Federal Register 2009

43846

Federal Register

/Vol. 67, No. 125/Friday, June 28, 2002/Proposed Rules

DEPARTMENT OF HEALTH ANDHUMAN SERVICESCenters for Medicare & MedicaidServices42 CFR Parts 410 and 414

[CMS–1204–P]RIN 0938–AL21

Medicare Program; Revisions toPayment Policies Under the PhysicianFee Schedule for Calendar Year 2003

AGENCY

:

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

ACTION

:

Proposed rule.

SUMMARY

:

The proposed rule wouldrefine the resource-based practiceexpense relative value units (RVUs) andmake other changes to Medicare Part Bpayment policy. The policy changesconcern: Medicare Economic Index,pricing of the technical component forpositron emission tomography (PET)scans, Medicare qualifications forclinical nurse specialists, a process toadd or delete services to the definitionof telehealth, definition for ZZZ globalperiods, global period for surfaceradiation, and an endoscopic base forurology codes. We also discuss therefinement of anesthesia work values,clinical social worker services, and howdrugs are accounted for in thesustainable growth rate.We are proposing these changes toensure that our payment systems areupdated to reflect changes in medicalpractice and the relative value of services. We solicit comments on theproposed policy changes.This proposed rule also clarifies theenrollment of physical and occupationaltherapists as therapists in privatepractice. In addition, this proposed rulediscusses physical and occupationaltherapy payment caps and makestechnical changes to outpatientrehabilitation services.

DATES

:

We will consider comments if we receive them at the appropriateaddress, as provided below, no laterthan 5 p.m. on August 27, 2002.

ADDRESSES

:

In commenting, please referto file code CMS–1204–P. Because of staff and resource limitations, we cannotaccept comments by facsimile (FAX)transmission. Mail written comments(one original and two copies) to thefollowing address ONLY: Centers forMedicare & Medicaid Services,Department of Health and HumanServices, Attention: CMS–1204–P, P.O.Box 8013, Baltimore, MD 21244–8013.Please allow sufficient time for us toreceive mailed comments on time in theevent of delivery delays.If you prefer, you may deliver (byhand or courier) your written comments(one original and two copies) to one of the following addresses: Room 445–G,Hubert H. Humphrey Building, 200Independence Avenue, SW.,Washington, DC 20201, or Room C5–14–03, 7500 Security Boulevard, Baltimore,MD 21244–8013.(Because access to the interior of theHHH Building is not readily available topersons without Federal Governmentidentification, commenters areencouraged to leave their comments inthe CMS drop slots located in the mainlobby of the building. A stamp-in clockis available if you wish to retain proof of filing by stamping in and retaining anextra copy of the comments being filed.)Comments mailed to the addressesindicated as appropriate for hand orcourier delivery may be delayed andcould be considered late.For information on viewing publiccomments, see the beginning of the

SUPPLEMENTARY INFORMATION

section.

FOR FURTHER INFORMATION CONTACT

:

Carolyn Mullen, (410) 786–4589, MarcHartstein, (410) 786–4539, or StephanieMonroe (410) 786–6864 (for issuesrelated to resource-based practiceexpense relative value units). Jim Menas, (410) 786–4507 (for issuesrelated to anesthesia).Marc Hartstein, (410) 786–4539 (forissues related to sustainable growthrate).Gail Addis, (410) 786–4522 (for issuesrelated to PET scans and HCPCS codes).Craig Dobyski, (410) 786–4584 (forissues related to telehealth).Terri Harris, (410) 786–6830 (forissues related to physical andoccupational therapy).Latesha Walker, (410) 786–1101 (forall other issues).

SUPPLEMENTARY INFORMATION

:

Inspection of Public Comments:

Comments received timely will beavailable for public inspection as theyare received, generally beginningapproximately 3 weeks after publicationof a document, at the headquarters of the Centers for Medicare & MedicaidServices, 7500 Security Boulevard,Baltimore, Maryland 21244, Mondaythrough Friday of each week from 8:30a.m. to 4 p.m. To schedule anappointment to view public comments,phone (410) 786–7197.

Copies:

To order copies of the

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containing this document, sendyour request to: New Orders,Superintendent of Documents, P.O. Box371954, Pittsburgh, PA 15250–7954.Specify the date of the issue requestedand enclose a check or money orderpayable to the Superintendent of Documents, or enclose your Visa orMaster Card number and expirationdate. Credit card orders can also beplaced by calling the order desk at (202)512–1800 (or toll-free at 1–888–293–6498) or by faxing to (202) 512–2250.The cost for each copy is $9. As analternative, you can view andphotocopy the

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document at most libraries designatedas Federal Depository Libraries and atmany other public and academiclibraries throughout the country thatreceive the

Federal Register

.This

Federal Register

document isalso available from the

Federal Register

online database through

GPO Access,

aservice of the U.S. Government PrintingOffice. The web site address is:

http:// www.access.gpo.gov/nara/index.html.

