Medicare Program: Payment Policies under Physician Fee Schedule and Other Revisions to Part B for CY 2012

This Proposed Rule document was issued by the Centers for Medicare Medicaid Services (CMS)

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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.

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.

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

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

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

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

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 printedFederal Register. However, beginning with the CY 2012 PFS proposed rule, the PFS Addenda will no longer appear in theFederal 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 PFSFederal Registerand 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, andobtained 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 theFederal 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 1,2007. 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 × GPCI work) + (RVU PE × GPCI PE) + (RVU Malpractice × GPCI Malpractice)] × 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 PFSconversion 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 proxyPE/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.

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 codeSpecialty description
49Ambulatory surgical center.
50Nurse practitioner.
51Medical supply company with certified orthotist.
52Medical supply company with certified prosthetist.
53Medical supply company with certified prosthetist-orthotist.
54Medical supply company not included in 51, 52, or 53.
55Individual certified orthotist.
56Individual certified prosthestist.
57Individual certified prosthetist-orthotist.
58Individuals not included in 55, 56, or 57.
59Ambulance service supplier, e.g., private ambulance companies, funeral homes, etc.
60Public health or welfare agencies.
61Voluntary health or charitable agencies.
73Mass immunization roster biller.
74Radiation therapy centers.
87All other suppliers (e.g., drug and department stores).
88Unknown supplier/provider specialty.
89Certified clinical nurse specialist.
95Competitive Acquisition Program (CAP) Vendor.
96Optician.
97Physician assistant.
A0Hospital.
A1SNF.
A2Intermediate care nursing facility.
A3Nursing facility, other.
A4HHA.
A5Pharmacy.
A6Medical supply company with respiratory therapist.
A7Department store.
1Supplier of oxygen and/or oxygen related equipment.
2Pedorthic personnel.
3Medical 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) ⁁ 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

Image #ep19jy11.000

BILLING CODE 4120-01-C
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 CodeShort code descriptorCMS Labor/supply codeDescription of labor/supply
12011Repair superficial wound(s)SA048pack, minimum multi-specialty visit
15360Apply cult derm sub t/a/lSA054pack, post-op incision care (suture)
19361Breast reconstr w/lat flapL037DRN/LPN/MTA
21147Reconstruct midface lefortSA054pack, post-op incision care (suture)
23515Treat clavicle fractureSA052pack, post-op incision care (staple)
25415Repair radius & ulnaSA052pack, post-op incision care (staple)
Repair radius & ulnaSA052pack, post-op incision care (staple)
28005Treat foot bone lesionSA054pack, post-op incision care (suture)
28456Treat midfoot fractureSA054pack, post-op incision care (suture)
28485Treat metatarsal fractureSA054pack, post-op incision care (suture)
32998Perq rf ablate tx pul tumorSG079tape, surgical paper 1in (Micropore)
35501Artery bypass graftL037DRN/LPN/MTA
Artery bypass graftSA048pack, minimum multi-specialty visit
35509Artery bypass graftL037DRN/LPN/MTA
Artery bypass graftSA048pack, minimum multi-specialty visit
35601Artery bypass graftL037DRN/LPN/MTA
Artery bypass graftSA048pack, minimum multi-specialty visit
36147Access av dial grft for evalSB008drape, sterile, c-arm, fluoro
Access av dial grft for evalSH026Conray Inj (iothalamate 43%)
Access av dial grft for evalSK093x-ray ID card (flashcard)
37231Tib/per revasc stent & atherSK034film, x-ray 14in × 17in
45541Correct rectal prolapseSJ032lubricating jelly (K-Y) (5gm uou)
45550Repair rectum/remove sigmoidSJ032lubricating jelly (K-Y) (5gm uou)
46258Remove in/ex hem grp w/fistuSD003anoscope
Remove in/ex hem grp w/fistuSD003anoscope
Remove in/ex hem grp w/fistuSD003anoscope
46261Remove in/ex hem grps & fissSD003anoscope
Remove in/ex hem grps & fissSD003anoscope
Remove in/ex hem grps & fissSD003anoscope
58563Hysteroscopy ablationSB027gown, staff, impervious
64704Revise hand/foot nerveSA054pack, post-op incision care (suture)
64726Release foot/toe nerveSA054pack, post-op incision care (suture)
64782Remove limb nerve lesionSA054pack, post-op incision care (suture)
65810Drainage of eyeSA082pack, ophthalmology visit (w-dilation)
67228Treatment of retinal lesionL038ACOMT/COT/RN/CST
Treatment of retinal lesionSA082pack, ophthalmology visit (w-dilation)
Treatment of retinal lesionSH049lidocaine 2% w-epi inj (Xylocaine w-epi)
76813Ob us nuchal meas 1 gestSK022film, 8in × (ultrasound, MRI)
78730Urinary bladder retentionSB044underpad 2ft × 3ft (Chux)
88365Insitu hybridization (fish)SM016eye shield, splash protection
91038Esoph imped funct test > 1hSJ016denture cup
95875Limb exercise testSC051syringe 10-12ml
BILLING CODE 4120-01-C
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 × 3in, catheter, suction, dressing, 4in × 4.75in (Tegaderm), electrode, ECG (single), electrode, ground, gas, oxygen, gauze, sterile 4in × 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 × 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 CodeShort descriptor
19298Place breast rad tube/caths
20982Ablate bone tumor(s) perq
22520Percut vertebroplasty thor
22521Percut vertebroplasty lumb
22526Idet single level
22527Idet 1 or more levels
31615Visualization of windpipe
31620Endobronchial us add-on
31622Dx bronchoscope/wash
31623Dx bronchoscope/brush
31624Dx bronchoscope/lavage
31625Bronchoscopy w/biopsy(s)
31626Bronchoscopy w/markers
31627Navigational bronchoscopy
31628Bronchoscopy/lung bx each
31629Bronchoscopy/needle bx each
31634Bronch w/balloon occlusion
31635Bronchoscopy w/fb removal
31645Bronchoscopy clear airways
31646Bronchoscopy reclear airway
31656Bronchoscopy inj for x-ray
32201Drain percut lung lesion
32550Insert pleural cath
32553Ins mark thor for rt perq
35471Repair arterial blockage
35472Repair arterial blockage
35475Repair arterial blockage
35476Repair venous blockage
36147Access av dial grft for eval
36148Access av dial grft for proc
36200Place catheter in aorta
36245Place catheter in artery
36481Insertion of catheter vein
36555Insert non-tunnel cv cath
36557Insert tunneled cv cath
36558Insert tunneled cv cath
36560Insert tunneled cv cath
36561Insert tunneled cv cath
36563Insert tunneled cv cath
36565Insert tunneled cv cath
36566Insert tunneled cv cath
36568Insert picc cath
36570Insert picvad cath
36571Insert picvad cath
36576Repair tunneled cv cath
36578Replace tunneled cv cath
36581Replace tunneled cv cath
36582Replace tunneled cv cath
36583Replace tunneled cv cath
36585Replace picvad cath
36590Removal tunneled cv cath
36870Percut thrombect av fistula
37183Remove hepatic shunt (tips)
37184Prim art mech thrombectomy
37185Prim art m-thrombect add-on
37186Sec art m-thrombect add-on
37187Venous mech thrombectomy
37188Venous m-thrombectomy add-on
37203Transcatheter retrieval
37210Embolization uterine fibroid
37220Iliac revasc
37221Iliac revasc w/stent
37222Iliac revasc add-on
37223Iliac revasc w/stent add-on
37224Fem/popl revas w/tla
37225Fem/popl revas w/ather
37226Fem/popl revasc w/stent
37227Fem/popl revasc stnt & ather
37228Tib/per revasc w/tla
37229Tib/per revasc w/ather
37230Tib/per revasc w/stent
37231Tib/per revasc stent & ather
37232Tib/per revasc add-on
37233Tibper revasc w/ather add-on
37234Revsc opn/prq tib/pero stent
37235Tib/per revasc stnt & ather
43200Esophagus endoscopy
43201Esoph scope w/submucous inj
43202Esophagus endoscopy biopsy
43216Esophagus endoscopy/lesion
43217Esophagus endoscopy
43234Upper gi endoscopy exam
43235Uppr gi endoscopy diagnosis
43236Uppr gi scope w/submuc inj
43239Upper gi endoscopy biopsy
43453Dilate esophagus
43456Dilate esophagus
43458Dilate esophagus
44385Endoscopy of bowel pouch
44386Endoscopy bowel pouch/biop
44388Colonoscopy
44389Colonoscopy with biopsy
44390Colonoscopy for foreign body
44391Colonoscopy for bleeding
44392Colonoscopy & polypectomy
44393Colonoscopy lesion removal
44394Colonoscopy w/snare
44901Drain app abscess percut
45303Proctosigmoidoscopy dilate
45305Proctosigmoidoscopy w/bx
45307Proctosigmoidoscopy fb
45308Proctosigmoidoscopy removal
45309Proctosigmoidoscopy removal
45315Proctosigmoidoscopy removal
45317Proctosigmoidoscopy bleed
45320Proctosigmoidoscopy ablate
45332Sigmoidoscopy w/fb removal
45333Sigmoidoscopy & polypectomy
45335Sigmoidoscopy w/submuc inj
45338Sigmoidoscopy w/tumr remove
45339Sigmoidoscopy w/ablate tumr
45340Sig w/balloon dilation
45378Diagnostic colonoscopy
45379Colonoscopy w/fb removal
45380Colonoscopy and biopsy
45381Colonoscopy submucous inj
45382Colonoscopy/control bleeding
45383Lesion removal colonoscopy
45384Lesion remove colonoscopy
45385Lesion removal colonoscopy
45386Colonoscopy dilate stricture
47000Needle biopsy of liver
47382Percut ablate liver rf
47525Change bile duct catheter
48511Drain pancreatic pseudocyst
49021Drain abdominal abscess
49041Drain percut abdom abscess
49061Drain percut retroper absc
49411Ins mark abd/pel for rt perq
49418Insert tun ip cath perc
49440Place gastrostomy tube perc
49441Place duod/jej tube perc
49442Place cecostomy tube perc
49446Change g-tube to g-j perc
50021Renal abscess percut drain
50200Renal biopsy perq
50382Change ureter stent percut
50384Remove ureter stent percut
50385Change stent via transureth
50386Remove stent via transureth
50387Change ext/int ureter stent
50592Perc rf ablate renal tumor
50593Perc cryo ablate renal tum
57155Insert uteri tandems/ovoids
58823Drain pelvic abscess percut
66720Destruction ciliary body
69300Revise external ear
77371Srs multisource
77600Hyperthermia treatment
77605Hyperthermia treatment
77610Hyperthermia treatment
77615Hyperthermia treatment
92960Cardioversion electric ext
93312Echo transesophageal
93314Echo transesophageal
93451Right heart cath
93452Left hrt cath w/ventrclgrphy
93453R&l hrt cath w/ventriclgrphy
93454Coronary artery angio s&i
93455Coronary art/grft angio s&i
93456Rhrt coronary artery angio
93457Rhrt art/grft angio
93458Lhrt artery/ventricle angio
93459Lhrt art/grft angio
93460R&l hrt art/ventricle angio
93461R&l hrt art/ventricle angio
93464Exercise w/hemodynamic meas
93505Biopsy of heart lining
93566Inject r ventr/atrial angio
93568Inject pulm art hrt cath
93642Electrophysiology 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.

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://www.cms.gov/PhysicianFeeSched/.

