposed to expand the categories
under the significant hardship exemption for the 2012 payment
adjustment. Because we believe the reasons for proposing the expanded
categories under the significant hardship exemption for the 2012
payment adjustment also apply to the 2013 and 2014 payment adjustments,
we propose to retain the following significant hardship exemptions for
the 2013 and 2014 payment adjustments:
Inability to electronically prescribe due to local, state,
or federal law or regulation
Eligible professionals who prescribe fewer than 100
prescriptions during a 6-month, payment adjustment reporting period
(i) Inability to Electronically Prescribe Due to Local, State, or
Federal Law or Regulation
We are proposing that, to the extent that local, State, or Federal
law or regulation limits or prevents an eligible professional or group
practice that otherwise has general prescribing authority from
electronically prescribing (for example, eligible professionals who
prescribe a large volume of narcotics, which may not be electronically

[[Page 42897]]

prescribed in some states, or eligible professionals who practice in a
State that prohibits or limits the transmission of electronic
prescriptions via a third party network such as Surescripts), the
eligible professional or group practice would be able to request
consideration for an exemption from application of the 2013 and/or 2014
payment adjustments, which would be reviewed on a case-by-case basis.
We believe eligible professionals in this situation face a significant
hardship with regard to the requirements for being successful
electronic prescribers because while they may meet the 10 percent
threshold for applicability of the payment adjustment, or the 100
denominator-eligible cases limit in a 6-month payment adjustment
reporting period, they may not have sufficient opportunities to meet
the requirements for being a successful electronic prescriber because
Federal, State, or local law or regulation may limit the number of
opportunities that an eligible professional or group practice has to
electronically prescribe.
(ii) Eligible Professionals Who Prescribe Fewer Than 100 Prescriptions
During a 6-Month, Payment Adjustment Reporting Period
We are proposing that an eligible professional who has prescribing
privileges but prescribes fewer than 100 prescriptions during a 6-
month, payment adjustment reporting period (for example, a nurse
practitioner who may not write prescriptions under his or her own NPI,
a physician who decides to let his Drug Enforcement Administration
registration expire during the reporting period without renewing it, or
an eligible professional who prescribed fewer than 100 prescriptions
between January 1, 2012 and June 30, 2012 regardless of whether the
prescriptions were electronically prescribed or not), yet still meets
the 10 percent threshold for applicability of the payment adjustment,
would be able to request consideration for a significant hardship
exemption from application of the 2013 and/or 2014 payment adjustment,
which would be reviewed on a case-by-case basis. We believe that it is
a significant hardship for eligible professionals who have prescribing
privileges, but infrequently prescribe, to become successful electronic
prescribers because the nature of their practice may limit the number
of opportunities an eligible professional or group practice to
prescribe, much less electronically prescribe.
We invite public comments on our proposal to modify 42 CFR 414.92
to include our proposed significant hardship exemption categories for
the 2013 and 2014 payment adjustments.
As we realize that the 4 significant hardship exemptions we have
proposed above may not capture every circumstance that could constitute
a significant hardship, we invite public comment on other suggestions
for significant hardship exemption categories that we may want to
consider.
(B) Process for Submitting Significant Hardship Exemptions--Individual
Eligible Professionals and Group Practices
To request a significant hardship exemption for any of the
categories proposed and previously described, we are proposing that an
eligible professional provide to us by the end of the 2013 and/or 2014
payment adjustment reporting periods (that is June 30, 2012 for the
2013 payment adjustment and June 30, 2013 for the 2014 payment
adjustment), the following:
The name of the practice and other Identifying information
(for example: TIN, NPI, mailing address, and e-mail address of all
affected eligible professionals.
The proposed significant hardship exemption category(ies)
that apply.
A justification statement describing how compliance with
the requirement for being a successful electronic prescriber for the
respective 2013 and/or 2014 payment adjustment during the reporting
period would result in a significant hardship to the eligible
professional.
An attestation of the accuracy of the information
provided.
The justification statement should be specific to the category
under which the eligible professional or group practice is submitting
its request and must explain how the exemption applies to the
professional. For example, if the eligible professional is requesting a
significant hardship exemption due to Federal, State, or local law or
regulation, he or she must cite the applicable law and how the law
restricts the eligible professional's ability to electronically
prescribe. CMS will review the information submitted by each eligible
professional on a case-by-case basis. In addition, we are proposing
that an eligible professional or group practice must, upon request,
provide additional supporting documentation if there is insufficient
information (such as, but not limited to, a TIN or NPI that we cannot
match to the Medicare claims, a certification number for the Certified
EHR Technology that does not appear on the list of Certified EHR
Technology, or an incomplete justification for the significant hardship
exemption request) to justify the request or make the determination of
whether a significant hardship exists.
We also are proposing that eligible professionals or group
practices would be able to submit significant hardship exemption
requests using the web-based tool or interface (that we also proposed
to use in the 2011 ``Proposed Changes to the Electronic Prescribing
(eRx) Incentive Program'' proposed rule). Under the web-based tool, we
propose that eligible professionals and group practices be able to log-
in, request a specific significant hardship exemption, and provide the
reasons why a significant hardship exemption should apply. We propose
that eligible professionals would be required to submit their requests
for a significant hardship exemption via the web-based tool during the
relevant 6-month payment adjustment reporting period. For example, if
an eligible professional is requesting a significant hardship exemption
from the 2013 payment adjustment, then the request must be submitted
between January 1, 2012 and June 30, 2012.
We also are proposing that once we have completed our review of the
eligible professional's or group practice's request and made a
decision, we would notify the eligible professional or group practice
of our decision and all such decisions would be final. Eligible
professionals or group practices would not have the opportunity to
request reconsiderations of their requests for significant hardship
exemption. We invite public comment on the proposed process for
individual eligible professionals and group practices for submitting
these requests for significant hardship exemptions to us (including
comments on the type of information we are proposing eligible
professionals must submit, the proposed options for how the information
could be submitted, and the proposed timeframes for submission).

G Physician Compare Web Site

1. Background and Statutory Authority
Section 10331 (a)(1) of the Affordable Care Act (42 U.S.C. 1395w-5
note) requires that we, by no later than January 1, 2011, develop a
Physician Compare Internet Web site with information on physicians
enrolled in the Medicare program under section 1866(j) of the Act as
well information on other eligible professionals who participate in the
Physician Quality Reporting System under section 1848 of the Act (42
U.S.C. 1395w-4). Public

[[Page 42898]]

reporting of performance results on standardized quality measures
currently exists on http://www.medicare.gov for the following:
Hospitals (Hospital Compare).
Dialysis facilities (Dialysis Facility Compare).
Nursing homes (Nursing Home Compare).
Home health facilities (Home Health Compare).
As an initial step towards providing information on the quality of
care for services furnished by physicians and other professionals to
Medicare beneficiaries, we have enhanced the existing Physician and
Other Health Care Professionals directory at http://www.medicare.gov to
develop a similar Compare Web site specific to physicians and other
professionals. In accordance with section 10331 of the Affordable Care
Act, we launched the first phase of the Physician Compare Internet Web
site on December 30, 2010. This initial phase included the posting of
the names of eligible professionals that satisfactorily submitted
quality data for the 2009 Physician Quality Reporting System.
2. Proposed Plans
Section 10331 (a)(2) of the Affordable Care Act also requires that,
no later than January 1, 2013, and with respect to reporting periods
that begin no earlier than January 1, 2012, we implement a plan for
making information on physician performance publicly available through
the Physician Compare Web site. To the extent that scientifically sound
measures are developed and are available, we are required to include,
to the extent practicable, the following types of measures for public
reporting:
Measures collected under the Physician Quality Reporting
System.
An assessment of patient health outcomes and functional
status of patients.
An assessment of the continuity and coordination of care
and care transitions, including episodes of care and risk-adjusted
resource use.
An assessment of efficiency.
An assessment of patient experience and patient,
caregiver, and family engagement.
An assessment of the safety, effectiveness, and timeliness
of care.
Other information as determined appropriate by the
Secretary.
As required under section 10331(b) of the Affordable Care Act, in
developing and implementing the plan, we must include, to the extent
practicable, the following:
Processes to ensure that data made public are
statistically valid, reliable, and accurate, including risk adjustment
mechanisms used by the Secretary.
Processes for physicians and eligible professionals whose
information is being publically reported to have a reasonable
opportunity, as determined by the Secretary, to review their results
before posting to Physician Compare.
Processes to ensure the data published on Physician
Compare provides a robust and accurate portrayal of a physician's
performance.
Data that reflects the care provided to all patients seen
by physicians, under both the Medicare program and, to the extent
applicable, other payers, to the extent such information would provide
a more accurate portrayal of physician performance.
Processes to ensure appropriate attribution of care when
multiple and other providers are involved in the care of the patient.
Processes to ensure timely statistical performance
feedback is provided to physicians concerning the data published on
Physician Compare.
Implementation of computer and data infrastructure and
systems used to support valid, reliable, and accurate reporting
activities.
Section 10331(d) of the Affordable Care Act requires us to consider
input from multi-stakeholder groups in selecting quality measures for
Physician Compare. In developing the plan for making information on
physician performance publicly available through the Physician Compare
Web site, section 10331(e) of the Affordable Care Act requires the
Secretary, as the Secretary deems appropriate, to consider the plan to
transition to value-based purchasing for physicians and other
practitioners that was developed under section 131(d) of the Medicare
Improvements for Patients and Providers Act of 2008.
We are required, under section 10331(f) of the Affordable Care Act,
to submit a report to the Congress by January 1, 2015 on the Physician
Compare Web site developed, and include information on the efforts and
plans to collect and publish data on physician quality and efficiency
and on patient experience of care in support of value-based purchasing
and consumer choice. Section 10331(g) of the Affordable Care Act
provides that any time before that date, we may continue to expand the
information made available on Physician Compare.
We believe section 10331 of the Affordable Care Act supports our
overarching goals to foster transparency and public reporting by
providing consumers with quality of care information to make informed
decisions about their health care, while encouraging clinicians to
improve on the quality of care they provide to their patients. In
accordance with Section 10331 of the Affordable Care Act, we intend to
utilize the Physician Compare Web site to publicly report physician
performance results.
For purposes of implementing a plan to publicly report physician
performance, we plan to use data reported under the existing Physician
Quality Reporting System as an initial step for making public physician
``measure performance'' information on Physician Compare. By ``measure
performance,'' we mean the percent of times that a particular clinical
quality action was reported as being performed, or a particular outcome
was attained, for the applicable persons to whom a measure applies as
described in the denominator for the measure.
The Physician Quality Reporting System is a readily available
source of measures performance data. First implemented in 2007, the
program grew to include 194 different measures in 2011. The measures
used in the Physician Quality Reporting System cover a wide range of
health conditions and topics and include measures applicable to most
physician specialties and other clinicians. Work is underway to ensure
consistency of quality measures reported under the Physician Quality
Reporting System and the EHR Incentive Program.
The first phase of the plan to make information on physicians and
other eligible professionals who participate in the Physician Quality
Reporting System publically available was completed through the launch
of the Physician Compare Web site and the posting of the names of those
eligible professionals who satisfactorily participated in the Physician
Quality Reporting System.
During the second phase of the plan, occurring in 2011 through
2012, we will continue to work towards the development and improvement
of the Web site. Our plans for Physician Compare Web site development
during this second phase include monthly data refreshes and a
semiannual Web site release to incorporate updates and improvements to
the Web site. Updates will include the addition of the names of
eligible professionals who are successful electronic prescribers, as
required by section 1848(m)(5)(G) of the Social Security Act (the Act),
as well as the names of those eligible professionals who participate in
the EHR Incentive Program, as required by section 1848(o)(3)(D) of the
Act. Additional enhancements planned include the addition of links to
specialty board Web sites that can provide more information

[[Page 42899]]

on an eligible professional's board certification status and improved
Web site functionality and layout.
Moving towards the reporting of physician performance information,
we propose to take an initial step by making public the performance
rates of the quality measures that group practices submit under the
2012 Physician Quality Reporting System group practice reporting option
(GPRO) described in section IV.F.b.2. of this proposed rule. We also
propose to publicly report the performance rates of the quality
measures that the group practices participating in the Physician Group
Practice demonstration report on the Physician Compare Web site as
early as 2013 for performance information collected in CY 2012. Subject
to the discussion later in this section, we would make public the
measure performance for each of the measures included in the 2012
Physician Quality Reporting System GPRO. Since the quality measures in
GPRO are reported for the group as a whole, the information on measure
performance would also apply to the group as a whole, rather than to
individual physicians within a group.
Public reporting of the group practices' measure performance
results at the group practice level would begin public reporting at the
earliest time specified by the statute. We believe the design of the
GPRO (see section IV.F.b.2. of this proposed rule) facilitates making
public groups' performance results. All groups participating in the
GPRO would be reporting on the same set of clinical quality measures,
which allows for comparison of the results across groups.
To eliminate the risk of calculating performance rates based on a
small denominator, we propose to set a minimum patient sample size
threshold. A minimum threshold of 25 patients will have to be met in
order for the group practice's measure performance rate to be reported
on the Physician Compare Web site. If the threshold of 25 patients is
not met for a particular measure, the group's performance rate for that
measure would be suppressed and not publically reported. In determining
the minimum patient sample size, we took into consideration the minimum
patient sample size used by other Compare Web sites that publically
report measure performance data. We wanted to ensure that we used a
number large enough to accurately reflect measure performance, but not
so large that it will limit the number of groups for which measure
performance could be reported. In taking into consideration the minimum
patient sample size used by other Compare Web sites that publically
report measure performance data, we also considered a minimum patient
sample size of 10 patients, 20 patients and 30 patients. As we are
proposing to report measure performance at a group level and a majority
of the other Compare Web sites use minimum sample sizes of between 20
and 30 patients, we concluded that a minimum patient sample size of 25
would meet our criteria.
As discussed in section IV.F.b.2 of this proposed rule, we propose
that group practices participating in the 2012 Physician Quality
Reporting System GPRO would agree in advance to have their reporting
performance results publicly reported as part of their self-nomination
to participate in the 2012 Physician Quality Reporting System GPRO.
Finally, we propose to modify the GPRO data collection tool for 2012 to
calculate the numerator, denominator, and measure performance rate for
each measure from the data that the group practices use to populate the
tool and provide each group practice this information at the time of
tool submission. This feature would allow the group practice the
opportunity to review their measure performance results before they are
made public in accordance with section 10331(b) of the Affordable Care
Act. For groups reporting using GPRO information that is made public in
2013, we do not propose to post information with respect to the measure
performance of individual physicians or eligible professionals
associated with the group. However, we propose to identify the
individual eligible professionals who were associated with the group
during the reporting period. We will identify the eligible
professionals associated with the group by posting a list of the
eligible professionals on the Physician Compare Web site.
We believe a staged approach to public reporting of physician
information allows for the use of information currently available while
we develop the infrastructure necessary to support the collection of
additional types of measures and public reporting of individual
physicians' quality measure performance results. Implementation of
subsequent phases of the plan will need to be developed and addressed
in future notice and comment rulemaking, as needed. We invite comments
regarding our proposal to: (1) To publicly report group practices'
measure performance results in 2013 based on group practices' 2012
Physician Quality Reporting System performance results under GPRO; and
(2) utilize a minimum patient sample size of 25 for reporting and
displaying measure performance on the Physician Compare Web site.

H. Medicare EHR Incentive Program for Eligible Professionals for the
2012 Payment Year

1. Background
On July 28, 2010, we published in the Federal Register (75 FR
44314) a final rule entitled ``Medicare and Medicaid Programs;
Electronic Health Record Incentive Program'' to implement the
provisions of the American Recovery and Reinvestment Act of 2009 (ARRA)
(Pub. L. 111-5) that amended sections 1848, 1853, and 1886 of the
Social Security Act (the Act) to provide incentive payments to eligible
professionals (EPs), eligible hospitals, and critical access hospitals
(CAHs) participating in the Medicare and Medicaid programs that
successfully adopt, implement, upgrade, or demonstrate meaningful use
of certified electronic health record (EHR) technology. In that final
rule, we specified the initial criteria EPs, eligible hospitals, and
CAHs must meet in order to qualify for an incentive payment, including
the initial clinical quality measures (CQMs) for which these providers
would be required to submit information to the Secretary in the form
and manner specified by CMS.
In the July 28, 2010 final rule (75 FR 44430), we stated that for
the Medicare EHR Incentive Program, for the 2011 payment year, EPs,
eligible hospitals, and CAHs will be required to submit CQM results as
calculated by certified EHR technology through attestation, and for the
2012 payment year and subsequent payment years, they will be required
to electronically submit CQM results as calculated by certified EHR
technology. Additionally, we stated that the primary method for these
providers to report required CQM information electronically will be to
submit data by an upload process through a CMS-designated portal. In
the final rule, we also stated that we anticipated that we would have
completed the necessary steps to have the capacity to receive
information on CQMs electronically for the 2012 payment year. However,
we also stated that if the Secretary does not have the capacity to
accept the information on CQMs electronically in 2012, consistent with
sections 1848(o)(2)(B)(ii) and 1886(n)(3)(B)(ii) of the Act, then we
will continue to rely on attestation for reporting CQMs as a
requirement for demonstrating meaningful use of certified EHR
technology for the 2012 payment year (75 FR 44380).

[[Page 42900]]

We also stated in the final rule that certified EHR technology will
be required to calculate the clinical quality measure results and
transmit under the Physician Quality Reporting Initiative (PQRI)
Registry XML specification (75 FR 44435). Since the publication of the
final rule, we have determined that it is not feasible to receive
electronically the information necessary for clinical quality measure
reporting based solely on the use of PQRI 2009 Registry XML
Specification content exchange standards as is required for certified
EHR technology. This is because the specification is tailored to the
elements required for 2009 PQRI Registry submission, rather than
constituting a more generic standard. As a result, we propose to modify
the requirement that clinical quality measure reporting must be done
electronically. Specifically, we propose that for the 2012 payment
year, EPs may continue to report clinical quality measure results as
calculated by certified EHR technology by attestation, as for the 2011
payment year.
In addition to attestation, we propose to establish a pilot
mechanism through which EPs participating in the Medicare EHR Incentive
Program may report CQM information electronically using certified EHR
technology for the 2012 payment year. Participation in the pilot would
be voluntary and would enable EPs to satisfy the Medicare EHR Incentive
Program requirements for reporting CQMs for the 2012 payment year. EPs
who choose not to participate in the pilot would be able to continue to
use an attestation methodology for reporting CQMs for payment year
2012.
We propose to modify 42 CFR 495.8(a)(2) by adding a new paragraph
to allow for the reporting of CQMs for the Medicare EHR Incentive
Program via the Physician Quality Reporting System-Medicare EHR
Incentive Pilot. Furthermore we are proposing to revise 42 CFR
495.8(a)(2)(ii) by deleting the word ``electronically'' and adding the
words ``form and'' such that it reads as follows:

Reporting of clinical quality information. For 42 CFR
495.6(d)(10), `Report ambulatory clinical quality measures to CMS
or, in the case of Medicaid EPs, the States,' report the ambulatory
clinical quality measures selected by CMS to CMS (or in the case of
Medicaid EPs, the States) in the form and manner specified by CMS
(or in the case of Medicaid EPs, the States).
2. The Proposed Physician Quality Reporting System-Medicare EHR
Incentive Pilot
We propose to modify 42 CFR 495.8(a)(2) to indicate that EPs
participating in the Medicare EHR Incentive Program can meet the CQM
reporting requirements of the EHR Incentive Program for payment year
2012 by participating in a pilot, which we refer to as the Physician
Quality Reporting System-Medicare EHR Incentive Pilot. Sections
1848(o)(2)(B)(ii) of the Act provides authority for the Secretary to
accept information on CQMs electronically on a pilot basis. We propose
that EPs may participate in the pilot on a voluntary basis, and that
those EPs who choose not to participate may instead continue to attest
to the results of the CQMs as calculated by certified EHR technology,
consistent with the CQM reporting method for the 2011 payment year.
However, we encourage participation in the pilot based on our desire to
adequately pilot electronic submission of CQMs and to move to a system
of reporting where EPs can satisfy the CQM reporting requirements for
both the Physician Quality Reporting System and the EHR Incentive
Program. To participate in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot, we propose that EPs would be required to
electronically report the CQMs using certified EHR technology via one
of two options that are based on the existing reporting platforms of
the Physician Quality Reporting System. As described later in this
section, one option would be based on the infrastructure used for the
Physician Quality Reporting System EHR data submission vendor reporting
mechanism. The second option would be based on the infrastructure used
for the Physician Quality Reporting System EHR reporting mechanism. EPs
who seek to participate in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot must also participate in the Physician
Quality Reporting System itself, because the pilot will rely on the
infrastructure used for Physician Quality Reporting System.
To move towards the integration of reporting on quality measures
under the Physician Quality Reporting System with the reporting
requirements of the Medicare EHR Incentive Program, as required by
section 1848(m)(7) of the Act (``Integration of Physician Quality
Reporting and EHR Reporting''), we propose that participation in the
Physician Quality Reporting System-Medicare EHR Incentive Pilot would
require EPs to submit information on the same CQMs that were adopted
for EPs for the Medicare EHR Incentive Program and included in Tables 6
and 7 of the July 28, 2010 final rule (75 FR 44398 through 44410). We
propose that EPs participating in this pilot must submit information on
the three core measures included in Table 7, up to three of the
alternate core measures included in Table 7 insofar as the denominator
for one or more of the core measures is zero, and three additional
measures from the measures included in Table 6, as is otherwise
required by the final rule to successfully demonstrate meaningful use
(75 FR 44409 through 44411). EPs that elect to participate in this
Physician Quality Reporting System-Medicare EHR Incentive Pilot will
still be required to report information on the CQMs as required under
the Stage 1 criteria established for the Medicare EHR Incentive Program
regardless of which option they select as described later in this
section. As the reporting of CQMs is only one of the 15 core meaningful
use objectives for EPs for the Medicare EHR Incentive Program, an EP
who elects to participate in the proposed Physician Quality Reporting
System-Medicare EHR Incentive Pilot would still be required to meet and
attest to the remaining 14 core objectives and required menu set
objectives using the attestation module on the CMS Web site for the
program. Consequently, participation in this pilot only applies to the
method of reporting for meeting the meaningful use CQM objective in the
EHR Incentive Program (42 CFR 495.6(d)(10)).
To participate in the Physician Quality Reporting System-Medicare
EHR Incentive Pilot, we propose EPs would be required to electronically
report the CQMs by choosing one of the options described later in this
section. By submitting the required information through the pilot, an
EP could meet the core objective for reporting CQMs for the Medicare
EHR Incentive Program for the 2012 payment year. After attesting to all
other meaningful use objectives, the EP's attestation file would be
placed in a holding status, with respect to the CQM objective only,
until the EP reports the CQMs via one of the proposed Physician Quality
Reporting System-Medicare EHR Incentive Pilot options. Thus, the EP
would not know if he/she successfully met the requirements for the
Medicare EHR Incentive Program with respect to the CQM objective until
the CQMs are received at the end of the submission period for measures
for the Physician Quality Reporting System (we expect this would be 2
months after the close of the reporting period, which is the CY 2012,
and no later than February 29, 2013). As explained later in this
section, any EP participating in this pilot would be required to report
CQMs based on a full calendar year, regardless

[[Page 42901]]

of the EP's year of participation in the Medicare EHR Incentive
Program.
If the EP who selects one of the pilot options subsequently
determines completion of the pilot is unfeasible, then we propose it is
permissible for the EP to go back into the Medicare EHR Incentive
Program attestation module on the CMS Web site and complete attestation
for the CQMs assuming it is within the reporting timeframes established
under the EHR Incentive Program. We note that EPs who are in their
first year of participation in the EHR Incentive Program and choose to
participate in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot only will have their EHR incentive payments delayed
until the data submitted under the Pilot has been analyzed. However,
participation in this Physician Quality Reporting System-EHR Incentive
Pilot will allow for the receipt of EHR Incentive Program and Physician
Quality Reporting System incentives, provided an EP meets the
provisions described later in this section.
a. EHR Data Submission Vendor-Based Reporting Option
As discussed further in the Physician Quality Reporting System
section IV.F.1(d).(3).(b). of this proposed rule, EPs participating in
the Physician Quality Reporting System may choose to report the
Physician Quality Reporting System measures to CMS via a Physician
Quality Reporting System qualified EHR data submission vendor. For
purposes of the Physician Quality Reporting System, a Physician Quality
Reporting System qualified EHR data submission vendor would receive
data from an EP's EHR and subsequently reformat and transmit the data
on behalf of the EP to CMS. Under this reporting option, we propose
that an EP participating in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot would submit CQM data from his or her
certified EHR technology to a Physician Quality Reporting System
qualified EHR data submission vendor. We expect to post a list of the
2012 Physician Quality Reporting System EHR data submission vendors
that are qualified to submit data from an EP's certified EHR technology
to CMS on the EP's behalf on the Physician Quality Reporting System
section of the CMS Web site (http://www.cms.gov/pqrs) by summer 2012.
Under this option, the Physician Quality Reporting System qualified
EHR data submission vendor would obtain data elements for the
calculation of CQMs from the EP's certified EHR technology and then
submit the calculated results to CMS on the EP's behalf via a secure
portal. As discussed previously, in order for an EP to submit CQMs
electronically through the Physician Quality Reporting System-Medicare
EHR Incentive Pilot EHR data submission vendor-based reporting option,
we propose that such EPs must submit information on the same CQMs as
required by the July 28, 2010 final rule, which must be based on data
contained in the EP's certified EHR technology. However, it would be
sufficient for an EP participating in this EHR data submission vendor-
based reporting option to submit CQM data as required by the pilot even
though such data would differ from what is required by the July 28,
2010 final rule in the following two respects: (1) The data would be
limited to Medicare patients rather than all patients, and (2) the data
would be based on a CQM reporting period of 1-calendar year regardless
of which year of participation in the Medicare EHR Incentive Program
the EP is in (resulting in a later determination of whether the EP has
successfully demonstrated meaningful use, for those EPs in their first
year of program participation). We invite comment on the proposed EHR
data submission vendor-based reporting option under the Physician
Quality Reporting System-Medicare EHR Incentive Pilot.
b. EHR-Based Reporting Option
As discussed further in the Physician Quality Reporting System
section IV.F.1.(d).(3).(a). of this proposed rule, EPs participating in
the Physician Quality Reporting System via the EHR reporting mechanism
can choose to report the Physician Quality Reporting System measures to
CMS directly from the EP's EHR. Therefore, under this EHR-Based
reporting option, we propose that an EP participating in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot would submit CQM
data directly from his or her certified EHR technology to CMS via a
secure portal using the infrastructure of the Physician Quality
Reporting System EHR reporting mechanism. We propose that in order to
participate in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot under this option, the EP's certified EHR technology
must also be a 2012 Physician Quality Reporting System qualified EHR.
We expect to post a list of the 2012 Physician Quality Reporting System
qualified EHRs on the Physician Quality Reporting System section of the
CMS Web site prior to January 1, 2012. Due to this proposed Physician
Quality Reporting System-Medicare EHR Incentive Pilot, we are proposing
to have an additional vetting process for EHR vendors wishing to
participate in the Pilot. We expect to post an additional list of these
additional 2012 qualified EHR vendors, if applicable, and their
products in the summer of 2012.
As discussed previously, in order for an EP to submit CQMs
electronically through the Physician Quality Reporting System-Medicare
EHR Incentive Pilot EHR-Based reporting option, we propose that such
EPs must submit information on the same CQMs as required by the July
28, 2010 final rule, which must be based on data contained in the EP's
certified EHR technology. That is, EPs participating in this pilot must
submit information on the three core measures included in Table 7, up
to three of the alternate core measures included in Table 7 insofar as
the denominator for one or more of the core measures is zero, and three
additional measures from the measures included in Table 6, as is
otherwise required by the final rule to successfully demonstrate
meaningful use. If the EP cannot report three additional measures
without zero denominators, the EP must report on all applicable
measures (that is, 1 or 2 measures) and attest that all remaining
measures have zero denominators. However, as with the EHR data
submission vendor-based reporting option, the data would be different
from what is required by the July 28, 2010 final rule in that it would
be: (1) Limited to Medicare patients rather than all patients; (2)
patient-level data from which we may calculate CQM results using a
uniform calculation process, rather than aggregate results calculated
by the EP's certified EHR technology; and (3) based on a CQM reporting
period of 1 calendar year regardless of the EP's year of participation
in the Medicare EHR Incentive Program (resulting in a later
determination of whether the EP has successfully demonstrated
meaningful use, for those EPs in their first year of program
participation). We invite comment on the proposed EHR-Based reporting
option under the Physician Quality Reporting System-Medicare EHR
Incentive Pilot.
In addition, as discussed in the Physician Quality Reporting System
section of this proposed rule, we propose if an EP successfully submits
all required CQM data from certified EHR technology, which also must be
a Physician Quality Reporting System qualified EHR product, directly to
CMS, then the EP would also meet the criteria for satisfactory
reporting under the 2012 Physician Quality Reporting System, which
would also qualify the EP under

[[Page 42902]]

the 2012 Physician Quality Reporting System.
The Medicare EHR Incentive Program measures, including the core and
alternate core measures, and the 38 additional measures, are specified
in the Physician Quality Reporting System's Table 31 of this proposed
rule. It should be noted that while the EP is required to use certified
EHR technology, the electronic submission format used for this pilot is
not a functionality of certified EHR technology. Rather, for purposes
of the pilot, the certified EHR technology must conform to the
qualifications for an EHR under the Physician Quality Reporting System.
3. Method for EPs To Indicate Election To Participate in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot for Payment Year
2012
EPs electing to participate in the Physician Quality Reporting
System-Medicare EHR Incentive Pilot would be able to indicate their
intent to fulfill the CQM objective by participating in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot under the EHR
Incentive Program attestation module. The EHR Incentive Program
attestation module is available on the CMS Web site at https://www.cms.gov/EHRIncentivePrograms/32_Attestation.asp#TopOfPage.