Information on the physician feeschedule can be found on ourhomepage. You can access this data byusing the following directions:1. Go to the CMS homepage (

http:// www.cms.hhs.gov

).2. Click on ‘‘Medicare.’’3. Click on ‘‘Professional/TechnicalInformation.’’4. Select Medicare Payment Systems.5. Select Physician Fee Schedule.Or, you can go directly to thePhysician Fee Schedule page by typingthe following:

http://www.cms.hhs.gov/ medicare/pfsmain.htm.

To assist readers in referencingsections contained in this preamble, weare providing the following table of contents. Some of the issues discussedin this preamble affect the paymentpolicies but do not require changes tothe regulations in the Code of FederalRegulations. Information on theregulation’s impact appears throughoutthe preamble and is not exclusively insection V.

Table of Contents

I. BackgroundA. Legislative HistoryB. Published Changes to the Fee ScheduleII. Provisions of the Proposed RegulationsA. Resource-Based Practice ExpenseRelative Value UnitsB. Anesthesia IssuesC. Changes to the Physician Fee ScheduleUpdate Calculation and the SustainableGrowth Rate (SGR)D. Pricing of Technical Components (TC)for Positron Emissions Tomography(PET) ScansE. Enrollment of Physical andOccupational Therapists as Therapists inPrivate PracticeF. Clinical Social Worker ServicesG. Medicare Qualifications for ClinicalNurse Specialists

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Federal Register

/Vol. 67, No. 125/Friday, June 28, 2002/Proposed Rules

H. Process to Add or Delete Services to theDefinition of TelehealthI. Definition for ZZZ Global Periods J. Change in Global Period for CPT Code77789 (Surface Application of RadiationSource)K. Technical Change:

§

410.61(d)(iii)Outpatient Rehabilitation ServicesL. New HCPCS G-CodesM. Endoscopic Base for Urology CodesN. Physical Therapy and OccupationalTherapy CapsIII. Collection of Information RequirementsIV. Response to CommentsV. Regulatory Impact AnalysisAddendum A

—

Explanation and Use of Addendum BAddendum B

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2003 Relative Value Unitsand Related Information Used inDetermining Medicare Payments for 2003.

In addition, because of the manyorganizations and terms to which werefer by acronym in this proposed rule,we are listing these acronyms and theircorresponding terms in alphabeticalorder below:AMA

—

American Medical AssociationBBA

—

Balanced Budget Act of 1997BBRA

—

Balanced Budget RefinementAct of 1999CF

—

Conversion factorCFR

—

Code of Federal RegulationsCMS

—

Centers for Medicare & MedicaidServicesCNS

—

Clinical Nurse SpecialistCPT

—

(Physicians

’

) Current ProceduralTerminology (4th Edition, 2002,copyrighted by the American MedicalAssociation)CPEP

—

Clinical Practice Expert PanelCRNA

—

Certified Registered NurseAnesthetistE/M

—

Evaluation and managementFMR

—

Fair market rentalGAF

—

Geographic adjustment factorGPCI

—

Geographic practice cost indexHCPCS

—

Healthcare Common ProcedureCoding SystemHHA

—

Home health agencyHHS

—

(Department of) Health andHuman ServicesIDTFs

—

Independent Diagnostic TestingFacilitiesMCM

—

Medicare Carrier ManualMedPAC

—

Medicare Payment AdvisoryCommissionMEI

—

Medicare Economic IndexMGMA

—

Medical Group ManagementAssociationMSA

—

Metropolitan Statistical AreaNAMCS

—

National Ambulatory MedicalCare SurveyPC

—

Professional componentPEAC

—

Practice Expense AdvisoryCommitteePET

—

Positron Emission TomographyPPS

—

Prospective payment systemRUC

—

(AMA

’

s Specialty Society)Relative (Value) Update CommitteeRVU

—

Relative value unitSGR

—

Sustainable growth rateSMS

—

(AMA

’

s) SocioeconomicMonitoring SystemSNF

—

Skilled Nursing FacilityTC

—

Technical component

I. Background

A. Legislative History

Since January 1, 1992, Medicare haspaid for physicians

’

services undersection 1848 of the Social Security Act(the Act),

‘‘

Payment for Physicians

’’

Services.

’’

This section provides forthree major elements: (1) A fee schedulefor the payment of physicians

’

services;(2) limits on the amounts thatnonparticipating physicians can charge beneficiaries; and (3) a sustainablegrowth rate for the rates of increase inMedicare expenditures for physicians

’

services. The Act requires that paymentsunder the fee schedule be based onnational uniform relative value units(RVUs) based on the resources used infurnishing a service. Section 1848(c) of the Act requires that national RVUs beestablished for physician work, practiceexpense, and malpractice expense.Section 1848(c)(2)(B)(ii)(II) of the Actprovides that adjustments in RVUs maynot cause total physician fee schedulepayments to differ by more than $20million from what they would have been had the adjustments not beenmade. If adjustments to RVUs causeexpenditures to change by more than$20 million, we must make adjustmentsto preserve budget neutrality.