Table 5—Group Education and Therapy Codes With Proposed Time Changes
CPT CodeShort descriptor
90849Multiple family group psytx
90853Group psychotherapy
90857Intac group psytx
92508Speech/hearing therapy
96153Intervene hlth/behave group
97150Group therapeutic procedures
97804Medical nutrition group
G0271Group mnt 2 or more 30 mins
G0421Ed svc ckd grp per session
G0109Diab 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 todecline 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 theFederal Registeron 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 theFourth 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 Actcategories 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 misvaluedcodes 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 specificFederal Registercitations, 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 andindicate 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 CodeShort descriptor
99201Office/outpatient visit new
99202Office/outpatient visit new
99203Office/outpatient visit new
99204Office/outpatient visit new
99205Office/outpatient visit new
99211Office/outpatient visit est
99212Office/outpatient visit est
99213Office/outpatient visit est
99214Office/outpatient visit est
99215Office/outpatient visit est
99217Observation care discharge
99218Initial observation care
99219Initial observation care
99220Initial observation care
99221Initial hospital care
99222Initial hospital care
99223Initial hospital care
99224Subsequent observation care
99225Subsequent observation care
99226Subsequent observation care
99231Subsequent hospital care
99232Subsequent hospital care
99233Subsequent hospital care
99234Observ/hosp same date
99235Observ/hosp same date
99236Observ/hosp same date
99238Hospital discharge day
99239Hospital discharge day
99281Emergency dept visit
99282Emergency dept visit
99283Emergency dept visit
99284Emergency dept visit
99285Emergency dept visit
99291Critical care first hour
99292Critical care addl 30 min
99304Nursing facility care init
99305Nursing facility care init
99306Nursing facility care init
99307Nursing fac care subseq
99308Nursing fac care subseq
99309Nursing fac care subseq
99310Nursing fac care subseq
99315Nursing fac discharge day
99316Nursing fac discharge day
99318Annual nursing fac assessmnt
99324Domicil/r-home visit new pat
99325Domicil/r-home visit new pat
99326Domicil/r-home visit new pat
99327Domicil/r-home visit new pat
99328Domicil/r-home visit new pat
99334Domicil/r-home visit est pat
99335Domicil/r-home visit est pat
99336Domicil/r-home visit est pat
99337Domicil/r-home visit est pat
99341Home visit new patient
99342Home visit new patient
99343Home visit new patient
99344Home visit new patient
99345Home visit new patient
99347Home visit est patient
99348Home visit est patient
99349Home visit est patient
99350Home visit est patient
99354Prolonged service office
99355Prolonged service office
99356Prolonged service inpatient
99357Prolonged service inpatient
99406Behav chng smoking 3-10 min
99407Behav chng smoking > 10 min
99460Init nb em per day hosp
99461Init nb em per day non-fac
99462Sbsq nb em per day hosp
99463Same day nb discharge
99464Attendance at delivery
99465Nb resuscitation
99466Ped crit care transport
99467Ped crit care transport addl
99468Neonate crit care initial
99469Neonate crit care subsq
99471Ped critical care initial
99472Ped critical care subsq
99475Ped crit care age 2-5 init
99476Ped crit care age 2-5 subsq
99477Init day hosp neonate care
99478Ic lbw inf < 1500 gm subsq
99479Ic lbw inf 1500-2500 g subsq
99480Ic inf pbw 2501-5000 g subsq
92002Eye exam new patient
92004Eye exam new patient
92012Eye exam established pat
92014Eye 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 CodeShort descriptor
95117Immunotherapy Injections
33533Cabg, Arterial, Single
33405Replacement Of Aortic Valve
33430Replacement Of Mitral Valve
93015Cardiovascular Stress Test
93880Extracranial Study
93000Electrocardiogram, Complete
17311Mohs, 1 Stage, H/N/Hf/G
17312Mohs Addl Stage
17004Destroy Premlg Lesions 15+
45378Diagnostic Colonoscopy
43235Uppr Gi Endoscopy, Diagnosis
47562Laparoscopic Cholecystectomy
47563Laparo Cholecystectomy/Graph
49505Prp I/Hern Init Reduc > 5 Yr
96413Chemo, Iv Infusion, 1 Hr
96367Tx/Proph/Dg Addl Seq Iv Inf
96365Ther/Proph/Diag Iv Inf, Init
62311Inject Spine L/S (Cd)
35476Repair Venous Blockage
36870Percut Thrombect Av Fistula
35475Repair Arterial Blockage
95903Motor Nerve Conduction Test
95819Eeg, Awake And Asleep
95861Muscle Test, 2 Limbs
22612Lumbar Spine Fusion
63047Removal Of Spinal Lamina
22851Apply Spine Prosth Device
76830Transvaginal Us, Non-Ob
67028Injection Eye Drug
92235Eye Exam With Photos
66982Cataract Surgery, Complex
27447Total Knee Arthroplasty
27130Total Hip Arthroplasty
27236Treat Thigh Fracture
69210Remove Impacted Ear Wax
31237Nasal/Sinus Endoscopy, Surg
88342Immunohistochemistry
88112Cytopath, Cell Enhance Tech
88312Special Stains Group 1
97140Manual Therapy
90862Medication Management
90801Psy Dx Interview
90805Psytx, Off, 20-30 Min W/E&M
94720Monoxide Diffusing Capacity
94240Residual Lung Capacity
77014Ct Scan For Therapy Guide
77301Radiotherapy Dose Plan, Imrt
77421Stereoscopic X-Ray Guidance
70450Ct Head/Brain W/O Dye
70553Mri Brain W/O & W/Dye
72148Mri Lumbar Spine W/O Dye
20610Drain/Inject, Joint/Bursa
53850Prostatic Microwave Thermotx
50590Fragmenting Of Kidney Stone
76872Us, Transrectal
35301Rechanneling Of Artery
98941Chiropractic Manipulation
98940Chiropractic Manipulation
98942Chiropractic Manipulation
90806Psytx, Off, 45-50 Min
90818Psytx, Hosp, 45-50 Min
90808Psytx, Office, 75-80 Min
72141Mri Neck Spine W/O Dye
73221Mri Joint Upr Extrem W/O Dye
70551Mri Brain W/O Dye
92083Visual Field Examination(S)
97530Therapeutic Activities
97112Neuromuscular Reeducation
97001Pt 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 publicas 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.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 havebeen 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 theFederal Registeron 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
CPT CodeShort descriptorCMS Work RVU decision publicationAMA RUCRecommendedwork RVUCMSWorkRVUdecisionCMSProposed/interimWork RVU
21025Excision of bone, lower jawCY 2012 PFS NPRM10.03Agree10.03
23415Release of shoulder ligamentCY 2012 PFS NPRM9.23Agree9.23
25116Remove wrist/forearm lesionCY 2012 PFS NPRM7.56Agree7.56
28120Part removal of ankle/heelFourth Five-Year Review of Work8.27Disagree7.31
28122Partial removal of foot boneFourth Five-Year Review of Work7.72Disagree6.76
28725Fusion of foot bonesCY 2012 PFS NPRM12.18Disagree11.22
28730Fusion of foot bonesCY 2012 PFS NPRM12.42Disagree10.70
36825Artery-vein autograftFourth Five-Year Review of Work15.13Disagree14.17
42415Excise parotid gland/lesionFourth Five-Year Review of Work18.12Disagree17.16
42420Excise parotid gland/lesionFourth Five-Year Review of Work21.00Disagree19.53
42440Excise submaxillary glandCY 2012 PFS NPRM7.13Disagree6.14
49507Prp i/hern init block >5 yrFourth Five-Year Review of Work10.05Disagree9.09
49521Rerepair ing hernia, blockedFourth Five-Year Review of Work12.44Disagree11.48
49587Rpr umbil hern, block > 5 yrFourth Five-Year Review of Work8.04Disagree7.08
52341Cysto w/ureter stricture txCY 2012 PFS NPRM5.35Agree5.35
52342Cysto w/up stricture txCY 2012 PFS NPRM5.85Agree5.85
52343Cysto w/renal stricture txCY 2012 PFS NPRM6.55Agree6.55
52344Cysto/uretero, stricture txCY 2012 PFS NPRM7.05Agree7.05
52345Cysto/uretero w/up strictureCY 2012 PFS NPRM7.55Agree7.55
52346Cystouretero w/renal strictCY 2012 PFS NPRM8.58Agree8.58
52400Cystouretero w/congen reprCY 2012 PFS NPRM8.69Agree8.69
52500Revision of bladder neckCY 2012 PFS NPRM8.14Agree8.14
52640Relieve bladder contractureFourth Five-Year Review of Work4.79Agree4.79
53445Insert uro/ves nck sphincterCY 2012 PFS NPRM15.39Disagree13.00
54410Remove/replace penis prosthCY 2012 PFS NPRM15.18Agree15.18
54530Removal of testisCY 2012 PFS NPRM8.46Agree8.46
57287Revise/remove sling repairFourth Five-Year Review of Work11.15Agree11.15
61885Insrt/redo neurostim 1 arrayCY 2011 PFS Final Rule6.44Disagree6.05
62263Epidural lysis mult sessionsCY 2012 PFS NPRM6.54Disagree5.00
62350Implant spinal canal cathCY 2012 PFS NPRM6.05Agree6.05
62355Remove spinal canal catheterCY 2012 PFS NPRM4.35Disagree3.55
62360Insert spine infusion deviceCY 2012 PFS NPRM4.33Agree4.33
62361Implant spine infusion pumpCY 2012 PFS NPRM5.65Disagree5.00
62362Implant spine infusion pumpCY 2012 PFS NPRM6.10Disagree5.60
62365Remove spine infusion deviceCY 2012 PFS NPRM4.65Disagree3.93
63650Implant neuroelectrodesCY 2012 PFS NPRM7.20Disagree7.15
63685Insrt/redo spine n generatorCY 2012 PFS NPRM6.05Disagree5.19
64708Revise arm/leg nerveCY 2012 PFS NPRM6.36Agree6.36
64831Repair of digit nerveCY 2012 PFS NPRM9.16Agree9.16
65285Repair of eye woundCY 2012 PFS NPRM16.00Disagree15.36
(2) Revised Work RVUs for Codes With Site-of-Service Anomalies
(A) Foot Arthrodesis
CPT CodeShort descriptorAMA RUCRecommendedwork RVUCMSWorkRVUdecisionCMSProposedwork RVU
28725Fusion of foot bones12.18Disagree11.22
28730Fusion of foot bones12.42Disagree10.70

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 thecurrent 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
CPT CodeShort descriptorAMA RUCRecommendedwork RVUCMSWorkRVUdecisionCMSProposedwork RVU
42440Excise submaxillary gland7.13Disagree6.14

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
CPT CodeShort descriptorAMA RUCRecommendedwork RVUCMSWorkRVUdecisionCMSProposedwork RVU
53445Insert uro/ves nck sphincter15.39Disagree13.00
54410Remove/replace penis prosth15.18Agree15.18
54530Removal of testis8.46Agree8.46

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 istypical 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
CPT CodeShort descriptorAMA RUCRecommendedworkRVUCMSWorkRVUdecisionCMSProposedwork RVU
62263Epidural lysis mult sessions6.54Disagree5.00

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
CPT CodeShort descriptorAMA RUCRecommendedwork RVUCMSWorkRVUdecisionCMSProposedworkRVU
62350Implant spinal canal cath6.05Agree6.05
62355Remove spinal canal catheter4.35Disagree3.55
62360Insert spine infusion device4.33Agree4.33
62361Implant spine infusion pump5.65Disagree5.00
62362Implant spine infusion pump6.10Disagree5.60
62365Remove spine infusion device4.65Disagree3.93

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 decreasedtime 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
CPT CodeShort descriptorAMA RUC Recommended workRVUCMSWorkRVUdecisionCMSProposedwork RVU
63650Implant neuroelectrodes7.20Disagree7.15
63685Insrt/redo spine n generator6.05Disagree5.19

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
CPT CodeShort descriptorAMA RUCRecommendedworkRVUCMSWorkRVUdecisionCMSProposedwork RVU
65285Repair of eye wound16.00Disagree15.36

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.