I. Improvements to the Physician Feedback Program and Establishment of
the Value-Based Payment Modifier (Effect of Sections 3003 and 3007 of
the Affordable Care Act on the Program)

1. Overview
The requirements of the Physician Feedback Program, in section
1848(n) of the Act, as amended by section 3003(a) of the Affordable
Care Act, and the value-based payment modifier (``value modifier''),
under section 1848(p) of the Act, as added by section 3007 of the
Affordable Care Act, mutually reinforce our goal to provide physicians
with fair, actionable and meaningful information concerning resource
use and quality regarding their Medicare fee-for-service patients. We
view value-based purchasing (``VBP'') as an important step toward
revamping not only how care and services are paid for, but also moving
increasingly toward rewarding better value, outcomes and innovations
instead of volume. The approach used this year and that we anticipate
using in future years for the Physician Feedback reports will serve as
the testing basis to develop and implement the value modifier, which
will be applied to certain physicians and physician groups under the
physician fee schedule starting in 2015.
In 2011, we will begin to include the quality measures that are
reported in the Physician Quality Reporting System in the Physician
Feedback reports. Aligning quality measures reduces potential program
inconsistencies, ensures we do not measure the same clinical process or
outcome using different data sources or methodologies, and does not
place new reporting burdens on physicians. For physicians who
participate in the Physician Quality Reporting System, it also
identifies clear and consistent opportunities for improvement, because
the Feedback reports will show how their performance compares to their
peers on the same quality measures.
Under section 1848(p)(4)(B) of the Act, we are required to begin
implementing the value modifier through the rulemaking process during
2013, so that it is ready for application to specific physicians and
groups of physicians under the physician fee schedule in 2015. We
expect the value modifier to evolve after its initial application in
2015. We anticipate that information we have obtained from the
Physician Feedback reports, our efforts to learn from and build upon
the best transparent practices and methodologies developed in the
private sector, and our continued and sustained dialogue with the
physician and patient communities will yield significant improvements
to the development of the value modifier. We plan to move forward with
substantial input from physicians and experts as we continue to develop
and implement these programs.
2. Background
As required under section 1848 (n) of the Act, as added by section
131(c) of the Medicare Improvements for Patients and Providers Act and
amended by section 3003(a) of the Affordable Care Act, we established
and implemented by January 1, 2009, the Physician Resource Use
Measurement & Reporting Program (now referred to as the Physician
Feedback Program) (74 FR 61844). The purpose of the Physician Feedback
Program is to provide confidential reports to physicians that measure
the resources involved in furnishing care to Medicare beneficiaries.
Section 1848(n) of the Act also authorized us to include information on
the quality of care furnished to Medicare beneficiaries by a physician
or group of physicians. We have completed two phases of Physician
Feedback reports and, by the end of 2011, we intend to implement Phase
III of the Physician Feedback Program, by providing reports on both
resource use and quality measures that cover a larger number and
increased breadth of physicians and groups of physicians.
Phase I was discussed in the CY 2010 PFS proposed and final rules
(74 FR 33589 and 74 FR 61844, respectively). In Phase I, we sent to
several hundred individual practicing physicians in 12 geographic areas
reports that contained per capita and episode-based cost information
based on 2007 claims.\1\ In creating these reports, we assessed patient
attribution models and risk adjustment methodologies. We also tested
various report designs with practicing physicians.
---------------------------------------------------------------------------

\1\ The 12 geographic areas are: Boston, MA, Syracuse, NY,
Northern New Jersey, Greenville, SC, Miami, FL, Little Rock, AR,
Indianapolis, IN, Cleveland, OH, Lansing, MI, Phoenix, AZ, Seattle,
WA, and Orange County, CA.
---------------------------------------------------------------------------

In Phase II of the Physician Feedback Program, we expanded on Phase
I by providing reports that included quality measures for both
individual and groups of physicians in the same 12 geographic areas
using the same 2007 claims data. (Phase II was discussed in the CY 2011
PFS proposed and final rules 75 FR 40113 and 75 FR 73377,
respectively). The quality measures used were the claims-based measures
developed by us in the Generating Medicare Physician Quality
Performance Measurement Results (GEM) project (74 FR 61846).\2\ This
initial core set of 12 quality measures was a first step to provide
sufficient quality information to allow peer group comparisons. These
measures were calculated using administrative claims data and did not
require physicians to submit additional quality data. The measures
captured several chronic conditions that are prevalent in the Medicare
population and could be applied to all eligible physicians, although
the measures were most applicable to primary care physicians.
---------------------------------------------------------------------------

\2\ http://www.cms.gov/GEM.
---------------------------------------------------------------------------

Phase II reports contained total per capita cost information, as
well as total per capita cost information for those beneficiaries with
the following five common chronic diseases: (1) Diabetes; (2)
congestive heart failure; (3) coronary artery disease; (4) chronic
obstructive pulmonary disease; and (5) prostate cancer. This
information was not limited to the cost of treating the disease itself,
but also included total Parts A and B per capita cost information, as
well as service category breakdowns, for the care received by the
subset of attributed beneficiaries with that disease. Phase II reports
did not include episode-specific cost information (as we had included
in the Phase I reports),

[[Page 42903]]

because we found that the two commercially available proprietary
groupers, which were not built for use with Medicare claims data, did
not work well to create episodes for the significant number of Medicare
beneficiaries with multiple chronic conditions (75 FR 73378).
We provided Phase II reports to 36 group practices and
approximately 1,650 individual physicians who were members of these
practices in the 12 geographic areas identified in Phase I. A group was
defined as a single provider entity, identified by its tax
identification number (TIN), which served at least 5,000 Medicare
beneficiaries and in which at least one primary care physician and at
least one medical specialist or surgeon in the group billed for
Evaluation and Management (E/M) Medicare services. The use of group
reports allowed for more robust comparisons on a fuller set of quality
measures, because the groups were more likely to have sufficient number
of cases to calculate each measure.
We used a ``single-provider plurality-minimum \3\'' method to
attribute beneficiaries to the 36 group practices and the individual
physicians. This method was based on the highest number of E/M services
furnished by an individual physician and a minimum threshold of 20
percent of E/M costs.\4\ Attribution of a beneficiary to a group
practice was based on the group practice that provided the plurality of
E/M services and a minimum threshold of 30 percent of E/M costs. For
both individuals and groups, we required at least 30 beneficiaries to
be assigned to either the individual or the group practice.\5\ Seventy
percent of eligible beneficiaries were attributed to an individual
physician or group practice. These beneficiaries accounted for 53
percent of total Parts A and B costs but covered only 30 percent of
individual physicians.
---------------------------------------------------------------------------

\3\ Under a ``single-provider plurality-minimum'' attribution
method, a beneficiary is attributed to the one physician who
furnished the plurality of the beneficiary's E/M services during the
year so long as that physician billed at least 20 percent of the
beneficiary's E/M allowed charges for the year. If a beneficiary did
not receive the plurality of services from the same physician that
met the 20 percent minimum, the beneficiary was not assigned to a
physician. For a more detailed discussion of methodology issues, see
the Detailed Methodology Specification, available at https://www.cms.gov/PhysicianFeedbackProgram/Downloads/2010_QRUR_Detailed_Methodology.pdf.
\4\ Costs refer to allowed charges for Part A and B services.
\5\ We chose 30 beneficiaries because this threshold is commonly
used for attribution purposes.
---------------------------------------------------------------------------

Our data analysis showed that the single-provider plurality-minimum
rule generally assigned Medicare beneficiaries correctly to primary
care physicians including internists, geriatricians, family
practitioners, and general practitioners. However, this rule did not
work well to attribute beneficiaries with multiple conditions that see
a variety of physicians, because a single physician was unlikely to
have both provided the plurality of E/M visits and to have also
accounted for 20 percent of E/M costs.
As in Phase I, we price standardized the cost data to adjust for
geographic differences. We also employed the same method of risk
adjustment for per capita costs as we use in the Medicare Advantage
(MA) program; that is, the hierarchal condition category (HCC) model
for the cost data.\6\ We did not risk-adjust the quality data included
in Phase II, because the GEM measures are all clinical process
measures, measure specifications provided detailed inclusion/exclusion
criteria, and it is generally accepted that these measures need not be
risk adjusted.
---------------------------------------------------------------------------

\6\ For more information about hierarchal condition categories
model, see https://www.cms.gov/MedicareAdvtgSpecRateStats/downloads/Evaluation_Risk_Adj_Model_2011.pdf.
---------------------------------------------------------------------------

The individual-level reports in both phases of the program
contained two peer group comparisons: (1) Physicians in the same
specialty in the same geographic area; and (2) physicians in the same
specialty across all 12 geographic areas. Peer group comparisons were
made for both measures of cost and quality. We imposed a minimum peer
group size of 30 physicians in Phase II for each of the cost and
quality measures to ensure the group comparisons were credible to the
physicians being compared. For the per capita cost measures, the
physician was shown his or her position in a distribution that
specifically identified the 10th, 50th, and 90th percentiles of
performance.
3. Future Considerations for Phase III Physician Feedback Program
a. Phase III Physician Feedback Reports (Fall 2011)
Based on the experience gained so far and our plan to provide
reports to a greater number and percentage of physicians, we intend to
increase production and dissemination of Physician Feedback reports. In
2011, we are examining several approaches to developing and
disseminating reports based on our 2010 experience. We believe that
many of the issues we address in these reports will assist us as we
begin to implement the value modifier in 2013.
We anticipate using quality measures reported in the Physician
Quality Reporting System in the Physician Feedback reports this year.
We further believe that use of these measures will begin to reduce
potential program inconsistencies, ensure we do not measure the same
clinical process or outcome using different data sources or
methodologies, and not place new reporting burdens on physicians. In
addition, elsewhere in this proposed rule, we are proposing to align
the quality measures in the Physician Quality Reporting System with the
Electronic Health Records incentive program quality measures. We seek
comment on using the performance data in the Physician Quality
Reporting System in the Physician Feedback program and on other issues
discussed below that could help inform future phases of the Physician
Feedback program.
(1) Physician Group Reports
We intend to create physician feedback reports for the 35 large
medical group practices (each with 200 or more physicians) that chose
to participate in the Physician Quality Reporting System Group Practice
Reporting Option (GPRO-1) in 2010. We specifically chose these medical
groups, because they could be compared on the common set of 26 quality
measures included in the GPRO-1 reporting tool. The reports will be e-
mailed to each group. We anticipate scheduling outreach and feedback
sessions following dissemination of these reports to garner physician
reaction to the information contained in the reports and elicit
physician input on ways to increase their utility in future years.
The resource use portion of these reports will present summary
information based on 2010 Medicare Parts A and B paid claims for all
Medicare providers paid under the PFS who treated patients attributed
to a participating medical practice group. This information will allow
each group to compare its per capita Medicare costs to the per capita
Medicare costs attributed to all 35 medical practice groups that
participated in the 2010 GPRO-1 cohort. In addition, the report will
show each medical group its average per capita costs for various types
of fee-for-service patient services. The reports will also display
group-specific data on per capita costs and hospital utilization of
patients who have chronic conditions such as diabetes, heart failure,
COPD, and coronary artery disease. Data in these reports will be risk
adjusted and price standardized in a similar manner to the Phase II
reports.

[[Page 42904]]

The quality portion of these reports will present the group's
performance on each of the 26 quality measures included in the
Physician Quality Reporting System 2010 GPRO-1 reporting option. It
will also show the average rate of preventable hospital admissions (for
which a lower rate is better) for six ambulatory care-sensitive
conditions: Diabetes, bacterial pneumonia, dehydration, chronic
obstructive pulmonary disease (COPD), urinary tract infection, and
congestive heart failure. The information presented will also allow
each group to compare its performance to the performance of all of the
35 medical practice groups that participated in the 2010 GPRO-1 cohort.
(2) Reports to Individual Physicians
Late in 2011, we also intend to disseminate Physician Feedback
reports to physicians paid under the PFS within four states: Iowa,
Kansas, Missouri, and Nebraska. We choose these four states because the
Medicare Administrative Contractor (MAC) serving these states can
assist us in e-mailing these reports to a substantial number of
physicians because of its robust electronic communications
infrastructure. There are approximately 56,000 physicians in these four
states. We realize, however, that we will not produce reports for all
of these physicians, because some portion of the total will not have
sufficient numbers of fee-for-service Medicare patients to qualify for
a report based on the attribution rules we use. As discussed later in
this section, we are examining which attribution rules to apply to
these individual reports.
Individual physicians in these four States who satisfactorily
reported data on quality measures under the Physician Quality Reporting
System will receive a report that includes their performance on these
quality measures. In addition, individual reports will display clinical
quality measures that are derived from Medicare claims for all
physicians in these four States. We used an internal multi-step process
among our medical officers (who represent a variety of medical
specialties) and other internal experts to identify these claims-based
quality measures. Our medical officers and internal experts thoroughly
reviewed over 70 claims-based National Quality Forum-endorsed measures
and ultimately recommended 28 claims-based clinical measures to include
in the 2011 individual physician reports. These measures include the 12
HEDIS measures that CMS included in the 2010 reports. Use of these 28
measures in the 2011 reports will allow us to have a sufficient number
of cases to make peer group comparisons, which we believe are a
critical component of the Physician Feedback program. The claims-based
clinical measures for the 2011 individual physician feedback reports
are displayed in Table 61 and additional information on these measures
is available at: http://www.cms.gov/physicianfeedbackprogram/.

Table 61--Claims-Based Measures for the 2011 Individual Physician Feedback Reports
----------------------------------------------------------------------------------------------------------------
Measure title and NQF measure No. or measure steward
Measure No. description * Source of data
----------------------------------------------------------------------------------------------------------------
1................... Acute Myocardial 0071.............................. Administrative Claims.
Infarction (AMI):
Persistence of
Beta-Blocker
Treatment After a
Heart Attack.
Percentage of
patients age 18
years and older
during the
measurement year
who were
hospitalized and
discharged alive
with a diagnosis
of acute
myocardial
infarction (AMI)
and who received
persistent beta-
blocker treatment
for six months
after discharge.
2................... Use of Spirometry 0577.............................. Administrative Claims.
Testing in the
Assessment and
Diagnosis of COPD).
Percentage of
patients at least
40 years old who
have a new
diagnosis or newly
active chronic
obstructive
pulmonary disease
(COPD) who
received
appropriate
spirometry testing
to confirm the
diagnosis.
3................... Antidepressant 0105.............................. Administrative Claims.
Medication
Management: (a)
Effective Acute
Phase Treatment.
Percentage of
patients who were
diagnosed with a
new episode of
depression and
treated with
antidepressant
medication and who
remained on an
antidepressant
drug during the
entire 84-day
Acute Treatment
Phase.
(b) Effective
Continuation Phase
Treatment.
Percentage of
patients who were
diagnosed with a
new episode of
depression and
treated with
antidepressant
medication and who
remained on an
antidepressant
drug for at least
180 days.
4................... Follow-Up After 0576.............................. Administrative Claims.
Hospitalization
for Mental Illness.
Percentage of
discharges for
patients who were
hospitalized for
treatment of
selected mental
health disorders
and who had an
outpatient visit,
an intensive
outpatient
encounter, or
partial
hospitalization
with a mental
health
practitioner.
Two rates are
reported:
Rate 1: Percentage
of patients who
received follow-up
within 30 days of
discharge.
Rate 2: Percentage
of patients who
received follow-up
within 7 days of
discharge.
5................... Osteoporosis 0053.............................. Administrative Claims.
management in
women who had a
fracture.
Percentage of women
67 years and older
who suffered a
fracture and who
had either a bone
mineral density
(BMD) test or
prescription for a
drug to treat or
prevent
osteoporosis in
the six months
after the date of
fracture.
6................... Use of High-Risk 0022.............................. Administrative Claims.
Medications in the
Elderly: (a)
Patients Who
Receive At Least
One Drug To Be
Avoided.
Percentage of
patients ages 65
years and older
who received at
least one high-
risk medication in
the measurement
year.
(b) Patients Who
Receive At Least
Two Different
Drugs To Be
Avoided.

[[Page 42905]]

Percentage of
patients 65 years
of age and older
who received at
least two
different high-
risk medications
in the measurement
year.
7................... Potentially Harmful National Committee for Quality Administrative Claims.
Drug-Disease Assurance (NCQA).
Interactions in
the Elderly.
Percentage of
Medicare patients
65 years of age
and older who have
evidence of an
underlying
disease, condition
or health concern
and who were
dispensed an
ambulatory
prescription for a
contraindicated
medication,
concurrent with or
after the
diagnosis.
Report each of the
three rates
separately and as
a total rate:
Rate 1: A history
of falls and a
prescription for
tricyclic
antidepressants,
antipsychotics or
sleep agents.
Rate 2: Dementia
and a prescription
for tricyclic
antidepressants or
anticholinergic
agents.
Rate 3: Chronic
renal failure
(CRF) and
prescription for
nonaspirin NSAIDs
or Cox-2 Selective
NSAIDs.
Total rate: The sum
of the three
numerators divided
by the sum of the
three denominators.
8................... International 0556.............................. Administrative Claims.
Normalized Ration
(INR) for
Beneficiaries
Taking Warfarin
and Interacting
Anti-Infective
Medications.
Percentage of
episodes with an
INR test performed
3 to 7 days after
a newly-started
interacting anti-
infective
medication for
Part D
beneficiaries
receiving warfarin.
9................... Appropriate Follow- 0568.............................. Administrative Claims.
Up for Patients
with HIV.
Percentage of
patients diagnosed
with HIV who
received a CD4
count and an HIV
RNA level
laboratory test in
the 6 months
following
diagnosis.
10.................. Ischemic Vascular 0075.............................. Administrative Claims.
Disease (IVD):
Complete Lipid
Profile.
Percentage of
patients 18 years
of age and older
who were
discharged alive
for acute
myocardial
infarction (AMI),
coronary artery
bypass graft
(CABG) or
percutaneous
coronary
interventions
(PCI) from January
1-November 1 of
the year prior to
the measurement
year, or who had a
diagnosis of
ischemic vascular
disease (IVD)
during the
measurement year
and the year prior
to measurement
year, who had a
complete lipid
profile during the
measurement year.
11.................. Breast Cancer-- 0623.............................. Administrative Claims.
Cancer
Surveillance.
Percentage of
female patients 18
and older with
breast cancer who
had breast cancer
surveillance in
the past 12 months.
12.................. Prostate Cancer-- 0625.............................. Administrative Claims.
Cancer
Surveillance.
Percentage of males
with prostate
cancer that have
had their PSA
monitored in the
past 12 months.
13.................. Diabetes: Eye Exam. 0055.............................. Administrative Claims.
Percentage of adult
patients with
diabetes aged 18-
75 years who
received a dilated
eye exam by an
ophthalmologist or
optometrist during
the measurement
year, or had a
negative retinal
exam (no evidence
of retinopathy) by
an eye care
professional in
the year prior to
the measurement
year.
14.................. Diabetes: 0057.............................. Administrative Claims.
Hemoglobin A1c
Testing.
Percentage of adult
patients with
diabetes aged 18-
75 years receiving
one or more A1c
test(s) per year.
15.................. Diabetes: Medical 0062.............................. Administrative Claims.
Attention for
Nephropathy.
Percentage of adult
diabetes patients
aged 18-75 years
with at least one
test nephropathy
screening test
during the
measurement year
or who had
evidence existing
nephropathy
(diagnosis of
nephropathy or
documentation of
microalbuminuria
or albuminuria).
16.................. Diabetes: LDL-C NCQA.............................. Administrative Claims.
Screening.
Percentage of adult
patients with
diabetes aged 18-
75 who had an LDL-
C test performed
during the
measurement year.
17.................. Pharmacotherapy 0549.............................. Administrative Claims.
Management of COPD
Exacerbation.
Percentage of
chronic
obstructive
pulmonary disease
(COPD)
exacerbations for
patients 40 years
of age and older
who had an acute
inpatient
discharge or ED
encounter between
January 1-November
30 of the
measurement year
and were dispensed
appropriate
medications.
Two rates are
reported:
Rate 1: Dispensed a
systemic
corticosteroid
within 14 days of
the event.
Rate 2: Dispensed a
bronchodilator
within 30 days of
the event.
Note: The eligible
population for
this measure is
based on acute
inpatient
discharges and
emergency
department (ED)
visits, not on
patients; it is
possible for the
denominator to
include multiple
events for the
same individual.

[[Page 42906]]

18.................. Arthritis: Disease 0054.............................. Administrative Claims.
Modifying
Antirheumatic Drug
(DMARD) Therapy in
Rheumatoid
Arthritis.
Percentage of
patients 18 years
and older,
diagnosed with
rheumatoid
arthritis who have
had at least one
ambulatory
prescription
dispensed for a
DMARD.
19.................. Coronary Artery 0543.............................. Administrative Claims.
Disease and
Medication
Possession Ratio
for Statin Therapy.
Medication
Possession Ratio
(MPR) for statin
therapy for
individuals over
18 years of age
with coronary
artery disease.
Rate 1: Percentage
of patients who
are prescribed
statin therapy in
the measurement
year.
Rate 2: Average
Medication
Possession Ratio
(MPR) of patients
in the measurement
year (MPR = the
days supply of
medication divided
by the number of
days in the
measurement
period).
Rate 3: The
percentage of
patients with MPR
>= 0.80 in the
measurement year.
20.................. Therapeutic 0021.............................. Administrative Claims.
Monitoring: Annual
Monitoring for
Patients on
Persistent
Medications.
Percentage of
patients 18 years
of age and older
who received at
least 180
treatment days of
ambulatory
medication therapy
for a select
therapeutic agent
during the
measurement year
and at least one
therapeutic
monitoring event
for the
therapeutic agent
in the measurement
year.
Report each of the
four rates
separately and as
a total rate:
Rate 1: Annual
monitoring for
patients on
angiotensin
converting enzyme
(ACE) inhibitors
or angiotensin
receptor blockers
(ARB).
Rate 2: Annual
monitoring for
patients on
digoxin.
Rate 3: Annual
monitoring for
patients on
diuretics.
Rate 4: Annual
monitoring for
patients on
anticonvulsants.
Total Rate: The sum
of the four
numerators divided
by the sum of the
four denominators.
21.................. Deep Vein 0581.............................. Administrative Claims.
Thrombosis
Anticoagulation At
Least 3 Months.
Percentage of
patients diagnosed
with a lower
extremity DVT more
than 3 months
prior to the end
of the measurement
year (who do not
have
contraindications
to warfarin
therapy and who do
not have an IVC
filter in the 90
days after the
onset of PE) who
had at least 3
months of
anticoagulation
after the event or
patients showing
compliance with
anticoagulation
therapy as
indicated by a
Home PT Monitoring
device or multiple
instances of
prothrombin time
testing over the 3-
month period.
22.................. Pulmonary Embolism 0593.............................. Administrative Claims.
Anticoagulation At
Least 3 Months.
Percentage of
patients diagnosed
with a PE more
than 3 months
prior to the end
of the measurement
year (who do not
have
contraindications
to warfarin
therapy and who do
not have an IVC
filter in the 90
days after the
onset of PE) who
had at least 3
months of
anticoagulation
after the event or
patients showing
compliance with
anticoagulation
therapy as
indicated by a
Home PT Monitoring
device or multiple
instances of
prothrombin time
testing over the 3-
month period.
23.................. Monthly INR 0555.............................. Administrative Claims.
Monitoring for
Beneficiaries on
Warfarin.
Average percentage
of 40-day
intervals in which
Part D
beneficiaries with
claims for
warfarin do not
receive an INR
test during the
measurement period.
24.................. Steroid Use-- 0614.............................. Administrative Claims.
Osteoporosis
Screening.
Percentage of
patients, 18 and
older, who have
been on chronic
steroids for at
least 180 days in
the past 9 months
and who had a bone
density evaluation
or osteoporosis
treatment.
25.................. Appropriate Work-Up 0567.............................. Administrative Claims.
Prior To
Endometrial
Ablation Procedure.
Percentage of women
who had an
endometrial
ablation procedure
during the
measurement year
who received
endometrial
sampling or
hysteroscopy with
biopsy during the
previous year.
26.................. Breast Cancer 0031.............................. Administrative Claims.
Screening.
Percentage of
eligible women 40-
69 who receive a
mammogram in
during the
measurement year
or in the year
prior to the
measurement year.
27.................. Hepatitis C: Viral 0584.............................. Administrative Claims.
Load Test.
Percentage of
patients 18 years
or older with
Hepatitis C (HCV)
who began HCV
antiviral therapy
during the
measurement year
and had HCV Viral
Load testing prior
to initiation of
antiviral therapy.
28.................. Dyslipidemia New 0583.............................. Administrative Claims.
Medication 12-Week
Lipid Test.

[[Page 42907]]

Percentage of
patients age 18 or
older starting
lipid-lowering
medication during
the measurement
year who had a
lipid panel
checked within 3
months after
starting drug
therapy.
----------------------------------------------------------------------------------------------------------------
* The NQF measure number is reported unless the measure is not NQF-endorsed, in which case the measure steward
is reported.

The individual reports will not contain the average rate of
preventable hospital admissions for the six ambulatory care-sensitive
conditions identified above because these measures are not specified at
the individual physician level at this time.
We again plan to display resource use measures that reflect average
per capita cost for a given physician's Medicare patients. In addition
to comparing average per capita costs of one physician's patients to
the average per capita costs of his/her peers' patients, the reports
will compare total per capita costs for patients with the following
chronic conditions: Heart failure, chronic pulmonary obstructive
disease (COPD), diabetes, and coronary artery disease.
b. Refinement of the Physician Feedback Program in 2011: Individual
Physicians/Medical Group Practices/Specialties
As stated in the CY 2011 PFS proposed rule, deciding which
physician(s) is/are responsible for the care of which beneficiaries is
an important aspect of measurement (75 FR 40115). When attributing
beneficiary cost information to physicians, we must balance between
costs for delivered services that are within the physician's control
and costs for delivered services that are not within their control. We
recognize that attribution rules have the potential to alter incentives
regarding how physicians coordinate and deliver care to beneficiaries
and seek to encourage better care coordination and accountability for
patient outcomes. In addition, determining how to make relevant
comparisons of physicians to a standard or to their peers is also an
important policy aspect of the Physician Feedback Program. In light of
these issues, we are engaging in the efforts described below to help
inform how to develop and produce this and future year's reports.
First, we are examining alternative attribution methods that would
allow more Medicare beneficiaries to be matched to physicians for
purposes of assessing the quality of care furnished and the associated
resources. We plan to explore broader attribution models than we used
in last year's Physician Feedback reports, in which beneficiaries were
attributed to physicians/groups based on E/M services and a minimum
cost threshold. Cost of service rules, for example, may better apply to
physicians who commonly furnish surgical procedures or interventions,
especially those that are high volume and/or high cost. We anticipate
combining this effort with work to identify quality measures
appropriate to the practices of these specialists. We recognize that
characteristics of physicians and the scope of their medical practices
vary far more than those of other provider types such as hospitals,
home health agencies, and nursing homes and, thus, we want to ensure we
develop sound attribution rules that recognize these variations and are
appropriate for physicians.
We also are planning to investigate stratifying physicians by
specialty and by the conditions they treat, which would allow both cost
and clinical measures to reflect procedures and services that best
portray physician practice patterns.
Second, we intend to examine whether to provide reports to groups
of physicians who submit Medicare claims under a single tax
identification number (TIN) to see if we can provide feedback reports
that cover more physicians. TIN-level reporting may prove useful in
situations where individual physicians have too few of some types of
patients to allow for accurate reporting of cost measures or certain
quality measures.
We seek comment on these and any other issues to ensure that the
future Physician Feedback reports provide meaningful and actionable
information.
c. Beyond 2011: Future Scale Up and Dissemination for Increased
Physician Feedback Reporting
In CY 2012, we expect to expand dissemination of reports to cover
100,000 physicians nationally. In 2012, we expect to be able to
evaluate whether leveraging the quality measures in the Physician
Quality Reporting System will help achieve this goal. We recognize that
our current inventory of quality measures, both claims-based and those
used in the 2010 GPRO-1 quality measures, best covers primary care
practitioners including family physicians, general practitioners,
internists, geriatricians, and related medical non-procedural
specialists. As the scope of measures, including outcomes, in the
Physician Quality Reporting System increases and as more physicians
report measures, we expect to be able to provide meaningful and
actionable quality information to an increasing number of physicians.
This increased participation will increase the breadth of Medicare
physicians for whom Physician Feedback reports can be created.
Second, section 1848(n)(9)(A) of the Act, as added by section 3003
of the Affordable Care Act, requires the development, by not later than
January 1, 2012, of a Medicare-specific episode grouper so that
physicians can be compared on episode-based costs of care. The episode
grouper will require further testing and refinement in order to see how
well it integrates with other parameters, such as attribution and
benchmarking, before it can be fully operational. The episode grouper
is being developed to determine episode-based costs for a subset of
selected high cost, high volume conditions for Medicare beneficiaries,
including six of the following nine conditions: Hip fracture/hip
replacement; pneumonia; heart attack; coronary artery disease; asthma;
COPD; stroke; diabetes; and heart failure. Aspects of the episode
grouper could be applied, on a limited basis, in Physician Feedback
reports in 2012 or 2013, depending upon the testing and validation of
the methodology. Section 1848(n)(9)(A)(iv) of the Act requires that the
Secretary seek endorsement of the grouper by an entity with a contract
under section 1890(a) of the Act. Plans to secure this endorsement are
under development. We plan to make details of the Medicare grouper
publicly available as required by section 1848(n)(9)(A)(iii)) of the
Act.
In addition, we will continue to monitor developments regarding the
National Quality Forum's project regarding resource use measures.
Learning from this project is likely to help refine the next steps
related to the scale up of the Physician Feedback reports.

[[Page 42908]]

Lastly, we will pursue how best to incorporate the production and
dissemination of the feedback reports into the IT infrastructure of the
agency. For example, in this year's reports we plan to use the Medicare
Administrative Contractor to distribute the individual physician
reports by e-mail. It is our intent in future years to use other
mechanisms, such as a secure portal, for physicians to obtain and
review their reports. It is critical for us to plan for the very
significant, and ongoing, data and dissemination infrastructure that
must be built for us to provide feedback reports to all physicians paid
under the PFS.
As the science of quality measurement improves, attribution
methodologies mature, participation rates in our reporting programs
increase, and our IT infrastructure evolves, we will determine how best
to incorporate these advances into a better physician feedback program.
Furthermore, it is our intent to engage in continued dialogue with the
physician community about ways to improve these reports and their
dissemination.
4. The Value-Based Payment Modifier: Section 3007 of the Affordable
Care Act
Section 1848(p) of the Act, as added by Section 3007 of the
Affordable Care Act, requires the Secretary to ``establish a payment
modifier that provides for differential payment to a physician or a
group of physicians'' under the physician fee schedule ``based upon the
quality of care furnished compared to cost * * * during a performance
period.'' The provision requires that ``such payment modifier be
separate from the geographic adjustment factors'' established for the
physician fee schedule. We believe that this provision requires the
Secretary to establish a differential payment under the physician fee
schedule to reflect ``value,'' for example, the quality of care
compared to cost, and that the value modifier is independent from the
geographic adjustments applied under the fee schedule.
Section 1848(p)(4)(C) of the Act requires that the value modifier
be implemented in a budget-neutral manner. Budget neutrality means that
payments will increase for some physicians but decrease for others, but
the aggregate amount of Medicare spending in any given year for
physicians' services will not change as a result of application of the
value modifier. Over time, we expect that implementation of the value
modifier will lead to more efficient use of services.
Section 1848(p)(4)(A) and (B) of the Act establish the time frame
for implementation of the value modifier. Section 1848(p)(4)(B)(iii) of
the Act requires the Secretary to apply the value modifier beginning
January 1, 2015 to specific physicians and groups of physicians the
Secretary determines appropriate. This section also requires the
Secretary to apply the value modifier with respect to all physicians
and groups of physicians beginning not later than January 1, 2017.
Section 1848(p)(4) of the Act requires the Secretary to take a
series of steps, beginning not later than January 1, 2012, and leading
up to implementation of the value modifier on January 1, 2015. Section
1848(p)(4)(A) of the Act requires us to publish, not later than January
1, 2012, three items related to the establishment of the value
modifier: (a) The quality of care and cost measures established by the
Secretary for purposes of the modifier; (b) the dates for
implementation of the value modifier; and (c) the initial performance
period for application of value modifier in 2015.
Section 1848(p)(4)(B) of the Act requires the Secretary to begin
implementing the value modifier through the physician fee schedule
rulemaking process during 2013; this rulemaking would apply to value
modifier payment adjustments for 2015. Section 1848(p)(4)(B) of the Act
further requires the Secretary, to the extent practicable during the
initial performance period, to provide information to physicians and
physician groups about the quality of care furnished by the physician
or group of physicians to Medicare beneficiaries compared to cost.
The value modifier is an important component in revamping how care
and services are paid for under the physician fee schedule. Currently,
payments under the physician fee schedule are generally based on the
relative resources involved with furnishing each service, and adjusted
for differences in resource inputs among geographic areas. Thus, all
physicians in a geographic area are paid the same amount for individual
services regardless of the quality of care or outcomes of services they
furnish.
Although the fee schedule payments are or will soon be adjusted
depending upon whether eligible professionals are satisfactory
reporters of PQRS quality measures, successful electronic prescribers
and meaningful users of electronic health records (EHRs),\7\ these
adjustments do not currently take into account performance on these
quality measures. In addition, the fee schedule does not take into
account the overall cost of services furnished or ordered by physicians
for individual Medicare beneficiaries. These limitations mean that the
physician fee schedule does not contain incentives for physicians to
focus on: (1) The relative cost or value of each service they furnish
or order; (2) the cumulative cost of their own services and the
services that their beneficiaries receive from other providers; or (3)
the quality and outcomes of all the care furnished to beneficiaries.\8\
---------------------------------------------------------------------------

\7\ See, for example, section 1848(a)(8) of the Act, as added by
section 3002(b) of the Affordable Care Act; section 1848(a)(7)(A) of
the Act, as added by section Sec 4101 (b) of the HITECH Act.
\8\ Source: MedPAC, Report to the Congress: Reforming the
Delivery System, Chapter 1 (June 2008), available at: http://www.medpac.gov/documents/Jun08_EntireReport.pdf.
---------------------------------------------------------------------------