B. Published Changes to the FeeSchedule

In the July 2000 proposed rule (65 FR44177), we listed all of the final rulespublished through November 1999. Inthe August 2001 proposed rule (66 FR40372) we discussed the November2000 final rule relating to the updates tothe RVUs and revisions to paymentpolicies under the physician feeschedule.In the November 2001 final rule withcomment period (66 FR 55246), werevised the policy for resource-basedpractice expense RVUs; services andsupplies incident to a physician

’

sprofessional service; anesthesia baseunit variations; recognition of CPTtracking codes; and nurse practitioners,physician assistants, and clinical nursespecialists performing screeningsigmoidoscopies. We also addressedcomments received on the June 8, 2001proposed notice (66 FR 31028) for the 5-year review of work RVUs and finalizedthese work RVUs. In addition, weacknowledged comments received inresponse to a discussion of modifier-62,which is used to report the work of co-surgeons. The November 2001 final rulealso updated the list of services that aresubject to the physician self-referralprohibitions in order to reflect CPT andHealthcare Common Procedure CodingSystem (HCPCS) code changes that wereeffective January 1, 2002. All theserevisions ensure that our paymentsystems are updated to reflect changesin medical practice and the relativevalue of services.The Medicare, Medicaid, and StateChild Health Insurance Program(SCHIP) Benefits Improvement andProtection Act of 2000 (Pub. L. 106

–

554)(BIPA) modernized the mammographyscreening benefit and authorizedpayment under the physician feeschedule effective January 1, 2002. Itprovided for biennial screening pelvicexaminations for certain beneficiariesand expanded coverage for screeningcolonoscopies to all beneficiarieseffective July 1, 2001. It provided forannual glaucoma screenings for high-risk beneficiaries and establishedcoverage for medical nutrition therapyservices for certain beneficiarieseffective January 1, 2002. It expandedpayment for telehealth services effectiveOctober 1, 2001; required certain IndianHealth Service providers to be paid forsome services under the physician feeschedule effective July 1, 2001; andrevised the payment for certainphysician pathology services effective January 1, 2001. This final ruleconformed our regulations to reflectthese statutory provisions.The final rule also announced thecalendar year 2002 physician feeschedule conversion factor of $36.1992.

II. Provisions of the ProposedRegulations

This proposed rule would affect theregulations set forth at part 410,Supplementary medical insurance (SMI) benefits and part 414, Payment for PartB medical and other health services.

A. Resource-Based Practice ExpenseRelative Value Units

1. Resource-Based Practice ExpenseLegislationSection 121 of the Social Security ActAmendments of 1994 (Pub. L. 103

–

432),enacted on October 31, 1994, requiredus to develop a methodology for aresource-based system for determiningpractice expense RVUs for eachphysician

’

s service beginning in 1998.In developing the methodology, wewere to consider the staff, equipment,and supplies used in providing medicaland surgical services in various settings.The legislation specifically requiredthat, in implementing the new system of

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Federal Register

/Vol. 67, No. 125/Friday, June 28, 2002/Proposed Rules

practice expense RVUs, we apply thesame budget-neutrality provisions thatwe apply to other adjustments under thephysician fee schedule.Section 4505(a) of the BalancedBudget Act of 1997 (BBA) (Pub. L. 105

–

33), enacted on August 5, 1997,amended section 1848(c)(2)(ii) of theAct and delayed the effective date of theresource-based practice expense RVUsystem until January 1, 1999. Inaddition, section 4505(b) of the BBAprovided for a 4-year transition periodfrom charge-based practice expenseRVUs to resource-based RVUs.Further legislation affecting resource- based practice expense RVUs wasincluded in the Medicare, Medicaid andState Child Health Insurance Program(SCHIP) Balanced Budget RefinementAct of 1999 (BBRA) (Pub. L. 106

–

113),enacted on November 29, 1999. Section212 of the BBRA amended section1848(c)(2)(ii) of the Act by directing usto establish a process under which weaccept and use, to the maximum extentpracticable and consistent with sounddata practices, data collected ordeveloped by entities and organizations.These data would supplement the datawe normally collect in determining thepractice expense component of thephysician fee schedule for payments inCY 2001 and CY 2002. (In the 1999 finalrule (64 FR 59380), we extended, for anadditional 2 years, the period duringwhich we would accept supplementarydata.)2. Current Methodology for Computingthe Practice Expense Relative ValueUnit SystemEffective with services furnished onor after January 1, 1999, we establisheda new methodology for computingresource-based practice expense RVUsthat used the two significant sources of actual practice expense data we haveavailable