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

Image #EP19JY11.001

Image #EP19JY11.002

Image #EP19JY11.003

Image #EP19JY11.004

Image #EP19JY11.005

Image #EP19JY11.006

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;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
CPT CodeModifierPhysicianwork RVUFullyimplementednon-facilityPE RVUTransitionalnon-facilityPE RVUFullyimplementedfacilityPE RVUTransitionalfacilityPE RVUMalpracticeRVU
770800.201.261.44NANA0.02
77080TC0.001.181.36NANA0.01
77080260.200.080.080.080.080.01
770820.170.630.65NANA0.02
77082TC0.000.560.58NANA0.01
77082260.170.070.070.070.070.01

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 PFSbudget 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.

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) (1/2Work 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 smallerefficiencies 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 haveproposed 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
CPT CodeShort descriptorCY 2012proposedspecialtyrisk factorCY 2011MP RVUProposedCY 2012 MP RVU
33471Valvotomy pulmonary valveCardiac Surgery: 6.931.625.76
33472Revision of pulmonary valveCardiac Surgery: 6.931.635.80
33676Close mult vsd w/resectionCardiac Surgery: 6.932.639.36
33677Cl mult vsd w/rem pul bandCardiac Surgery: 6.932.749.75
33692Repair of heart defectsCardiac Surgery: 6.93* 2.569.11
33762Major vessel shuntCardiac Surgery: 6.931.615.73
33768Cavopulmonary shuntingCardiac Surgery: 6.930.561.99
33771Repair great vessels defectCardiac Surgery: 6.932.9010.32
33775Repair great vessels defectCardiac Surgery: 6.932.338.29
33776Repair great vessels defectCardiac Surgery: 6.932.458.72
33777Repair great vessels defectCardiac Surgery: 6.932.428.61
33778Repair great vessels defectCardiac Surgery: 6.933.0510.85
33779Repair great vessels defectCardiac Surgery: 6.933.0910.99
33780Repair great vessels defectCardiac Surgery: 6.933.1311.14
33781Repair great vessels defectCardiac Surgery: 6.933.0910.99
33786Repair arterial trunkCardiac Surgery: 6.932.9810.60
33788Revision of pulmonary arteryCardiac Surgery: 6.931.936.87
33822Revise major vesselCardiac Surgery: 6.931.254.45
32442Sleeve pneumonectomyThoracic Surgery: 6.494.2513.21

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 1.0physician 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 arebased 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 annuallyand 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 representcost 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 PEGPCI 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
Expense categoryCurrent costshareweights %Proposedcost shareweights %
Physician Work52.46648.266
Practice Expense43.66947.439
Employee Compensation18.65419.153
Office Rent12.209 1 10.223
Purchased ServicesN/A 2 8.095
Equipment, Supplies, and Other12.8069.968
Malpractice Insurance3.8654.295
(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
StateTotal countiesFrontier countiesPercent frontier counties(relative to counties in the State)
Montana564580
Wyoming231774
North Dakota533668
Nevada171165
South Dakota663452
(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.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 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 § 410.78(b), we generally require that a telehealth service be furnished via an interactive telecommunications system. Under § 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 § 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 ofDecember 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, 2002Federal 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 similardiagnostic 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 § 410.78(b) and § 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 inpatienttelehealth 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 counselingservices 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 wouldbe 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 throughtelehealth, 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 CodeCY 2011 Long code descriptor
G0425Initial inpatient telehealth consultation, typically 30 minutes communicating with the patient via telehealth.
G0426Initial inpatient telehealth consultation, typically 50 minutes communicating with the patient via telehealth.
G0427Initial inpatient telehealth consultation, typically 70 minutes or more communicating with the patient via telehealth.
G0406Follow-up inpatient telehealth consultation, limited, physicians typically spend 15 minutes communicating with the patient via telehealth.
G0407Follow-up inpatient telehealth consultation, intermediate, physicians typically spend 25 minutes communicating with the patient via telehealth.
G0408Follow-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 § 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 AMPthreshold 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 notadequately 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 § 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
DateReport title
5/2011Comparison of Third-Quarter 2010 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for First Quarter 2011 (OEI-03-11-00160).
4/2011Comparison of Average Sales Prices and Average Manufacturer Prices: An overview of 2009 (OEI-03-10-00380).
2/2011Comparison of Second-Quarter 2010 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2010 (OEI-03-11-00030).
11/2010Comparison of First-Quarter 2010 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Third Quarter 2010 (OEI-03-10-00440).
7/2010Comparison of Fourth-Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Second Quarter 2010 (OEI-03-10-00350).
4/2010Comparison of Third-Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for First Quarter 2010 (OEI-03-10-00150).
2/2010Comparison of Average Sales Prices and Average Manufacturer Prices: An overview of 2008 (OEI-03-09-00350).
1/2010Comparison of Second-Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2009 (OEI-03-09-00640).
8/2009Comparison of First-Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Third Quarter 2009 (OEI-03-09-00490).
8/2009Comparison of Fourth-Quarter 2008 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Second Quarter 2009 (OEI-03-09-00340).
4/2009Comparison of Third-Quarter 2008 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare Reimbursement for first Quarter 2009 (OEI-03-09-00150).
2/2009Comparison of Second-Quarter 2008 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2008 (OEI-03-09-00050).
12/2008Comparison of First-Quarter 2008 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Third Quarter 2008 (OEI-03-08-00530).
12/2008Comparison of Average Sales Prices and Average Manufacturer Prices: An Overview of 2007 (OEI-03-08-00450).
8/2008Comparison of Fourth-Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Second Quarter 2008 (OEI-03-08-00340).
7/2008A comparison of average sales price to widely available market prices for inhalation drugs (OEI-03-07-00190).
5/2008Comparison of Third-Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for First Quarter 2008 (OEI-03-08-00130).
12/2007Comparison of Second-Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2007 (OEI-03-08-00010).
9/2007Comparison of First-Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Third Quarter 2007 (OEI-03-07-00530).
7/2007Comparison of Third-Quarter 2006 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for First Quarter 2007 (OEI-03-07-00140).
7/2006Comparison of Fourth-Quarter 2005 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Second Quarter 2006 (OEI-03-06-00370).
6/2006A Comparison of Average Sales Price to Widely Available Market Prices: Fourth Quarter 2005 (OEI-03-05-00430).
4/2006Monitoring 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 § 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 § 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
Q2-11Q3-11Q4-11Q1-12
ASP ProcessManufacturer sells drugManufacturer submits Q2-11 pricing data. CMS calculates ASP payment limits for Q4-11 and publishes Q4-11 payment limitsQ4-11 payment limits applyCMS calculates ASP payment limits for Q1-12. Compares calculated payment limits to OIG substitute prices. Publishes Q1-12 prices that may include OIG substitute pricesQ1-12 payment limits apply, including any adjusted payment limit resulting from the price substitution.
OIG ProcessOIG receives Q4-11 payment limits from CMS and compares them to Q2-11 volume-weighted AMP dataOIG notifies CMS of HCPCS for which Q4-11 ASP exceeds Q2-11 AMP by the applicable 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 finalcomparison 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 § 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 containbetween 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 § 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
2011 Code2011 Long descriptorProposedreportingunit
J0256INJECTION, ALPHA 1—PROTEINASE INHIBITOR—HUMAN, 10 MG1MG
J1680INJECTION, HUMAN FIBRINOGEN CONCENTRATE, 100 MG1MG
J7184INJECTION, VON WILLEBRAND FACTOR COMPLEX (HUMAN), WILATE, PER 100 IU VWF:RCO1 IU VWF:RCO
J7185INJECTION, FACTOR VIII (ANTIHEMOPHILIC FACTOR, RECOMBINANT) (XYNTHA), PER I.U1 IU
J7186INJECTION, ANTIHEMOPHILIC FACTOR VIII/VON WILLEBRAND FACTOR COMPLEX (HUMAN), PER FACTOR VIII I.U1 IU
J7187INJECTION, VON WILLEBRAND FACTOR COMPLEX (HUMATE-P), PER IU VWF:RCO1 IU VWF:RCO
J7190FACTOR VIII (ANTIHEMOPHILIC FACTOR, HUMAN) PER I.U1 IU
J7192FACTOR VIII (ANTIHEMOPHILIC FACTOR, RECOMBINANT) PER I.U., NOT OTHERWISE SPECIFIED1 IU
J7193FACTOR IX (ANTIHEMOPHILIC FACTOR, PURIFIED, NON-RECOMBINANT) PER I.U1 IU
J7194FACTOR IX, COMPLEX, PER I.U1 IU
J7195FACTOR IX (ANTIHEMOPHILIC FACTOR, RECOMBINANT) PER I.U1 IU
J7197ANTITHROMBIN III (HUMAN), PER I.U1 IU
J7198ANTI-INHIBITOR, PER I.U. INJECTION, ANTITHROMBIN RECOMBINANT, 50 I.U1 IU

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.

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 inthe 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 § 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 § 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 § 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 § 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 § 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 areestablished 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, 2010Federal 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, 2010Federal 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 ofHRAs 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 § 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 § 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 § 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 § 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 § 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 Medicarethat 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 4103of 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 measuresdetermined 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 CFR414.92(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 theirinterest 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 thePhysician 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 twocategories 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 ReportingSystem 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.

(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 Medicareclinical 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-mailwhich 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 individualeligible 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.

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.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 mechanismReporting criteriaReporting period
Claims-based reporting• Report at least three Physician Quality Reporting System measures, which consist of one Physician Quality Reporting System core measure + 2 additional measures of the eligible professional's choosing; ORJanuary 1, 2012-December 31, 2012.
• 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 
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 mechanismReporting criteriaReporting period
Claims-based reporting• Report at least three Physician Quality Reporting System measures; OR• 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.January 1, 2012-December 31, 2012.

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.

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 mechanismReporting criteriaReporting period
Registry-based reporting• Report at least three Physician Quality Reporting System measures, which 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.January 1, 2012—December 31, 2012.
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 mechanismReporting criteriaReporting period
Registry-based reporting• Report at least three Physician Quality 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 countedJanuary 1, 2012—December 31, 2012.