We note that Medicare is beginning to implement value-based payment
adjustments for other types of services. For example, recently, we
published a final rule to implement the hospital value-based purchasing
program that will affect hospitals beginning with FY 2013 discharges
(76 FR 26490). In addition, section 3006 of the Affordable Care Act
requires us to develop a plan to implement value-based purchasing
programs for skilled nursing facilities, home health agencies, and
ambulatory surgical centers. We view the physician value modifier as
the companion value-based payment mechanism for physicians.
In implementing value-based purchasing initiatives generally, we
seek to meet the following goals:
Improving quality.
++ Value-based payment systems and public reporting should rely on
a mix of standards, processes, outcomes, and patient experience
measures, including measures of care transitions and changes in patient
functional status. Across all programs, we seek to move as quickly as
possible to the use of outcome and patient experience measures. To the
extent practicable and appropriate, we believe these outcome and
patient experience measures should be adjusted for risk or other
appropriate patient population or provider characteristics.
++ To the extent possible, and recognizing differences in payment
system readiness and statutory requirements and authorities, measures
should be aligned across Medicare and Medicaid's public reporting and
payment systems. We seek to evolve a focused core set of measures
appropriate to each specific provider category that reflects the level
of care and the most

[[Page 42909]]

important areas of service and measures for that provider.
++ The collection of information should minimize the burden on
providers to the extent possible. As part of that effort, we will
continuously seek to align our measures with the adoption of meaningful
use standards for health information technology (HIT), so the
collection of performance information is part of care delivery.
++ To the extent practicable, measures used by us should be
nationally endorsed by a multi-stakeholder organization. Measures
should be aligned with best practices among other payers and the needs
of the end users of the measures.
Lowering per-capita growth in expenditures.
++ Providers should be accountable for the cost of care, and be
rewarded for reducing unnecessary expenditures and be responsible for
excess expenditures.
++ In reducing excess expenditures, providers should continually
improve the quality of care they deliver.
++ To the extent possible, and recognizing differences in payers'
value based purchasing initiatives, providers should apply cost-
reducing and quality-improving redesigned care processes to their
entire patient population.
Our experience with providing physicians confidential feedback
reports, which include various measures of cost and quality, is helping
us to design and develop the value modifier. In addition, we seek to
build upon best practices that have evolved in the private sector to
provide meaningful and actionable information to physicians. For
example, we recognize the importance of transparent methodologies and
of procedural safeguards necessary to provide physicians with an
opportunity to review the value modifier such as the one we will
develop.\9\
---------------------------------------------------------------------------

\9\ See for example Ambulatory Quality Alliance, Performance
Measurement Workgroup materials, available at: http://www.ambulatoryqualityalliance.org/performancewg.htm; New York
Attorney General Settlement with Excellus, available at: http://www.ag.ny.gov/bureaus/health_care/pdfs/Excellus%20Settlement.pdf.
---------------------------------------------------------------------------

We intend to move both deliberately and carefully because we
recognize the complexities of calculating a reliable and valid measure
of value that compares physicians against their peers and uses the
measure to differentiate payment. We view this rulemaking as one part
of an ongoing and extensive dialogue with health care stakeholders on
how best to ensure development of a fair, meaningful, and actionable
value modifier on which to differentiate payments to physicians.
a. Measures of Quality of Care and Costs
(1) Quality of Care Measures
Section 1848(p)(2) of the Act requires that the quality of care be
evaluated, to the extent practicable, based on a composite of measures
of the quality of care furnished. Section 1848(p)(2)(B) of the Act
requires that the Secretary establish appropriate measures of the
quality of care furnished by a physician or a group of physicians to
Medicare beneficiaries such as measures that reflect health outcomes.
The statute requires the measures to be risk adjusted as determined
appropriate by the Secretary. Section 1848(p)(2)(B)(ii) of the Act
requires the Secretary to seek endorsement of the quality of care
measures by the entity with a contract under section 1890(a) of the
Act, which is the National Quality Forum.
In establishing the quality of care measures for the value
modifier, our interest is to move toward a core set of measures so that
we can assess and benchmark physician performance. We are interested in
ensuring that this set of core measures includes outcome measures,
especially for care provided by specialists. We also want to start a
discussion of potential measures that could provide a richer picture of
the quality of care furnished by a physician. At our September 24,
2010, Listening Session on the Physician Feedback Program and
Implementation of the Value-Based Payment Modifier for Fee-for-Service
Medicare, the stakeholder community suggested the need for additional
quality measures that focus on care coordination/care transitions,
patient experience, and outcomes such as functional health status.\10\
We agree with these suggestions and believe that these measures could
provide a richer picture of the quality of care furnished by physicians
to Medicare beneficiaries.
---------------------------------------------------------------------------

\10\ Listening Session Regarding: Physician Feedback Program and
Implementation of the Value-Based Payment Modifier for Fee-for-
Service Medicare (Sept. 24, 2010) (see, for example, comments of
Pacific Business Group on Health, Consumer Purchaser Disclosure
Project), transcript available at: https://www.cms.gov/PhysicianFeedbackProgram/Downloads/092410_Listening_Session_Feedback_Program_Transcript.pdf.
---------------------------------------------------------------------------

We view the requirement for the Secretary to establish, by January
1, 2012, the quality measures for the value modifier to be the first
step in identifying a robust core set of measures of the quality of
care furnished by physicians for use in the value modifier. We envision
incorporating additional quality measures into the value modifier over
time.
(A) Proposed Quality of Care Measures for the Value-Modifier
For purposes of section 1848(p)(4)(A)(i) of the Act, we propose to
use performance on: (1) The measures in the core set of the Physician
Quality Reporting System for 2012; (2) all measures in the GPRO of the
Physician Quality Reporting System for 2012; and (3) the core measures,
alternate core, and 38 additional measures in the Electronic Health
Record Incentive Program measures for 2012. Table 62 lists these
measures. We recognize that there are measures common to these two
programs because they are derived from the proposed 2012 Physician
Quality Reporting System and may be available for reporting in other
CMS programs, such as the Medicare and Medicaid EHR Incentive Program
as well as the Medicare Shared Savings Program. We note that measure
titles, in some instances, may vary from program to program. Once these
measures are finalized, we will identify the measures more fully to
eliminate any duplication.

Table 62--Proposed Quality Measures for the Value Modifier
----------------------------------------------------------------------------------------------------------------
EHR
Physician quality reporting Measure title NQF Measure Measure Incentive PQRS PQRS
system No. No. developer program GPRO Core
----------------------------------------------------------------------------------------------------------------
110......................... Preventative Care 0041 AMA-PCPI....... X X
and Screening:
Influenza
Immunization for
Patients >= 50
Years Old.
111......................... Preventive Care and 0043 NCQA........... X X
Screening:
Pneumonia
Vaccination for
Patients 65 Years
and Older.
112......................... Preventive Care and 0031 NCQA........... X X
Screening:
Screening
Mammography.

[[Page 42910]]

113......................... Preventive Care and 0034 NCQA........... X X
Screening:
Colorectal Cancer
Screening.
128......................... Preventive Care and 0421 CMS-QIP........ X
Screening: Body
Mass Index (BMI)
Screening and
Follow[dash]up.
TBD......................... Preventive Care: N/A CMS............ X
Cholesterol[dash]LD
L test performed.
TBD......................... Falls: Screening for 101 NCQA........... X
Falls Risk.
TBD......................... Cervical Cancer 0032 NCQA........... X
Screening.
226......................... Preventive Care and 0028 AMA-PCPI....... X X X
Screening: Tobacco
Use: Screening and
Cessation
Intervention.
235......................... Hypertension (HTN): 0017 AMA-PCPI....... X
Plan of Care.
236......................... Controlling High 0018 NCQA........... X X X
Blood Pressure.
237......................... Hypertension (HTN): 0013 AMA-PCPI....... X X
Blood Pressure
Measurement.
TBD......................... Proportion of adults N/A CMS............ X X
18 years and older
who have had their
BP measured within
the preceding 2
years.
6........................... Coronary Artery 0067 AMA-PCPI....... X X
Disease (CAD): Oral
Antiplatelet
Therapy Prescribed
for Patients with
CAD.
7........................... Coronary Artery 0070 AMA-PCPI....... X X
Disease (CAD): Beta-
Blocker Therapy for
CAD Patients with
Prior Myocardial
Infarction (MI).
118......................... Coronary Artery 0066 AMA-PCPI....... X
Disease (CAD):
Angiotensin-
Converting Enzyme
(ACE) Inhibitor or
Angiotensin
Receptor Blocker
(ARB) Therapy for
Patients with CAD
and Diabetes and/or
Left Ventricular
Systolic
Dysfunction (LVSD).
TBD......................... Coronary Artery NA CMS............ X
Disease (CAD): LDL
<100 mg/dl.
197......................... Coronary Artery 0074 AMA-PCPI....... X X
Disease (CAD):
Lipid Control.
201......................... Ischemic Vascular 0073 NCQA........... X X
Disease (IVD):
Blood Pressure
Management Control.
204......................... Ischemic Vascular 0068 NCQA........... X X X
Disease (IVD): Use
of Aspirin or
another
Antithrombotic.
TBD......................... Ischemic Vascular 0075 NCQA........... x X X
Disease (IVD):
Complete Lipid
Profile and LDL
Control < 100 mg/dl.
5........................... Heart Failure: 0081 AMA-PCPI....... X X
Angiotensin-
Converting Enzyme
(ACE) Inhibitor or
Angiotensin
Receptor Blocker
(ARB) Therapy for
Left Ventricular
Systolic
Dysfunction (LVSD).
8........................... Heart Failure: Beta- 0083 AMA-PCPI....... X X
Blocker Therapy for
Left Ventricular
Systolic
Dysfunction (LVSD).
228......................... Heart Failure: Left N/A CMS............ X
Ventricular
Function (LVF)
Testing.
198......................... Heart Failure: Left 0079 AMA-PCPI....... X
Ventricular
Function (LVF)
Assessment.
227......................... Heart Failure: 0085 AMA-PCPI....... X
Weight Measurement.
199......................... Heart Failure: 0082 AMA-PCPI....... X
Patient Education.
200......................... Heart Failure: 0084 AMA-PCPI....... X X
Warfarin Therapy
for Patients with
Atrial Fibrillation.
TBD......................... Monthly INR for 555 CMS............ X
Beneficiaries on
Warfarin.
1........................... Diabetes Mellitus: 0059 AMA-PCPI....... X X
Hemoglobin A1c Poor
Control in Diabetes
Mellitus.
TBD......................... Diabetes: Aspirin 0729 MN Community X
Use. Measurement.
3........................... Diabetes Mellitus: 0061 NCQA........... X X
High Blood Pressure
Control in Diabetes
Mellitus.
TBD......................... Diabetes: Hemoglobin 575 NCQA........... X X
A 1 c Control (<
8.0%).
2........................... Diabetes Mellitus: 0064 NCQA........... X X X
Low Density
Lipoprotein (LDL-C)
Control in Diabetes
Mellitus.
117......................... Diabetes Mellitus: 0055 NCQA........... X X
Dilated Eye Exam in
Diabetic Patient.
18.......................... Diabetic 0088 AMA-PCPI....... X
Retinopathy:
Documentation of
Presence or Absence
of Macular Edema
and Level of
Severity of
Retinopathy.
TBD......................... Diabetic 0089 AMA-PCPI....... X
Retinopathy:
Communication with
the Physician
Managing Ongoing
Diabetes Care.

[[Page 42911]]

119......................... Diabetes Mellitus: 0062 NCQA........... X X
Urine Screening for
Microalbumin or
Medical Attention
for Nephropathy in
Diabetic Patients.
163......................... Diabetes Mellitus: 0056 NCQA........... X X
Foot Exam.
TBD......................... Diabetes Mellitus: 0729 MN Community X
Tobacco Non-Use. Measurement.
239......................... Weight Assessment 0024 NCQA........... X
and Counseling for
Children and
Adolescents.
240......................... Childhood 0038 NCQA........... X
Immunization Status.
TBD......................... Appropriate Testing 0002 NCQA........... X
for Children with
Pharyngitis.
TBD......................... Prenatal Care: 0012 AMA-PCPI....... X
Screening for Human
Immunodeficiency
Virus (HIV).
TBD......................... Prenatal Care: Anti- 0014 AMA-PCPI....... X
D Immune Globulin.
53.......................... Asthma Pharmacologic 0047 AMA-PCPI....... X
Therapy.
64.......................... Asthma Assessment... 0001 AMA-PCPI....... X
TBD......................... Use of Appropriate 0036 NCQA........... X
Medications for
Asthma.
51.......................... Chronic Obstructive 0091 NCQA........... X
Pulmonary Disease
(COPD): Spirometry
Evaluation.
52.......................... Chronic Obstructive 0102 AMA-PCPI....... X
Pulmonary Disease
(COPD):
Bronchodilator
Therapy.
TBD......................... Chronic Obstructive N/A CMS............ X
Pulmonary Disease
(COPD): Smoking
Cessation
Counseling Received.
71.......................... Oncology Breast 0387 AMA-PCPI....... X
Cancer: Hormonal
Therapy for Stage
IC-IIIC Estrogen
Receptor/
Progesterone
Receptor (ER/PR)
Positive Breast
Cancer.
72.......................... Oncology Colon 0385 AMA-PCPI....... X
Cancer:
Chemotherapy for
Stage III Colon
Cancer Patients.
102......................... Prostate Cancer: 0389 AMA-PCPI....... X
Avoidance of
Overuse of Bone
Scan for Staging
Low Risk Prostate
Cancer Patients.
9........................... Anti-depressant 0105 NCQA........... X
Medication
Management:.
(a) Effective Acute
Phase Treatment,
(b) Effective
Continuation Phase
Treatment.
TBD......................... Initiation and 0004 NCQA........... X
Engagement of
Alcohol and Other
Drug Dependence
Treatment: (a)
Initiation, (b)
Engagement.
40.......................... Osteoporosis: 0045 NCQA........... X
Management
Following Fracture
of Hip, Spine or
Distal Radius for
Men and Women Aged
50 Years and Older.
TBD......................... Low Back Pain: Use 0052 NCQA........... X
of Imaging Studies.
TBD......................... Chlamydia Screening 0033 NCQA........... X
for Women.
12.......................... Primary Open Angle 0086 AMA-PCPI....... X
Glaucoma (POAG):
Optic Nerve
Evaluation.
46.......................... Medication 0097 AMA-PCPI....... X
Reconciliation:
Reconciliation
After Discharge
from an Inpatient
Facility.
TBD......................... 30-Day Post N/A Colorado X
Discharge Physician Foundation for
Visit. Medical Care.
----------------------------------------------------------------------------------------------------------------

We seek comment on whether to include additional measures from the
Physician Quality Reporting System (which are described elsewhere in
this proposed rule) in the measures that we propose for the value
modifier. We also seek comment on whether there are any measures
included here that should be excluded from the value modifier, and on
the appropriate number of measures for inclusion.
To the extent that the 2013 measures adopted for the Physician
Quality Reporting System and Electronic Health Record Incentive Program
are different than those used in 2012, we would consider, through
rulemaking next year, revising the value modifier quality measures
applicable to 2013 to be consistent with the revisions made to the
measures for those programs. Indeed, Section 1848(p)(9) of the Act
directs us to coordinate the value modifier quality measures with the
Physician Feedback Program, and, as the Secretary determines
appropriate, other similar provisions of Title XVIII of the Social
Security Act. We plan to coordinate the value modifier with the
Physician Feedback Program, the Physician Quality Reporting System, and
the EHR incentive program. We seek comment on the proposed measures and
on our interest to establish a core measure set for the value modifier.
(B) Potential Quality of Care Measures for Additional Dimensions of
Care in the Value Modifier
As described previously, one of our goals is to start a discussion
about potential measures that could provide a richer picture of the
quality of care furnished by a physician. For example, we are very
interested in quality measures that assess the care provided by
specialists. We specifically seek

[[Page 42912]]

comment from specialists about measures that are not included in the
list of proposed measures.
We also seek comment on the types of measures identified below as
well as the 28 administrative claims measures (described above with
respect to the 2011 Physician Feedback reports) and whether we should
include them in the value modifier. We especially urge the physician
community and private payers that have been engaged in pay-for-
performance programs to identify other quality measures that they have
used and to describe their experience with these measures. We seek
comment on how the measures discussed below align with current private
sector quality measurement initiatives. To the extent that such
measures are not currently developed, we would use the established
agency procedures to develop such measures.
(i) Outcome Measures
We are very interested in moving toward a core quality of care
measure set for the value modifier that includes outcome measures. For
example, the Physician Feedback reports already display the rate of
potentially preventable hospital admissions for six ambulatory care
sensitive conditions at the practice group level: Diabetes, bacterial
pneumonia, dehydration, chronic obstructive pulmonary disease (COPD),
urinary tract infection, and congestive heart failure. These measures
have been developed by the Agency for Healthcare Research and Quality
and specifications for these measures can be found at http://www.qualityindicators.ahrq.gov/modules/PQI_TechSpec.aspx. We also are
developing an all-cause hospital readmission measure for potential use
in the Shared Savings Program, and section 1886(q)(8) of the Act
requires us to develop an all-patient hospital readmission measure. We
are considering use of these measures for physicians and physician
groups. Our goal is to focus on outcomes of care for which it would be
appropriate to assess physician performance. We seek comments about
these potential measures for physicians. Although we are not proposing
these measures at this time, we are soliciting comment and will
consider including these outcome measures in the value modifier.
We also specifically seek suggestions about other outcome measures
that would be appropriate measures of the quality of care furnished for
purposes of the value modifier. For example, section 931 of the Public
Health Service Act, as added by section 3013(a) and amended by section
10303 of the Affordable Care Act, also requires the Secretary to
develop and periodically update provider-level outcome measures for
physicians, among other types of providers. We also could consider
development of measures that examine emergency room use for ambulatory
care sensitive conditions. We are interested in outcome measures that
can be calculated from existing Medicare claims data and do not require
reporting by physicians. In addition, we are particularly interested in
comments on potential measures of complications that would be
appropriate to include in the value modifier.
(ii) Care Coordination/Transition Measures
We believe that care transitions such as transition of a
beneficiary from an inpatient setting to the community or to a post-
acute setting are important aspects of quality of care furnished.
Successful transitions help ensure that a beneficiary is on a path to
improvement and could avoid readmission. We believe that several
aspects of the care transition could be developed into quality of care
measures for purposes of the value modifier. For example, we could
potentially consider developing a measure that would assess whether an
appointment was set up or whether the hospitalized beneficiary saw a
physician during a specified post-discharge period. This measure could
apply to both the hospital physician and the community physician. In
addition, beneficiaries often have unscheduled admissions (such as, via
an emergency room) of which their primary physician is not made aware.
We are considering including a care transition/care coordination
measure that would involve a hospital physician checking to see if the
hospital has notified the beneficiary's primary physician of an
unscheduled admission (if the hospital and community physician were not
the same).
Another aspect of care coordination could involve services that are
ordered by one physician but furnished by another physician. Under this
scenario, the treating physician may send a report back to the ordering
physician. However, this is not always the case. The lack of
coordination between two physicians involved in the beneficiary's care
could be a missed opportunity to provide optimal, seamless care for the
beneficiary. A care coordination measure could potentially assess the
extent to which the report is sent back to the ordering physician and
whether the furnishing physician has confirmation that the report was
actually received.
We seek input about these and other potential aspects of care
coordination/transitions for which measures could be developed and/or
used for purposes of the value modifier. To the extent commenters are
aware of potential measures that address care coordination/transitions
that we could use, we welcome such suggestions. We would propose the
specific measures through notice and comment rulemaking before
including them as measures of the quality of care furnished for
purposes of the value modifier.
(iii) Patient Safety, Patient Experience and Functional Status:
We believe that it is important to develop measures of patient
safety, patient experience and functional status for purposes of the
value modifier. A potential patient safety measure might involve use of
a surgical checklist. We seek comment about such a measure and other
potential patient safety measures that could be developed and/or used
for purposes of the value modifier. To the extent commenters are aware
of potential measures of patient safety, patient experience, or
functional status that we could use, we welcome such suggestions. We
would propose the specific measures through notice and comment
rulemaking before including them as measures of the quality of care
furnished for purposes of the value modifier.
(2) Cost Measures
Section 1848(p)(3) of the Act requires that cost measures used in
the value modifier be evaluated, to the extent practicable, based on a
composite of appropriate measures of costs established by the
Secretary. This composite would eliminate the effect of geographic
adjustments in payment rates and account for risk factors and other
factors determined appropriate by the Secretary. In our Physician
Feedback reports, we currently use a total per capita cost measure and
per capita cost measures for the overall costs for beneficiaries with
four chronic conditions: Chronic obstructive pulmonary disease; heart
failure; coronary artery disease; and diabetes. These per capita cost
measures are price standardized and risk adjusted to ensure geographic
and clinical comparability, as required by section 1848(p)(3) of the
Act. These measures are described in more detail in the Detailed
Methodology Specification document accompanying the 2010 Physician
Feedback reports.\11\
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\11\ The Detailed Methodology Specifications are available at:
https://www.cms.gov/PhysicianFeedbackProgram/Downloads/2010_QRUR_
Detailed_Methodology.pdf.

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[[Page 42913]]

(A) Proposed Cost Measures for the Value Modifier
For purposes of section 1848(p)(4)(A)(i) of the Act, we propose to
use total per capita cost measures and per capita cost measures for
beneficiaries with these four chronic conditions (chronic obstructive
pulmonary disease; heart failure; coronary artery disease; and
diabetes) in the value modifier. These cost measures would be compared
to the quality of care furnished for use in determining the value
modifier. We seek comment on this proposal.
(B) Potential Cost Measures for Future Use in the Value Modifier
During 2012 we will test and plan how to use an ``episode
grouper.'' The purpose of the episode grouper is to combine separate,
but clinically related items and services into an episode of care for a
beneficiary. Section 1848(n)(9)(A) of the Act requires us to develop an
episode grouper so that physicians can be compared on episode-based
costs of care. In order to comply with this statutory requirement, we
have awarded separate contracts to four different project teams. We
have tasked each project team to design a ``prototype'' of the episode
grouper by determining episode-based costs for selected high-cost,
high-volume conditions that occur among Medicare beneficiaries,
including six of the following nine conditions: Hip fracture/hip
replacement; pneumonia; heart attack; coronary artery disease; asthma;
COPD; stroke; diabetes; and heart failure. By January 1, 2012, we will
select one project team's prototype. The selected team will then be
tasked to develop episode groupers for a more comprehensive set of
conditions over a four-year period.
As a transition to implementing the episode grouper, we could use
cost measures based on the inpatient hospital Medicare Severity
Diagnosis Related Groups (MS-DRG) classification system. Specifically,
we could use allowed Parts A and B charges per beneficiary for all
services furnished on the day of admission and furnished through a
specific number of days after the day of discharge. We are currently
assessing how to attribute episode costs to physicians. We seek comment
on whether we should pursue the MS-DRG approach in the near term while
we develop episode-based cost measures for a significant number of
high-cost and high-volume conditions in the Medicare program.
In addition, we specifically seek comment on the resource and cost
measures used in private sector initiatives and how they are used to
profile physicians compared to the quality of care provided.
b. Assessing Physician Performance and Applying the Value Modifier
Apart from the measures that would be used for purposes of applying
the value modifier, there are a number of issues related to the
implementation of the value modifier including steps for both
measurement of performance and application of payment adjustments.
While we are not making proposals on these issues at this time, we have
briefly described them below and welcome public comments to be
considered as we develop proposals on the value modifier for future
rulemaking.
Pursuant to statutory requirements, we are examining how to create
composites of measures of quality of care and of cost from the measures
we have proposed so that we can compare quality relative to cost. We
are also examining how to make appropriate risk and other adjustments
to these measures. In addition, we are examining how to attribute
beneficiaries to physicians to develop meaningful and actionable
physician profiles for use in the value modifier. Some of the issues
involved with examining attribution rules were discussed earlier in the
discussion of Physician Feedback reports and include issues of sample
size. We are also developing appropriate peer groups or benchmarks in
order to compare physicians on the value modifier.
As previously mentioned, prior to application of the value modifier
to all physicians and physician groups in 2017, section
1848(p)(4)(B)(iii) of the Act allows the Secretary in 2015 and 2016 to
apply the value modifier to specific physicians and physician groups
the Secretary determines appropriate. For example, we could apply the
value modifier to physicians who are outliers (as identified
individually, by practice group, or by geographic region) compared to
national or regional areas in terms of high cost and low quality.
Alternatively, we could apply the modifier to physicians who treat the
conditions that are most prevalent and/or most costly, among Medicare
beneficiaries.
As stated previously, we seek comment on these issues and other
issues related to implementation of the value modifier. Our plan is to
begin implementing the value modifier through the rulemaking process
during 2013 as required by section 1848(p)(4)(B)(i) of the Act. We seek
input from stakeholders as we work on these issues.
c. Dates for Implementation of the Value Modifier
Section 1848(p)(4)(B)(iii) of the Act requires that the Secretary
apply the value modifier for items and services furnished beginning on
January 1, 2015, with respect to specific physicians and groups of
physicians, and not later than January 1, 2017, with respect to all
physicians and groups of physicians. As required by section
1848(p)(4)(B)(i) of the Act, we will begin implementation of the value
modifier through the rulemaking process during 2013 for the physician
fee schedule effective for CY 2014. We anticipate that the methodology
we propose to calculate the value modifier may be further refined, if
necessary, during the 2014 rulemaking process for the physician fee
schedule that will take effect in 2015.
d. Initial Performance Period
Section 1848(p)(4)(B)(ii)(I) of the Act requires the Secretary to
specify an initial performance period for the application of the value
modifier with respect to 2015. We propose that the initial performance
period be the full calendar year 2013, that is, January 1, 2013 through
December 31, 2013. The value modifier that is applied to items and
services furnished by specific physicians and groups of physicians
under the 2015 physician fee schedule would be based on performance
during 2013. We propose this performance period because some claims for
2013 (which could be used in cost or quality measures) may not be fully
processed until 2014. As such, we will need adequate lead time to
collect performance data, assess performance, and construct and compute
the value modifier during 2014 so that it can be applied to specific
physicians starting January 1, 2015, as required by statute. As we have
done in other payment systems, we plan to use claims that are paid
within a specified time period, such as, 90-days after 2013, for
assessment of performance and application of the value modifier for
2015. We will propose the specific cut-off period as part of the more
detailed methodology for computation and application of the value
modifier in future rulemakings. We seek comment on this proposed
performance period.
e. Other Issues
We also seek comment on a number of issues related to the
development of the value modifier, which we will address in future
rulemaking. Although we are not proposing particular policies

[[Page 42914]]

at this time, we seek comment on two specific issues.
(1) Systems-Based Care
Section 1848(p)(5) of the Act requires the Secretary, as
appropriate, to apply the value-based modifier in a manner that
promotes systems-based care. We seek comment on how we might determine
the scope of systems-based care and how best to promote it in applying
the value modifier. For example, systems-based care might include an
integrated group practice participation in the Shared Savings Program,
a medical home, or an Innovation Center program that promotes systems-
based care. We also could implement an attribution method that
attributes patients to a collection of physicians that treat patients
in common to encourage better coordination of care. Additionally, we
could promote systems-based care by developing a common set of quality
measures on which all providers would be evaluated. We seek comment on
these and other ways in which we could promote systems-based care
through the application of the value modifier.
(2) Special Circumstances for Physicians in Rural Areas and Other
Underserved Communities
Section 1848(p)(6) of the Act requires the Secretary in applying
the value modifier, as appropriate, to take into account the special
circumstances of physicians or groups of physicians in rural areas and
other underserved communities. We seek comment on how we should
identify physicians or groups of physicians in rural areas and other
underserved communities, the specific special circumstances they face,
and once identified, how these special circumstances should be taken
into account for purposes of applying the value modifier. In addition,
we seek comment on the organizational structures and practices that
rural physicians and other underserved communities use and how we could
apply a value modifier in these areas to accommodate their special
circumstances.

J. Bundling of Payments for Services Provided to Outpatients Who Later
Are Admitted as Inpatients: 3-Day Payment Window Policy and the Impact
on Wholly Owned or Wholly Operated Physician Practices

1. Introduction
On June 25, 2010, the Preservation of Access to Care for Medicare
Beneficiaries and Pension Relief Act of 2010 (PACMBPRA) (Pub. L. 111-
192) was enacted. Section 102 of this Act entitled, ``Clarification of
3-Day Payment Window,'' clarified when certain services furnished to
Medicare beneficiaries in the 3-days (or, in the case of a hospital
that is not a subsection (d) hospital, during the 1-day) preceding an
inpatient admission should be considered ``operating costs of inpatient
hospital services'' and therefore included in the hospital's payment
under the Hospital Inpatient Prospective Payment System (IPPS). This
policy is generally known as the ``3-day payment window.'' Under the 3-
day payment window, a hospital (or an entity that is wholly owned or
wholly operated by the hospital) must include on the claim for a
Medicare beneficiary's inpatient stay, the technical portion of any
outpatient diagnostic services and admission-related nondiagnostic
services provided during the payment window. The new law makes the
policy pertaining to admission-related nondiagnostic services more
consistent with common hospital billing practices. Section 102 of the
PACMBPRA is effective for services furnished on or after June 25, 2010.
2. Background
We discussed changes to the 3-day payment window in the interim
final rule with comment period that was issued as part of last year's
IPPS final rule (75 FR 50346). The law makes no changes to the billing
of ``diagnostic services'' furnished during the 3-day payment window,
which are included in the ``operating costs of inpatient hospital
services'' pursuant to section 1886(a)(4) of the Act. All diagnostic
services furnished to a Medicare beneficiary by a hospital (or an
entity wholly owned or wholly operated by the hospital), on the date of
a beneficiary's admission or during the 3-days (1-day for a non-
subsection (d) hospital) immediately preceding the date of a
beneficiary's inpatient hospital admission, continue to be included on
the Part A bill for the beneficiary's inpatient stay at the hospital.
In accordance with section 102(a)(1) of the PACMBPRA, for outpatient
services furnished on or after June 25, 2010, all nondiagnostic
services, other than ambulance and maintenance renal dialysis services,
provided by the hospital (or an entity wholly owned or wholly operated
by the hospital) on the date of a beneficiary's inpatient admission and
during the 3 calendar days (1 calendar day for a nonsubsection (d)
hospital) immediately preceding the date of admission are deemed
related to the admission and, therefore, must be billed with the
inpatient stay, unless the hospital attests that certain nondiagnostic
services are unrelated to the hospital claim (that is, the preadmission
nondiagnostic services are clinically distinct or independent from the
reason for the beneficiary's inpatient admission). In such cases, the
unrelated outpatient hospital nondiagnostic services are covered by
Medicare Part B, and the hospital may separately bill for those
services.
Prior to the enactment of section 102 of the PACMBPRA clarifying
the 3-Day Payment Window, the term ``related to the admission'' was
defined in section 40.3, Chapter 3, Inpatient Hospital Billing, of the
Medicare Claims Processing Manual (Pub. 100-04) to mean an exact match
between the principal ICD-9 CM diagnosis codes for the outpatient
encounter and the inpatient admission. On November 5, 1990, section
4003(a) of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-
508) amended the statutory definition of ``operating cost of inpatient
hospital services'' to include the costs of certain services furnished
prior to admission. Section 4003(a) also required that these
preadmission services be included on the Medicare Part A bill for the
subsequent inpatient stay. With this amendment, section 1886(a)(4) of
the Act defines the operating costs of inpatient hospital services to
include diagnostic services (including clinical diagnostic laboratory
tests) or other services related to the admission (as defined by the
Secretary) furnished by the hospital (or by an entity that is wholly
owned or wholly operated by the hospital) to the patient during the 3-
days prior to the date of the patient's admission to the hospital.
Section 1886(a)(4) of the Act was further amended by section 110 of
the Social Security Amendments of 1994 (Pub. L. 103-432) enacted on
October 31, 1994. This provision revised the payment window for
hospitals that are excluded from the IPPS to include only those
services furnished by the hospital or an entity wholly owned or wholly
operated by the hospital during the 1-day (instead of the previous 3-
days) prior to the patient's hospital inpatient admission. The hospital
and hospital units excluded from the IPPS and affected by this policy
are psychiatric hospitals and units, inpatient rehabilitation hospitals
and units, long-term care hospitals, children's hospitals, and cancer
hospitals. In the FY 1996 IPPS final rule (60 FR 45840), we noted that
the term ``day'' refers to the entire calendar-day immediately
preceding the date of admission and not the 24-hour time period that
immediately precedes the hour of admission.