—

the Clinical Practice ExpertPanel (CPEP) data and the AmericanMedical Association

’

s (AMA)Socioeconomic Monitoring System(SMS) data. The methodology was basedon an assumption that current aggregatespecialty practice costs are a reasonableway to establish initial estimates of relative resource costs for physicians

’

services across specialties. Themethodology allocated these aggregatespecialty practice costs to specificprocedures and, thus, can be seen as a

‘‘

top-down

’’

approach.a. Major StepsA brief discussion of the major stepsinvolved in the determination of thepractice expense RVUs follows. (Pleasesee the November 1, 2001 final rule (66FR 55249) for a more detailedexplanation of the top-downmethodology.)

•

Step 1

—

Determine the specialtyspecific practice expense per hour of physician direct patient care. We usedthe AMA

’

s SMS survey of actualaggregate cost data by specialty todetermine the practice expenses perhour for each specialty. We calculatedthe practice expenses per hour for thespecialty by dividing the aggregatepractice expenses for the specialty bythe total number of hours spent inpatient care activities.

•

Step 2

—

Create a specialty specificpractice expense pool of practiceexpense costs for treating Medicarepatients. To calculate the total numberof hours spent treating Medicarepatients for each specialty, we used thephysician time assigned to eachprocedure code and the Medicareutilization data. We then calculated thespecialty specific practice expense pools by multiplying the specialty practiceexpenses per hour by the total physicianhours.

•

Step 3

—

Allocate the specialtyspecific practice expense pool to thespecific services performed by eachspecialty. For each specialty, wedivided the practice expense pool intotwo groups based on whether direct orindirect costs were involved and used adifferent allocation basis for each group.(i) Direct costs

—

For direct costs(which include clinical labor, medicalsupplies, and medical equipment), weused the procedure specific CPEP dataon the staff time, supplies, andequipment as the allocation basis.(ii) Indirect costs

—

To allocate the costpools for indirect costs, includingadministrative labor, office expenses,and all other expenses, we used the totaldirect costs combined with thephysician fee schedule work RVUs. Weconverted the work RVUs to dollarsusing the Medicare CF (expressed in1995 dollars for consistency with theSMS survey years).

•

Step 4

—

For procedures performed by more than one specialty, the finalprocedure code allocation was aweighted average of allocations for thespecialties that perform the procedure,with the weights being the frequencywith which each specialty performs theprocedure on Medicare patients. b. Other Methodological Issues(i) Zero Physician Work Pool

—

Forservices with physician work RVUsequal to zero (including those serviceswith a technical and professionalcomponent), we created a separatepractice expense pool using the averageclinical staff time from the CPEP dataand the

‘‘

all physicians

’’

practiceexpense per hour.We then used the adjusted 1998practice expense RVUs to allocate thispool to each service. Also, for allradiology services that are assignedphysician work RVUs, we used theadjusted 1998 practice expense RVUsfor radiology services as an interimmeasure to allocate the direct practiceexpense cost pool for radiology.(ii) Crosswalks for Specialties withoutPractice Expense Survey DataSince many specialties identified inour claims data did not correspondexactly to the specialties included in theSMS survey data, it was necessary tocrosswalk these specialties to the mostappropriate SMS specialty.(iii) Because we believe that mostphysical therapy services furnished inphysicians

’

offices are performed byphysical therapists, we crosswalked allutilization for therapy services in theCPT 97000 series to the physical andoccupational therapy practice expensepool.

B. Practice Expense Proposals for Calendar Year 2003

1. CPEP Dataa. Ophthalmology Services

—

Rank OrderAnomaliesRank order anomalies were created inthree ophthalmology families of codes because only certain services in eachfamily were brought to the PracticeExpense Advisory Committee (PEAC)for refinement, while CPEP data for theother codes were left unchanged. TheAmerican Academy of Ophthalmologyhas requested that we make thefollowing changes in the CPEP data toensure that the more complex servicesin a family of codes are not paid lessthan the simpler services and we areproposing to do so.CPT code 67820, Revise eyelashes

—

remove ophthane from the supply list.CPT code 67825, Revise eyelashes

—

remove the bipolar handpiece from thesupply list.CPT code 65220, Removal foreign body from eye

—

use the supply list andclinical staff time assigned to CPT code65222. The exam lane should be theonly equipment assigned.CPT codes 92081 and 92083, Visualfield examination(s)

—

Assign the samesupplies and equipment as CPT code92082; assign 35 minutes of clinical staff time to 92081 and 70 minutes to 92083. b. Practice Expense Inputs forThermotherapy ProceduresThere are three CPT codes fortransurethral destruction of prostatetissue: CPT 53850, by microwave

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