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—

(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 mechanismReporting criteriaReporting period
EHR—Aligning with the Medicare EHR Incentive Program• Reports on ALL three Medicare EHR 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 ProgramJanuary 1, 2012-December 31, 2012.
EHR• Report on ALL Physician Quality Reporting System core 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, unless the measure is a Physician Quality Reporting System core measureJanuary 1, 2012-December 31, 2012.
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 mechanismReporting criteriaReporting period
EHR—Aligning with the Medicare EHR Incentive Program• Reports on ALL three Medicare EHR Incentive Program core measures (as identified in Table 31 of this proposed rule)January 1, 2012-December 31, 2012.
• 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 Reporting System measures ANDJanuary 1, 2012-December 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 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 § 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 becauseeligible 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
ReportingmechanismReporting criteriaReporting period
Claims• 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 report 1 Physician Quality core measure; ANDJanuary 1, 2012-December 31, 2012.
• 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 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; ANDJanuary 1, 2012-December 31, 2012.
• 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
ReportingmechanismReporting criteriaReporting period
Claims• Report at least 1 Physician Quality Reporting System measures group; AND• Report each measures group for at least 30 Medicare Part B FFS patientsJanuary 1, 2012-December 31, 2012.
• Measures groups containing a measure with a 0% performance rate will not be counted 
Claims• Report at least 1 Physician Quality 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; BUTJanuary 1, 2012-December 31, 2012.
• 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, generalpractice, 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 mechanismReporting criteriaReporting period
Registry• Report at least 1 Physician Quality Reporting System measures group; ANDJanuary 1, 2012-December 31, 2012.
• 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 Reporting System measures group;January 1, 2012-December 31, 2012.
• 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 Reporting System measures group;July 1, 2012-December 31, 2012.
• 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 
Table 27—Proposed 2012 Criteria for Satisfactory Reporting on Measures Groups via Registry for All Other Eligible Professionals Not Identified in Table 26
Reporting mechanismReporting criteriaReporting period
Registry• Report at least 1 Physician Quality Reporting System measures group; ANDJanuary 1, 2012-December 31, 2012.
• 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 Reporting System measures group; ANDJanuary 1, 2012-December 31, 2012.
• 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 Reporting System measures group; ANDJuly 1, 2012-December 31, 2012.
• 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 diseasemodule 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)
Group practice sizeReporting mechanismReporting criteriaReporting period
25-99 Eligible ProfessionalsA submission web interface provided by CMS• Report on all measures included in the web interface; 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-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 beneficiariesJanuary 1, 2012-December 31, 2012.
100+ Eligible ProfessionalsA submission web interface provided by CMS• Report on all measures included in the web interface; 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-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 beneficiariesJanuary 1, 2012-December 31, 2012.

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 followingconsiderations, 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 theFederal 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 measuresgroups 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-Based Reporting
Physician qualityreportingsystemmeasure No.Measure titleNQF measureNo.MeasuredeveloperReportingmechanism
204Ischemic Vascular Disease (IVD): Use of Aspirin or another Antithrombotic0068NCQAClaims, Registry, EHR.
236Controlling High Blood Pressure0018NCQAClaims, Registry, EHR.
2Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control in Diabetes Mellitus0064NCQAClaims, Registry, EHR.
226Measure pair: a. Tobacco Use Assessment, b. Tobacco Cessation Intervention0028AMA-PCPIClaims, Registry, EHR.
TBDIschemic Vascular Disease (IVD): Complete Lipid Profile and LDL Control < 1000075NCQAClaims, Registry, EHR.
TBDProportion of adults 18 years and older who have had their BP measured within the preceding 2 yearsN/ACMSClaims, Registry, EHR.
TBDPreventative Care: Cholesterol-LDL test performedN/ACMSEHR.

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.

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.”