[[Page 42915]]

On February 11, 1998, we published a final rule (63 FR 6864), that
responded to public comments received on a prior interim final rule on
this policy. In that final rule, we confirmed that ambulance services
and chronic maintenance of renal dialysis services are excluded from
the 3-day payment window. This final rule also clarified that the
payment window applies to outpatient services that are otherwise
billable under Part B and does not apply to nonhospital services that
are generally covered under Part A (such as home health, skilled
nursing facility, and hospice). In addition, the rule clarified the
terms ``wholly owned or operated'' and ``admission-related'' for
nondiagnostic services.
The 1998 final rule (63 FR 6866) defined an entity as wholly owned
or wholly operated if a hospital has direct ownership or control over
another entity's operations. Specifically, 42 CFR 412.2(c)(5)(i)
states, ``An entity is wholly owned by the hospital if the hospital is
the sole owner of the entity. An entity is wholly operated by a
hospital if the hospital has exclusive responsibility for conducting
and overseeing the entity's routine operations, regardless of whether
the hospital also has policymaking authority over the entity.'' The
1998 final rule also stated ``that we have defined services as being
related to the admission only when there is an exact match between the
ICD-9-CM diagnosis code assigned for both the preadmission services and
the inpatient stay.'' The rule also stated ``A hospital-owned or
hospital-operated physician clinic or practice is subject to the
payment window provision.'' Therefore, related preadmission
nondiagnostic services provided by a wholly owned or wholly operated
physician clinic or practice are also included in the 3-Day (or 1-day)
payment window policy, and services were considered related when there
was an exact match between ICD-9 CM diagnosis codes for the outpatient
encounter and the inpatient admission.
Prior to the June 25, 2010 enactment of section 102(a)(1) of
PACMBPRA (Pub. L. 111-192), the payment window policy for preadmission
nondiagnostic services was rarely applied in the wholly-owned or
operated physician's office or clinic because, as noted, the policy
required an exact match between the principal ICD-9 CM diagnosis codes
for the outpatient services and the inpatient admission. Because of the
exact match policy, very few services furnished in a physician's office
or clinic that is wholly owned or operated by the hospital would be
subject to the policy. Because the policy applied only in such narrow
circumstances, until the recent statutory change, we have not provided
further guidance to wholly owned or wholly operated physician offices
on how nondiagnostic services are to be included on hospital bills when
the 3-day payment window applied. However, the statutory change to the
payment window policy made by Public Law 111-192 significantly
broadened the definition of nondiagnostic services that are subject to
the payment window to include any nondiagnostic service that is
clinically related to the reason for a patient's inpatient admission,
regardless of whether the inpatient and outpatient diagnoses are the
same.
The FY 2012 IPPS proposed rule (76 FR 25960) further discusses
application of the 3-day payment window for both preadmission
diagnostic and related nondiagnostic services furnished to a patient at
wholly owned or wholly operated physician practices after June 25,
2010. We do not know how many physician offices will meet this
definition of wholly owned or wholly operated. Our expectation is that
most hospital-owned entities providing outpatient services would be
considered part of the hospital, likely as an outpatient department,
and not separate physician clinics or practices. However, we believe
there may be at least some hospital-owned clinics that meet the
definition of a wholly owned or wholly operated physician practice.
When a physician furnishes a service in a hospital, including an
outpatient department of a hospital, Medicare pays the physician under
the physician fee schedule, generally at a facility-based payment rate
that is lower than the ``nonfacility'' payment rate in order to avoid
duplication of payment for supplies, equipment, and staff that are paid
directly to the hospital by Medicare.
3. Applicability of the 3-Day Payment Window Policy for Services
Furnished in Physician Practices
In circumstances where the 3-day payment window applies to
nondiagnostic services related to an inpatient admission furnished in a
wholly owned or wholly operated physician practice, we propose that
Medicare would make payment under the physician fee schedule for the
physicians' services that are subject to the 3-day payment window at
the facility rate. As explained more fully later in this section, the
services that are subject to the 3-day payment window would be billed
to Medicare similar to services that are furnished in a hospital,
including an outpatient department of a hospital. On or after January
1, 2012, we propose that when a physician furnishes services to a
beneficiary in a hospital's wholly owned or wholly operated physician
practice and the beneficiary is admitted as an inpatient within 3 days
(or, in the case of non-IPPS hospitals, 1 day), the payment window will
apply to all diagnostic services furnished and to any nondiagnostic
services that are clinically related to the reason for the patient's
inpatient admission regardless of whether the reported inpatient and
outpatient ICD-9-CM diagnosis codes are the same.
a. Payment Methodology
Specifically, we would establish a new Medicare HCPCS modifier that
will signal claims processing systems to provide payment at the
facility rate. We propose to pay only the Professional Component (PC)
for CPT/HCPCS codes with a Technical Component (TC)/PC split that are
provided in the 3-day (or, in the case of non-IPPS hospitals, 1-day)
payment window in a hospital's wholly owned or wholly operated
physician practice. We propose to pay the facility rate for codes
without a TC/PC split to avoid duplicate payment for the technical
resources required to provide the services as those costs will be
included on the hospital's inpatient claim for the related inpatient
admission. The facility rate includes physician work, malpractice, and
the facility practice expense, which is a payment to support services
provided by the physician office when a physician treats patients at
another facility, such as updating medical records. We propose to
modify our regulation at Sec. 414.22(b)(5)(i), which defines the sites
of service that result in a facility practice expense RVU for payment,
to add an entity that is wholly owned or wholly operated by a hospital,
as defined in Sec. 412.2(c)(5)(ii) when that entity furnishes
preadmission services.
If this proposal is finalized, we would establish a new HCPCS
modifier through sub-regulatory guidance. We would require that this
modifier be appended to the physician preadmission diagnostic and
admission-related nondiagnostic services, reported with HCPCS codes,
which are subject to the 3-day payment window policy. Each wholly owned
or wholly operated physician's practice would need to manage its
billing processes to ensure that it billed for its physician services
appropriately when a related inpatient admission has occurred. The
hospital would be responsible for notifying the practice of related
inpatient admissions for a patient who received services in a wholly
owned or wholly operated

[[Page 42916]]

physician practice within the 3-day (or when appropriate 1-day) payment
window prior to the inpatient stay. We would make the new modifier
effective for claims with dates of service on or after January 1, 2012,
and wholly owned or wholly operated physician practices would receive
payment at the facility rate for related nondiagnostic services and
receive payment for only the professional component for diagnostic
services effective for services furnished on or after January 1, 2012.
We realize that the time frames associated with the global surgical
package for many surgical services could overlap with the 3-day (or 1-
day) payment window policy. Global surgical payment rules apply to
major and minor surgeries, and endoscopies. Section 40.1 of the Claims
Processing Manual (100-04 chapter 12 Physician/Nonphysician
Practitioners) defines the global surgical package. Procedures can have
a global surgical period of 0, 10, or 90-days. Generally, the global
period for major surgeries is 1-day prior to the surgical procedure and
90-days immediately following the procedure. For minor surgeries, the
global period is the-day of the procedure and 10-days immediately
following the procedure.
Medicare payment for the global surgical package is based on the
typical case for a procedure, and includes preoperative visits, intra-
operative services, and complications following surgery, postoperative
visits, postsurgical pain management, supplies, and miscellaneous other
services such as dressing changes and removal of sutures or staples.
Medicare makes a single payment to the treating physician (or group
practice) for the surgical procedure and any of the pre- and
postoperative services typically associated with the surgical procedure
provided within the global surgical period (10 or 90-days). The same
section of the Claims Processing Manual (100-04 chapter 12 Physician/
Nonphysician Practitioners) also discusses the services that are not
included in payment for the global surgical period. In general, these
services are unrelated to the surgery, are diagnostic or are part of
the decision to pursue surgery, or are related to the surgery but are
so significant they warrant an additional payment. Some examples of
services not included in payment for the global surgical period include
the initial evaluation of the problem by the surgeon to determine the
need for major surgery; services of another physician; visits unrelated
to the diagnosis for the surgical procedure unless the visits occur due
to surgical complications; treatment that is not part of the normal
recovery from surgery; diagnostic tests; distinct surgical procedures
that are not re-operations; treatment for postoperative complications
that require a return trip to the operating room; critical care
unrelated to the surgery where a seriously injured or burned patient is
critically ill and requires the constant attention of the physician;
and immunosuppressive therapy for organ transplants.
The time frames for application of the 3-day payment window and the
global surgical package could overlap. In some cases, the application
of the 3-day payment window is straightforward. For example, a patient
could have minor surgery in a wholly owned or wholly operated
physician's office and, due to complications, need to be admitted
within 3-days to an acute care hospital paid under the IPPS for follow-
up surgery. Under the 3-day payment window policy, the practice expense
portion of the initial surgery and any pre- and postoperative visits
associated with the surgery (both those subject to the global surgery
rules and separate diagnostic procedures) should be included on the
hospital's Part A claim for the inpatient admission. The wholly owned
or wholly operated physician practice would bill for the surgery
performed for the inpatient as well as for the initial surgical
procedure performed in the physician practice that started the global
period. The wholly owned or wholly operated physician practice would
apply the HCPCS modifier that CMS would pursue to implement the 3-day
payment window to each of these services HCPCS code. Medicare would pay
the physician practice for the initial surgical procedure and the
related procedure following inpatient admission at the facility rate.
Finally, any preadmission diagnostic tests conducted by the wholly
owned or wholly operated physician practice in the 3-day payment window
would be included on the physician practice's claim with the
anticipated HCPCS modifier, and Medicare would pay the wholly owned or
wholly operated physician practice only the professional portion of the
service.
However, the situation could arise where a global surgical period
overlaps with the 3-day payment window, but the actual surgical
procedure with the global surgical package occurred before the 3-day
payment window. In this case, several post-operative services, such as
follow-up visits, would occur during the global period, but the surgeon
would not bill separately for those services. We propose that services
with a global surgical package would be subject to the 3-day payment
window policy when wholly owned or wholly operated physician practices
furnish preadmission diagnostic and nondiagnostic services that are
clinically related to an inpatient admission when the date of the
actual surgical procedure falls within the 3-day payment window policy.
However, when the actual surgical procedure for a service that has a
global surgical package is furnished on a date that falls outside the
3-day payment window, the 3-day window policy would not apply. We do
not believe it would be appropriate to require the wholly owned or
wholly operated physician practice to unbundle the post operative
services associated with the global surgical procedure so that the
practice expense portion of those services could be paid under the PFS
at the facility rate and the costs included on the hospital's inpatient
claim. However, any service that a wholly owned or wholly operated
physician practice would bill separately from the global surgical
package, such as a separate initial evaluation of a problem by the
surgeon to determine the need for surgery or separate diagnostic tests,
would continue to be subject to the 3-day payment window policy.
b. Identification of Wholly Owned or Wholly Operated Physician
Practices
The 1998 final rule (63 FR 6864) defined wholly owned or wholly
operated as a hospital's direct ownership or control over another
entity's operations. In that rule, we added the regulation at 42 CFR
412.2(c)(5)(i) which states, ``An entity is wholly owned by the
hospital if the hospital is the sole owner of the entity. An entity is
wholly operated by a hospital if the hospital has exclusive
responsibility for conducting and overseeing the entity's routine
operations, regardless of whether the hospital also has policymaking
authority over the entity.'' Physician practices self-designate whether
they are owned or operated by a hospital during the Medicare enrollment
process. Currently, a physician practice enrolls in Medicare with CMS
form ``855B.'' This enrollment form reports pertinent practice
information such as ownership, organizational structure, and
operational duties. Likewise, hospitals enroll in Medicare using CMS
form ``855A'' also reporting pertinent hospital information such as
ownership, organizational structure and operational duties. Medicare
Administrative Contractors update files of physician practices that are
owned and operated by hospitals, and the files of hospitals that own
those physician practices, in

[[Page 42917]]

their claims processing systems and use that data to confirm an
ownership relationship for identified physician practices. We will
investigate the feasibility of establishing national system edits
within the Common Working File to fully identify whether a physician
practice is wholly owned or wholly operated by a hospital and to
associate such practice with its affiliated hospital.

K. Hospital Discharge Care Coordination

We are committed to achieving better care for individuals, better
health for populations, and reduced expenditure growth. Reforms such as
Accountable Care Organizations and Medical Homes work to achieve these
goals. We are also committed to reforms to the fee-for-service payment
system to achieve these goals. We recently launched the Partnership for
Patients, (in April 2011), a national patient safety initiative that
includes the Community Based Care Transitions Program, which provides
funding to community-based organizations to coordinate a continuum of
post-acute care in order to test models for improving care transitions
for high risk Medicare beneficiaries.
Care coordination involving the transition of a beneficiary from
care furnished by a treating physician during a hospital stay to the
beneficiary's primary physician in the community could avoid adverse
events such as readmissions or subsequent illnesses, improve
beneficiary outcomes, and avoid a financial burden on the health care
system. Successful efforts to improve hospital discharge care
coordination and care transitions could improve the quality of care
while simultaneously decreasing costs. We are interested in broad
public comment on how to further improve physician care coordination
within the statutory structure for physician payment and quality
reporting, particularly for a beneficiary's transition from the
hospital to the community.
Care coordination is a component of many evaluation and management
(E/M) services. Under the physician fee schedule, there are two
hospital discharge codes, hospital discharge day management services
CPT codes 99238 (Hospital discharge day management; 30 minutes or less)
and 99239 (Hospital discharge day management; more than 30 minutes).
Both of these codes include care coordination activities. The specific
physician activities for care coordination associated with the hospital
discharge day management codes as shown in Table 63 include the
following:
Providing care coordination for the transition including
instructions for aftercare to caregivers.
Ordering and arranging for post discharge follow-up
professional services and testing.
Discussing aftercare treatment with the beneficiary,
family, and other healthcare professionals.
Informing the primary care or referring physician of
discharge plans.
Provide necessary care coordination, telephonic or
electronic communication assistance, and other necessary management
related to this hospitalization.
Revise treatment plan(s) and communicate with beneficiary
and/or caregiver, as necessary.
Providing necessary care coordination also is a component of the
office visit CPT codes 99203 (Level 3 new patient office or other
outpatient visit) and 99213 (Level 3 established patient office or
other outpatient visit) that a beneficiary's primary physician would
use to bill for the first visit after discharge. The physician
activities for care coordination associated with these E/M services as
shown in Table 63 include providing necessary care coordination,
telephonic or electronic communication assistance, and other necessary
management related to this office visit.
The clinical vignettes that are used to value the resources
included in these codes are shown in Table 63. We have provided the
full clinical vignettes used by the American Medical Association/
Specialty Society Relative Value Update Committee (AMA RUC) to develop
recommended RVU values for the resources included in the discharge day
management and E/M codes. These vignettes detail all the specific
physician activities that the AMA RUC considered for these CPT codes,
including hospital discharge care coordination activities.

[[Page 42918]]

Table 63--AMA RUC Clinical Vignette
----------------------------------------------------------------------------------------------------------------
CPT code Long descriptor Vignette Pre service Intra service Post service
----------------------------------------------------------------------------------------------------------------
99238........ Hospital discharge Discharge visit Review Review Complete
day management; for a 55-year-old data not medical records discharge
30 minutes or male admitted available on the and data records.
less. with a community- unit (such as available on the Handle
acquired diagnostic and unit. (with the help
pneumonia is seen imaging studies). Obtain an of clinical
in preparation interval history. staff) any
for discharge Communicate with Perform a treatment
from the other physical exam.. failures or
hospital. He is professionals and Consider adverse
euvolemic, with patient or relevant data, reactions to
afebrile, patient's family. options, and medications that
asymptomatic, and risks and may occur after
his oxygen formulate/revise discharge.
saturations are diagnosis and Provide
normal. treatment plan(s) necessary care
including making coordination,
the decision for telephonic or
discharge. electronic
Discuss communication
aftercare assistance, and
treatment with other necessary
the patient, management
family and other related to this
healthcare hospitalization.
professionals. Receive
Provide and respond to
care coordination any interval
for the testing results
transition or
including correspondence,
instructions for including
aftercare to obtaining any
caregivers. results pending
Order/ at discharge.
arrange for post Revise
discharge follow- treatment
up professional plan(s) and
services and communicate with
testing. patient and/or
Reconcile caregiver, as
medications with necessary.
attention to pre-
admission
therapy,
inpatient therapy
and outpatient
formulary and
write
prescriptions.
Complete
discharge and
aftercare forms.
Inform
the primary care
or referring
physician of
discharge plans.
Complete
medical record
documentation.
99239........ Hospital discharge Discharge visit Review Review Complete
day management; for a 75-year-old data not medical records discharge
more than 30 female who available on the and data records.
minutes. required a below- unit (such as available on the Handle
the knee diagnostic and unit. (with the help
amputation for an imaging studies). Obtain an of clinical
infected non- interval history.. staff) any
healing ulcer on Communicate with Perform a treatment
her right foot is other physical exam.. failures or
seen in professionals and Consider adverse
preparation for with patient or relevant data, reactions to
discharge from patient's family. options, and medications that
the hospital. She risks and may occur after
has Type 2 formulate/revise discharge.
diabetes diagnosis and Provide
mellitus, treatment plan(s) necessary care
ischemic including making coordination,
cardiomyopathy, the decision for telephonic or
atherosclerotic discharge. electronic
peripheral Discuss communication
vascular disease, aftercare assistance, and
hypertension, treatment with other necessary
chronic renal the patient, management
insufficiency, family and other related to this
and dementia. She healthcare hospitalization.
is no longer professionals. Receive
delirious, her Provide and respond to
blood sugars are care coordination any interval
well controlled, for the testing results
and she is at her transition or
baseline weight. including correspondence,
She is being instructions for including
discharged back aftercare to obtaining any
to the nursing caregivers. results pending
home. Order/ at discharge.
arrange for post Revise
discharge follow- treatment
up professional plan(s) and
services and communicate with
testing. patient and/or
Reconcile caregiver, as
medications with necessary.
attention to pre-
admission
therapy,
inpatient therapy
and outpatient
formulary and
write
prescriptions.
Complete
discharge and
aftercare forms.
Inform
the primary care
or referring
physician of
discharge plans.
Complete
medical record
documentation.

[[Page 42919]]

99203........ Office/outpatient Initial office Review Obtain a Complete
visit, new. visit for a 63- the medical detailed history.. the medical
year-old female history form Perform a record
with hypertension completed by the detailed documentation.
presents for a patient and vital examination. Handle
pre-employment signs obtained by Consider (with the help
physical after clinical staff. relevant data, of clinical
moving to the options, and staff) any
area. Her blood Communicate with risks and treatment
pressure has been other health formulate a failures or
adequately professionals. diagnosis and adverse
controlled with develop a reactions to
her current treatment plan medications that
medication on (low complexity may occur after
home blood medical decision the visit.
pressure making). Provide
monitoring. Discuss necessary care
diagnosis and coordination,
treatment options telephonic or
with the patient. electronic
Address communication
the preventive assistance, and
health care needs other necessary
of the patient. management
Reconcile related to this
medication(s). office visit.
Write Receive
prescription(s).. and respond to
Order and any interval
arrange testing results
diagnostic or
testing or correspondence.
referral as Revise
necessary. treatment
plan(s) and
communicate with
patient, as
necessary.
99213........ Office/outpatient Office visit, Review Obtain an Complete
visit, est. established the medical expended problem the medical
patient, a 55- history form focused history record
year-old male completed by the (including documentation.
with a history of patient and vital response to Handle
hypertension and signs obtained by treatment at last (with the help
hyperlipidemia clinical staff. visit and of clinical
who presents for reviewing staff) any
follow up. interval treatment
correspondence or failures or
medical records adverse
received).* reactions to
Perform medications that
an expended may occur after
problem focused the visit.
examination.*. Provide
Consider necessary care
relevant data, coordination,
options, and telephonic or
risks and electronic
formulate a communication
diagnosis and assistance, and
develop a other necessary
treatment plan management
(low complexity related to this
medical decision office visit.
making).*. Receive
Discuss and respond to
diagnosis and any interval
treatment options testing results
with the patient. or
Address correspondence.
the preventive Revise
health care needs treatment
of the patient. plan(s) and
Reconcile communicate with
medication(s).. patient, as
Write necessary.
prescription(s).. * Two of these
Order and three components
arrange required.
diagnostic
testing or
referral as
necessary.
----------------------------------------------------------------------------------------------------------------

In order to ensure that these hospital discharge care coordination
services are appropriately valued, we are seeking comment on the
specific physician activities and the associated resources involved in
physician provision of effective care coordination surrounding a
hospital discharge. For the treating physician(s) overseeing the care
of the beneficiary in the hospital, specific care coordination
activities (for example, transfer of the beneficiary to a community
physician) could include the following:
Transitioning responsibility for the beneficiary's care to
a receiving physician without a ``gap'' (that is, a seamless
transition). This could include identifying the receiving physician by
name and providing that physician's contact information to the
beneficiary and/or family representative.
Facilitating the transfer of ``core'' information to the
receiving physician and/or beneficiary/family (if requested), via fax,
secure e-mail, hard copy, or other mechanism. The core set of
information could include (unless not applicable):
++ Important lab and diagnostic test results and drugs and
treatments, as well as pending tests and how and when to obtain
results.
++ Drugs prescribed, including planned changes.
++ Other treatments and tests prescribed, including planned
changes.
++ Allergies.
++ Receiving physician contact information and specification of
physician coverage for problems before any initial appointment. For
hospitalized beneficiaries, this could include a planned initial post-
discharge appointment within 7 business days with a physician, NP, or
PA (if authorized by State law).
++ Overview of the caregiver situation.
++ Summary of beneficiary/family goals of care, with time frames
and any restrictions.
++ Family caregiver and surrogate decision-maker identification,
and assessment of needs (for the caregiver), as appropriate.
++ Responding to inquiries from the receiving physician or other
provider (such as, LTCH, IRF, SNF) about the beneficiary's hospital
stay and care plan in a timely and collaborative way.
For the beneficiary's primary physician(s) in the community
overseeing the beneficiary's care post hospital discharge, specific
care coordination activities could include:
Assuming responsibility for the beneficiary's care without
a gap.
Notifying the patient that the receiving physician will be
responsible for the beneficiary's care, and checking on the
beneficiary's condition in the first few days after the transition.

[[Page 42920]]

Obtaining and reviewing the core information provided by
the sending physician.
Contacting the physician(s) involved in the beneficiary's
care during the hospital stay (as appropriate).
Setting up an appointment for a face-to-face visit with
the beneficiary, as appropriate.
We welcome comment on key physician activities associated with
effective care coordination between the treating physician in the
hospital and the beneficiary's primary physician in the community upon
hospital discharge. We request public comment on the extent to which
the clinical vignette for the hospital discharge and office visit codes
appropriately incorporate hospital discharge care coordination
activities. We also seek comment about whether the relative values
assigned to these services under the physician fee schedule
appropriately reflect the resources involved in performing activities
that are essential to hospital discharge care coordination, and on ways
to ensure appropriate recognition of the resources involved in these
services, specifically, the physician time and complexity of physician
work as well as the associated practice expenses. We also seek comments
on the current coding structure for these services and on any other
suggested changes to improve care coordination, particularly for the
beneficiary's transition from the hospital to the community, to better
reflect the resources required. We note that the Assistant Secretary of
Planning and Evaluation (ASPE) in the Department of Health and Human
Services hosted a technical expert panel in May 2011 identifying areas
of additional research into equitable payment for services among
specialties, with particular attention to valuing the resources
required for primary care including generally identifying and valuing
care coordination activities. We will consider the panel's discussion
and any available analyses as we broadly consider physician payment for
hospital discharge care coordination activities.
In addition to specific comments on the resources required for
effective care coordination activities, we also broadly invite comment
on other means to emphasize physician care coordination, such as
educational efforts or the development of additional care coordination
performance measures for the Physician Quality Reporting System and the
Physician Fee Schedule Value Modifier.
A new trend in care transition planning is the use of shared care
plans between beneficiary and physician rather than those created
solely by the physician and dictated as ``doctor's orders'' to the
beneficiary. Shared care plans are jointly developed between
beneficiary and physician where the physician sets and documents self-
management goals collaboratively with beneficiaries. These jointly
developed care plans can be particularly important to improving overall
beneficiary outcomes for beneficiaries with chronic illnesses, such as
diabetes or HIV/AIDS, by developing a sense of personal responsibility
for health outcomes. These plans give the patients a tool to learn
about and practice principles of self-management, producing motivated
and engaged beneficiaries. In addition, they provide health care
professionals a communication tool to provide timely information that
supports planned care and beneficiary self-management. (For more
information see http://www.innovations.ahrq.gov/content.aspx?id=2191 or
http://www.ihi.org/IHI/Topics/HIVAIDS/HIVDiseaseGeneral/Tools/
My+Shared+Care+Plan.htm.)
We will carefully weigh all comments received as we consider
changes to the Medicare physician fee schedule to appropriately reflect
the relative value of effective post discharge care coordination or
other means to focus attention in this area. We note that we are not
proposing any changes at this time. If we believe it would be
appropriate to make certain changes, they would be proposed through
future notice and comment rulemaking and would be subject to the budget
neutrality requirements of section 1848(c)(2)(B)(ii)(II) of the Act.

L. Technical Corrections

1. Outpatient Speech-Language Pathology Services: Conditions and
Exclusions
We are proposing a technical correction to the heading of the
condition of coverage at Sec. 410.62(b) for outpatient speech-language
pathology services. The heading was inadvertently changed in the course
of rulemaking for CY 2009 when a new paragraph was added at Sec.
410.62(c) to recognize speech-language pathologists in private
practice. The section heading at Sec. 410.62(b) currently reads
``Special provisions for services furnished by speech-language
pathologists in private practice.'' We are proposing to reinstate the
correct heading at Sec. 410.62(b) to read ``Condition for coverage of
outpatient speech-language pathology services furnished to certain
inpatients of a hospital or a CAH or SNF.''
2. Outpatient Diabetes Self-Management Training and Diabetes Outcome
Measurements
a. Proposed Changes to the Definition of Deemed Entity
We are proposing the following technical corrections to the
definition of ``deemed entity'' in Sec. 410.140:
Removing the following phrases to clarify the purpose of
the reference to an approved entity:
++ ``[B]y CMS to furnish and receive Medicare payment for the
training''.
++ ``Upon being approved''.
++ ``CMS refers to this entity as an ``approved entity'' ''.
Removing an incorrect reference to Sec. 410.141(e) and
replacing it with Sec. 410.145(b).
The proposed revisions would read as follows:
Deemed entity means an individual, physician, or entity accredited
by an approved organization, but that has not yet been approved by CMS
under Sec. 410.145(b) to furnish training.
b. Proposed Changes to the Condition of Coverage Regarding Training
Orders
We are proposing the following technical correction to Sec.
410.141(b)(1) entitled ``training orders'':
Removing the cross-reference ``Sec. 410.32(a)'' and
adding the cross-reference ``Sec. 410.32(a)(2)''.
Removing the term ``it'' and adding the phrase ``the
training'' in its place.
The proposed revisions would read as follows:
Training orders. Following an evaluation of the beneficiary's need
for the training, the training is ordered by the physician (or
qualified nonphysician practitioner) (as defined in Sec. 410.32(a)(2))
treating the beneficiary's diabetes.
3. Practice Expense Relative Value Units (RVUs)
We are proposing the following technical corrections to the
regulation at Sec. 414.22(b):
In paragraphs (b)(5)(i)(A) and (B)--
++ Include additional examples of the settings in which the
facility or nonfacility practice expense (PE) RVUs are applied,
respectively; and
++ Clarify that the lists of settings are not exhaustive; and amend
these lists to include additional place of service examples.
In paragraph (b)(5)(i)(A) we would add ``hospice'' to the
list of places of service after ``community mental health center.
In paragraph (b)(5)(i)(B)--
++ Revise the language to be more consistent with (b)(5)(i)(A) and
to

[[Page 42921]]

include the ``comprehensive outpatient rehabilitation facility (CORF)''
as a place of service example; and
++ Clarify this provision by removing the text regarding the use of
the nonfacility PE RVUs for services in ``* * * a facility or
institution other than the hospital, skilled nursing facility,
community mental health center, or ASC'' because this phrase does not
accurately reflect the places of service where the nonfacility PE RVUs
are applied.
In paragraph (b)(5)(i)(C)--
++ Revise the paragraph introduction by adding ``and CORF'' after
``outpatient therapy'' and before ``services'' and, to more accurately
define the term ``outpatient therapy services,'' to add ``(including
physical therapy, occupational therapy and speech-language pathology
services)'' after ``therapy services'' and before ``CORF services
billed under * * *''.
The proposed revisions to Sec. 414.22(b)(5)(i)(A), (B), and (C)
would read as follows:
(A) Facility practice expense RVUs. The facility practice expense
RVUs apply to services furnished to patients in places of service
including, but not limited to, a hospital, a skilled nursing facility,
a community mental health center, a hospice, or an ambulatory surgical
center.
(B) Nonfacility practice expense RVUs. The nonfacility practice
expense RVUs apply to services furnished to patients in places of
service including, but not limited to, a physician's office, the
patient's home, a nursing facility, or a comprehensive outpatient
rehabilitation facility (CORF).
(C) Outpatient therapy and CORF services. Outpatient therapy
services (including physical therapy, occupational therapy, and speech-
language pathology services) and CORF services billed under the
physician fee schedule are paid using the nonfacility practice expense
RVUs.

V. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
The proposed rule imposes collection of information requirements as
outlined in the regulation text and specified in various section of
this proposed rule. However, this proposed rule also makes reference to
several associated information collections that are not discussed in
the regulation text contained in this document. The following is a
discussion of these information collections, some of which have already
received OMB approval.

A. Part B Drug Payment

The discussion of average sales price (ASP) issues in section
IV.A.1 of this proposed rule with comment period pertains to payment
for Medicare Part B drugs and biologicals under the ASP methodology.
Drug manufacturers are required to submit ASP data to us on a quarterly
basis. The ASP reporting requirements are set forth in section 1927(b)
of the Act.
In order to facilitate more accurate and consistent ASP data
reporting from manufacturers, we are proposing the following:
To revise existing reporting fields and add new fields to
the Addendum A template.
To add a macro to the Addendum A template that will allow
manufacturers to validate the format of their data prior to submission.
To maintain a list of HCPCS codes for which manufacturer's
report ASPs for NDCs on the basis of a specified unit.
A clarification to existing regulation text at Sec.
414.802. Current regulation text states that ``Unit means the product
represented by the 11 digit National Drug Code.'' We propose to update
the definition to account for situations when an alternative unit of
reporting must be used.
Additionally, we will also be revising our instructions for the
reporting of dermal grafting products in a user guide available on the
ASP Web site at: Zhttp://www.cms.gov/McrPartBDrugAvgSalesPrice/.
The burden associated with this requirement is the time and effort
required by manufacturers of Medicare Part B drugs and biologicals to
calculate, record, and submit the required data to CMS. The Addendum A
template is currently approved under OMB control number 0938-0921. For
the first year, we estimate that collection of the additional data
elements will take approximately 2 additional hours for each submission
of data, or 12 hours per response, at a cost of $252 per response.
Based on the current number of respondents, we estimate that this
requirement will affect approximately 180 manufacturers. Since
manufacturers will respond 4 times per year, we estimate that, on an
annual basis, the annual number of responses will be 720 (180
manufacturers multiplied by 4 responses) and the total annual hours
burden will be 34,560 hours (720 annual responses multiplied by 48
annual hours per response). We estimate the annual cost burden to be
$181,440 (cost per response multiplied by the annual number of
responses). Once manufacturers adjust to the changes associated with
electronic reporting after the first year, we anticipate that the
burden estimate will decrease.

B. The Physician Quality Reporting System

Section IV.F.1. of this proposed rule discusses the background of
the Physician Quality Reporting System, provides information about the
proposed measures and reporting mechanisms that would be available to
eligible professionals and group practices who choose to participate in
the 2012 Physician Quality Reporting System, and the proposed criteria
for satisfactory reporting in 2012.
With respect to satisfactory submission of data on quality measures
by eligible professionals, eligible professionals include physicians,
other practitioners as described in section 1842(b)(18)(c) of the Act,
physical and occupational therapists, qualified speech-language
pathologists, and qualified audiologists. Eligible professionals may
choose whether to participate and, to the extent they satisfactorily
submit data on quality measures for covered professional services, they
can qualify to receive an incentive payment. To qualify to receive an
incentive payment for 2012, we propose that the eligible professional
(or group practice) would need to meet one of the criteria for
satisfactory reporting described in section IV.F.1.e. or IV.F.1.f. of
this proposed rule (or section IV.F.1.g. for group practices).
Because this is a voluntary program, it is difficult to accurately
estimate how many eligible professionals would opt to participate in
the Physician Quality Reporting System in CY 2012. Information from the
``Physician Quality

[[Page 42922]]

Reporting System 2009 Reporting Experience Report, ``which is available
on the Physician Quality Reporting System section of the CMS Web site
at http://www.cms.hhs.gov/pqrs, indicates that eligible professionals
from nearly 120,000 unique TIN/NPI combinations attempted to submit
Physician Quality Reporting System quality measures data for the 2009
Physician Quality Reporting System. Therefore, for purposes of
conducting a burden analysis for the 2012 Physician Quality Reporting
System, we will assume that all eligible professionals who attempted to
participate in the 2009 Physician Quality Reporting System will also
attempt to participate in the 2012 Physician Quality Reporting System.
Furthermore, we believe that the burden for eligible professionals who
are participating in the Physician Quality Reporting System for the
first time in 2012 would be considerably higher than the burden for
eligible professionals who have participated in the Physician Quality
Reporting System in prior years. As described later in this section,
some preparatory steps are needed to begin participating in the
Physician Quality Reporting System. To the extent that we are not
proposing to retire the measures that an eligible professional has
reported in a prior year and there are no changes to the measure's
specifications from a prior year, such preparatory steps would not need
to be repeated in subsequent years.
For individual eligible professionals, the burden associated with
the requirements of this reporting initiative would be the time and
effort associated with eligible professionals identifying applicable
Physician Quality Reporting System quality measures for which they can
report the necessary information, collecting the necessary information,
and reporting the information needed to report the eligible
professional's or group practice's measures. We believe it is difficult
to definitively quantify the burden because eligible professionals may
have different processes for integrating the data collection for the
Physician Quality Reporting System measures into their practice's work
flows. Moreover, we expect that the time needed for an eligible
professional to review the quality measures and other information,
select measures applicable to his or her patients and the services he
or she furnishes to them, and incorporate the use of quality data codes
into the office work flows would vary along with the number of measures
that are potentially applicable to a given professional's practice.
Since a majority of eligible professionals participate via claims or
registry-based reporting of individual measures, they would generally
be required to report on at least three measures to earn a Physician
Quality Reporting System incentive. Therefore, we will assume that each
eligible professional who attempts to submit Physician Quality
Reporting System quality measures data via claims or registry reporting
is attempting to earn a Physician Quality Reporting System incentive
payment and reports on an average of three measures for this burden
analysis.
Due to the fact that we have seen significant increases in
participation each year since the program's inception, we anticipate
even greater participation in the 2012 Physician Quality Reporting
System than in previous years, including participation by eligible
professionals who are participating in the Physician Quality Reporting
System for the first time in 2012. As discussed previously, eligible
professionals who are participating in the Physician Quality Reporting
System for the first time in 2012 need to take preparatory steps to
begin participating in the program. Since this burden analysis focuses
on those new to the Physician Quality Reporting System, we will assign
5 hours as the amount of time needed for eligible professionals to
review the 2012 Physician Quality Reporting System Measures List,
review the various reporting options, select the most appropriate
reporting option, identify the applicable measures or measures groups
for which they can report the necessary information, review the measure
specifications for the selected measures or measures groups, and
incorporate reporting of the selected measures or measures groups into
the office work flows. This estimate is based on our assumption that an
eligible professional would need up to 2 hours to review the 2012
Physician Quality Reporting System Measures List, review the reporting
options, and select a reporting option and measures on which to report
and 3 hours to review the measure specifications for up to 3 selected
measures or up to 1 selected measures group and to develop a mechanism
for incorporating reporting of the selected measures or measures group
into the office work flows.
Information from the Physician Voluntary Reporting Program (PVRP),
which was a predecessor to the Physician Quality Reporting System,
indicated an average labor cost of $50 per hour for 2006. To account
for salary increases over time, we will use an average practice labor
cost of $60 per hour in our estimates based on an assumption of an
average annual increase of approximately 3 percent. Thus, we estimate
the cost for an eligible professional associated with preparing to
report Physician Quality Reporting System quality measures would be
approximately $300 per eligible professional ($60 per hour x 5 hours).
We continue to expect the ongoing costs associated with Physician
Quality Reporting System participation to decline based on an eligible
professional's familiarity with and understanding of the Physician
Quality Reporting System, experience with participating in the
Physician Quality Reporting System, and increased efforts by CMS and
stakeholders to disseminate useful educational resources and best
practices. We also continue to expect the ongoing costs associated with
Physician Quality Reporting System participation to decline as we align
the participation requirements in the Physician Quality Reporting
System with the reporting requirements in the Medicare and Medicaid
Electronic Health Record (EHR) Incentive Program such that an eligible
professional would only need to submit data to CMS one time for
multiple purposes.
We believe the burden associated with actually reporting the
Physician Quality Reporting System quality measures would vary
depending on the reporting mechanism selected by the eligible
professional. For the proposed claims-based reporting option, eligible
professionals would need to gather the required information, select the
appropriate quality data codes (QDCs), and include the appropriate QDCs
on the claims they submit for payment. The Physician Quality Reporting
System would collect QDCs as additional (optional) line items on the
existing HIPAA transaction 837-P and/or CMS Form 1500 (OCN: 0938-0999).
We do not anticipate any new forms and or any modifications to the
existing transaction or form. We also do not anticipate changes to the
837-P or CMS Form 1500 for CY 2012.
Based on our experience with the PVRP, we continue to estimate that
the time needed to perform all the steps necessary to report each
measure (that is, reporting the relevant quality data code(s) for a
measure) on claims would ranges from 15 seconds (0.25 minutes) to over
12 minutes for complicated cases and/or measures, with the median time
being 1.75 minutes. At an average labor cost of $60 per hour per
practice, the cost associated with this burden would range from $0.25
in labor to about $12.00 in labor time for more complicated cases and/
or measures,

[[Page 42923]]

with the cost for the median practice being $1.75.
The total estimated annual burden for this requirement would also
vary along with the volume of claims on which quality data is reported.
In previous years, when we required reporting on 80 percent of eligible
cases for claims-based reporting, we found that on average, the median
number of reporting instances for each of the Physician Quality
Reporting System measures was 9. Since we proposed to reduce the
required reporting rate by over one-third to 50 percent, then for
purposes of this burden analysis we will assume that an eligible
professional will need to report each selected measure for 6 reporting
instances. The actual number of cases on which an eligible professional
would be required to report quality measures data would vary, however,
with the eligible professional's patient population and the types of
measures on which the eligible professional chooses to report (each
measure's specifications includes a required reporting frequency).
Based on the assumptions discussed previously, we estimate the
total annual reporting burden per individual eligible professional
associated with claims-based reporting would range from 4.5 minutes
(0.25 minutes per measure x 3 measures x 6 cases per measure) to 180
minutes (12 minutes per measure x 3 measures x 6 cases per measure),
with the burden to the median practice being 31.5 minutes (1.75 minutes
per measure x 3 measures x 6 cases). We estimate the total annual
reporting cost per eligible professional associated with claims-based
reporting would range from $4.50 ($0.25 per measure x 3 measures x 6
cases per measure) to $216.00 ($12.00 per measure x 3 measures x 6
cases per measure), with the cost to the median practice being $31.50
per eligible professional ($1.75 per measure x 3 measures x 6 cases per
measure).
For registry-based reporting, there would be no additional time
burden for eligible professionals to report data to a registry as
eligible professionals opting for registry-based reporting would more
than likely already be reporting data to the registry for other
purposes and the registry would merely be re-packaging the data for use
in the Physician Quality Reporting System. Little, if any, additional
data would need to be reported to the registry solely for purposes of
participation in the 2012 Physician Quality Reporting System. However,
eligible professionals would need to authorize or instruct the registry
to submit quality measures results and numerator and denominator data
on quality measures to CMS on their behalf. We estimate that the time
and effort associated with this would be approximately 5 minutes per
eligible professional.
We are proposing that registries interested in submitting quality
measures results and numerator and denominator data on quality measures
to CMS on their participants' behalf in 2012 would need to complete a
self-nomination process in order to be considered ``qualified'' to
submit on behalf of eligible professionals unless the registry was
qualified to submit on behalf of eligible professionals for prior
program years and did so successfully. We estimate that the proposed
self-nomination process for qualifying additional registries to submit
on behalf of eligible professionals for the 2012 Physician Quality
Reporting System would involve approximately 1 hour per registry to
draft the letter of intent for self-nomination. We estimate that each
self-nominated entity would also spend 2 hours for the interview with
CMS officials and 2 hours calculating numerators, denominators, and
measure results for each measure the registry wishes to report using a
CMS-provided measure flow. However, the time it takes to produce
calculated numerators, denominators, and measure results using the CMS-
provided measure flows could vary depending on the registry's
experience and the number and type of measures for which the registry
wishes to submit on behalf of eligible professionals. Additionally,
part of the proposed self-nomination process involves the completion of
an XML submission by the registry, which we estimate to take
approximately 5 hours, but may vary depending on the registry's
experience. We estimate that the registry staff involved in the
registry self-nomination process would have an average labor cost of
$50 per hour. Therefore, assuming the total burden hours per registry
associated with the registry self-nomination process is 10 hours, we
estimate that the total cost to a registry associated with the registry
self-nomination process would be approximately $500 ($50 per hour x 10
hours per registry).
The burden associated with the proposed registry-based reporting
requirements of the Physician Quality Reporting System would be the
time and effort associated with the registry calculating quality
measures results from the data submitted to the registry by its
participants and submitting the quality measures results and numerator
and denominator data on quality measures to CMS on behalf of their
participants. We expect that the time needed for a registry to review
the quality measures and other information, calculate the measures
results, and submit the measures results and numerator and denominator
data on the quality measures on their participants' behalf is would
vary along with the number of eligible professionals reporting data to
the registry and the number of applicable measures. However, we believe
that registries already perform many of these activities for their
participants. Therefore, there may not necessarily be a burden on a
particular registry associated with calculating the measure results and
submitting the measures results and numerator and denominator data on
the quality measures to CMS on behalf of their participants. Whether
there is any additional burden to the registry as a result of the
registry's participation in the Physician Quality Reporting System
would depend on the number of measures that the registry intends to
report to CMS and how similar the registry's measures are to CMS'
proposed Physician Quality Reporting System measures.
For EHR-Based reporting we have proposed for the CY 2012 Physician
Quality Reporting System, the individual eligible professional could
either submit the quality measures data directly to CMS from their EHR
or utilize an EHR data submission vendor to submit the data to CMS on
the eligible professionals' behalf. To submit data to CMS must directly
from their EHR, the eligible professional would have to have access to
a CMS-specified identity management system, such as IACS, which we
believe takes less than 1 hour to obtain. Once an eligible professional
has an account for this CMS-specified identity management system, he or
she would need to extract the necessary clinical data from his or her
EHR, and submit the necessary data to the CMS-designated clinical data
warehouse. With respect to our proposed requirement for an eligible
professional to submit a test file, we believe that doing so would take
less than 1 hour. With respect to submitting the actual 2012 data file
in 2013, we believe that this would take an eligible professional no
more than 2 hours, depending on the number of patients on which the
eligible professional is submitting. We believe that once the EHR is
programmed by the vendor to allow data submission to CMS, the burden to
the eligible professional associated with submission of data on
Physician Quality Reporting System quality measures should be minimal
as all of the information required to report the measure should already
reside in the

[[Page 42924]]

eligible professional's EHR. We did not introduce the EHR-Based
reporting mechanism into the Physician Quality Reporting System until
2010. We are still in the process of analyzing 2010 data. As such, we
believe it is difficult to predict how many eligible professionals may
choose to participate in the 2012 Physician Quality Reporting System
via the EHR-Based reporting mechanism.
We are proposing that an EHR vendor interested in having their
product(s) be used by eligible professionals to submit the proposed
Physician Quality Reporting System quality measures data to CMS or
interested in submitting data obtained from an EHR to CMS on behalf of
eligible professionals would be required to complete a self-nomination
process in order for the vendor and/or its product(s) to be considered
``qualified'' for 2012. It is difficult to definitively quantify the
burden associated with the proposed EHR self-nomination process as
there is variation regarding the technical capabilities and experience
among vendors. For purposes of this burden analysis, however, we
estimate that the time required for an EHR vendor to complete the self-
nomination process would be similar to the time required for registries
to self-nominate, which is approximately 10 hours at $50 per hour for a
total of $500 per EHR vendor ($50 per hour x 10 hours per EHR vendor).
The burden associated with the EHR vendor programming its EHR
product(s) to extract the clinical data that the eligible professional
would need to submit to CMS for purposes of reporting 2012 Physician
Quality Reporting System quality measures would be dependent on the EHR
vendor's familiarity with the Physician Quality Reporting System, the
vendor's system capabilities, as well as the vendor's programming
capabilities. Some vendors already have these necessary capabilities
and for such vendors, we estimate that the total burden hours would be
40 hours at a rate of $50 per hour for a total burden estimate of
$2,000 ($50 per hour x 40 hours per vendor). However, given the
variability in the capabilities of the vendors, we believe those
vendors with minimal experience would have a burden of approximately
200 hours at $50 per hour, for a total estimate of $10,000 per vendor
($50 per hour x 200 hours per EHR vendor).
With respect to the proposed criteria for satisfactorily reporting
data on the proposed quality measures for group practices to be treated
as satisfactorily submitting quality measures data under the 2012
Physician Quality Reporting System discussed in section IV.F.1. of this
proposed rule, group practices interested in participating in the 2012
Physician Quality Reporting System through the proposed group practice
reporting option (GPRO) would need to complete a proposed self-
nomination process similar to the proposed self-nomination process
required of registries and EHR vendors. Therefore, assuming it takes 2
hours for a group practice to decide whether to participate as a group
or individually, approximately 2 hours per group practice to draft the
letter of intent for self-nomination, gather the requested information,
and provide this requested information, and an additional 2 hours
undergoing the vetting process with CMS officials, we estimate a total
of 6 hours associated with the proposed self-nomination process.
Assuming that the group practice staff involved in the group practice
proposed self-nomination process have the same average practice labor
cost as the average practice labor cost estimates we used for
individual eligible professionals of $60 per hour, we estimate that the
total cost to a group practice associated with the group practice self-
nomination process would be approximately $360 ($60 per hour x 6 hours
per group practice).
The burden associated with the proposed group practice reporting
requirements of the 2012 Physician Quality Reporting System is the time
and effort associated with the group practice submitting the proposed
quality measures data. For practices participating under the proposed
GPRO process, this would be the time associated with the physician
group completing the data collection tool. The information collection
components of this data collection tool have been reviewed by OMB and
are currently approved under OMB control number 0938-0941, with an
expiration date of December 31, 2011, for use in the Physician Group
Practice, Medicare Care Management Performance (MCMP), and EHR
demonstrations. Based on burden estimates for the PGP demonstration,
which uses the same data submission methods, we estimate the burden
associated with a physician group completing the data collection tool
would be approximately 79 hours per physician group. Based on an
average labor cost of $60 per physician group, we estimate the cost of
data submission per physician group associated with participating in
the proposed 2012 Physician Quality Reporting System GPRO would be
$4,740 ($60 per hour x 79 hours per group practice).
Eligible professionals who wish to qualify for the additional 0.5
percent incentive payment authorized under section 1848(m)(7) of the
Act (``Additional Incentive Payments'') for 2012 would need to more
frequently than is required to qualify for or maintain board
certification status participate in a qualified Maintenance of
Certification Program for 2012 and successfully complete a qualified
Maintenance of Certification Program practice assessment for 2012. We
believe that a majority of the eligible professionals who would attempt
to qualify for this additional 0.5 percent incentive payment would be
those who are already enrolled and participating in a Maintenance of
Certification Board. The amount of time that it would take for the
eligible professional to participate in the Maintenance of
Certification Program more frequently than is required to qualify for
or maintain board certification status would vary based on what each
individual board determines constitutes ``more frequently.'' We expect
that the amount of time needed to complete a qualified Maintenance of
Certification Program practice assessment would be spread out over time
since a quality improvement component is often required. Information
from an informal poll of a few ABMS member boards indicates that the
time an individual eligible professional spends to complete the
practice assessment component of the Maintenance of Certification
ranges from 8 to 12 hours.
We are seeking comments on this burden analysis, including the
underlying assumptions used in developing our burden estimates.

C. Electronic Prescribing (eRx) Incentive Program

The eRx Incentive Program is a voluntary reporting program. In
2009, approximately 670,000 eligible professionals were eligible to
participate in the eRx Incentive Program. Approximately 90,000 (or
about 14 percent) of eligible professionals participated in the eRx
Incentive Program in 2009. For purposes of participation in the eRx
Incentive Program to earn an incentive payment, we expect that the
number of eligible professionals participating in the eRx Incentive
Program to be approximately 90,000, based on participation rates from
the 2009 eRx Incentive Program.
Due to the implementation of the 2013 and 2014 payment adjustments
as well as the proposals to expand the reporting mechanisms for
purposes of

[[Page 42925]]

reporting the electronic prescribing measure for the 2013 and 2014
payment adjustments, we expect that there will be an increase in
eligible professionals who participate in the eRx Incentive Program for
CYs 2012 through 2014. Therefore, for purposes of conducting a burden
analysis for the 2012 through 2014 eRx Incentive Program, we will
assume that approximately 90,000 professionals eligible to participate
in the 2009 eRx Incentive Program will participate. This is based on
participation rates from the 2009 eRx Incentive Program, which is the
highest participation level for the eRx Incentive Program we have yet
recorded. As such, we can estimate that more than 90,000 unique TIN/NPI
combinations will participate in the 2012, 2013, and 2014 eRx Incentive
Program for purposes of the 2013 and 2014 payment adjustment (see the
``2009 Reporting Experience,'' which is available on the Physician
Quality Reporting System section of the CMS Web site at http://
www.cms.hhs.gov/pqrs). Although this estimate only accounts for
approximately 13 percent of all professionals eligible to participate
in the eRx Incentive Program, we believe that participation may be
offset by the limitations and significant hardship exemptions we have
proposed for the 2013 and 2014 payment adjustment.
Section IV.F.2. of this proposed rule discusses the background of
the eRx Incentive Program. For the proposed programs for 2012 through
2014, eligible professionals and group practices may choose whether to
participate and, to the extent they meet--(1) Certain proposed
thresholds with respect to the volume of covered professional services
furnished; and (2) the proposed criteria for being a successful
electronic prescriber described in section IV.F.2.b.(2). of this
proposed rule, they would qualify to receive an incentive payment for
2012 and 2013 and/or avoid being subject to the 2013 and 2014 payment
adjustment.
In section IV.F.2.b.(2). of this proposed rule, we propose the
requirements for eligible professionals and group practices can qualify
for being a successful electronic prescriber in order to earn a 2012
and/or 2013 incentive payment. For the 2012 and 2013 incentives, as
discussed in section IV.F.2. of this proposed rule, each eligible
professional would need to report the electronic prescribing measure's
numerator indicating that at least one prescription generated during an
encounter was electronically submitted at least 25 instances during the
reporting period in association with a denominator-eligible visit.
In section IV.F.2.b.(2). of this proposed rule, we propose
additional requirements for eligible professionals and group practices
can meet for the 2013 payment adjustment, as well as propose
requirements for being a successful electronic prescriber for the 2014
payment adjustment. For the 2013 and 2014 payment adjustment, we
propose that each eligible professional would need to report the
electronic prescribing measure's numerator at least 10 instances during
the reporting period.
We expect the ongoing costs associated with participation in the
eRx Incentive Program to decline based on an eligible professional's
understanding of the eRx Incentive Program, experience with
participating in the eRx Incentive Program, and increased efforts by
CMS and stakeholders to disseminate useful educational resources and
best practices.
Similar to the Physician Quality Reporting System, one factor in
the burden to individual eligible professionals is the time and effort
associated with individual eligible professionals reviewing the
electronic prescribing measure to determine whether it is applicable to
them, reviewing and selecting one of the available proposed reporting
options (for purposes of the 2012 and 2013 incentives and the 2013 and
2014 payment adjustments, this measure would be reportable through
claims-based reporting, registry-based reporting, or through EHRs) and
selecting one, gathering the required information, and incorporating
reporting of the measure into their office work flows. Since the eRx
Incentive Program consists of only 1 measure to report, we estimate 2
hours as the amount of time that would be needed for individual
eligible professionals to prepare for participation in the eRx
Incentive Program. At an average cost of approximately $60 per hour per
practice, we estimate the total preparation costs to individual
eligible professionals would be approximately $120 (2 hours x $60 per
hour).
Another factor that we believe influences the burden to eligible
professionals is how they choose to report the electronic prescribing
measure. For eligible professionals who choose to do so via claims, we
estimate that the burden associated with the requirements of this
incentive program would be the time and effort associated with
gathering the required information and identifying when it is
appropriate to include the measure's quality data code (QDC) on the
claims they submit for payment. For claims-based reporting, the
measure's QDC would be collected as additional (optional) line items on
the existing HIPAA transaction 837-P and/or CMS Form 1500. We do not
anticipate any new forms and or modifications to the existing
transaction or form. We also do not anticipate changes to the 837-P or
CMS Form 1500 for CY 2012.
Based on the information from the PVRP for the amount of time it
takes a median practice to report one measure one time on claims (1.75
minutes) and our proposed requirement that eligible professionals
report the measure 25 times for purposes of the incentive payment, we
estimate the burden associated with claims-based data submission to
would be 43.75 minutes (1.75 minutes per case x 1 measure x 25 cases
per measure). This equates to a cost of approximately $43.75 (1.75
minutes per case x 1 measure x 25 cases per measure x $60 per hour) per
individual eligible professional. For purposes of the 2013 and 2014 eRx
payment adjustment, where we propose that an eligible professional is
required to report the measure only 10 times, we estimate the burden
associated with claims-based submission would be 17.5 minutes (1.75
minutes per case x 1 measure x 10 cases per measure). This equates to a
cost of approximately $17.50 (1.75 minutes per case x 1 measure x 10
cases per measure x $60 per hour) per individual eligible professional.
Because registry-based reporting of the electronic prescribing
measure to CMS was added to the eRx Incentive Program for 2010 and
eligible professionals are not required to indicate to us how they plan
to report the electronic prescribing measure each year, it is difficult
to accurately estimate how many eligible professionals would opt to
participate in the eRx Incentive Program through the proposed registry-
based reporting mechanism in CYs 2012 through 2014. We do not
anticipate, however, any additional burden for eligible professionals
to report data to a registry as eligible professionals opting for
registry-based reporting would more than likely already be reporting
data to the registry for other purposes. Little, if any, additional
data would need to be reported to the registry for purposes of
participation in the 2012, 2013, and 2014 eRx Incentive Program since
the only information that the registry would need to report to us is
the number of times the eligible professional electronically
prescribed. However, eligible professionals would need to authorize or
instruct the registry to submit quality measures results and numerator
and denominator data on the

[[Page 42926]]

electronic prescribing measure to CMS on their behalf. We estimate that
the time and effort associated with this would be approximately 5
minutes for each eligible professional that wishes to authorize or
instruct the registry to submit quality measures results and numerator
and denominator data on the electronic prescribing measure to CMS on
their behalf.
Based on our proposal to consider only registries qualified to
submit Physician Quality Reporting System quality measures results and
numerator and denominator data on quality measures to CMS on their
participants' behalf for the 2012 and 2013 Physician Quality Reporting
System reporting periods to be qualified to submit results and
numerator and denominator data on the electronic prescribing measure
for the respective eRx Incentive Program reporting periods that occur
in 2012 and 2013, there would be no need for a registry to undergo a
separate self-nomination process for the eRx Incentive Program and
therefore, no additional burden associated with the registry self-
nomination process.
There would also be a burden to the registry associated with the
registry calculating results for the electronic prescribing measure
from the data submitted to the registry by its participants and
submitting the quality measures results and numerator and denominator
data on the electronic prescribing quality measure to CMS on behalf of
their participants. We expect that the time needed for a registry to
review the electronic prescribing measure's specifications, calculate
the measure's results, and submit the measure's results and numerator
and denominator data on their participants' behalf would vary along
with the number of eligible professionals reporting data to the
registry. However, we believe that registries already perform many of
these activities for their participants. Since the eRx Incentive
Program consists of only one measure, we believe that the burden
associated with the registry reporting the measure's results and
numerator and denominator to CMS on behalf of their participants would
be minimal.
For the proposed EHR-Based reporting mechanism, the eligible
professional would need to either extract the necessary clinical data
from his or her EHR and submit the necessary data to the CMS-designated
clinical data warehouse or have an EHR data submission vendor extract
the necessary clinical data from his or her EHR and submit the
necessary data to CMS on the professional's behalf. Because this manner
of reporting quality data to CMS was first added to the eRx Incentive
Program in 2010 and eligible professionals are not currently required
to (and we are not proposing to require that they) indicate to us how
they intend to report the electronic prescribing measure, it is
difficult to estimate how many eligible professionals would opt to
participate in the eRx Incentive Program through the proposed EHR-Based
reporting mechanism for reporting periods that occur in CYs 2012 and
2013. We believe that once an eligible professional's EHR is programmed
by the vendor to allow data submission to CMS, the burden to the
eligible professional associated with submission of data on the
electronic prescribing measure should be minimal. The eligible
professional who chooses to submit the electronic prescribing measure
data directly to CMS from his or her EHR would have to have access to a
CMS-specified identity management system, such as IACS, though. We
believe it takes less than 1 hour to obtain access to the identity
management system.
Since we are proposing that only EHR products and data submission
vendors qualified for 2012 and 2013 Physician Quality Reporting System
reporting periods could be used to submit data on the electronic
prescribing measure for the respective eRx Incentive Program reporting
periods that occur in CYs 2012 and 2013, there would be no need for EHR
vendors and/or their products to undergo a separate self-nomination
process for the eRx Incentive Program and therefore, no additional
burden associated with the self-nomination process for the eRx
Incentive Program.
There would also be a burden to the EHR vendor associated with the
EHR vendor programming its EHR product(s) to extract the clinical data
that the eligible professional and/or vendor would need to submit to
CMS for purposes of reporting the proposed electronic prescribing
measure. The time needed for an EHR vendor to review the measure's
specifications and program its product to submit data on the measure to
the CMS-designated clinical data warehouse would be dependent on the
EHR vendor's familiarity with the electronic prescribing measure, the
vendor's system capabilities, as well as the vendor's programming
capabilities. Since we are proposing that only EHR products qualified
for 2012 and 2013Physician Quality Reporting System reporting periods
would qualify for the respective eRx Incentive Program reporting
periods that occur in CY 2012 or 2013, and the eRx Incentive Program
consists of only one measure, we believe that any burden associated
with the EHR vendor to program its product(s) to submit data on the
electronic prescribing measure to the CMS-designated clinical data
warehouse would be minimal.
Finally, with respect to the proposed criteria for group practices
to be treated as successful electronic prescribers for the 2012 and
2013 incentive, as well as with regard to the 2013 and 2014 payment
adjustments, as discussed in section IV.F.2. of this proposed rule,
respectively, group practices would have the same options as individual
eligible professionals in terms of the form and manner for reporting
the electronic prescribing measure (that is, group practices would have
the option of reporting the measure through claims, a qualified
registry, or a qualified EHR product). There are only 2 differences
between the proposed requirements for an individual eligible
professional and a group practice: (1) The fact that a group practice
would have to self-nominate; and (2) a difference in the number of
times that a group practice would be required to report the electronic
prescribing measure.
We do not anticipate any additional burden associated with the
proposed group practice self-nomination process since we propose to
limit the group practices to those selected to participate in the
Physician Quality Reporting System GPRO. We are proposing that the
practice only would need to indicate its desire to participate in the
proposed eRx GPRO at the same time it self-nominates for the Physician
Quality Reporting System GPRO and indicate how it intends to report the
electronic prescribing measure.
In terms of the burden to group practices comprised of 25 to 99
eligible professionals associated with submission of the electronic
prescribing measure, we believe that this would be similar to the
burden to individual eligible professionals for submitting the
electronic prescribing measure. In fact, overall, there could be less
burden associated with a practice participating as a group rather than
as individual eligible professionals because the total number of
proposed reporting instances required by the group could be less than
the total number of proposed reporting instances that would be required
if each member of the group separately reported the electronic
prescribing measure. Thus, we believe that the burden to a group
practice associated with reporting the electronic prescribing measure
could range from almost no burden (for groups who choose to do so
through a qualified EHR or registry) to 18.22 hours (1.75 minutes per
measure x 1 measure

[[Page 42927]]

x 625 cases per measure) for a group practice that chooses to report
the electronic prescribing measures through the proposed claims
submission process. Consequently, the total estimated cost per group
practice to report the electronic prescribing measure could be as high
as $1,093 ($1.75 per measure x 1 measure x 625 cases per measure).
In terms of the burden to group practices comprised of 100 or more
eligible professionals associated with submission of the electronic
prescribing measure, we believe that this would be similar to the
burden to individual eligible professionals for submitting the
electronic prescribing measure. In fact, overall, there could be less
burden associated with a practice participating as a group rather than
as individual eligible professionals because the total number of
proposed reporting instances required by the group could be less than
the total number of proposed reporting instances that would be required
if each member of the group separately reported the electronic
prescribing measure. Thus, we believe that the burden to a group
practice associated with reporting the electronic prescribing measure
could range from almost no burden (for groups who choose to do so
through a qualified EHR or registry) to 72.92 hours (1.75 minutes per
measure x 1 measure x 2,500 cases per measure) for a group practice
that chooses to report the electronic prescribing measures through the
proposed claims submission process. Consequently, the total estimated
cost per group practice to report the electronic prescribing measure
could be as high as $4,375 ($1.75 per measure x 1 measure x 2,500 cases
per measure).
As with individual eligible professionals, we believe that group
practices that choose to participate in the eRx GPRO through the
proposed registry-based reporting mechanism of the electronic
prescribing measure would more than likely already be reporting data to
the registry. Little, if any, additional data would need to be reported
to the registry for purposes of participation in the eRx Incentive
Program for CYs 2012 through 2014 beyond authorizing or instructing the
registry to submit quality measures results and numerator and
denominator data on the electronic prescribing measure to CMS on their
behalf. We estimate that the time and effort associated with this
proposed registry option would be approximately 5 minutes for each
group practice that wishes to authorize or instruct the registry to
submit quality measures results and numerator and denominator data on
the electronic prescribing measure to CMS on their behalf.
For group practices that choose to participate in the eRx Incentive
Program for CYs 2012 through 2014 via the proposed EHR-Based reporting
of the electronic prescribing mechanism, once the EHR is programmed by
the vendor to allow data submission to CMS, the burden to the group
practice associated with submission of data on the electronic
prescribing measure should be minimal.
We invite comments on this burden analysis, including the
underlying assumptions used in developing our burden estimates.