Table 30—Proposed 2012 Physician Quality Reporting System Individual Quality Measures Available for Either Claims-Based Reporting and/or Registry-Based Reporting
Physician qualityreporting system measure No.Measure titleNQF measure No.Measure developerReportingmechanism
1Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus0059NCQAClaims, Registry.
2Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control in Diabetes Mellitus0064NCQAClaims, Registry.
3Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus0061NCQAClaims, Registry.
5Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD)0081AMA-PCPIRegistry.
6Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD0067AMA-PCPIClaims, Registry.
7Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior Myocardial Infarction (MI)0070AMA-PCPIRegistry.
8Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD)0083AMA-PCPIRegistry.
9Major Depressive Disorder (MDD): Antidepressant Medication During Acute Phase for Patients with MDD0105NCQAClaims, Registry.
10Stroke and Stroke Rehabilitation: Computed Tomography (CT) or Magnetic Resonance Imaging (MRI) Reports00246AMA-PCPI/NCQAClaims, Registry.
12Primary Open Angle Glaucoma (POAG): Optic Nerve Evaluation0086AMA-PCPIClaims, Registry.
14Age-Related Macular Degeneration (AMD): Dilated Macular Examination0087AMA-PCPI/NCQAClaims, Registry.
18Diabetic Retinopathy0088AMA-PCPIClaims, Registry.
19Diabetic Retinopathy: Communication with the Physician Managing On-going Diabetes Care0089AMA-PCPIClaims, Registry.
20Perioperative Care: Timing of Antibiotic Prophylaxis—Ordering Physician0270AMA-PCPI/NCQAClaims, Registry.
21Perioperative Care: Selection of Prophylactic Antibiotic0268AMA-PCPI/NCQAClaims, Registry.
22Perioperative Care: Discontinuation of Prophylactic Antibiotics (Non-Cardiac Procedures)0271AMA-PCPI/NCQAClaims, Registry.
23Perioperative Care: Venous Thromboembolism (VTE) Prophylaxis (When Indicated in ALL Patients)0239AMA-PCPI/NCQAClaims, Registry.
24Osteoporosis: Communication with the Physician Managing On-going Care Post-Fracture of Hip, Spine or Distal Radius for Men and Women Aged 50 Years and Older0045AMA-PCPI/NCQAClaims, Registry.
28Aspirin at Arrival for Acute Myocardial Infarction (AMI)0092AMA-PCPI/NCQAClaims, Registry.
30Perioperative Care: Timely Administration of Prophylactic Parenteral Antibiotics0270AMA-PCPI/NCQAClaims, Registry.
31Stroke and Stroke Rehabilitation: Deep Vein Thrombosis Prophylaxis (DVT) for Ischemic Stroke or Intracranial Hemorrhage0240AMA-PCPI/NCQAClaims, Registry.
32Stroke and Stroke Rehabilitation: Discharged on Antiplatelet Therapy0325AMA-PCPI/NCQAClaims, Registry.
33Stroke and Stroke Rehabilitation: Anticoagulant Therapy Prescribed for Atrial Fibrillation at Discharge0241AMA-PCPI/NCQARegistry.
35Stroke and Stroke Rehabilitation: Screening for Dysphagia0243AMA-PCPI/NCQAClaims, Registry.
36Stroke and Stroke Rehabilitation: Consideration of Rehabilitation Services0244AMA-PCPI/NCQAClaims, Registry.
39Screening or Therapy for Osteoporosis for Women Aged 65 Years and Older0046AMA-PCPI/NCQAClaims, Registry.
40Osteoporosis: Management Following Fracture of Hip, Spine or Distal Radius for Men and Women Aged 50 Years and Older0045AMA-PCPI/NCQAClaims, Registry.
41Osteoporosis: Pharmacologic Therapy for Men and Women Aged 50 Years and Older0049AMA-PCPI/NCQAClaims, Registry.
43Coronary Artery Bypass Graft (CABG): Use of Internal Mammary Artery (IMA) in Patients with Isolated CABG Surgery0516STSClaims, Registry.
44Coronary Artery Bypass Graft (CABG): Preoperative Beta-Blocker in Patients with Isolated CABG Surgery0235STSClaims, Registry.
45Perioperative Care: Discontinuation of Prophylactic Antibiotics (Cardiac Procedures)0637AMA-PCPI/NCQAClaims, Registry.
46Medication Reconciliation: Reconciliation After Discharge from an Inpatient Facility0097AMA-PCPI/NCQAClaims, Registry.
47Advance Care Plan0326AMA-PCPI/NCQAClaims, Registry.
48Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in Women Aged 65 Years and Older0098AMA-PCPI/NCQAClaims, Registry.
49Urinary Incontinence: Characterization of Urinary Incontinence in Women Aged 65 Years and Older0099AMA-PCPI/NCQAClaims, Registry.
50Urinary Incontinence: Plan of Care for Urinary Incontinence in Women Aged 65 Years and Older0100AMA-PCPI/NCQAClaims, Registry.
51Chronic Obstructive Pulmonary Disease (COPD): Spirometry Evaluation0091AMA-PCPIClaims, Registry.
52Chronic Obstructive Pulmonary Disease (COPD): Bronchodilator Therapy0102AMA-PCPIClaims, Registry.
53Asthma: Pharmacologic Therapy0047AMA-PCPIClaims, Registry.
5412-Lead Electrocardiogram (ECG) Performed for Non-Traumatic Chest Pain0090AMA-PCPI/NCQAClaims, Registry.
5512-Lead Electrocardiogram (ECG) Performed for Syncope0093AMA-PCPI/NCQAClaims, Registry.
56Community-Acquired Pneumonia (CAP): Vital Signs0232AMA-PCPI/NCQAClaims, Registry.
57Community-Acquired Pneumonia (CAP): Assessment of Oxygen Saturation0094AMA-PCPI/NCQAClaims, Registry.
58Community-Acquired Pneumonia (CAP): Assessment of Mental Status0234AMA-PCPI/NCQAClaims, Registry.
59Community-Acquired Pneumonia (CAP): Empiric Antibiotic0096AMA-PCPI/NCQAClaims, Registry.
64Asthma: Asthma Assessment0001AMA-PCPIClaims, Registry.
65Treatment for Children with Upper Respiratory Infection (URI): Avoidance of Inappropriate Use0069NCQAClaims, Registry.
66Appropriate Testing for Children with Pharyngitis0002NCQAClaims, Registry.
67Myelodysplastic Syndrome (MDS) and Acute Leukemias: Baseline Cytogenetic Testing Performed on Bone Marrow0377AMA-PCPI/ASHClaims, Registry.
68Myelodysplastic Syndrome (MDS): Documentation of Iron Stores in Patients Receiving Erythropoietin Therapy0378AMA-PCPI/ASHClaims, Registry.
69Multiple Myeloma: Treatment with Bisphosphonates0380AMA-PCPI/ASHClaims, Registry.
70Chronic Lymphocytic Leukemia (CLL): Baseline Flow Cytometry0379AMA-PCPI/ASHClaims, Registry.
71Breast Cancer: Hormonal Therapy for Stage IC-IIIC Estrogen Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer0387AMA-PCPI/ASCO/NCCNClaims, Registry.
72Colon Cancer: Chemotherapy for Stage III Colon Cancer Patients0385AMA-PCPI/ASCO/NCCNClaims, Registry.
76Prevention of Catheter-Related Bloodstream Infections (CRBSI): Central Venous Catheter (CVC) Insertion Protocol0464AMA-PCPIClaims, Registry.
79End Stage Renal Disease (ESRD): Influenza Immunization in Patients with ESRD0227AMA-PCPIClaims, Registry.
81End Stage Renal Disease (ESRD): Plan of Care for Inadequate Hemodialysis in ESRD Patients0323AMA-PCPIRegistry.
82End Stage Renal Disease (ESRD): Plan of Care for Inadequate Peritoneal Dialysis0321AMA-PCPIRegistry.
83Hepatitis C: Testing for Chronic Hepatitis C—Confirmation of Hepatitis C Viremia0393AMA-PCPIRegistry.
84Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating Treatment0395AMA-PCPIClaims, Registry.
85Hepatitis C: HCV Genotype Testing Prior to Treatment0396AMA-PCPIClaims, Registry.
86Hepatitis C: Antiviral Treatment Prescribed0397AMA-PCPIClaims, Registry.
87Hepatitis C: HCV Ribonucleic Acid (RNA) Testing at Week 12 of Treatment0398AMA-PCPIClaims, Registry.
89Hepatitis C: Counseling Regarding Risk of Alcohol Consumption0401AMA-PCPIClaims, Registry.
90Hepatitis C: Counseling Regarding Use of Contraception Prior to Antiviral Therapy0394AMA-PCPIClaims, Registry.
91Acute Otitis Externa (AOE): Topical Therapy0653AMA-PCPIClaims, Registry.
92Acute Otitis Externa (AOE): Pain AssessmentN/AAMA-PCPIClaims, Registry.
93Acute Otitis Externa (AOE): Systemic Antimicrobial Therapy—Avoidance of Inappropriate Use0654AMA-PCPIClaims, Registry.
94Otitis Media with Effusion (OME): Diagnostic Evaluation—Assessment of Tympanic Membrane MobilityN/AAMA-PCPIClaims, Registry.
99Breast Cancer Resection Pathology Reporting: pT Category (Primary Tumor) and pN Category (Regional Lymph Nodes) with Histologic Grade0391AMA-PCPI/CAPClaims, Registry.
100Colorectal Cancer Resection Pathology Reporting: pT Category (Primary Tumor) and pN Category (Regional Lymph Nodes) with Histologic Grade0392AMA-PCPI/CAPClaims, Registry.
102Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low-Risk Prostate Cancer Patients0389AMA-PCPIClaims, Registry.
104Prostate Cancer: Adjuvant Hormonal Therapy for High-Risk Prostate Cancer Patients0390AMA-PCPIClaims, Registry.
105Prostate Cancer: Three-Dimensional (3D) Radiotherapy0388AMA-PCPIClaims, Registry.
106Major Depressive Disorder (MDD): Diagnostic Evaluation0103AMA-PCPIClaims, Registry.
107Major Depressive Disorder (MDD): Suicide Risk Assessment0104AMA-PCPIClaims, Registry.
108Rheumatoid Arthritis (RA): Disease Modifying Anti-Rheumatic Drug (DMARD) Therapy0054NCQAClaims, Registry.
109Osteoarthritis (OA): Function and Pain Assessment0050AMA-PCPIClaims, Registry.
110Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old0041AMA-PCPIClaims, Registry.
111Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and Older0043NCQAClaims, Registry.
112Preventive Care and Screening: Screening Mammography0031NCQAClaims, Registry.
113Preventive Care and Screening: Colorectal Cancer Screening0034NCQAClaims, Registry.
116Antibiotic Treatment for Adults with Acute Bronchitis: Avoidance of Inappropriate Use0058NCQAClaims, Registry.
117Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient0055NCQAClaims, Registry.
118Coronary Artery 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)0066AMA-PCPIRegistry.
119Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy in Diabetic Patients0062NCQAClaims, Registry.
121Chronic Kidney Disease (CKD): Laboratory Testing (Calcium, Phosphorus, Intact Parathyroid Hormone (iPTH) and Lipid Profile)N/AAMA-PCPIClaims, Registry.
122Chronic Kidney Disease (CKD): Blood Pressure ManagementAQA adoptedAMA-PCPIClaims, Registry.
123Chronic Kidney Disease (CKD): Plan of Care—Elevated Hemoglobin for Patients Receiving Erythropoiesis-Stimulating Agents (ESA)AQA adoptedAMA-PCPIClaims, Registry.
124Health Information Technology (HIT): Adoption/Use of Electronic Health Records (EHR)0488CMS/QIPClaims, Registry.
126Diabetes Mellitus: Diabetic Foot and Ankle Care, Peripheral Neuropathy—Neurological Evaluation0417APMAClaims, Registry.
127Diabetes Mellitus: Diabetic Foot and Ankle Care, Ulcer Prevention—Evaluation of Footwear0416APMAClaims, Registry.
128Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up0421CMS/QIPClaims, Registry.
130Documentation of Current Medications in the Medical Record0419CMS/QIPClaims, Registry.
131Pain Assessment Prior to Initiation of Patient Therapy and Follow-Up0420CMS/QIPClaims, Registry.
134Screening for Clinical Depression and Follow-Up Plan0418CMS/QIPClaims, Registry.
135Chronic Kidney Disease (CKD): Influenza ImmunizationAQA adoptedAMA-PCPIClaims, Registry.
137Melanoma: Continuity of Care—Recall System0650AMA-PCPI/NCQARegistry.
138Melanoma: Coordination of Care0561AMA-PCPI/NCQARegistry.
140Age-Related Macular Degeneration (AMD): Counseling on Antioxidant Supplement0566AMA-PCPI/NCQAClaims, Registry.
141Primary Open-Angle Glaucoma (POAG): Reduction of Intraocular Pressure (IOP) by 15% OR Documentation of a Plan of Care0563AMA-PCPI/NCQAClaims, Registry.
142Osteoarthritis (OA): Assessment for Use of Anti-Inflammatory or Analgesic Over-the-Counter (OTC) Medications0051AMA-PCPIClaims, Registry.
143Oncology: Medical and Radiation—Pain Intensity Quantified0384AMA-PCPIRegistry.
144Oncology: Medical and Radiation—Plan of Care for Pain0383AMA-PCPIRegistry.
145Radiology: Exposure Time Reported for Procedures Using Fluoroscopy0510AMA-PCPI/NCQAClaims, Registry.
146Radiology: Inappropriate Use of “Probably Benign” Assessment Category in Mammography Screening0508AMA-PCPI/NCQAClaims, Registry.
147Nuclear Medicine: Correlation with Existing Imaging Studies for All Patients Undergoing Bone Scintigraphy0511AMA-PCPIClaims, Registry.
153Chronic Kidney Disease (CKD): Referral for Arteriovenous (AV) FistulaAQA adoptedAMA-PCPIClaims, Registry.
154Falls: Risk AssessmentAQA adoptedAMA-PCPI/NCQAClaims, Registry.
155Falls: Plan of CareAQA adoptedAMA-PCPI/NCQAClaims, Registry.
156Oncology: Radiation Dose Limits to Normal Tissues0382AMA-PCPIClaims, Registry.
157Thoracic Surgery: Recording of Clinical Stage for Lung Cancer and Esophageal Cancer Resection0455STSClaims, Registry.
158Carotid Endarterectomy: Use of Patch During Conventional Carotid Endarterectomy0466SVSClaims, Registry.
159HIV/AIDS: CD4+ Cell Count or CD4+ Percentage0404AMA-PCPI/NCQARegistry.
160HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP) Prophylaxis0405AMA-PCPI/NCQARegistry.
161HIV/AIDS: Adolescent and Adult Patients with HIV/AIDS Who Are Prescribed Potent Antiretroviral Therapy0406AMA-PCPI/NCQARegistry.
162HIV/AIDS: HIV RNA Control After Six Months of Potent Antiretroviral Therapy0407AMA-PCPI/NCQARegistry.
163Diabetes Mellitus: Foot Exam0056NCQAClaims, Registry.
164Coronary Artery Bypass Graft (CABG): Prolonged Intubation (Ventilation)0129STSRegistry.
165Coronary Artery Bypass Graft (CABG): Deep Sternal Wound Infection Rate0130STSRegistry.
166Coronary Artery Bypass Graft (CABG): Stroke/Cerebrovascular Accident (CVA)0131STSRegistry.
167Coronary Artery Bypass Graft (CABG): Postoperative Renal Insufficiency0114STSRegistry.
168Coronary Artery Bypass Graft (CABG): Surgical Re-exploration0115STSRegistry.
169Coronary Artery Bypass Graft (CABG): Antiplatelet Medications at Discharge0237STSRegistry.
170Coronary Artery Bypass Graft (CABG): Beta-Blockers Administered at Discharge0238STSRegistry.
171Coronary Artery Bypass Graft (CABG): Lipid Management and Counseling0118STSRegistry.
172Hemodialysis Vascular Access Decision-Making by Surgeon to Maximize Placement of Autogenous Arterial Venous (AV) Fistula0259SVSClaims, Registry.
173Preventive Care and Screening: Unhealthy Alcohol Use—ScreeningAQA adoptedAMA-PCPIClaims, Registry.
175Pediatric End Stage Renal Disease (ESRD): Influenza ImmunizationAQA adoptedAMA-PCPIClaims, Registry.
176Rheumatoid Arthritis (RA): Tuberculosis ScreeningAQA adoptedAMA-PCPI/NCQAClaims, Registry.
177Rheumatoid Arthritis (RA): Periodic Assessment of Disease ActivityAQA adoptedAMA-PCPI/NCQAClaims, Registry.
178Rheumatoid Arthritis (RA): Functional Status AssessmentAQA adoptedAMA-PCPI/NCQAClaims, Registry.
179Rheumatoid Arthritis (RA): Assessment and Classification of Disease PrognosisAQA adoptedAMA-PCPI/NCQAClaims, Registry.
180Rheumatoid Arthritis (RA): Glucocorticoid ManagementAQA adoptedAMA-PCPI/NCQAClaims, Registry.
181Elder Maltreatment Screen and Follow-Up PlanAQA adoptedCMS/QIPClaims, Registry.
182Functional Outcome Assessment in Chiropractic CareAQA adoptedCMS/QIPClaims, Registry.
183Hepatitis C: Hepatitis A Vaccination in Patients with HCV0399AMA-PCPIClaims, Registry.
184Hepatitis C: Hepatitis B Vaccination in Patients with HCV0400AMA-PCPIClaims, Registry.
185Endoscopy & Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use0659AMA-PCPI/NCQAClaims, Registry.
186Wound Care: Use of Compression System in Patients with Venous UlcersAQA adoptedAMA-PCPI/NCQAClaims, Registry.
187Stroke and Stroke Rehabilitation: Thrombolytic Therapy0437AHA/ASA/TJCRegistry.
188Referral for Otologic Evaluation for Patients with Congenital or Traumatic Deformity of the EarN/AAQCClaims, Registry.
189Referral for Otologic Evaluation for Patients with History of Active Drainage From the Ear Within the Previous 90 DaysN/AAQCClaims, Registry.
190Referral for Otologic Evaluation for Patients with a History of Sudden or Rapidly Progressive Hearing LossN/AAQCClaims, Registry.
191Cataracts: 20/40 or Better Visual Acuity Within 90 Days Following Cataract Surgery0565AMA-PCPI/NCQARegistry.
192Cataracts: Complications within 30 Days Following Cataract Surgery Requiring Additional Surgical Procedures0564AMA-PCPI/NCQARegistry.
193Perioperative Temperature Management0454AMA-PCPIClaims, Registry.
194Oncology: Cancer Stage Documented0386AMA-PCPI/ASCOClaims, Registry.
195Radiology: Stenosis Measurement in Carotid Imaging Studies0507AMA-PCPI/NCQAClaims, Registry.
196Coronary Artery Disease (CAD): Symptom and Activity Assessment0065AMA-PCPIRegistry.
197Coronary Artery Disease (CAD): Lipid Control0074AMA-PCPIRegistry.
198Heart Failure: Left Ventricular Function (LVF) Assessment0079AMA-PCPIRegistry.
199Heart Failure: Patient Education0082AMA-PCPIRegistry.
200Heart Failure: Warfarin Therapy for Patients with Atrial Fibrillation0084AMA-PCPIRegistry.
201Ischemic Vascular Disease (IVD): Blood Pressure Management Control0073NCQAClaims, Registry.
202Ischemic Vascular Disease (IVD): Complete Lipid Profile0075NCQAClaims, Registry.
203Ischemic Vascular Disease (IVD): Low Density Lipoprotein (LDL-C) Control0075NCQAClaims, Registry.
204Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic0068NCQAClaims, Registry.
205HIV/AIDS: Sexually Transmitted Disease Screening for Chlamydia and Gonorrhea0409AMA-PCPI/NCQARegistry.
206HIV/AIDS: Screening for High Risk Sexual Behaviors0413AMA-PCPI/NCQARegistry.
207HIV/AIDS: Screening for Injection Drug Use0415AMA-PCPI/NCQARegistry.
208HIV/AIDS: Sexually Transmitted Disease Screening for Syphilis0410AMA-PCPI/NCQARegistry.
209Functional Communication Measure-Spoken Language Comprehension0445ASHARegistry.
210Functional Communication Measure-Attention0449ASHARegistry.
211Functional Communication Measure-Memory0448ASHARegistry.
212Functional Communication Measure-Motor Speech0447ASHARegistry.
213Functional Communication Measure-Reading0446ASHARegistry.
214Functional Communication Measure-Spoken Language Expression0444ASHARegistry.
215Functional Communication Measure-Writing0442ASHARegistry.
216Functional Communication Measure-Swallowing0443ASHARegistry.
217Functional Deficit: Change in Risk-Adjusted Functional Status for Patients with Knee Impairments0422FOTORegistry.
218Functional Deficit: Change in Risk-Adjusted Functional Status for Patients with Hip Impairments0423FOTORegistry.
219Functional Deficit: Change in Risk-Adjusted Functional Status for Patients with Lower Leg, Foot or Ankle Impairments0424FOTORegistry.
220Functional Deficit: Change in Risk-Adjusted Functional Status for Patients with Lumbar Spine Impairments0425FOTORegistry.
221Functional Deficit: Change in Risk-Adjusted Functional Status for Patients with Shoulder Impairments0426FOTORegistry.
222Functional Deficit: Change in Risk-Adjusted Functional Status for Patients with Elbow, Wrist or Hand Impairments0427FOTORegistry.
223Functional Deficit: Change in Risk-Adjusted Functional Status for Patients with Neck, Cranium, Mandible, Thoracic Spine, Ribs, or Other General Orthopedic Impairments0428FOTORegistry.
224Melanoma: Overutilization of Imaging Studies in Stage 0-IA Melanoma0562AMA-PCPIRegistry.
225Radiology: Reminder System for Mammograms0509AMA-PCPIClaims, Registry.
226Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention0028AMA-PCPIClaims, Registry.
228Heart Failure (HF): Left Ventricular Function (LVF) Testing0079CMSRegistry.
231Asthma: Tobacco Use: Screening-Ambulatory Care SettingN/AAMA-PCPIClaims, Registry.
232Asthma: Tobacco Use: Intervention-Ambulatory Care SettingN/AAMA-PCPIClaims, Registry.
233Thoracic Surgery: Recording of Performance Status Prior to Lung or Esophageal Cancer Resection0457STSRegistry.
234Thoracic Surgery: Pulmonary Function Tests Before Major Anatomic Lung Resection (Pneumonectomy, Lobectomy, or Formal Segmentectomy)0458STSRegistry.
235Hypertension (HTN): Plan of Care0017AMA-PCPIClaims, Registry.
TBDChronic Wound Care: Use of Wound Surface Culture Technique in Patients with Chronic Skin UlcersN/AASPS-PCPI-NCQAClaims, Registry.
TBDChronic Wound Care: Use of Wet to Dry Dressings in Patients with Chronic Skin UlcersN/AASPS-PCPI-NCQAClaims, Registry.
TBDSubstance Use Disorders: Counseling Regarding Psychosocial and Pharmacologic Treatment Options for Alcohol DependenceAQA adoptedASPS-PCPI-NCQAClaims, Registry.
TBDSubstance Use Disorders: Screening for Depression Among Patients with Substance Abuse or DependenceAQA adoptedASPS-PCPI-NCQAClaims, Registry.
TBDCoronary Artery Disease (CAD): Symptom ManagementN/AASPS-PCPI-NCQARegistry.
TBDCardiac Rehabilitation Patient Referral From an Outpatient SettingN/AACCF-AHARegistry.
TBDHypertension: Blood Pressure ControlN/AACC-AHA-PCPIRegistry.
TBDBarrett's EsophagusN/ACAPClaims, Registry.
TBDRadical Prostatectomy Pathology ReportingN/ACAPClaims, Registry.