D. Medicare Electronic Health Record (EHR) Incentive Program for
Eligible Professionals for the 2012 Payment Year

The EHR Incentive Program (discussed in section IV.H. of this
proposed rule) is a voluntary program whereby eligible professionals
(EPs) may earn an incentive payment for demonstrating meaningful use of
certified EHR technology, which includes among other requirements, the
submission of clinical quality measures (CQMs). The ``Electronic Health
Record Incentive Program'' final rule (75 FR 44314 through 75 FR 44588)
describes the CQMs and the CQM reporting mechanisms that will be
available to EPs who choose to participate in the EHR Incentive Program
(75 FR 44380) and established the criteria for achieving meaningful use
in Stage 1, which includes CY 2012. In the final rule, for CY 2012, we
estimated that approximately 385,954 Medicare EPs will be eligible to
receive an incentive under the EHR Incentive Program (75 FR 44518).
Section IV.H.2. of this proposed rule proposes changes to the EHR
Incentive Program for EPs for the 2012 payment year. Aside from
continuing the attestation method of reporting CQMs, we propose to
allow the reporting of CQMs for purposes of demonstrating meaningful
use through participation in the Physician Quality Reporting System--
Medicare EHR Incentive Pilot. Eligible professionals may participate in
the Pilot by submitting CQMs via (1) a Physician Quality Reporting
System ``qualified'' EHR data submission vendor or (2) an EHR-Based
reporting option using the EP's certified EHR technology, which must
also be a Physician Quality Reporting System ``qualified'' EHR.
Because this is a voluntary program, EPs may choose whether to
participate in the EHR Incentive Program and attest that they have met
the meaningful use objectives and measures. Registration for the EHR
Incentive Program opened in January 2011. At this time, we do not have
sufficient data available on participation in the EHR Incentive Program
by EPs to revise the final rule's estimate of how many EPs will opt to
participate in the EHR Incentive Program for payment year 2012.
We believe the burden associated with actually reporting CQMs will
vary depending on the reporting mechanism selected by the EP.
Attestation to the objectives and measures is the only method available
for EPs to demonstrate that they have met the meaningful use criteria
in 2011. Attestation was first available on April 18, 2011 and we do
not yet have sufficient data on the 2011 participation in the EHR
Incentive Program. Therefore, it is difficult to estimate the level of
participation in the proposed Pilot versus the number of EPs that would
prefer to attest to the CQMs. However, we believe that the number of
EPs who choose to participate via attestation will largely be those who
are not participating in both the EHR Incentive Program and Physician
Quality Reporting System. This is because EPs participating in the
Physician Quality Reporting System would be more likely to participate
in the Pilot.
As we estimated in the EHR Incentive Program final rule, we
estimate that it would take 8 hours and 52 minutes for an EP to attest
that during the EHR reporting period, the EP used certified EHR
technology, specify the technology, and satisfied all Stage 1
meaningful use core criteria for payment year 2012 (75 FR 44518). We
estimate that it will further take an additional 0.5 hours to select
and attest to the clinical quality measures, in the format and manner
specified by CMS (75 FR 44517).
For reporting via a qualified EHR data submission vendor, there
would be no additional time burden for eligible professionals to report
CQM data to a ``qualified'' EHR data submission vendor as EPs opting
for this option would more than likely already be reporting data to the
EHR data submission vendor for other purposes, such as the Physician
Quality Reporting System, and the EHR data submission vendor would
merely be re-packaging the data for use in the EHR Incentive Program.
Furthermore, EPs more than likely would not need to authorize or
instruct the EHR data submission vendor to submit CQM data to CMS on
their behalf because this likely will have already been done as a
requirement for reporting via an EHR data submission vendor under the
Physician Quality Reporting System.
Qualified EHR data submission vendors interested in submitting CQM

[[Page 42928]]

data to CMS on their participants' behalf will not need to complete a
self-nomination process in order to be considered ``qualified'' to
submit on behalf of EPs as this process would have already been
performed for the Physician Quality Reporting System. Therefore, we
believe that there is no additional burden aside from the burden
associated with being a Physician Qualified Reporting System qualified
EHR data submission vendor for such vendors to submit CQMs on behalf of
EPs.
For EPs who choose to participate in the pilot via direct data
submission to CMS from the EP's certified her technology, an EP must
have access to a CMS-specified identity management system, such as
IACS, to participate in the Physician Quality Reporting System or eRx
Incentive Program. We believe that EPs that choose the EHR-Based
reporting pilot to report CQMs will do so only if they are
participating in the Physician Quality Reporting System. As such, we
believe there will be no additional burden on EPs to have access to a
CMS-specified identity management system if the EP is already
participating in the Physician Quality Reporting System. With respect
to submitting the actual 2012 data file in 2013, we believe that this
would take an EP no more than 2 hours, depending on the number of
patients on which the EP is submitting. We believe that once the EHR is
programmed by the vendor to allow data submission to CMS and the EP
participates in the Physician Quality Reporting System, the additional
burden to the EP associated with electronic submission of the CQMs
should be minimal. Since this is a new, proposed reporting mechanism
for the EHR Incentive Program 2012 payment year, it is difficult to
predict the level of participation in EHR-Based reporting. However, we
believe that the number of EPs who choose to participate in the EHR-
Based reporting pilot will be the same as the number of eligible
professionals who choose the EHR-Based reporting mechanism for the
Physician Quality Reporting System. This is primarily because in
addition to being certified EHR technology, the technology used under
this reporting option would need to be ``qualified'' according to the
Physician Quality Reporting System qualification process.
The burden associated with the EHR vendor programming its EHR
product(s) to extract the clinical data that the EP or vendor needs to
submit to CMS for purposes of reporting CQMs will be dependent on the
EHR vendor's familiarity with the EHR Incentive Program, the vendor's
system capabilities, as well as the vendor's programming capabilities.
As we already propose to require ``qualified'' EHRs vendors to perform
these functions under the Physician Quality Reporting System, the
burden for submitting CQMs under the EHR Incentive Program will be
similar to the EHR vendor reporting burden under the Physician Quality
Reporting System. For vendors who already have these necessary
capabilities, we estimate the total burden hours to be 40 hours at a
rate of $50 per hour for a total burden estimate of $2,000 ($50 per
hour x 40 hours per vendor). However, given the variability in the
capabilities of the vendors, those vendors with minimal experience
would have a burden of approximately 200 hours at $50 per hour, for a
total estimate of $10,000 per vendor ($50 per hour x 200 hours per EHR
vendor).
We invite comments on this burden analysis, including the
underlying assumptions used in developing our burden estimates.
To obtain copies of the supporting statement and any related forms
for the proposed paperwork collections referenced above, access CMS'
Web site at http://www.cms.gov/PaperworkReductionActof1995/PRAL/list.asp#TopOfPage or e-mail your request, including your address,
phone number, OMB number, and CMS document identifier, to
Paperwork@cms.hhs.gov, or call the Reports Clearance Office at (410)
786-1326.
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this proposed rule; or
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Attention: CMS Desk Officer,
[CMS-1524-P], Fax: (202) 395-5806; or E-mail: OIRA_submission@omb.eop.gov.

VI. 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, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.

VII. Regulatory Impact Analysis

A. Statement of Need

This proposed rule is necessary in order to make payment and policy
changes under the Medicare PFS and to make required statutory changes
under the Affordable Care Act and MIPPA and other statutory changes.
This proposed rule is also necessary to make changes to the Part B drug
payment policy and other Part B related policies.

B. Overall Impact

We have examined the impact of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated an ``economically''
significant rule, under section 3(f)(1) of Executive Order 12866.
Accordingly, the rule has been reviewed by the Office of Management and
Budget. We have prepared a Regulatory Impact Analysis, that to the best
of our ability presents the costs and benefits of the proposed rule. We
solicit comment on the Regulatory Impact Analysis provided.
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of $7.0 million to $34.5 million in any 1 year (for details
see the SBA's Web site at http://www.sba.gov/content/table-small-business-size-standards (refer to the 620000 series)). Individuals

[[Page 42929]]

and States are not included in the definition of a small entity. The
RFA requires that we analyze regulatory options for small businesses
and other entities. A Regulatory Flexibility Act 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 with less
significant adverse economic impact on the small entities.
For purposes of the RFA, physicians, NPPs, and suppliers including
IDTFs are considered small businesses if they generate revenues of $10
million or less based on SBA size standards. Approximately 95 percent
of physicians are considered to be small entities. There are over 1
million physicians, other practitioners, and medical suppliers that
receive Medicare payment under the PFS.
Because we acknowledge that many of the affected entities are small
entities, the analysis provided here and throughout the preamble of
this proposed rule constitutes our Initial Regulatory Flexibility Act
(IRFA) analysis for the remaining provisions. This includes
alternatives considered for the various proposed policies in this rule.
We solicit public comment on the IRFA analysis provided.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule 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 of a Metropolitan
Statistical Area for Medicare payment regulations and has fewer than
100 beds. We are not preparing an analysis for section 1102(b) of the
Act because we have determined, and the Secretary certifies, that this
proposed rule would not have a significant impact on the operations of
a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2011, that
threshold is approximately $136 million. This regulation does not
impose any costs on State or local governments, the requirements of
Executive Order 13132 are not applicable.
We have prepared the following analysis, which together with the
information provided in the rest of this preamble, meets all assessment
requirements. The analysis explains the rationale for and purposes of
this proposed rule; details the costs and benefits of the rule;
analyzes alternatives; and presents the measures we would use to
minimize the burden on small entities. As indicated elsewhere in this
proposed rule, we are implementing a variety of changes to our
regulations, payments, or payment policies to ensure that our payment
systems reflect changes in medical practice and the relative value of
services. We provide information for each of the policy changes in the
relevant sections of this proposed rule. We are unaware of any relevant
Federal rules that duplicate, overlap, or conflict with this proposed
rule. The relevant sections of this proposed rule contain a description
of significant alternatives if applicable.

C. RVU Impacts

1. Resource-Based Work, PE, and Malpractice RVUs
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 adjustments to preserve budget neutrality.
Our estimates of changes in Medicare revenues for PFS services
compare payment rates for CY 2011 with proposed payment rates for CY
2012 using CY 2010 Medicare utilization for all years. To the extent
that there are year-to-year changes in the volume and mix of services
provided by physicians, the actual impact on total Medicare revenues
will be different than those shown in Table 64. 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 furnishes. The
average change in total revenues would be less than the impact
displayed here because 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 PFS. For instance,
independent laboratories receive approximately 85 percent of their
Medicare revenues from clinical laboratory services that are not paid
under the PFS.
Table 64 shows only the payment impact on PFS services. We note
that these impacts do not include the effect of the January 2012
conversion factor changes under current law. The annual update to the
PFS conversion factor is calculated based on a statutory formula that
measures actual versus allowed or ``target'' expenditures, and applies
a sustainable growth rate (SGR) calculation intended to control growth
in aggregate Medicare expenditures for physicians' services. This
update methodology is typically referred to as the ``SGR'' methodology,
although the SGR is only one component of the formula. Medicare
physician fee schedule payments for services are not withheld if the
percentage increase in actual expenditures exceeds the SGR. Rather, the
PFS update, as specified in section 1848(d)(4) of the Act, is adjusted
to eventually bring actual expenditures back in line with targets. If
actual expenditures exceed allowed expenditures, the update is reduced.
If actual expenditures are less than allowed expenditures, the update
is increased. We currently estimate that the statutory formula used to
determine the physician update will result in a CY 2012 conversion
factor of $23.9635 which represents a PFS update of -29.5 percent. By
law, we are required to make these reductions in accordance with
section 1848(d) and (f) of the Act, and these reductions can only be
averted by an Act of the Congress. While the Congress has provided
temporary relief from these reductions for every year since 2003, a
long-term solution is critical. We are committed to working with the
Congress to permanently reform the SGR methodology for Medicare
physician fee schedule updates.
The following is an explanation of the information represented in
Table 64:
Column A (Specialty): The Medicare specialty code as
reflected in our physician/supplier enrollment files.
Column B (Allowed Charges): The aggregate estimated PFS
allowed charges for the specialty based on CY 2010 utilization and CY
2011 rates. That is, allowed charges are the PFS amounts for covered
services and include coinsurance and deductibles (which are the
financial responsibility of the beneficiary). These amounts have been
summed across all services furnished by physicians, practitioners, and
suppliers within a specialty to arrive at the total allowed charges for
the specialty.
Column C (Impact of Work and Malpractice (MP) RVU
Changes): This column shows the estimated CY 2012

[[Page 42930]]

impact on total allowed charges of the changes in the work and
malpractice RVUs, including the impact of changes due to potentially
misvalued codes. These impacts are primarily due to the multiple
procedure payment reduction (MPPR) for the professional component of
advanced imaging services.
Column D (Impact of PE RVU Changes--Full): This column
shows the estimated CY 2012 impact on total allowed charges of the
changes in the PE RVUs if there were no remaining transition to the
full use of the PPIS data.
Column E (Impact of PE RVU Changes--Tran): This column
shows the estimated CY 2012 impact on total allowed charges of the
changes in the PE RVUs under the third year of the 4-year transition to
the full use of the PPIS data. This column also includes the impact of
the MPPR policy and, and the impact of changes due to potentially
misvalued codes.
Column F (Combined Impact--Full): This column shows the
estimated CY 2012 combined impact on total allowed charges of all the
changes in the previous columns if there were no remaining transition
to the new PE RVUs using the PPIS data.
Column G (Combined Impact--Tran): This column shows the
estimated CY 2012 combined impact on total allowed charges of all the
changes in the previous columns under the third year of the 4-year
transition to the new PE RVUs using the PPIS data.

Table 64--CY 2012 PFS Proposed Rule Total Allowed Charge Estimated Impact for RVU and MPPR Changes *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Impact of work Impact of PE RVU changes Combined impact
Specialty Allowed and MP RVU ---------------------------------------------------------------
charges (mil) changes Full Tran Full Tran
(A) (B) (C) (D) (E) (F) (G)
--------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL................................................... $83,014 0% 0% 0% 0% 0%
ALLERGY/IMMUNOLOGY...................................... 194 0% 1% 1% 1% 1%
ANESTHESIOLOGY.......................................... 1,847 0% 4% 2% 4% 2%
CARDIAC SURGERY......................................... 384 0% -2% -1% -2% -1%
CARDIOLOGY.............................................. 6,778 0% -3% -1% -3% -1%
COLON AND RECTAL SURGERY................................ 146 0% 2% 1% 2% 1%
CRITICAL CARE........................................... 252 0% 1% 0% 1% 0%
DERMATOLOGY............................................. 2,931 0% 0% 0% 0% 0%
EMERGENCY MEDICINE...................................... 2,658 0% -1% -1% -1% -1%
ENDOCRINOLOGY........................................... 415 0% 1% 0% 1% 0%
FAMILY PRACTICE......................................... 5,640 0% 2% 1% 2% 1%
GASTROENTEROLOGY........................................ 1,837 0% 1% 0% 0% 0%
GENERAL PRACTICE........................................ 656 0% 2% 1% 2% 1%
GENERAL SURGERY......................................... 2,277 0% 1% 0% 1% 0%
GERIATRICS.............................................. 200 0% 2% 1% 2% 1%
HAND SURGERY............................................ 121 0% 3% 1% 2% 1%
HEMATOLOGY/ONCOLOGY..................................... 1,912 0% -1% 0% -2% 0%
INFECTIOUS DISEASE...................................... 597 0% 1% 1% 1% 0%
INTERNAL MEDICINE....................................... 10,737 0% 1% 1% 1% 1%
INTERVENTIONAL PAIN MGMT................................ 448 0% 3% 2% 2% 1%
INTERVENTIONAL RADIOLOGY................................ 211 -1% -3% -1% -4% -2%
MULTISPECIALTY CLINIC/OTHER............................. 84 1% 1% 1% 2% 1%
NEPHROLOGY.............................................. 2,011 0% 0% 0% 0% 0%
NEUROLOGY............................................... 1,520 0% 4% 2% 4% 2%
NEUROSURGERY............................................ 669 0% 1% 0% 1% 0%
NUCLEAR MEDICINE........................................ 53 0% -4% -2% -5% -3%
OBSTETRICS/GYNECOLOGY................................... 678 0% 0% 0% 0% 0%
OPHTHALMOLOGY........................................... 5,316 0% 3% 2% 3% 2%
ORTHOPEDIC SURGERY...................................... 3,572 0% 2% 1% 2% 1%
OTOLARNGOLOGY........................................... 1,001 0% 2% 1% 1% 1%
PATHOLOGY............................................... 1,122 0% -2% -1% -2% -1%
PEDIATRICS.............................................. 68 0% 1% 1% 1% 1%
PHYSICAL MEDICINE....................................... 928 0% 3% 2% 3% 2%
PLASTIC SURGERY......................................... 339 0% 2% 1% 1% 0%
PSYCHIATRY.............................................. 1,134 0% 0% 0% 0% 0%
PULMONARY DISEASE....................................... 1,758 0% 1% 0% 1% 0%
RADIATION ONCOLOGY...................................... 1,968 0% -8% -4% -8% -4%
RADIOLOGY............................................... 4,722 -1% -5% -2% -6% -4%
RHEUMATOLOGY............................................ 530 0% 0% 0% 0% 0%
THORACIC SURGERY........................................ 371 0% -2% -1% -1% -1%
UROLOGY................................................. 1,919 0% -3% -2% -3% -2%
VASCULAR SURGERY........................................ 749 0% -2% -1% -2% -1%
AUDIOLOGIST............................................. 56 0% -6% -3% -6% -3%
CHIROPRACTOR............................................ 743 0% 2% 1% 2% 1%
CLINICAL PSYCHOLOGIST................................... 559 0% -5% -3% -5% -3%
CLINICAL SOCIAL WORKER.................................. 386 0% -6% -3% -6% -3%
DIAGNOSTIC TESTING FACILITY............................. 833 0% -8% -2% -8% -3%
INDEPENDENT LABORATORY.................................. 1,047 0% -3% -1% -3% -1%
NURSE ANES/ANES ASST.................................... 769 0% 5% 2% 5% 2%
NURSE PRACTITIONER...................................... 1,376 0% 2% 1% 2% 1%
OPTOMETRY............................................... 980 0% 4% 2% 4% 2%

[[Page 42931]]

ORAL/MAXILLOFACIAL SURGERY.............................. 43 0% 2% 1% 2% 1%
PHYSICAL/OCCUPATIONAL THERAPY........................... 2,324 0% 5% 3% 5% 3%
PHYSICIAN ASSISTANT..................................... 1,055 0% 1% 0% 1% 0%
PODIATRY................................................ 1,902 0% 3% 2% 3% 2%
PORTABLE X-RAY.......................................... 97 0% 4% 3% 4% 3%
RADIATION THERAPY CENTERS............................... 73 0% -9% -5% -9% -5%
OTHER................................................... 17 0% 5% 4% 5% 4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Table 64 shows only the payment impact on PFS services. We note that these impacts do not include the effects of the January 2012 conversion factor
change under current law.

2. CY 2012 PFS Impact Discussion
a. Changes in RVUs
The most widespread specialty impacts of the RVU changes are
generally related to several factors. First, as discussed in section
II.A.2. of this proposed rule, we are currently implementing the third
year of the 4-year transition to new PE RVUs using the PPIS data that
were adopted in the CY 2010 PFS final rule with comment period. The
impacts of the third year of the transition are generally consistent
with the impacts that would be expected based on the impacts displayed
in the CY 2011 final rule with comment period.
The second general factor contributing to the CY 2012 impacts shown
in Table 64 is a secondary effect of the CY 2011 rescaling of the RVUs
so that, in the aggregate, they match the work, PE, and malpractice
proportions in the revised and rebased MEI for CY 2011. That is, the
rebased MEI had a greater proportion attributable to malpractice and PE
and, correspondingly, a lesser proportion attributable to work.
Specialties that have a high proportion of total RVUs attributable to
work, such as emergency medicine, experienced a decrease in aggregate
payments as a result of this rescaling, while specialties that have a
high proportion attributable to PE, such as diagnostic testing
facilities, experienced an increase in aggregate payments. (For further
details on the MEI rebasing, see the discussion beginning on 75 FR
73262 in the CY 2011 PFS final rule.)
Table 64 also includes the impacts resulting from our proposal to
expand the current 50 percent MPPR policy to the professional component
of advanced imaging services. We estimate that this policy would
redistribute approximately $100 million through a small increase in the
conversion factor and a small adjustment to all PE RVUs. We estimate
that this change would primarily reduce payments to the specialties of
radiology and interventional radiology. Finally, Table 64 also reflects
the impacts of our proposed adjustments to improve the accuracy of the
time associated with the work RVUs for certain services, including
group therapy services, as discussed previously in section II.A. of
this proposed rule.
b. Combined Impact
Column F of Table 64 displays the estimated CY 2012 combined impact
on total allowed charges by specialty of all the proposed RVU and MPPR
changes. These impacts range from an increase of 5 percent for nurse
anesthetists to a decrease of 9 percent for radiation therapy centers.
Again, these impacts are estimated prior to the application of the
negative CY 2012 Conversion Factor (CF) update applicable under the
current statute.
Table 65 shows the estimated impact on total payments for selected
high-volume procedures of all of the changes discussed previously. We
have included CY 2012 payment rates with and without the effect of the
CY 2012 negative PFS CF update for comparison purposes. We selected
these procedures because they are the most commonly furnished by a
broad spectrum of physician specialties. There are separate columns
that show the change in the facility rates and the nonfacility rates.
For an explanation of facility and nonfacility PE, we refer readers to
Addendum A of this proposed rule.
BILLING CODE 4120-01-P

[[Page 42932]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.007

[[Page 42933]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.008

BILLING CODE 4120-01-C

[[Page 42934]]

D. Effects of Proposal To Review Potentially Misvalued Codes on an
Annual Basis Under the PFS

This year's proposal of a process to consolidate the Five-Year
Reviews of Work and PE RVUs with the annual review of potentially
misvalued codes, as discussed in section II.B.3. of this proposed rule
with comment period, is not anticipated to have a budgetary impact in
CY 2012. As noted previously, to the extent that for CY 2012 we have
proposed revised RVUs for codes identified under the potentially
misvalued codes initiative, Table 64 includes the estimated CY 2012
impact on total allowed charges of the changes in the RVUs for these
codes.

E. Effect of Proposed Revisions to Malpractice RUVs

As discussed in section II.D.2. of this proposed rule, we proposed
to revise malpractice RVUs for a limited number of codes. The
utilization of many of these services is 0, while the others have a
very low utilization. Therefore, we estimate no significant budgetary
impact from the proposed changes to the MP RVUs due to the very low
utilization of these services.

F. Effect of Proposed Changes to Geographic Practice Cost Indices
(GPCIs)

As discussed in section II.E. of this proposed rule, we are
required to update the GPCI values at least every 3 years and phase in
the adjustment over 2 years (if there has not been an adjustment in the
past year). For CY 2012, we are proposing to revise the PE GPCIs for
each Medicare locality, as well as the cost share weights for all three
GPCI components. Moreover, the proposed revised PE GPCI values are a
result of our analysis of the PE methodology as required by section
1848(e)(1)(H)(iv) of the Act. The new GPCIs rely upon the 2006-2008
American Community Survey (ACS) data for determining the relative cost
differences in the office rent component of the PE GPCIs. In addition,
we utilized 2006 through 2008 Bureau of Labor Statistics (BLS) and
Occupational Employment Statistics (OES) data to determine the employee
compensation component with data specific to the offices of physicians
industry. Finally, we proposed to create a purchased services index
that will be used to geographically adjust for differences in the
labor-related share of the industries occupying the ``All Other
Services'' and ``Other Professional Expenses'' 2006-based MEI
categories.
To determine the cost share weights for the proposed CY 2012 PE
GPCIs, we used the 2006-based MEI weight for the PE category of 51.734
percent minus the professional liability insurance category weight of
4.295 percent. Therefore, we propose a cost share weight for the PE
GPCIs of 47.439 percent. For the employee compensation portion of the
PE GPCIs, we used the non-physician employee compensation category
weight of 19.153 percent. The fixed capital and utilities MEI
categories were combined to achieve a total office rent weight of
10.223 percent. As discussed in the previous paragraph, a new purchased
services index was created to geographically adjust the labor-related
components of the ``All Other Services'' and ``Other Professional
Expenses'' categories of the MEI. In order to calculate the purchased
services index, we are proposing to merge the corresponding weights of
these two categories to form a combined purchased services weight of
8.095. However, since our proposed purchased services methodology only
accounts for the labor related share of the industries comprising the
``All Other Services'' and ``Other Professional Expenses'' categories,
only 5.011 percentage points of the 8.095 percentage points accounting
for the purchased services cost share weight is adjusted for locality
cost differences. We are proposing a cost share weight for the medical
equipment, supplies, and other miscellaneous expenses component of
9.968 percent. Furthermore, the physician compensation cost category
and its weight of 48.266 percent reflects the proposed work GPCI cost
share weight and the professional liability insurance weight of 4.295
percent was used for the malpractice GPCI cost share weight. A more
detailed discussion on the proposed CY 2012 GPCI cost share weights can
be found in section II.E. of this proposed rule.
Additionally, section 1848(e)(1)(E) of the Act (as amended by
section 103 of the Medicare and Medicaid Extenders Act of 2010)
extended the 1.000 work GPCI floor through December 31, 2011.
Therefore, the CY 2012 GPCIs reflect the sunset of the 1.000 work GPCI
floor. Section 1848(e)(1)(G) of the Act (as amended by section 134(b)
of the MIPPA) established a permanent 1.500 work GPCI floor in Alaska,
beginning January 1, 2009 and, therefore, the 1.500 work GPCI floor in
Alaska will remain in place for CY 2012. Moreover, section
1848(e)(1)(I) of the Act (as added by section 10324(c) of the
Affordable Care Act) established a permanent 1.000 PE GPCI floor for
services furnished in frontier States effective January 1, 2011.
Addendum D to this proposed rule shows the estimated effects of the
revised GPCIs on locality GAFs for CY 2012. The GAFs reflect the use of
revised GPCI data and the updated cost share weights. The GAFs are a
weighted composite of each area's work, PE, and malpractice GPCIs using
the national GPCI cost share weights. While we do not actually use the
GAFs in computing the PFS payment for a specific service, they are
useful in comparing the estimated overall costs and payments for
different localities. The cumulative effects of all of the GPCI
revisions, including the updated underlying GPCI data, updated cost
share weights, and provisions of the Affordable Care Act, are reflected
in the CY 2012 GPCI values that are displayed in Addendum E in this
proposed rule.
The following Table 66 illustrates the impact by physician fee
schedule geographic locality of moving from the current law CY 2011
Geographic Adjustment Factors (GAFs) to the proposed CY 2012 GAFs. The
GAFs summarize the combined impact of the three separate GPCIs into a
single number to more easily compare the impact of policy changes among
localities. More specifically, the GAF for a locality is the weighted
average of the individual work, practice expense, and malpractice. The
table first shows the impact under current law and regulation, and then
with the additional impact of our recommendations. As shown in the
table, the primary driver of the CY 2012 impact is the current law
expiration of the non-budget neutral increases to the CY 2011 GPCIs for
lower expense areas authorized by the Affordable Care Act and the
Medicare and Medicaid Extenders Act. The table is sorted by total
impact from largest reductions to largest increases. When the overall
impacts directly resulting from our proposed changes to the PE GPCI are
isolated, the impacts are negligible (Column F). The following is an
explanation of the information represented in Table 66:
Column (A): Medicare Locality--The PFS geographic
locality.
Column (B): CY 2011 GAF--The current CY 2011 Geographic
Adjustment Factor for the locality, which includes the non-budget
neutral increases to the CY 2011 GPCIs for lower expense areas
authorized by the Affordable Care Act and the Medicare and Medicaid
Extenders Act. These figures also reflect the first year of the two-
year transition to the latest GPCIs that began in 2011.
Column (C): CY 2012 GAF (Current Law/Reg)--The CY 2012
Geographic

[[Page 42935]]

Adjustment Factor for the locality under current law and regulations,
which includes the expiration of the non-budget neutral increases to
the CY 2011 GPCIs for lower expense areas authorized by the Affordable
Care Act and the MMEA. These numbers also reflect the end of the
transition to the latest GPCIs that began in 2011.
Column (D): CY 2012 GAF (Proposed NPRM)--The CY 2012
Geographic Adjustment Factor for the locality under the recommended
NPRM proposals. The two largest drivers are the proposed use of
residential rent data from the Census Bureau's ACS data instead of the
Department of Housing and Urban Development's HUD FMR data, and the
proposed benchmarking of the GPCI practice expense weights to the 2006-
based MEI cost share weights. The Geographic Adjustment Factors in this
column are for 2012 and do not reflect any temporary increases to work
and practice expense required by the Affordable Care Act.
Column (E): Percent Change CY 2011 to CY 2012 (current)--
Impact of the expiration of the non-budget neutral increases to the CY
2011 GPCIs for lower expense areas authorized by the Affordable Care
Act and the MMEA and the end of the transition to the latest GPCIs that
began in 2011.
Column (F): Percent Change CY 2012 (No NPRM) to CY 2012
(NPRM)--Impact of the four regulatory changes described previously.
Column (G): Percent Change Combined Impact CY 2011 to CY
2012--Combined impact of all changes from CY 2011 to CY 2012.

TABLE 66--CY 2012 Geographic Adjustment Factors (GAFS) Changes Under Current Law and the Proposed Rule
----------------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G)
----------------------------------------------------------------------------------------------------------------
% Change CY % Change CY % Change
2011 to CY 2012 (curr) combined
CY 2012 GAF CY 2012 GAF 2012 to CY 2012 impact CY
Medicare locality CY 2011 GAF (current (proposed) (current) (proposed 2011 to CY
law/reg) Col (C)/Col rule) Col 2012 Col
(B) (D)/Col (C) (D)/Col (B)
----------------------------------------------------------------------------------------------------------------
PUERTO RICO....................... 0.903 0.786 0.769 -13 -2 -15
WEST VIRGINIA..................... 0.972 0.910 0.909 -6 0 -6
OKLAHOMA.......................... 0.955 0.904 0.897 -5 -1 -6
MISSISSIPPI....................... 0.961 0.910 0.907 -5 0 -6
REST OF MISSOURI.................. 0.961 0.903 0.908 -6 1 -6
ARKANSAS.......................... 0.945 0.893 0.895 -6 0 -5
REST OF LOUISIANA................. 0.965 0.914 0.914 -5 0 -5
IOWA.............................. 0.950 0.898 0.902 -5 0 -5
BEAUMONT, TX...................... 0.978 0.925 0.932 -5 1 -5
KENTUCKY.......................... 0.959 0.917 0.914 -4 0 -5
ALABAMA........................... 0.949 0.905 0.907 -5 0 -4
TENNESSEE......................... 0.959 0.918 0.918 -4 0 -4
NEBRASKA.......................... 0.947 0.905 0.909 -4 0 -4
REST OF MAINE..................... 0.961 0.922 0.923 -4 0 -4
IDAHO............................. 0.959 0.926 0.923 -3 0 -4
KANSAS............................ 0.964 0.923 0.928 -4 1 -4
SOUTH CAROLINA.................... 0.959 0.925 0.924 -4 0 -4
INDIANA........................... 0.966 0.928 0.932 -4 0 -4
REST OF TEXAS..................... 0.973 0.934 0.939 -4 1 -3
REST OF GEORGIA................... 0.970 0.936 0.937 -4 0 -3
METROPOLITAN BOSTON............... 1.106 1.079 1.069 -2 -1 -3
NORTH CAROLINA.................... 0.970 0.934 0.938 -4 0 -3
UTAH.............................. 0.982 0.946 0.950 -4 0 -3
MANHATTAN, NY..................... 1.153 1.142 1.119 -1 -2 -3
REST OF PENNSYLVANIA.............. 0.986 0.957 0.957 -3 0 -3
NEW ORLEANS, LA................... 1.005 0.980 0.977 -2 0 -3
SOUTH DAKOTA**.................... 0.978 0.952 0.951 -3 0 -3
LOS ANGELES, CA................... 1.106 1.099 1.076 -1 -2 -3
REST OF ILLINOIS.................. 0.985 0.950 0.959 -4 1 -3
NEW MEXICO........................ 0.979 0.949 0.955 -3 1 -2
REST OF MICHIGAN.................. 0.985 0.962 0.962 -2 0 -2
ALASKA*........................... 1.289 1.289 1.260 0 -2 -2
VENTURA, CA....................... 1.113 1.105 1.090 -1 -1 -2
REST OF NEW YORK.................. 0.965 0.948 0.946 -2 0 -2
OHIO.............................. 0.992 0.970 0.974 -2 0 -2
METROPOLITAN KANSAS CITY, MO...... 0.996 0.975 0.978 -2 0 -2
MONTANA**......................... 0.996 0.976 0.978 -2 0 -2
CONNECTICUT....................... 1.094 1.086 1.075 -1 -1 -2
NORTH DAKOTA**.................... 0.979 0.964 0.963 -2 0 -2
ANAHEIM/SANTA ANA, CA............. 1.129 1.129 1.111 0 -2 -2
REST OF FLORIDA................... 1.014 0.996 0.999 -2 0 -1
NYC SUBURBS/LONG I., NY........... 1.161 1.159 1.144 0 -1 -1
SAN MATEO, CA..................... 1.199 1.194 1.183 0 -1 -1
EAST ST. LOUIS, IL................ 1.016 0.997 1.003 -2 1 -1
REST OF MASSACHUSETTS............. 1.040 1.039 1.028 0 -1 -1
REST OF OREGON.................... 0.968 0.950 0.958 -2 1 -1
HAWAII............................ 1.074 1.091 1.063 2 -3 -1

[[Page 42936]]

ARIZONA........................... 0.989 0.977 0.979 -1 0 -1
SAN FRANCISCO, CA................. 1.198 1.194 1.186 0 -1 -1
WISCONSIN......................... 0.965 0.949 0.956 -2 1 -1
METROPOLITAN ST. LOUIS, MO........ 0.988 0.971 0.979 -2 1 -1
FORT WORTH, TX.................... 0.991 0.981 0.982 -1 0 -1
VERMONT........................... 0.982 0.980 0.974 0 -1 -1
NORTHERN NJ....................... 1.120 1.105 1.112 -1 1 -1
AUSTIN, TX........................ 0.992 0.979 0.985 -1 1 -1
MIAMI, FL......................... 1.108 1.100 1.101 -1 0 -1
SOUTHERN MAINE.................... 0.997 0.993 0.991 0 0 -1
WYOMING**......................... 1.002 0.994 0.996 -1 0 -1
HOUSTON, TX....................... 1.008 0.992 1.002 -2 1 -1
METROPOLITAN PHILADELPHIA, PA..... 1.068 1.062 1.062 -1 0 -1
VIRGINIA.......................... 0.978 0.971 0.974 -1 0 0
DETROIT, MI....................... 1.060 1.047 1.056 -1 1 0
OAKLAND/BERKELEY, CA.............. 1.133 1.136 1.130 0 -1 0
REST OF NEW JERSEY................ 1.074 1.066 1.072 -1 1 0
BRAZORIA, TX...................... 0.996 0.977 0.995 -2 2 0
DC + MD/VA SUBURBS................ 1.124 1.125 1.123 0 0 0
RHODE ISLAND...................... 1.042 1.039 1.042 0 0 0
MARIN/NAPA/SOLANO, CA............. 1.119 1.127 1.120 1 -1 0
DELAWARE.......................... 1.012 1.010 1.013 0 0 0
DALLAS, TX........................ 1.004 0.997 1.005 -1 1 0
VIRGIN ISLANDS.................... 0.998 0.997 1.000 0 0 0
FORT LAUDERDALE, FL............... 1.061 1.062 1.064 0 0 0
POUGHKEEPSIE/N NYC SUBURBS, NY.... 1.037 1.039 1.040 0 0 0
ATLANTA, GA....................... 1.002 0.997 1.005 0 1 0
QUEENS, NY........................ 1.140 1.150 1.144 1 -1 0
CHICAGO, IL....................... 1.081 1.076 1.085 0 1 0
NEW HAMPSHIRE..................... 1.007 1.012 1.011 0 0 0
GALVESTON, TX..................... 0.997 0.995 1.002 0 1 1
COLORADO.......................... 0.989 0.990 0.994 0 0 1
MINNESOTA......................... 0.969 0.968 0.974 0 1 1
REST OF CALIFORNIA................ 1.025 1.038 1.033 1 0 1
REST OF WASHINGTON................ 0.987 0.985 0.997 0 1 1
NEVADA**.......................... 1.024 1.031 1.037 1 1 1
SUBURBAN CHICAGO, IL.............. 1.061 1.059 1.077 0 2 2
BALTIMORE/SURR. CNTYS, MD......... 1.052 1.070 1.069 2 0 2
REST OF MARYLAND.................. 1.004 1.024 1.021 2 0 2
PORTLAND, OR...................... 0.991 0.995 1.009 0 1 2
SANTA CLARA, CA................... 1.156 1.164 1.179 1 1 2
SEATTLE (KING CNTY), WA........... 1.045 1.056 1.077 1 2 3
----------------------------------------------------------------------------------------------------------------
* GAF reflects a 1.5 work GPCI floor in Alaska established by the MIPPA.
** GAFs reflect a 1.0 PE GPCI floor for frontier States as required by the Affordable Care Act.

G. Effects of Proposed Changes to Medicare Telehealth Services Under
the Physician Fee Schedule

As discussed in section III.D. of this proposed rule, we are
proposing to add several new codes to the list of telehealth services
and revise the criteria for adding services to the list of telehealth
services. While we expect these changes to increase access to care in
rural areas, based on recent utilization of similar services already on
the telehealth list, we estimate no significant budgetary impact from
the proposed additions. In addition, the proposed revision to the
telehealth criteria would be effective for CY 2013 PFS telehealth
services, with no impact in CY 2012.

H. Effects of the Impacts of Other Provisions of the Proposed Rule

1. Part B Drug Payment: ASP Issues
Application of our proposals for ``ASP Reporting Template Update''
and ``Reporting of ASP Units and Sales Volume for Certain Products,''
as discussed in section IV.A. of this proposed rule involve revisions
to the existing ASP reporting template which will facilitate the
accuracy and efficiency of data transfer from manufacturers. Any
impacts are dependent on the status and quality of quarterly
manufacturer data submissions, so we cannot quantify associated
savings.
Finally, as discussed in section IV.A. of this proposed rule, we
are proposing to provide for appropriate price substitutions that
account for market-related pricing changes and would allow Medicare to
pay based off lower

[[Page 42937]]

market prices for those drugs and biologicals that consistently exceed
the applicable threshold percentage. Based on estimates published in
various OIG reports (see section IV.A. for a list of citations), we
believe that this proposal will generate minor savings for the Medicare
program and its beneficiaries since any substituted prices would be for
amounts less than the calculated 106 percent of the ASP.
2. Chiropractic Services Demonstration
As discussed in section IV.B. of this proposed rule, we are
continuing the recoupment of the $50 million in expenditures from this
demonstration in order to satisfy the budget neutrality requirement in
section 651(f)(1)(b) of the MMA. We initiated this recoupment in CY
2010 and this will be the third year. As discussed in the CY 2010 PFS
final rule with comment period, we finalized a policy to recoup $10
million each year through adjustments to the PFS for all chiropractors
in CYs 2010 through 2014. To implement this required budget neutrality
adjustment, we are recouping $10 million in CY 2012 by reducing the
payment amount under the PFS for the chiropractic CPT codes (that is,
CPT codes 98940, 98941, and 98942) by approximately 2 percent.
3. Extension of Payment for Technical Component of Certain Physician
Pathology Services
As discussed in section IV.D. of this proposed rule, we are
proposing to implement the provision that specifies that for services
furnished after December 31, 2011, an independent laboratory may not
bill the Medicare contractor for the TC of physician pathology services
furnished to a hospital inpatient or outpatient. The savings associated
with implementing this provision are estimated to be approximately 80
million dollars for CY 2012.
4. Section 4103: Medicare Coverage of Annual Wellness Visit Providing a
Personalized Prevention Plan: Incorporation of a Health Risk Assessment
as Part of the Annual Wellness Visit
As discussed in section IV.E. of this proposed rule, section
1861(s)(2)(FF) of the Act, as described more fully in section
1861(hhh), of the Act (as added by section 4103 of the Affordable Care
Act) provides Medicare coverage for an annual wellness visit.
Regulations for Medicare coverage of the AWV are established at 42 CFR
410.15. The annual wellness visit is covered with no coinsurance or
deductible when furnished by a Medicare participating provider (a
health professional as that term is defined in 42 CFR 410.15). The
annual wellness visit entails the creation of a personalized prevention
plan for an individual and includes elements, such as updating medical
and family history, identifying providers that regularly provide
medical care to the individual, measurement of height, weight, and body
mass index, identification of risk factors, the provision of
personalized health advice, and development of a screening schedule
(such as a checklist), and referrals as appropriate for additional
preventive services. Section 1861(hhh)(1)(A) of the Act specifies that
a personalized prevention plan for an individual includes a health risk
assessment (HRA) that meets the guidelines established by the Secretary
and takes into account the results of a HRA. We are proposing to
incorporate the use and results of an HRA as part of the provision of
personalized prevention plan services during the AWV. The estimated
impact of incorporating the HRA as part of the AWV is unknown for CY
2012. We are specifically seeking public comment on the following:
The impact of use of the HRA on health professional
practices.
The burden on health professional practices of
incorporating an HRA into subsequent AWVs, as well as the first AWV.
The impact of the elements included in the definitions of
first and subsequent AWVs.
Modification of those AWV elements for which the Secretary
has authority to determine appropriateness.
5. Physician Payment, Efficiency, and Quality Improvements--Physician
Quality Reporting System
As discussed in section IV.F.1 of this proposed rule, we are
proposing several different reporting options for eligible
professionals who wish to participate in the 2012 Physician Quality
Reporting System. Although there may be some cost incurred by CMS for
maintaining the Physician Quality Reporting System measures and their
associated code sets, and for expanding an existing clinical data
warehouse to accommodate the proposed registry-based reporting, EHR-
Based reporting, and group practice reporting options for the 2012
Physician Quality Reporting System, we do not anticipate a significant
cost impact on the Medicare program.
Participation in the CY 2012 Physician Quality Reporting System by
individual eligible professionals and group practices is voluntary and
individual eligible professionals and group practices may have
different processes for integrating the collection of the Physician
Quality Reporting System measures into their practice's work flows.
Given this variability and the multiple reporting options that we
provide, it is difficult to definitively estimate the impact of the
Physician Quality Reporting System on providers. Furthermore, we
believe that costs for eligible professionals who are participating in
the Physician Quality Reporting System for the first time in 2012 would
be considerably higher than the cost for eligible professionals who
participated in the Physician Quality Reporting System in prior years.
Some preparatory steps are needed to begin participating in the
Physician Quality Reporting System. To the extent that we are not
proposing to retire the measures that an eligible professional has
reported in a prior year and there are no changes to the measure's
specifications from a prior year, such preparatory steps would not need
to be repeated in subsequent years. In addition, for many eligible
professionals, the cost of participating in the Physician Quality
Reporting System is offset by the incentive payment received.
With respect to the potential incentive payments that would be made
to satisfactory reporters under the 2012 Physician Quality Reporting
System, we estimate this amount for individual eligible professionals
would be approximately $60 million. This estimate is derived from
looking at our 2009 incentive payment of approximately $235 million and
then accounting for the fact that the 2009 incentive payment was 2.0
percent of an eligible professional's total estimated Medicare Part B
PFS allowed charges for all such covered professional services
furnished by the eligible professional during the 2009 reporting
period. For 2012, the incentive payment is 0.5 percent of an eligible
professional's total estimated Medicare Part B PFS allowed charges for
all covered professional services furnished by an eligible professional
during the 2012 reporting period. Although we expect that the lower
incentive payment percentage for 2012 would reduce the total outlay by
approximately one-fourth, we also expect more eligible professionals to
participate in the 2012 Physician Quality Reporting System because
there we are proposing more methods of data submission, additional
alternative reporting methods, and because CMS seeks to align the
Physician Quality Reporting System with the EHR Incentive Program. We
also believe that some eligible professionals would

[[Page 42938]]

qualify for the additional 0.5 percent incentive authorized under
section 1848(m)(7) of the Act (``Additional Incentive Payment'').
One factor that influences the cost to individual eligible
professionals is the time and effort associated it would take
individual eligible professionals to identify applicable proposed
Physician Quality Reporting System quality measures and reviewing and
selecting a reporting option. This burden would vary with each
individual eligible professional by the number of applicable measures,
the eligible professional's understanding of the Physician Quality
Reporting System, experience with Physician Quality Reporting System
participation, and the proposed method(s) selected by the eligible
professional for reporting of the proposed measures, and incorporating
the reporting of the proposed measures into the office work flows.
Information obtained from the Physician Voluntary Reporting Program
(PVRP), which was a predecessor to the Physician Quality Reporting
System and was the first step for the reporting of physician quality of
care through certain quality metrics, indicated an average labor cost
per practice of approximately $50 per hour in 2006. To account for
salary increases over time, we will use an average practice labor cost
of $60 per hour for our estimates, based on an assumption of an average
annual increase of approximately 3 percent. Therefore, assuming that it
takes an individual eligible professional approximately 5 hours to
review the Physician Quality Reporting System quality measures, review
the various reporting options, select the most appropriate reporting
option, identify the applicable measures for which they can report the
necessary information, and incorporate reporting of the selected
measures into their office work flows, we estimate that the cost to
eligible professionals associated with preparing to report Physician
Quality Reporting System quality measures would be approximately $300
per individual eligible professional ($60 per hour x 5 hours).
Another factor that influences the cost to individual eligible
professionals is how they choose to report the Physician Quality
Reporting System measures (that is, whether they select the claims-
based, registry-based or EHR-Based reporting mechanism we are
proposing). For the proposed claims-based reporting mechanism,
estimates from the PVRP indicate the time needed to perform all the
steps necessary to report quality data codes (QDCs) for 1 measure on a
claim ranges from 15 seconds (0.25 minutes) to 12 minutes for
complicated cases or measures. In previous years, when we required
reporting on 80 percent of eligible cases for claims-based reporting,
we found that on average, the median number of reporting instances for
each of the Physician Quality Reporting System measures was 9. Since we
are proposing to reduce the required reporting rate by over one-third
to 50 percent, then for purposes of this impact analysis we will assume
that an eligible professional will would need to report each selected
measure for 6 reporting instances, or 6 cases. Assuming that an
eligible professional, on average, would report 3 measures since a
majority of eligible professionals participate in the Physician Quality
Reporting System by reporting individual measures via claims or
registry and that an eligible professional reports on an average of 6
reporting instances per measure, we estimate that the cost to an
individual eligible professional associated with the proposed claims-
based reporting option of Physician Quality Reporting System measures
would range from approximately $4.50 (0.25 minutes per reporting
instance x 6 reporting instances per measure x 3 measures x $60 per
hour) to $216.00 (12 minutes per reporting instance x 6 reporting
instances per measure x 3 measures x $60 per hour). If an eligible
professional satisfactorily reports, these costs would more than likely
be negated by the incentive earned. For the 2009 Physician Quality
Reporting System, which had a 2.0 percent incentive, the mean incentive
amount was close to $2,000 for an individual eligible professional. For
the proposed registry-based reporting option, individual eligible
professionals would generally incur a cost to submit data to
registries. We estimate that fees for using a qualified registry would
range from no charge, or a nominal charge, for an individual eligible
professional to use a registry to several thousand dollars, with a
majority of registries charging fees ranging from $500 to $1,000.
However, our impact analysis is limited to the incremental costs
associated with Physician Quality Reporting System reporting, which we
believe are minimal. We believe that many eligible professionals who
would select the proposed registry-based reporting option would already
be utilizing the registry for other purposes and would not need to
report additional data to the registry specifically for Physician
Quality Reporting System. The registries also often provide the
eligible professional services above and beyond what is required for
Physician Quality Reporting System.
For the proposed EHR-Based reporting option, an individual eligible
professional generally would incur a cost associated with purchasing an
EHR product. Although we do not believe that the majority of eligible
professionals would purchase an EHR solely for the purpose of
participating in Physician Quality Reporting System, cost estimates for
EHR adoption by eligible professionals from the EHR Incentive Program
final rule (75 FR 44549) show that an individual eligible professional
who chooses to do so would have to spend anywhere from $25,000 to
$54,000 to purchase and implement an EHR and up to $18,000 annually for
ongoing maintenance.
Although we believe that the majority of eligible professionals
attempting to qualify for the additional 0.5 percent incentive payment
authorized by section 1848(m)(7) of the Act would be those who are
already required by their Boards to participate in a Maintenance of
Certification Program, individual eligible professionals who wish to
qualify for the additional 0.5 percent incentive payment and are not
currently participating in a Maintenance of Certification Program would
also have to incur a cost for participating in a Maintenance of
Certification Program. The manner in which fees are charged for
participating in a Maintenance of Certification Program vary by
specialty. Some Boards charge a single fee for participation in the
full cycle of Maintenance of Certification Program. Such fees appear to
range anywhere from over $1,100 to nearly $1,800 per cycle. Some Boards
have annual fees that are paid by their diplomates. On average, ABMS
diplomates pay approximately $200.00 per year for participating in
Maintenance of Certification Program. Some Boards have an additional
fee for the Maintenance of Certification Program Part III secure
examination, but most Boards do not have additional charges for
participation in the Part IV practice/quality improvement activities.
With respect to the proposed requirements for group practices to be
treated as satisfactorily submitting quality measures data for the CY
2012 Physician Quality Reporting System discussed in section IV.F.1 of
this proposed rule, group practices interested in participating in the
CY 2012 Physician Quality Reporting System through the proposed group
practice reporting option (GPRO) may also incur a cost. However, for
groups that satisfactorily report for the proposed 2012 Physician
Quality

[[Page 42939]]

Reporting System, we believe these costs would be completely offset if
the group practice earns the incentive payment since the group practice
would be eligible for an incentive payment equal to 0.5 percent of the
entire group's total estimated Medicare Part B PFS allowed charges for
covered professional services furnished by the group practice during
the reporting period.
One factor in the cost to group practices would be the costs
associated with the proposed self-nomination process. Similar to our
estimates for staff involved with the proposed claims-based reporting
option for individual eligible professionals, we also estimate that the
group practice staff involved in the proposed group practice self-
nomination process would have an an average labor cost of $60 per hour.
Therefore, assuming 2 hours for a group practice to decide whether to
participate as a group or have members of the practice participate
individually and 4 hours for the self-nomination process, we estimate
the total cost to a group practice associated with the group practice
self-nomination process would be approximately $360 ($60 per hour x 6
hours per group practice).
For groups participating under the proposed GPRO process that are
comprised of 25 or more eligible professionals, another factor in the
cost to the group would be the time and effort associated with the
group practice completing and submitting the proposed data collection
tool. Based on the Physician Group Practice (PGP) demonstration's
estimate that it takes approximately 79 hours for a group practice to
complete the data collection tool, which uses the same data submission
methods as those we have proposed, we estimate the cost associated with
a physician group completing the data collection tool would be
approximately $4,740 ($60 per hour x 79 hours per group practice).
In addition to costs incurred by individual eligible professionals
and group practices, registries and EHR vendors may also incur some
costs related to the proposals for the 2012 Physician Quality Reporting
System. Registries interested in becoming ``qualified'' to submit on
behalf of individual eligible professionals would also have to incur a
cost associated with the vetting process, and with calculating quality
measures results from the data submitted to the registry by its
participants, and submitting the quality measures results, as well as
numerator and denominator data on quality measures, to CMS on behalf of
their participants. We estimate the registry self-nomination process
will cost approximately $500 per registry ($50 per hour x 10 hours per
registry). This cost estimate includes the cost of submitting the self-
nomination letter to CMS and completing the proposed CMS vetting
process. Our estimate of $50 per hour average labor cost for registries
is based on the assumption that registry staff include IT professionals
whose average hourly rates range from $36 to $84 per hour depending on
experience, with an average rate of nearly $50 per hour for a mid-level
programmer. We do not believe that there are any additional costs for
registries associated with a registry calculating quality measures
results from the data submitted to the registry by its participants and
submitting the quality measures results and numerator and denominator
data on quality measures to CMS on behalf of their participants under
the proposed program for 2012. We believe that the majority of
registries already perform these functions for their participants.
An EHR vendor interested in having its product(s) be used by
individual eligible professionals to submit the proposed Physician
Quality Reporting System measures to CMS for 2012 would have to
complete the proposed vetting process during 2012 and program its EHR
product(s) to extract the clinical data that the eligible professional
would need to submit to CMS for purposes of reporting the proposed 2012
quality measures in 2013 as well. We proposed that previously qualified
vendors would need to only update their electronic measure
specifications and data transmission schema during 2012 to incorporate
any new EHR measures we proposed to maintain their qualification for
the 2012 Physician Quality Reporting System. Therefore, for EHR vendors
that were not previously qualified, we estimate the cost associated
with completing the proposed self-nomination process, including the
proposed vetting process with CMS officials, is estimated would be $500
($50 per hour x 10 hours per EHR vendor). Our estimate of a $50 per
hour average labor cost for EHR vendors is based on the assumption that
vendor staff include IT professionals whose average hourly rates range
from $36 to $84 per hour depending on experience, with an average rate
of nearly $50 per hour for a mid-level programmer. We believe that the
cost associated with the time and effort needed for an EHR vendor to
review the proposed quality measures and other information and program
the EHR product to enable individual eligible professionals to submit
Physician Quality Reporting System proposed quality measures data to
the CMS-designated clinical warehouse would be dependent on the EHR
vendor's familiarity with the Physician Quality Reporting System, the
vendor's system's capabilities, as well as the vendor's programming
capabilities. Some vendors already have the necessary capabilities and
for such vendors, we estimate the total cost would be approximately
$2,000 ($50 per hour x 40 hours per vendor). However, given the
variability in the capabilities of the vendors, we believe an estimate
for those vendors with minimal experience would be approximately
$10,000 per vendor ($50 per hour x 200 hours per EHR vendor).

Table 67--Estimated Costs to Professionals: Physician Quality Reporting
----------------------------------------------------------------------------------------------------------------
Estimated Estimated Number of
hours instances measures Hourly rate Total cost
----------------------------------------------------------------------------------------------------------------
Individual Eligible 5.0 1 N/A $60 $300.
Professional (EP):
Preparation.
Individual EP: Claims 0.2 6 3 60 $216.
Reporting.
Individual EP: Registry N/A 1 N/A N/A $500 to $1,000.
Reporting.
Individual EP: EHR Reporting.. N/A 1 N/A N/A $25,000-$54,000
initial start-
up.
.............. .............. .............. .............. $18,000 annually
for subsequent
years.
Group Practice: Self- 6.0 1 N/A 60 $360.
Nomination.
Group Practice: Reporting..... 79 1 N/A 60 $4,740.
----------------------------------------------------------------------------------------------------------------

[[Page 42940]]

Table 68--Estimated Costs to Vendors: Physician Quality Reporting
----------------------------------------------------------------------------------------------------------------
Estimated hours Hourly rate Total cost
----------------------------------------------------------------------------------------------------------------
Registry: Self-Nomination........................... 10 $50 $500
EHR: Self-Nomination................................ 10 50 500
EHR: Programming.................................... 40-200 50 2,000-10,000
----------------------------------------------------------------------------------------------------------------

6. Incentives for Electronic Prescribing (eRx)--The Electronic
Prescribing Incentive Program
Section IV.F.2. of this proposed rule describes the proposed
Electronic Prescribing (eRx) Incentive Programs for CYs 2012 through
2014. To be considered a successful electronic prescriber in CYs 2012
through 2014, an individual eligible professional would need to meet
the proposed requirements described in section IV.F.2. of this proposed
rule.
We estimate that the cost impact of the proposed eRx Incentive
Programs for CYs 2012 through 2014 on the Medicare program would be the
cost incurred for maintaining the electronic prescribing measure and
its associated code set, and for maintaining the existing clinical data
warehouse to accommodate the proposed registry-based reporting and EHR-
Based reporting options for the electronic prescribing measure.
However, we do not believe that the proposed program for CYs 2012
through 2014 has a significant administrative cost impact on the
Medicare program since much of this infrastructure has already been
established for the eRx Incentive Program.
Individual eligible professionals and group practices may have
different processes for integrating data collection on the electronic
prescribing measure into their practices' work workflows. Given this
variability and the multiple reporting options that we are proposing,
it is difficult to accurately estimate the impact of the eRx Incentive
Program for CYs 2012 through 2014 on providers. Furthermore, we believe
that costs for eligible professionals who would participate in the eRx
Incentive Program for the first time would be considerably higher than
the cost for eligible professionals who participated in the eRx
Incentive Program in prior years as there are preparatory steps that an
eligible professional would need to take to begin participating in the
program. In addition, for many eligible professionals (especially those
who participated in the eRx Incentive Program in prior years), we
believe the cost of participating in the eRx Incentive Program in 2012
or 2013 would be offset by the incentive payment received. As a result
of the payment adjustment that begins in 2012 and continues until 2014,
the cost of not participating in the eRx Incentive Program for CYs 2012
through 2014 could be higher than the cost of participating in the form
of reduced Medicare payments as a result of the payment adjustment.
For the 2009 eRx Incentive Program, based on an incentive of 2.0
percent of eligible professionals' total estimated Medicare Part B
allowed charges, approximately $148 million in total incentives were
paid to eligible professionals with a mean incentive amount of
approximately $3,000. Based on the aforementioned figures from the 2009
eRx Incentive Program, we estimate that the total incentive payments
for individual eligible professionals for the 2012 eRx incentive would
be approximately $74 million, taking into account that the incentive
payment for 2012 would be 1.0 percent. Assuming no changes in the
participation rates, we estimate that the total incentive payments for
the 2013 eRx incentive would be approximately $37 million, taking into
account that the incentive payment for 2013 would be 0.5 percent.
From 2009, 89,752 eligible professionals participated in the eRx
Incentive Program. For purposes of the 2013 and 2014 payment
adjustment, we anticipate that despite a decrease in the incentive
payment amount from 2 percent in 2009 to 1 percent of total estimated
Medicare Part B allowed charges for covered professional services in
2012 and 0.5 percent in 2013, more eligible professionals (and groups)
will choose to participate in the eRx Incentive Program due to the 2013
and 2014 payment adjustments of 1.5 percent and 2.0 percent
respectively on eligible professionals' totally estimated Medicare Part
B allowed charges for not demonstrating that they are successful
electronic prescribers. In order to become a successful electronic
prescriber for purposes of the 2013 and 2014 payment adjustments, we
are proposing to provide more opportunities to report on the electronic
prescribing measure by concentrating only on the numerator of the
measure. Furthermore, we are proposing to expand the reporting
mechanisms for the 2013 and 2014 payment adjustments to include
registry and EHR-Based reporting. Although we expect an increase in
participation for purposes of the 2013 and 2014 payment adjustments, we
believe that at least some of these anticipated increases would be
offset by the additional significant hardship exemptions we have
proposed for the 2013 and 2014 payment adjustments. As such, we expect
that the participation level for the eRx Incentive Program will be
approximately 90,000 eligible professionals, based on the level of
participation in 2009 (which was the highest participation level for
the eRx Incentive Program recorded as of yet).
Since we do not have participation results for the implementation
of the eRx payment adjustment as the reporting period for the 2012
payment adjustment (the first of 3 such payment adjustments), we will
base our estimates for the distribution of payment adjustment amounts
on the incentives earned in the 2009 eRx Incentive Program. For the
2013 payment adjustment, taking into account that the payment
adjustment would be 1.5 percent, we believe that the total payment
adjustment amount would be $111 million. This is based off of the
incentive amount distributed for the 2009 eRx Incentive Program. For
the 2014 payment adjustment, taking into account that the payment
adjustment would be 2.0 percent, we believe that the total payment
adjustment amount would be $148 million. This is also based off of the
incentive amount distributed for the 2009 eRx Incentive Program.
We propose that any eligible professional who wishes to participate
in the eRx Incentive Program must have a qualified electronic
prescribing system in order to participate. Therefore, a one-time
potential cost to some individual eligible professionals would be the
cost of purchasing and using an electronic prescribing system, which
varies by the commercial software package selected, the level at which
the professional currently employs information technology in his or her
practice and the training needed. One study indicated that a midrange
complete electronic medical record with electronic prescribing
functionality costs $2,500 per license with an annual fee of $90 per
license for quarterly updates of the

[[Page 42941]]

drug database after setup costs while standalone prescribing,
messaging, and problem list system may cost $1,200 per physician per
year after setup costs. Hardware costs and setup fees substantially add
to the final cost of any software package. (Corley, S.T. (2003).
``Electronic prescribing: a review of costs and benefits.'' Topics in
Health Information Management 24(1):29-38.). These are the estimates
that we intend to use for our impact analysis.
Similar to the Physician Quality Reporting System, one factor in
the cost to individual eligible professionals is the time and effort
associated with individual eligible professionals reviewing the
electronic prescribing measure to determine whether it is applicable to
them, reviewing the available reporting options and selecting one,
gathering the required information, and incorporating reporting of the
measure into their office work flows. Since the eRx Incentive Program
consists of only 1 quality measure, we estimate 2 hours as the amount
of time needed for individual eligible professionals to prepare for
participation in the eRx Incentive Program. Information obtained from
the PVRP, which was a predecessor to the Physician Quality Reporting
System and was the first step for the reporting of physician quality of
care through certain quality metrics, indicated an average labor cost
per practice of approximately $50 per hour. To account for salary
increases over time, we will use an average practice labor cost of $60
per hour for our estimates, based on an assumption of an average annual
increase of approximately 3 percent. At an average cost of
approximately $60 per hour, we estimate the total preparation costs to
individual eligible professionals to be approximately $120 ($60 per
hour x 2 hours).
Another factor that influences the cost to individual eligible
professionals is how they choose to report the electronic prescribing
measure (that is, whether they select the claims-based, registry-based
or EHR-Based reporting mechanism). For claims-based reporting, there
would be a cost associated with reporting the appropriate QDC on the
claims an individual eligible professional submits for payment. Based
on the information from the PVRP described previously for the amount of
time it takes a median practice to report one measure one time (1.75
minutes) and the requirement to report 25 electronic prescribing events
during 2012, we estimate the annual estimated cost per individual
eligible professional to report the electronic prescribing measure via
claims-submission would be $43.75 (1.75 minutes per case x 1 measure x
25 cases per measure x $60 per hour). We believe that for most
successful electronic prescribers who earn an incentive, these costs
would be negated by the incentive payment received given that the
median incentive for eligible professionals who qualified for a 2010
eRx incentive was around $1,600.
For eligible professionals who select the proposed registry-based
reporting mechanism, we do not anticipate any additional cost for
individual eligible professionals to report data to a registry, as
individual eligible professionals opting for registry-based reporting
are more than likely already reporting data to the registry. Little if
any, additional data would need to be reported to the registry for
purposes of participation in the eRx Incentive Program for CYs 2012
through 2014. Individual eligible professionals using registries for
Physician Quality Reporting System would likely experience minimal, if
any, increased costs charged by the registry to report this 1
additional measure.
For EHR-Based reporting, we propose that the eligible professional
must extract the necessary clinical data from his or her EHR, and
submit the necessary data to the CMS-designated clinical data
warehouse. Once the EHR is programmed by the vendor to allow data
submission to CMS, the cost to the individual eligible professional
associated with the time and effort to submit data on the electronic
prescribing measure should be minimal.
With respect to the proposed process for group practices to be
treated as successful electronic prescribers for the 2012 and 2013
incentive and 2013 and 2014 payment adjustment discussed in section
IV.F.2. of this proposed rule, group practices have the same proposed
options as individual eligible professionals in terms of the form and
manner for reporting the electronic prescribing measure (that is, group
practices have the option of reporting the measure through claims, a
qualified registry, or a qualified EHR product). There are only 2
differences between the proposed requirements for an individual
eligible professional and a group practice: (1) The fact that a group
practice would have to self-nominate; and (2) the number of times a
group practice would be required to report the electronic prescribing
measure. Overall, there could be less cost associated with a practice
participating in the eRx Incentive Program as a group rather than the
individual members of the group separately participating. We do not
believe that there are any additional costs associated with the group
practice self-nomination process since we are limiting the group
practices to those selected to participate in the 2012, 2013, and/or
2014 respective Physician Quality Reporting System GPRO. The practices
only will need to indicate their desire to participate in the eRx GPRO
at the time they self-nominate for the Physician Quality Reporting
System GPRO.
The costs for a group practice reporting to an EHR or registry
should be similar to the costs associated with registry and EHR
reporting for an individual eligible professional, as the process is
the same with the exception that more electronic prescribing events
must be reported by the group. For similar reasons, the costs for a
group practice reporting via claims should also be similar to the costs
associated with claims-based reporting for an individual eligible
professional. Therefore, we estimate that the costs for group practices
who are selected to participate in the eRx Incentive Program for CYs
2012 through 2014 as a group would range from $3,349.61 (1.75 minutes
per case x 1 measure x 625 cases per measure x $60 per hour) for groups
comprised of 25-99 eligible professionals participating as an eRx GPRO
to $4,375.00 (1.75 minutes per case x 2,500 cases per measure x $60 per
hour) for the groups comprised of 100 or more eligible professionals
participating as an eRx GPRO.
We believe that the costs to individual eligible professionals and
group practices associated with avoiding the 2013 and 2014 payment
adjustment would be similar to the costs of an eligible professional or
group practice reporting the electronic prescribing measure for
purposes of the 2012 and 2013 incentive. Specifically, we believe that
the cost of reporting the electronic prescribing measure in one
instance for purposes of the payment adjustment is identical to the
cost of reporting the electronic prescribing measure for one instance
on claims for purposes of the incentive payment. The only difference
would be in the total costs for an individual eligible professional.
Group practices would be required to report the electronic prescribing
measure for the same number of electronic prescribing events for both
the 2012 and 2013 incentives and the 2013 and 2014 payment adjustments.
Individual eligible professionals, however, would be required to report
the electronic prescribing measure for only 10 electronic prescribing
events for purposes of the 2013 and 2014 payment adjustments as opposed
to 25 electronic