TBDImmunohistochemical (IHC) Evaluation of HER2 for Breast Cancer PatientsN/ACollege of American PathologistsClaims, Registry.
TBDAnticoagulation for Acute Pulmonary Embolus Patients0503ACEPClaims, Registry.
TBDPregnancy Test for Female Abdominal Pain Patients0502ACEPClaims, Registry.
TBDUltrasound Determination of Pregnancy Location for Pregnant Patients with Abdominal PainN/AACEPClaims, Registry.
TBDRh Immunoglobulin (Rhogam) for Rh Negative Pregnant Women at Risk of Fetal Blood ExposureN/AACEPRegistry.
TBDSurveillance after Endovascular Abdominal Aortic Aneurysm Repair (EVAR)N/ASVSRegistry.
TBDStatin Therapy at Discharge after Lower Extremity Bypass (LEB)N/ASVSRegistry.
TBDRate of Open AAA Repair without Major Complications (discharged to home no later than post-operative day #7)N/ASVSRegistry.
TBDRate of EVAR without Major Complications (discharged to home no later than POD #2)N/ASVSRegistry.
TBDRate of Carotid Endarterectomy for Asymptomatic Patients, without Major Complications (discharged to home no later than post-operative day #2)N/ASVSRegistry.
TBDReferral for Otology Evaluation for Patients with Acute or Chronic DizzinessN/AAQCClaims, Registry.
TBDImage Confirmation of Successful Excision of Image-Localized Breast LesionN/AASBSClaims, Registry.
TBDPreoperative Diagnosis of Breast CancerN/AASBSClaims, Registry.
TBDSentinel Lymph Node Biopsy for Invasive Breast CancerN/AASBSRegistry.
TBDBiopsy Follow-upN/AAADRegistry.
TBDImprovement in Patient's Visual Function within 90 Days Following Cataract SurgeryN/AAAORegistry.
TBDPatient Satisfaction within 90 Days Following Cataract SurgeryN/AAAORegistry.
(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 titleNQF measure No.Measure developer
MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM CORE MEASURES   
128Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-up *0421CMS/QIP
237Hypertension (HTN): Blood Pressure Measurement0013AMA-PCPI
226Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention **0028AMA-PCPI
MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM ALTERNATE CORE MEASURES   
110Preventative Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old0041AMA-PCPI
239Weight Assessment and Counseling for Children and Adolescents0024NCQA
TBDChildhood Immunization Status0038NCQA
MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM MEASURES   
1Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus0059NCQA
2Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control in Diabetes Mellitus0064NCQA
3Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus0061NCQA
5Heart Failure: Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD)0081AMA-PCPI
6Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD0067AMA-PCPI
7Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior Myocardial Infarction (MI)0070AMA-PCPI
8Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD)0083AMA-PCPI
9Anti-depressant medication management: (a) Effective Acute Phase Treatment, (b) Effective Continuation Phase Treatment0105NCQA
12Primary Open Angle Glaucoma (POAG): Optic Nerve Evaluation0086AMA-PCPI
18Diabetic Retinopathy: Documentation of Presence or Absence of Macular Edema and Level of Severity of Retinopathy0088AMA-PCPI
19Diabetic Retinopathy: Communication with the Physician Managing Ongoing Diabetes Care0089AMA-PCPI
53Asthma Pharmacologic0047AMA-PCPI
64Asthma Assessment0001AMA-PCPI
66Appropriate Testing for Children with Pharyngitis0002NCQA
71Oncology Breast Cancer: Hormonal Therapy for Stage IC-IIIC Estrogen Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer0387AMA-PCPI
72Oncology Colon Cancer: Chemotherapy for Stage III Colon Cancer Patients0385AMA-PCPI
102Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low Risk Prostate Cancer Patients0389AMA-PCPI
111Preventive Care and Screening: Screening Mammography0043NCQA
112Preventive Care and Screening: Colorectal Cancer Screening0031NCQA
113Colorectal Cancer Screening0034NCQA
114 & 115Smoking and Tobacco Use Cessation, Medical Assistance: a. Advising Smokers to Quit, b. Discussing Smoking and Tobacco Use Cessation Medications, c. Discussing Smoking and Tobacco Use Cessation Strategies0027NCQA
117Diabetes: Eye Exam0055AMA-PCPI
119Diabetes: Urine Screening0062NCQA
163Diabetes: Foot Exam0056NCQA
197Coronary Artery Disease (CAD): Lipid Control0074AMA-PCPI
200Heart Failure: Warfarin Therapy Patients with Atrial Fibrillation0084AMA-PCPI
201Ischemic Vascular Disease (IVD): Blood Pressure Management0073NCQA
204Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic0068NCQA
TBDInitiation and Engagement of Alcohol and Other Drug Dependence Treatment: (a) Initiation, (b) Engagement0004NCQA
TBDPrenatal Care: Screening for Human Immunodeficiency Virus (HIV)0012AMA-PCPI
TBDPrenatal Care: Anti-D Immune Globulin0014AMA-PCPI
236Controlling High Blood Pressure0018NCQA
TBDCervical Cancer Screening0032NCQA
TBDChlamydia Screening for Women0033NCQA
240Use of Appropriate Medications for Asthma0036NCQA
TBDLow Back Pain: Use of Imaging Studies0052NCQA
202 & 203Ischemic Vascular Disease (IVD): Complete Lipid Panel and LDL Control0075NCQA
TBDDiabetes: Hemoglobin A1c Control (< 8.0%)0575NCQA
OTHER PHYSICIAN QUALITY REPORTING SYSTEM EHR MEASURES   
39Screening or Therapy for Osteoporosis for Women Aged 65 Years and Older0046AMA-PCPI/NCQA
47Advance Care Plan0326AMA-PCPI/NCQA
48Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in Women Aged 65 Years and Older0098AMA-PCPI/NCQA
124Health Information Technology (HIT): Adoption/Use of Electronic Health Records (EHR)0488CMS/QIP
173Preventive Care and Screening: Unhealthy Alcohol Use—ScreeningAQA AdoptedAMA-PCPI
238Drugs to be Avoided in the Elderly0022NCQA
(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 theProposed 2012 Diabetes Mellitus Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
1Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus0059NCQA
2Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control in Diabetes Mellitus0064NCQA
3Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus0061NCQA
117Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient0055NCQA
119Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy in Diabetic Patients0062NCQA
163Diabetes Mellitus: Foot Exam0056NCQA
Table 33—Proposed Measures Included in theProposed 2012 CKD Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
121Chronic Kidney Disease (CKD): Laboratory Testing (Calcium, Phosphorus, Intact Parathyroid Hormone (iPTH) and Lipid Profile)Not applicableAMA-PCPI
122Chronic Kidney Disease (CKD): Blood Pressure ManagementAQA adoptedAMA-PCPI
123Chronic Kidney Disease (CKD): Plan of Care—Elevated Hemoglobin for Patients Receiving Erythropoiesis-Stimulating Agents (ESA)AQA adoptedAMA-PCPI
153Chronic Kidney Disease (CKD): Referral for Arteriovenous (AV) FistulaAQA adoptedAMA-PCPI
Table 34—Proposed Measures Included in the Proposed 2012 Preventative Care Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
39Screening or Therapy for Osteoporosis for Women Aged 65 Years and Older0046AMA-PCPI/NCQA
48Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in Women Aged 65 Years and Older0098AMA-PCPI/NCQA
110Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old0041AMA-PCPI
111Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and Older0043NCQA
112Preventive Care and Screening: Screening Mammography0031NCQA
113Preventive Care and Screening: Colorectal Cancer Screening0034NCQA
128Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up0421CMS/QIP
173Preventive Care and Screening: Unhealthy Alcohol Use—ScreeningAQA adoptedAMA-PCPI
226Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention0028AMA-PCPI
Table 35—Proposed Measures Included in the Proposed 2012 CABG Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
43Coronary Artery Bypass Graft (CABG): Use of Internal Mammary Artery (IMA) in Patients with Isolated CABG Surgery0516STS
44Coronary Artery Bypass Graft (CABG): Preoperative Beta-Blocker in Patients with Isolated CABG Surgery0235STS
164Coronary Artery Bypass Graft (CABG): Prolonged Intubation (Ventilation)0129STS
165Coronary Artery Bypass Graft (CABG): Deep Sternal Wound Infection Rate0130STS
166Coronary Artery Bypass Graft (CABG): Stroke/Cerebrovascular Accident (CVA)0131STS
167Coronary Artery Bypass Graft (CABG): Postoperative Renal Insufficiency0114STS
168Coronary Artery Bypass Graft (CABG): Surgical Re-exploration0115STS
169Coronary Artery Bypass Graft (CABG): Antiplatelet Medications at Discharge0237STS
170Coronary Artery Bypass Graft (CABG): Beta-Blockers Administered at Discharge0238STS
171Coronary Artery Bypass Graft (CABG): Lipid Management and Counseling0118STS
Table 36—Proposed Measures Included in theProposed 2012 Rheumatoid Arthritis Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
108Rheumatoid Arthritis (RA): Disease Modifying Anti-Rheumatic Drug (DMARD) Therapy0054NCQA
176Rheumatoid Arthritis (RA): Tuberculosis ScreeningAQA adoptedAMA-PCPI/NCQA
177Rheumatoid Arthritis (RA): Periodic Assessment of Disease ActivityAQA adoptedAMA-PCPI/NCQA
178Rheumatoid Arthritis (RA): Functional Status AssessmentAQA adoptedAMA-PCPI/NCQA
179Rheumatoid Arthritis (RA): Assessment and Classification of Disease PrognosisAQA adoptedAMA-PCPI/NCQA
180Rheumatoid Arthritis (RA): Glucocorticoid ManagementAQA adoptedAMA-PCPI/NCQA
Table 37—Proposed Measures Included in theProposed 2012 Perioperative Care Measures Group
Physician quality reporting system No.Measure titleNQF Measure No.Measure developer
20Perioperative Care: Timing of Antibiotic Prophylaxis—Ordering Physician0270AMA-PCPI/NCQA
21Perioperative Care: Selection of Prophylactic Antibiotic—First OR Second Generation Cephalosporin0268AMA-PCPI/NCQA
22Perioperative Care: Discontinuation of Prophylactic Antibiotics (Non-Cardiac Procedures)0271AMA-PCPI/NCQA
23Perioperative Care: Venous Thromboembolism (VTE) Prophylaxis (When Indicated in ALL Patients)0239AMA-PCPI/NCQA
Table 38—Proposed Measures Included in the 2012 Proposed Back Pain Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
148Back Pain: Initial Visit0322NCQA
149Back Pain: Physical Exam0319NCQA
150Back Pain: Advice for Normal Activities0315NCQA
151Back Pain: Advice Against Bed Rest0313NCQA
Table 39—Proposed Measures Included in theProposed 2012 CAD Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
6Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD0067AMA-PCPI
196Coronary Artery Disease (CAD): Symptom and Activity Assessment0065AMA-PCPI
197Coronary Artery Disease (CAD): Lipid Control0074AMA-PCPI
226Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention0028AMA-PCPI
Table 40—Proposed Measures Included in theProposed 2012 Heart Failure Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
5Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD)0081AMA-PCPI
8Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD)0083AMA-PCPI
198Heart Failure: Left Ventricular Function (LVF) Assessment0079AMA-PCPI
199Heart Failure: Patient Education0082AMA-PCPI
226Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention0028AMA-PCPI
Table 41—Proposed Measures Included in theProposed 2012 IVD Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
201Ischemic Vascular Disease (IVD): Blood Pressure Management Control0073NCQA
202Ischemic Vascular Disease (IVD): Complete Lipid Profile0075NCQA
203Ischemic Vascular Disease (IVD): Low Density Lipoprotein (LDL-C) Control0075NCQA
204Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic0068NCQA
226Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention0028AMA-PCPI
Table 42—Proposed Measures Included in theProposed 2012 Hepatitis C Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
84Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating Treatment0395AMA-PCPI
85Hepatitis C: HCV Genotype Testing Prior to Treatment0396AMA-PCPI
86Hepatitis C: Antiviral Treatment Prescribed0397AMA-PCPI
87Hepatitis C: HCV Ribonucleic Acid (RNA) Testing at Week 12 of Treatment0398AMA-PCPI
89Hepatitis C: Counseling Regarding Risk of Alcohol Consumption0401AMA-PCPI
90Hepatitis C: Counseling Regarding Use of Contraception Prior to Antiviral Therapy0394AMA-PCPI
183Hepatitis C: Hepatitis A Vaccination in Patients with HCV0399AMA-PCPI
184Hepatitis C: Hepatitis B Vaccination in Patients with HCV0400AMA-PCPI
Table 43—Proposed Measures Included in the Proposed 2012 HIV/AIDS Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
159HIV/AIDS: CD4+ Cell Count or CD4+ Percentage0404AMA-PCPI/NCQA
160HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP) Prophylaxis0405AMA-PCPI/NCQA
161HIV/AIDS: Adolescent and Adult Patients with HIV/AIDS Who Are Prescribed Potent Antiretroviral Therapy0406AMA-PCPI/NCQA
162HIV/AIDS: HIV RNA Control After Six Months of Potent Antiretroviral Therapy0407AMA-PCPI/NCQA
205HIV/AIDS: Sexually Transmitted Disease Screening for Chlamydia and Gonorrhea0409AMA-PCPI/NCQA
206HIV/AIDS: Screening for High Risk Sexual Behaviors0413AMA-PCPI/NCQA
207HIV/AIDS: Screening for Injection Drug Use0415AMA-PCPI/NCQA
208HIV/AIDS: Sexually Transmitted Disease Screening for Syphilis0410AMA-PCPI/NCQA
Table 44—Proposed Measures Included in theProposed 2012 Cap Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
56Community-Acquired Pneumonia (CAP): Vital Signs0232AMA-PCPI/NCQA
57Community-Acquired Pneumonia (CAP): Assessment of Oxygen Saturation0094AMA-PCPI/NCQA
58Community-Acquired Pneumonia (CAP): Assessment of Mental Status0234AMA-PCPI/NCQA
59Community-Acquired Pneumonia (CAP): Empiric Antibiotic0096AMA-PCPI/NCQA
Table 45—Proposed Measures Included in the Proposed 2012 Asthma Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
53Asthma: Pharmacologic Therapy0047AMA-PCPI
64Asthma: Asthma Assessment0001AMA-PCPI
231Asthma: Tobacco Use: Screening—Ambulatory SettingN/AAMA-PCPI
232Asthma: Tobacco Use: Intervention—Ambulatory ScreeningN/AAMA-PCPI
Table 46—Proposed Measures Included in the Proposed 2012 COPD Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
110Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old0041AMA-PCPI
111Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and Older0043AMA-PCPI
51Chronic Obstructive Pulmonary Disease (COPD): Spirometry Evaluation0091AMA-PCPI
52Chronic Obstructive Pulmonary Disease (COPD): Bronchodilator Therapy0102AMA-PCPI
226Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention0028AMA-PCPI
Table 47—Proposed Measures Included in the Proposed 2012 IBD Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
TBDInflammatory Bowel Disease (IBD): Assessment of Inflammatory Bowel Disease Activity and SeverityN/AAGA/AMA-PCPI
TBDInflammatory Bowel Disease (IBD): Preventive Care: Steroid Sparing TherapyN/AAGA/AMA-PCPI
TBDInflammatory Bowel Disease (IBD): Preventive Care: Steroid Related Iatrogenic Injury—Bone Loss AssessmentN/AAGA/AMA-PCPI
TBDInflammatory Bowel Disease (IBD): Preventive Care: Influenza ImmunizationN/AAGA/AMA-PCPI
TBDInflammatory Bowel Disease (IBD): Preventive Care: Pneumococcal ImmunizationN/AAGA/AMA-PCPI
TBDInflammatory Bowel Disease (IBD): Screening for Latent TB Before Initiating Anti-TNF TherapyN/AAGA/AMA-PCPI
TBDInflammatory Bowel Disease (IBD): Hepatitis B Assessment Before Initiating Anti-TNF TherapyN/AAGA/AMA-PCPI
226Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention0028AMA-PCPI
Table 48—Proposed Measures Included in the Proposed 2012 Sleep Apnea Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
TBDAssessment of Sleep SymptomsN/AAMA/PCPI/AASM
TBDSeverity Assessment at Initial DiagnosisN/AAMA/PCPI/AASM
TBDPositive Airway Pressure Therapy PrescribedN/AAMA/PCPI/AASM
TBDAssessment of Adherence to Positive Airway Pressure TherapyN/AAMA/PCPI/AASM
Table 49—Proposed Measures in the Proposed 2012 Epilepsy Measures Group
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
TBDSeizure Type(s) and Current Seizure Frequency(ies)N/AAAN/AMA-PCPI
TBDDocumentation of Etiology of Epilepsy or Epilepsy SyndromeN/AAAN/AMA-PCPI
TBDQuerying and Counseling about Anti-Epileptic Drug (AED) Side-EffectsN/AAAN/AMA-PCPI
TBDCounseling about Epilepsy Specific Safety IssuesN/AAAN/AMA-PCPI
TBDCounseling for Women of Childbearing Potential with EpilepsyN/AAAN/AMA-PCPI
Table 50—Proposed Measures Included in the Proposed 2012 Dementia Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
TBDDementia: Staging of DementiaN/AAAN/AGS/AMDA/APA/AMA-PCPI
TBDDementia: Cognitive AssessmentN/AAAN/AGS/AMDA/APA/AMA-PCPI
TBDDementia: Functional Status AssessmentN/AAAN/AGS/AMDA/APA/AMA-PCPI
TBDDementia: Neuropsychiatric Symptom AssessmentN/AAAN/AGS/AMDA/APA/AMA-PCPI
TBDDementia: Management of Neuropsychiatric SymptomsN/AAAN/AGS/AMDA/APA/AMA-PCPI
TBDDementia: Screening for Depressive SymptomsN/AAAN/AGS/AMDA/APA/AMA-PCPI
TBDDementia: Counseling Regarding Safety ConcernsN/AAAN/AGS/AMDA/APA/AMA-PCPI
TBDDementia: Counseling Regarding Risks of DrivingN/AAAN/AGS/AMDA/APA/AMA-PCPI
TBDDementia: Caregiver Education and SupportN/AAAN/AGS/AMDA/APA/AMA-PCPI
Table 51—Proposed Measures Included in the Proposed 2012 Parkinson's Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
TBDAnnual Parkinson's Disease Diagnosis ReviewN/AAAN
TBDPsychiatric Disorders or Disturbances AssessmentN/AAAN
TBDCognitive Impairment or Dysfunction AssessmentN/AAAN
TBDQuerying about Sleep DisturbancesN/AAAN
TBDParkinson's Disease Rehabilitative Therapy OptionsN/AAAN
TBDParkinson's Disease Related Safety Issues CounselingN/AAAN
TBDParkinson's Disease Medical and Surgical Treatment Options ReviewedN/AAAN
Table 52—Proposed Measures Included in the Proposed 2012 Elevated Blood Pressure Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
TBDAspirin or Other Anti-Platelet or Anti-Coagulant TherapyN/AABIM
TBDComplete Lipid ProfileN/AABIM
TBDUrine Protein TestN/AABIM
TBDAnnual Serum Creatinine TestN/AABIM
TBDDiabetes Documentation or Screen TestN/AABIM
TBDCounseling for Diet and Physical ActivityN/AABIM
TBDBlood Pressure ControlN/AABIM
TBDLDL ControlN/AABIM
TBDOverall Hypertension Care SatisfactionN/AABIM
TBDPatient Self-care SupportN/AABIM
TABLE 53—Proposed Measures Included in the Proposed 2012 Radiology Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
TBDReporting to a Radiation Dose Index RegistryN/A
TBDCumulative Count of Potential High Dose Radiation Imaging Studies: CT Scans and Cardiac Nuclear Medicine ScansN/AABMS/ABR/ACR/PCPI
TBDUtilization of a Standardized Nomenclature for CT Imaging DescriptionN/AABR
TBDAppropriateness: Follow-up CT Imaging for Incidental Pulmonary Nodules According to Recommended GuidelinesN/AABR
TBDOveruse: Abdomen, Pelvis or Combined Abdomen/Pelvis CT StudiesN/AABR
TBDEquipment Evaluation for Pediatric CT Imaging ProtocolsN/AABR
TBDUtilization of Pediatric CT Imaging ProtocolsN/AABR
TBDSearch for Prior Imaging Studies through a Secure, Authorized Media-Free Shared ArchiveN/AABR
TBDImages Available for Patient Follow-up and Comparison PurposesN/AABR
TBDExposure Time Reported for Procedures Using FluoroscopyN/APCPI/ACR/NCQA
Table 54—Proposed Measures Included in the Proposed 2012 Cardiovascular Prevention Measures Group
Physician quality reporting systemMeasure titleNQF measure No.Measure developer
204Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic0068NCQA
236Controlling High Blood Pressure0018NCQA
2Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control in Diabetes Mellitus0064NCQA
226Measure pair: a. Tobacco Use Assessment, b. Tobacco Cessation Intervention0028AMA-PCPI
TBDIschemic Vascular Disease (IVD): Complete Lipid Profile and LDL Control < 1000075NCQA
TBDProportion of adults 18 years and older who have had their BP measured within the preceding 2 yearsN/ACMS
Table 55—Proposed Measures Included in the Proposed 2012 Cataracts Measures Group *
Physician quality reporting system No.Measure titleNQF measure No.Measure developer
TBDCataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract SurgeryN/AAAO
TBDCataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract SurgeryN/AAAO
191Cataracts: 20/40 or Better Visual Acuity within 90 Days Following Cataract Surgery0565AMA-PCPI/NCQA
192Cataracts: Complications within 30 Days Following Cataract Surgery Requiring Additional Surgical Procedures0564AMA-PCPI/NCQA