[[Page 42942]]

prescribing events for purposes of the 2012 and 2013 incentives.
Based on our decision to consider only registries qualified to
submit quality measures results and numerator and denominator data on
quality measures to CMS on their participant's behalf for the 2012,
2013, and 2014 Physician Quality Reporting System to be qualified to
submit results and numerator and denominator data on the electronic
prescribing measure for eRx Incentive Program for CYs 2012, 2013, and
2014 respectively, we do not estimate any cost to the registry
associated with becoming a registry qualified to submit the electronic
prescribing measure for CYs 2012 through 2014.
The cost for the registry would be the time and effort associated
with the registry calculating results for the electronic prescribing
measure from the data submitted to the registry by its participants and
submitting the quality measures results and numerator and denominator
data on the eRx quality measure to CMS on behalf of their participants.
We believe such costs would be minimal as registries would already be
required to perform these activities for Physician Quality Reporting
System.
Likewise, based on our decision to consider only EHR products
qualified for the Physician Quality Reporting System for CYs 2012,
2013, and 2014 to be qualified to submit results and numerator and
denominator data on the electronic prescribing measure for the eRx
Incentive Program for CYs 2012, 2013, and 2014, there would be no need
for EHR vendors to undergo a separate self-nomination process for the
eRx Incentive Program. Therefore, there would be no additional cost
associated with the self-nomination process.
The cost to the EHR vendor associated with the proposed EHR-Based
reporting requirements of this reporting initiative is the time and
effort associated with the EHR vendor programming its EHR product(s) to
extract the clinical data that the individual eligible professional
needs to submit to CMS for reporting the electronic prescribing
measure. Since we determined that only EHR products qualified for the
Physician Quality Reporting System would be qualified for the eRx
Incentive Program, and the eRx Incentive Program consists of only one
measure, we believe that any burden associated with the EHR vendor to
program its product(s) to enable individual eligible professionals to
submit data on the electronic prescribing measure to the CMS-designated
clinical data warehouse would be minimal.
7. Physician Compare Web Site
Section IV.G.2. of this proposed rule discusses the background of
the Physician Compare Web site. As described in section IV.G.2. of this
proposed rule, we propose to develop aspects of the Physician Compare
Web site in stages. In the first stage, which was completed in 2011, we
posted the names of those eligible professionals who satisfactorily
participated in the 2009 Physician Quality Reporting System. The second
phase of the plan, which would occur during CYs 2011 through 2012,
would include the posting of the names of eligible professionals who
are successful electronic prescribers under the 2009 eRx Incentive
Program, as well as eligible professionals (EPs) who participate in the
EHR Incentive Program.
We are proposing to include performance information with respect to
the 2012 Physician Quality Reporting System GPRO measures. As reporting
of physician performance rates on the Physician Compare Web site will
be performed directly by us using the data that we collect under the
2012 Physician Quality Reporting System GPRO, we do not anticipate any
notable impact on eligible professionals with respect to the posting of
information on the Physician Compare Web site.
8. Medicare EHR Incentive Program
Section IV.H.2. of this proposed rule proposes changes to the EHR
Incentive Program for EPs for the 2012 payment year. Aside from
continuing the attestation method of reporting CQMs, we propose to
allow the reporting of CQMs for purposes of demonstrating meaningful
use through participation in the Physician Quality Reporting System--
Medicare EHR Incentive Pilot via--(1) A Physician Quality Reporting
System ``qualified'' EHR data submission vendor or (2) using an EP's
certified EHR technology, which also must be a Physician Quality
Reporting System ``qualified'' EHR.
We believe the impact associated with actually reporting CQMs would
vary depending on how the EP chooses to do so. We believe that the
number of EPs who choose to participate via attestation would largely
be those who are not participating in both the EHR Incentive Program
and Physician Quality Reporting System as this is the method of
reporting most favorable to EPs not participating in the Physician
Quality Reporting System. EPs participating in the Physician Quality
Reporting System would be more likely to participate in the proposed
pilot. Therefore, based on the previously mentioned assumptions, we do
not believe there would be any additional impact on EPs specific to the
EP's participation in the proposed pilot. All the steps necessary to
participate in the proposed pilot would need to be performed to
participate in the Physician Quality Reporting System.
9. Physician Feedback Program/Value Modifier Payment
The proposed changes to the Physician Feedback Program in section
IV.I. of this proposed rule would not impact CY 2012 physician payments
under the Physician Fee Schedule. However, we expect that our proposals
to use the Physician Quality Reporting System quality measures in the
Physician Feedback reports and in the value modifier to be implemented
in CY 2015 may result in increased participation in the Physician
Quality Reporting System in CY 2012. We anticipate that as we approach
implementation of the value modifier, physicians will increasingly
participate in the Physician Quality Reporting System to determine and
understand how the value modifier could affect their payments.
10. Bundling of Payments for Services Provided to Outpatients Who Later
Are Admitted as Inpatients: 3-Day Payment Window Policy and the Impact
on Wholly Owned or Wholly Operated Physician Offices
Medicare traditionally collects ownership information obtained in
the 855 A and 855 B enrollment forms completed upon a facility or a
practitioner's Medicare enrollment. The 855 forms are self-selecting
enrollment forms that may be updated as necessary. Although the
enrollment forms do not specifically require information on whether a
physician office is wholly owned or wholly operated by a hospital, we
will use this information to aid us in identifying physician offices
and clinics that might be wholly owned or operated by a hospital. While
we believe that most hospital owned entities providing physician
services will be considered part of the hospital and operating as
hospital outpatient departments; there will be at least some hospital
owned physician offices and clinics that will meet the definition of
``wholly-owned or wholly-operated'' and will be subject to the 3-day
payment window policy. We are unable to accurately estimate and verify
the number of wholly owned or wholly operated physician offices or
clinics enrolled in Medicare and furnishing health services to Medicare
beneficiaries that will be subject to the 3-day

[[Page 42943]]

payment window policy under the PFS because the 855 forms do not
explicitly capture information on sole ownership or operation. We note
that the application of the 3-day window policy is limited to only
those outpatient services provided within the payment window to
patients that are admitted to a hospital. The 3-day window policy would
not apply to the majority of services provided by wholly-owned or
wholly-operated physician offices. Furthermore, application of the 3-
day window policy would be limited to only the practice expense
component of the payment rate, and the professional component will be
unchanged by the payment policy. For the CY 2012 PFS proposed rule, we
are unable to estimate the impact of this proposed policy change.
However, we note that if we were able to estimate a savings in Part B
payments as a result of the application of the 3-day payment window,
the program savings would be redistributed across all other services
paid under the PFS in accordance with due to the PFS budget neutrality
provisions.

I. Alternatives Considered

This proposed rule contains a range of policies, including some
provisions related to specific statutory provisions. The preceding
preamble provides descriptions of the statutory provisions that are
addressed, identifies those policies when discretion has been
exercised, presents rationale for our policies and, where relevant,
alternatives that were considered.

J. Impact on Beneficiaries

There are a number of changes in this proposed rule that would have
an effect on beneficiaries. In general, we believe that many of the
proposed changes, including the refinements of the Physician Quality
Reporting System with its focus on measuring, submitting, and analyzing
quality data will have a positive impact and improve the quality and
value of care provided to Medicare beneficiaries.
The regulatory provisions may affect beneficiary liability in some
cases. Most changes in aggregate beneficiary liability due to a
particular provision would be a function of the coinsurance (20 percent
if applicable for the particular provision after the beneficiary has
met the deductible). To illustrate this point, as shown in Table 65,
the CY 2011 national payment amount in the nonfacility setting for CPT
code 99203 (Office/outpatient visit, new) is $102.95, which means that
in CY 2011 a beneficiary would be responsible for 20 percent of this
amount, or $20.59. Based on this proposed rule, including the negative
update, the CY 2012 national payment amount in the nonfacility setting
for CPT code 99203, as shown in Table 65, is $73.57, which means that,
in CY 2012, the beneficiary coinsurance for this service would be
$14.71. Most policies discussed in this proposed rule that impact
payment rates, such as the expansion of the MPPR to the professional
component of imaging procedures, would similarly impact beneficiaries'
coinsurance.

K. Accounting Statement

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 69, we have
prepared an accounting statement showing the estimated expenditures
associated with this proposed rule. This estimate includes the
estimated CY 2012 incurred benefit impact associated with the estimated
CY 2012 PFS conversion factor update based on the FY 2012 President's
Budget baseline.

Table 69--Accounting Statement: Classification of Estimated Transfers
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
CY 2012 Annualized Monetized Estimated decrease in expenditures
Transfers. of $20.2 billion for the PFS
update.
From Whom To Whom?................ Federal Government to physicians,
other practitioners and providers
and suppliers who receive payment
under Medicare.
------------------------------------------------------------------------

L. Conclusion

The analysis in the previous sections, together with the remainder
of this preamble, provides an Initial Regulatory Flexibility Act
Analysis. The previous analysis, together with the remainder of this
preamble, provides a Regulatory Impact Analysis.

VIII. Addenda Referenced in This Proposed Rule and Available Only
Through the Internet on the CMS Web Site

This section lists the Addenda referred to throughout the preamble
of this proposed rule. Beginning with the CY 2012 PFS proposed rule,
the PFS Addenda A, B, C, D, E, F, G, and H will no longer appear in the
Federal Register. Instead, these Addenda, along with other supplemental
documents, will be available through the Internet.
Readers who experience any problems accessing any of the Addenda
that are posted on the CMS Web sites identified above should contact
Erin Smith at (410) 786-4497.
The following PFS Addenda for CY 2012 PFS proposed rule are
available through the Internet on the CMS Web site at http://www.cms.gov/PhysicianFeeSched/. Click on the link on the left side of
the screen titled, ``PFS Federal Regulations Notices'' for a
chronological list of PFS Federal Register and other related documents.
For the CY 2012 PFS proposed rule, refer to item CMS-1524-P.

Addendum A--Explanation and Use of Addendum B
Addendum B--Proposed Relative Value Units and Relations Information
Used in Determining Medicare Payments for CY 2012
Addendum C--[Reserved]
Addendum D--Proposed CY 2012 Geographic Adjustment Factors (GAFs)
Addendum E--Proposed CY 2012 Geographic Practice Cost Indices (GPCIs)
by States and Medicare Locality
Addendum F--Proposed CY 2012 Diagnostic Imaging Services Subject to the
Multiple Procedure Payment Reduction
Addendum G--CPT/HCPCS Imaging Codes Defined by Section 5102(b) of the
DRA
Addendum H--CY 2011 ``Always Therapy'' Services Subject to the Multiple
Procedure Payment Reduction

List of Subjects

42 CFR Part 410

Health facilities, Health professions, Kidney diseases,
Laboratories, Medicare, Reporting and recordkeeping requirements, Rural
areas, X-rays.

42 CFR Part 414

Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medicare, Reporting and recordkeeping
requirements.

[[Page 42944]]

42 CFR Part 415

Health facilities, Health professions, Medicare, Reporting and
recordkeeping requirements.

42 CFR Part 495

Administrative practice and procedure, Electronic health records,
Health facilities, Health professions, Health Maintenance Organizations
(HMO), Medicaid, Medicare, Penalties, Privacy, Reporting and
recordkeeping requirements.

For the reasons set forth in the preamble of this proposed rule,
the Centers for Medicare & Medicaid Services proposes to amend 42 CFR
chapter IV as set forth below:

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

Subpart B--Medical and Other Health Services

1. The authority citation for part 410 continues to read as
follows:

Authority: Secs. 1102, 1834, 1871, and 1893 of the Social
Security Act (42 U.S.C. 1302, 1395m, 1395hh, and 1395ddd).

2. Amend Sec. 410.15(a) as follows:
A. Amending the definition of ``first annual wellness visit
providing personalized prevention plan services'' by--
1. Revising the introductory text.
2. Redesignating paragraphs (i) through (ix) as paragraphs (ii)
through (x).
3. Adding a new paragraph (i).
4. Revising newly redesignated paragraph (viii)(A).
B. Adding the definition of ``Health risk assessment''.
C. In the definition of ``subsequent annual wellness visit
providing personalized prevention plan services''.
1. Revising the introductory text.
2. Redesignating paragraphs (i) through (vii) as paragraphs (ii)
through (viii).
3. Adding a new paragraph (i).
4. Revising newly redesigned paragraphs (iii) and (vi)(B).
The revisions and additions read as follows:

Sec. 410.15 Annual wellness visits providing Personalized Prevention
Plan Services: Conditions for and limitations on coverage.

(a) * * *
First annual wellness visit providing personalized prevention plan
services means the following services furnished to an eligible
beneficiary by a health professional, taking into account the results
of a health risk assessment, as those terms are defined in this
section:
(i) Review (and administration if needed) of a health risk
assessment (as defined in this paragraph).
* * * * *
(viii) * * *
(A) A written screening schedule for the individual such as a
checklist for the next 5 to 10 years, as appropriate, based on
recommendations of the United States Preventive Services Task Force and
the Advisory Committee on Immunization Practices, and the individual's
health risk assessment (as that term is defined in this section),
health status, screening history, and age-appropriate preventive
services covered by Medicare.
* * * * *
Health risk assessment means, for the purposes of this section, an
evaluation tool that meets the following criteria:
(i) Collects self-reported information about the beneficiary.
(ii) Can be administered independently by the beneficiary or
administered by a health professional prior to or as part of the AWV
encounter.
(iii) Is appropriately tailored to and takes into account the
communication needs of underserved populations, persons with limited
English proficiency, and persons with health literacy needs.
(iv) Takes no more than 20 minutes to complete.
(v) Addresses, at a minimum, the following topics:
(A) Demographic data, including but not limited to age, gender,
race, and ethnicity.
(B) Self assessment of health status, frailty, and physical
functioning.
(C) Psychosocial risks, including but not limited to, depression/
life satisfaction, stress, anger, loneliness/social isolation, pain, or
fatigue.
(D) Behavioral risks, including but not limited to, tobacco use,
physical activity, nutrition and oral health, alcohol consumption,
sexual practices, motor vehicle safety (seat belt use), and home
safety.
(E) Activities of daily living (ADLs), including but not limited
to, dressing, feeding, toileting, grooming, physical ambulation
(including balance/risk of falls), and bathing.
(F) Instrumental activities of daily living (IADLs), including but
not limited to, shopping, food preparation, using the telephone,
housekeeping, laundry, mode of transportation, responsibility for own
medications, and ability to handle finances.
* * * * *
Subsequent annual wellness visit providing personalized prevention
plan services means the following services furnished to an eligible
beneficiary by a health professional, taking into account the results
of a health risk assessment, as those terms are defined in this
section:
(i) Review (and administration, if needed) of a health risk
assessment (as defined in this section).
* * * * *
(iii) An update of the list of current providers and suppliers that
are regularly involved in providing medical care to the individual as
that list was developed for the first annual wellness visit providing
personalized prevention plan services or the previous subsequent annual
wellness visit providing personalized prevention plan services.
* * * * *
(vi) * * *
(B) The list of risk factors and conditions for which primary,
secondary or tertiary interventions are recommended or are underway for
the individual as that list was developed at the first annual wellness
visit providing personalized prevention plan services or the previous
subsequent annual wellness visit providing personalized prevention plan
services.
* * * * *
3. Amend Sec. 410.62 paragraph (b) by revising the paragraph
heading to read as follows:

Sec. 410.62 Outpatient speech-language pathology services: Conditions
and exclusions.

* * * * *
(b) Condition for coverage of outpatient speech-language pathology
services furnished to certain inpatients of a hospital or a CAH or
SNF.* * *
* * * * *

Sec. 410.78 [Amended]

4. In Sec. 410.78 the introductory text of paragraph (b) is
amended by removing the phrase ``and individual and group health and
behavior assessment and intervention services furnished by an
interactive telecommunications system if the following conditions are
met:'' and adding in its place the phrase ``individual and group health
and behavior assessment and intervention services, and smoking
cessation services furnished by an interactive telecommunications
system if the following conditions are met:''.
5. Amend Sec. 410.140 by revising the definition of ``Deemed
entity'' to read as follows:

Sec. 410.140 Definitions.

* * * * *
Deemed entity means an individual, physician, or entity accredited
by an

[[Page 42945]]

approved organization, but that has not yet been approved by CMS under
Sec. 410.145(b) to furnish training.

Sec. 410.141 [Amended]

6. Amend Sec. 410.141 paragraph (b)(1) as follows:
A. Removing the term ``it'' and adding the phrase ``the training''
in its place.
B. Removing the cross-reference ``Sec. 410.32(a)'' and adding the
cross-reference ``Sec. 410.32(a)(2)''.

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

Subpart B--Physicians and Other Practitioners

7. The authority citation for part 414 continues to read as
follows:

Authority: Secs. 1102, 1871, and 1881(b)(l) of the Social
Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)).

8. Amend Sec. 414.22 by revising paragraphs (b)(5)(i)(A) through
(b)(5)(i)(C) to read as follows:

Sec. 414.22 Relative value units (RVUs).

* * * * *
(b) * * *
(5) * * *
(i) * * *
(A) Facility practice expense RVUs. The facility practice expense
RVUs apply to services furnished to patients in places of service
including, but not limited to, a hospital, a skilled nursing facility,
a community mental health center, a hospice, or an ambulatory surgical
center, or in a wholly owned or wholly operated physician practice
providing preadmission services under Sec. 412.2(c)(5).
(B) Nonfacility practice expense RVUs. The nonfacility practice
expense RVUs apply to services furnished to patients in places of
service including, but not limited to, a physician's office, the
patient's home, a nursing facility, or a comprehensive outpatient
rehabilitation facility (CORF).
(C) Outpatient therapy and CORF services. Outpatient therapy
services (including physical therapy, occupational therapy, and speech-
language pathology services) and CORF services billed under the
physician fee schedule are paid using the nonfacility practice expense
RVUs.
* * * * *

Sec. 414.65 [Amended]

9. In Sec. 414.65 paragraph (a) is amended by removing the phrase
``and individual and group health and behavior assessment and
intervention furnished via an interactive telecommunications system is
equal to the current fee schedule amount applicable for the service of
the physician or practitioner.'' and adding in its place the phrase
``individual and group health and behavior assessment and intervention,
and smoking cessation services furnished via an interactive
telecommunications system is equal to the current fee schedule amount
applicable for the service of the physician or practitioner.''
10. Amend Sec. 414.90 as follows:
A. In paragraph (b), adding the definition of ``Certified
electronic health record technology''.
B. In paragraph (b), revising the definitions of ``Group
practice''.
C. Removing paragraph (c)(2).
D. Redesignating paragraph (c)(3) as (c)(2).
E. Revising paragraph (f)(1).
F. Removing paragraph (f)(2).
G. Redesignating paragraph (f)(3) as (f)(2).
H. Revising newly redesignated paragraph (f)(2) introductory text.
I. In newly redesignated paragraph (f)(2)(ii), removing the phrase
``behalf; or'' and adding in its place the phrase ``behalf.''
J. In newly redesignated paragraph (f)(2)(iii), removing the phrase
``containing real or dummy'' and adding in its place the phrase
``containing dummy''.
K. Revising paragraphs (g)(1), (g)(5), (i)(1) and (i)(2)
introductory text.
The revisions and additions and read as follows:

Sec. 414.90 Physician Quality Reporting System.

* * * * *
(b) * * *
Certified electronic health record technology means an electronic
health record vendor's product and version as described in 45 CFR
170.102.
Group practice means a physician group practice, as defined by a
TIN, with 25 or more individual eligible professionals (or, as
identified by NPIs) who have reassigned their billing rights to the
TIN.
* * * * *
(f) * * *
(1) Reporting periods. For purposes of this paragraph, the
reporting period is--
(i) The 12-month period from January 1 through December 31 of such
program year.
(ii) Exceptions--(A) Program year 2011. The reporting period for
the program year 2011 is one of the following:
(1) The 12-month period from January 1 through December 31 of such
program year; or
(2) The 6-month period from July 1 through December 31 of such
program year.
(B) For 2012 and subsequent program years, the 6-month reporting
period from July 1 through December 31 of such program year is
available for registry-based reporting of Physician Quality Reporting
System measures groups by eligible professionals.
(2) Reporting mechanisms. For program year 2011 and subsequent
program years, an eligible professional who wishes to participate in
the Physician Quality Reporting System must report information on the
individual Physician Quality Reporting System quality measures or
Physician Quality Reporting System measures groups identified by CMS in
one of the following manners:
(g) * * *
(1) Meets the participation requirements specified by CMS for the
Physician Quality Reporting System group practice reporting option;
* * * * *
(5) Payments to a group practice under this paragraph must be in
lieu of the payments that would otherwise be made under the Physician
Quality Reporting System to eligible professionals in the group
practice for meeting the criteria for satisfactory reporting for
individual eligible professionals.
(i) If an eligible professional, as identified by an individual
NPI, has reassigned his or her Medicare billing rights to a TIN
selected to participate in the Physician Quality Reporting System group
practice reporting option for a program year, then for that program
year the eligible professional must participate in the Physician
Quality Reporting System via the group practice reporting option. For
any program year in which the TIN is selected to participate in the
Physician Quality Reporting System group practice reporting option, the
eligible professional cannot individually qualify for a Physician
Quality Reporting System incentive payment by meeting the requirements
specified in paragraph (f) of this section.
(ii) If, for the program year, the eligible professional
participates in the Physician Quality Reporting System under a TIN that
is not selected to participate in the Physician Quality Reporting
System group practice reporting option for that program year, then the
eligible professional may individually qualify for a Physician Quality
Reporting System incentive by meeting the requirements specified in

[[Page 42946]]

paragraph (f) of this section under that TIN.
* * * * *
(i) * * *
(1) To request an informal review, an eligible professional (or in
the case of reporting under paragraph (g) of this section, group
practices) must submit a request to CMS within 90 days of the release
of the feedback reports. The request must be submitted in writing and
summarize the concern(s) and reasons for requesting an informal review
and may also include information to assist in the review.
(2) CMS will provide a written response within 90 days of the
receipt of the original request.
* * * * *
11. Section 414.92 is amended as follows:
A. In paragraph (b), adding the definition of ``Certified
electronic health record technology''.
B. In paragraph (b), revising paragraphs (ii) and (iii) of the
definition of ``Group practice''.
C. Revising paragraph (c)(1).
D. In paragraph (c)(2), revise the paragraph heading.
E. Revising paragraph (c)(2)(ii).
F. Adding paragraph (c)(2)(iii).
G. In paragraph (d)(1), removing the phrase ``For purposes of this
paragraph in 2011,'' is removed and adding in its place the phrase
``For purposes of this paragraph,''.
H. In paragraph (d)(2), removing the phrase ``For program year
2011,'' and adding in its place the phrase ``For the 2012 and 2013
incentive payments,''
I. Redesignating paragraph (f) as (g).
J. Adding a new paragraph (f).

Sec. 414.92 Electronic Prescribing Incentive Program.

* * * * *
(b) * * *
Certified electronic health record technology means an electronic
health record vendor's product and version as described in 45 CFR
170.102.
Group practice * * *
(ii) In a Medicare-approved demonstration project or other Medicare
program, under which Physician Quality Reporting System requirements
and incentives have been incorporated; and
(iii) Has indicated its desire to participate in the electronic
prescribing group practice reporting option.
* * * * *
(c) * * *
(1) Incentive payments. Subject to paragraph (c)(3) of this
section, with respect to covered professional services furnished during
a reporting period by an eligible professional, if the eligible
professional is a successful electronic prescriber for such reporting
period, in addition to the amount otherwise paid under section 1848 of
the Act, there also must be paid to the eligible professional (or to an
employer or facility in the cases described in section 1842(b)(6)(A) of
the Act) or, in the case of a group practice under paragraph (e) of
this section, to the group practice, from the Federal Supplementary
Medical Insurance Trust Fund established under section 1841 of the Act
an amount equal to the applicable electronic prescribing percent (as
specified in paragraph (c)(1)(ii) of this section) of the total
estimated allowed part B charges for all such covered professional
services furnished by the eligible professional (or, in the case of a
group practice under paragraph (e) of this section, by the group
practice) during the applicable reporting period.
(2) Payment adjustment.* * * (ii) Significant hardship exception.
CMS may, on a case-by-case basis, exempt an eligible professional (or
in the case of a group practice under paragraph (e) of this section, a
group practice) from the application of the payment adjustment under
paragraph (c)(2) of this section if, CMS determines, subject to annual
renewal, that compliance with the requirement for being a successful
electronic prescriber would result in a significant hardship. Eligible
professionals (or, in the case of a group practice under paragraph (e)
of this section, a group practice) may request consideration for a
significant hardship exemption from the 2013 and 2014 payment
adjustments if one of the following circumstances apply:
(A) The eligible professional or group practice is located in a
rural area without high speed internet access.
(B) The eligible professional or group practice is located in an
area without sufficient available pharmacies for electronic
prescribing.
(C) The eligible professional or group practice is unable to
electronically prescribe due to local, State, or Federal law or
regulation.
(D) The eligible professional or group practice has limited
prescribing activity, as defined by an eligible professional generating
fewer than 100 prescriptions during a 6-month reporting period.
(iii) Exemptions to the payment adjustment. An eligible
professional (or in the case of a group practice under paragraph (b) of
this section, a group practice) is exempt from the application of the
payment adjustment under paragraph (c)(2) of this section if one of the
following applies:
(A) The eligible professional is not an MD, DO, podiatrist, nurse
practitioner, or physician assistant.
(B) The eligible professional does not have at least 100 cases
containing an encounter code that falls within the denominator of the
electronic prescribing measure for dates of service during the 6-month
reporting period specified in paragraph (f)(1) of this section.
* * * * *
(f) Requirements for individual eligible professionals and group
practices for the payment adjustment. In order to be considered a
successful electronic prescriber for the electronic prescribing payment
adjustment, an individual eligible professional (or, in the case of a
group practice under paragraph (b) of this section, a group practice),
as identified by a unique TIN/NPI combination, must meet the criteria
for being a successful electronic prescriber specified by CMS, in the
form and manner specified in paragraph (f)(2) of this section, and
during the reporting period specified in paragraph (f)(1) of this
section.
(1) Reporting periods. (i) For purposes of this paragraph, the
reporting period for the 2013 payment adjustment is either of the
following:
(A) The 12-month period from January 1, 2011 through December 31,
2011.
(B) The 6-month period from January 1, 2012 through June 30, 2012.
(ii) For purposes of this paragraph, the reporting period for the
2014 payment adjustment is either of the following:
(A) The 12-month period from January 1, 2012 through December 31,
2012.
(B) The 6-month period from January 1, 2013 through June 30, 2013.
(2) Reporting mechanisms. For program years 2012 through 2014, an
eligible professional (or, in the case of a group practice under
paragraph (e) of this section, a group practice) who wishes to
participate in the Electronic Prescribing Incentive Program must report
information on the electronic prescribing measure identified by CMS to
one of the following:
(i) CMS, by no later than 2 months after the end of the applicable
12-month reporting period or by no later than 1 month after the end of
the applicable 6-month reporting period, on the eligible professional's
Medicare Part B claims for covered professional services furnished by
the eligible professional during the reporting period specified in
paragraph (f)(1) of this section.
(ii) A qualified registry (as defined in paragraph (b) of this
section) in the form

[[Page 42947]]

and manner and by the deadline specified by the qualified registry
selected by the eligible professional. The selected qualified registry
submits information, as required by CMS, for covered professional
services furnished by the eligible professional during the reporting
period specified in paragraph (f)(1) of this section to CMS on the
eligible professional's behalf.
(iii) CMS by extracting clinical data using a secure data
submission method, as required by CMS, from a qualified electronic
health record product (as defined in paragraph (b) of this section) by
the deadline specified by CMS for covered professional services
furnished by the eligible professional during the reporting period
specified in paragraph (f)(1) of this section. Prior to actual data
submission for a given program year and by a date specified by CMS, the
eligible professional must submit a test file containing dummy clinical
quality data extracted from the qualified electronic health record
product selected by the eligible professional using a secure data
submission method, as required by CMS.
* * * * *

Subpart J--Submission of Manufacturer's Average Sales Price Data

12. Section 414.802 is amended by revising the first sentence of
the definition of ``unit'' to read as follows:

Sec. 414.802 Definitions.

* * * * *
Unit means the product represented by the 11-digit National Drug
Code, unless otherwise specified by CMS to account for situations where
labeling indicates that the amount of drug product represented by an
NDC varies. * * *
* * * * *
13. Section 414.904 is amended by revising paragraph (d)(3) to read
as follows:

Sec. 414.904 Average sales price as the basis for payment.

* * * * *
(d) * * *
(3) Widely available market price and average manufacturer price.
If the Inspector General finds that the average sales price exceeds the
widely available market price or the average manufacturer price by the
applicable threshold percentage specified in paragraph (d)(3)(iii) or
(d)(3)(iv) of this section, the Inspector General is responsible for
informing the Secretary (at such times as specified by the Secretary)
and the payment amount for the drug or biological will be substituted
subject to the following adjustments:
(i) The payment amount substitution will be applied at the next ASP
payment amount calculation period after the Inspector General informs
the Secretary (at such times specified by the Secretary) about billing
codes for which the ASP has exceeded the AMP by the applicable
threshold percentage, and will remain in effect for one quarter after
publication.
(ii) Payment at 103 percent of the average manufacturer price for a
billing code will be applied at such times when--
(A) The threshold for making price substitutions, as defined in
paragraph (d)(3)(iii) of this section is met; and
(B) 103 percent of the AMP is less than the 106 percent of the ASP
for the quarter in which the substitution would be applied.
(iii) The applicable percentage threshold for AMP comparisons for
CYs 2005 through 2011 is 5 percent. For CY 2012, the applicable
percentage threshold for ASP comparisons is reached when--
(A) The ASP for the billing code has exceeded the AMP for the
billing code by 5 percent or more in two consecutive quarters, or three
of the last 4 quarters immediately preceding the quarter to which the
price substitution would be applied; and
(B) The average manufacturer price for the billing code is
calculated using the same set of NDCs used for the average sales price
for the billing code.
(iv) The applicable percentage threshold for WAMP comparisons for
CYs 2005 through 2012 is 5 percent.
* * * * *

PART 415--SERVICES FURNISHED BY PHYSICIANS IN PROVIDERS,
SUPERVISING PHYSICIANS IN TEACHING SETTINGS, AND RESIDENTS IN
CERTAIN SETTINGS

14. The authority citation for part 415 continues to read as
follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

Subpart C--Part B Carrier Payments for Physician Services to
Beneficiaries in Providers

Sec. 415.130 [Amended]

15. In Sec. 415.130, paragraphs (d)(1) and (d)(2) are amended by
removing the date ``December 31, 2010'' and adding the date ``December
31, 2011'' in its place.

PART 495--STANDARDS FOR THE ELECTRONIC HEALTH RECORD TECHNOLOGY
INCENTIVE PROGRAM

16. The authority for part 495 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

17. Amend Sec. 495.8 as follows:
A. In pargraph (a)(2)(ii), removing the phrase ``selected by CMS
electronically to CMS (or in the case of Medicaid EPs, the States) in
the manner specified by CMS (or in the case of Medicaid EPs, the
States).'' and adding in its place the phrase ``selected by CMS to CMS
(or in the case of Medicaid EPs, the States) in the form and manner
specified by CMS (or in the case of Medicaid EPs, the States).''
B. Adding a new paragraph (a)(2)(v) to read as follows:

Sec. 495.8 Demonstration of meaningful use criteria.

(a) * * *
(2) * * *
(v) Exception for Medicare EPs for PY 2012--Participation in the
Physician Quality Reporting System-Medicare EHR Incentive Pilot. In
order to satisfy the clinical quality measure reporting objective in
Sec. 495.6(d)(10), aside from attestation, an EP participating in the
Physician Quality Reporting System may also participate in the
Physician Quality Reporting System-Medicare EHR Incentive Pilot through
one of the following methods:
(A) Submission of data extracted from the EP's certified EHR
technology through a Physician Quality Reporting System qualified EHR
data submission vendor; or
(B) Submission of data extracted from the EP's certified EHR
technology, which must also be through a Physician Quality Reporting
System qualified EHR.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

Dated: June 16, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.
Approved: June 24, 2011.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2011-16972 Filed 7-1-11; 4:15 pm]
BILLING CODE 4120-01-P