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 thatgroup 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 qualityreportingsystem No.Measure titleNQF measure No.Measure developer
1Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus (> 9%)0059NCQA
2Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control in Diabetes Mellitus0064NCQA
3Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus0061NCQA
5Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD)0081AMA-PCPI
6Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD0067AMA-PCPI
7Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior Myocardial Infarction (MI)0070AMA-PCPI
8Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD)0083AMA-PCPI
110Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old0041AMA-PCPI
111Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and Older0043NCQA
112Preventive Care and Screening: Screening Mammography0031NCQA
113Preventive Care and Screening: Colorectal Cancer Screening0034NCQA
117Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient0055NCQA
118Coronary Artery 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)0066AMA-PCPI
119Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy in Diabetic Patients0062NCQA
163Diabetes Mellitus: Foot Exam0056NCQA
228Heart Failure: Left Ventricular Function (LVF) TestingCMS
198Heart Failure: Left Ventricular Function (LVF) Assessment0079AMA-PCPI
227Heart Failure: Weight Measurement0085AMA-PCPI
199Heart Failure: Patient Education0082AMA-PCPI
236Hypertension (HTN): Blood Pressure Control0018NCQA
235Hypertension (HTN): Plan of Care0017AMA-PCPI
201Ischemic Vascular Disease (IVD): Blood Pressure Management Control0073NCQA
51Chronic Obstructive Pulmonary Disease (COPD): Spirometry Evaluation0091AMA-PCPI
226Measure pair: a. Tobacco Use Assessment, b. Tobacco Cessation Intervention0028AMA-PCPI
52Chronic Obstructive Pulmonary Disease (COPD): Bronchodilator Therapy0102AMA-PCPI
204Ischemic Vascular Disease (IVD): Use of Aspirin or another Antithrombotic0068NCQA
TBDIschemic Vascular Disease (IVD): Complete Lipid Profile and LDL Control < 1000075NCQA
TBDProportion of adults 18 years and older who have had their BP measured within the preceding 2 yearsN/ACMS
TBD30-Day Post Discharge Physician VisitN/ACFMC
46Medication Reconciliation: Reconciliation After Discharge from an Inpatient Facility0097AMA-PCPI/NCQA
197Coronary Artery Disease (CAD): Lipid Control0074AMA-PCPI
200Heart Failure: Warfarin Therapy for Patients with Atrial Fibrillation0084AMA-PCPI
TBDDiabetes: Aspirin Use0076MN Community Measurement
TBDFalls: Screening for Fall Risk0101NCQA
40Osteoporosis: Management Following Fracture of Hip, Spine or Distal Radius for Men and Women Aged 50 Years and Older0045AMA-PCPI/NCQA
128Adult Weigh Screening and Follow-up421CMS/QIP
TBDDiabetes Mellitus: Tobacco Non-Use0729MN Community Management
TBDCoronary Artery Disease (CAD): LDL-level < 100 mg/dlN/ACMS
TBDDiabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus (< 8%)575NCQA
TBDChronic Obstructive Pulmonary Disease (COPD): Smoking Cessation Counseling ReceivedN/ACMS
TBDMonthly INR for Beneficiaries on Warfarin555CMS

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) ofthe 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 donot 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 whominformation 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 directlyrequest 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 believethat 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 2014payment 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 § 414.92(b). For the 2011 eRx Incentive Program, a group practice is—

(1) Defined at § 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 aseligible 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 Ddrug 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 theelectronic 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 § 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”).
  • 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 ofreporting 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 eRxIncentive 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 electronicprescribing 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 30,2013) 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.

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 periodCriteria
6-month(Jan 1, 2012-Jun 30, 2012)Report the electronic prescribing measure's numerator code at least 10 times.
Table 58—Proposed Criteria for Being a Successful Electronic Prescriber for the 2014 ERX Payment Adjustment—Individual Eligible Professionals
Reporting periodCriteria
12-month(Jan 1, 2012-Dec 31, 2012)Report the electronic 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-month(Jan 1, 2013-Jun 30, 2013)Report the electronic 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.

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 SizeReporting periodCriteria
25-99 Eligible Professionals6-month(Jan 1, 2012-Jun 30, 2012)Report the electronic prescribing measure's numerator code at least 625 times.
100+ Eligible Professionals6-month(Jan 1, 2012-Jun 30, 2012)Report the electronic prescribing 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 SizeReporting periodCriteria
25-99 Eligible Professionals12-month(Jan 1, 2012-Dec 31, 2012)Report the electronic prescribing 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 Professionals12-month(Jan 1, 2012-Dec 31, 2012)Report the electronic prescribing 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 Professionals6-month(Jan 1, 2013-Jun 30, 2013)Report the electronic prescribing measure's numerator code at least 625 times.
100+ Eligible Professionals6-month(Jan 1, 2013-Jun 30, 2013)Report the electronic prescribing 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 electronicallyprescribed 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). Publicreporting 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 informationon 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 theFederal 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).

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, regardlessof 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 underthe 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.

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.

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),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.

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.

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.

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 No.Measure title and descriptionNQF measure No. or measure steward *Source of data
1Acute Myocardial Infarction (AMI): Persistence of Beta-Blocker Treatment After a Heart Attack0071Administrative Claims.
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  
2Use of Spirometry Testing in the Assessment and Diagnosis of COPD)0577Administrative Claims.
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  
3Antidepressant Medication Management: (a) Effective Acute Phase Treatment0105Administrative Claims.
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  
4Follow-Up After Hospitalization for Mental Illness0576Administrative Claims.
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  
5Osteoporosis management in women who had a fracture0053Administrative Claims.
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  
6Use of High-Risk Medications in the Elderly: (a) Patients Who Receive At Least One Drug To Be Avoided0022Administrative Claims.
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  
Percentage of patients 65 years of age and older who received at least two different high-risk medications in the measurement year  
7Potentially Harmful Drug-Disease Interactions in the ElderlyNational Committee for Quality Assurance (NCQA)Administrative Claims.
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  
8International Normalized Ration (INR) for Beneficiaries Taking Warfarin and Interacting Anti-Infective Medications0556Administrative Claims.
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  
9Appropriate Follow-Up for Patients with HIV0568Administrative Claims.
Percentage of patients diagnosed with HIV who received a CD4 count and an HIV RNA level laboratory test in the 6 months following diagnosis  
10Ischemic Vascular Disease (IVD): Complete Lipid Profile0075Administrative Claims.
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  
11Breast Cancer—Cancer Surveillance0623Administrative Claims.
Percentage of female patients 18 and older with breast cancer who had breast cancer surveillance in the past 12 months  
12Prostate Cancer—Cancer Surveillance0625Administrative Claims.
Percentage of males with prostate cancer that have had their PSA monitored in the past 12 months  
13Diabetes: Eye Exam0055Administrative 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  
14Diabetes: Hemoglobin A1c Testing0057Administrative Claims.
Percentage of adult patients with diabetes aged 18-75 years receiving one or more A1c test(s) per year  
15Diabetes: Medical Attention for Nephropathy0062Administrative Claims.
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)  
16Diabetes: LDL-C ScreeningNCQAAdministrative Claims.
Percentage of adult patients with diabetes aged 18-75 who had an LDL-C test performed during the measurement year  
17Pharmacotherapy Management of COPD Exacerbation0549Administrative Claims.
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  
18Arthritis: Disease Modifying Antirheumatic Drug (DMARD) Therapy in Rheumatoid Arthritis0054Administrative Claims.
Percentage of patients 18 years and older, diagnosed with rheumatoid arthritis who have had at least one ambulatory prescription dispensed for a DMARD  
19Coronary Artery Disease and Medication Possession Ratio for Statin Therapy0543Administrative Claims.
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  
20Therapeutic Monitoring: Annual Monitoring for Patients on Persistent Medications0021Administrative Claims.
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  
21Deep Vein Thrombosis Anticoagulation At Least 3 Months0581Administrative Claims.
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  
22Pulmonary Embolism Anticoagulation At Least 3 Months0593Administrative Claims.
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  
23Monthly INR Monitoring for Beneficiaries on Warfarin0555Administrative Claims.
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  
24Steroid Use—Osteoporosis Screening0614Administrative Claims.
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  
25Appropriate Work-Up Prior To Endometrial Ablation Procedure0567Administrative Claims.
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  
26Breast Cancer Screening0031Administrative Claims.
Percentage of eligible women 40-69 who receive a mammogram in during the measurement year or in the year prior to the measurement year  
27Hepatitis C: Viral Load Test0584Administrative Claims.
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  
28Dyslipidemia New Medication 12-Week Lipid Test0583Administrative Claims.
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 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.

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)

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 mostimportant 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)

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.

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
Physician quality reporting system No.Measure titleNQF Measure No.Measure developerEHRIncentive programPQRS GPROPQRS Core
110Preventative Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old0041AMA-PCPIXX 
111Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and Older0043NCQAXX 
112Preventive Care and Screening: Screening Mammography0031NCQAXX 
113Preventive Care and Screening: Colorectal Cancer Screening0034NCQAXX 
128Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-up0421CMS-QIPX  
TBDPreventive Care: Cholesterol-LDL test performedN/ACMSX
TBDFalls: Screening for Falls Risk101NCQAX 
TBDCervical Cancer Screening0032NCQAX  
226Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention0028AMA-PCPIXXX
235Hypertension (HTN): Plan of Care0017AMA-PCPIX 
236Controlling High Blood Pressure0018NCQAXXX
237Hypertension (HTN): Blood Pressure Measurement0013AMA-PCPIXX 
TBDProportion of adults 18 years and older who have had their BP measured within the preceding 2 yearsN/ACMSXX
6Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD0067AMA-PCPIXX 
7Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior Myocardial Infarction (MI)0070AMA-PCPIXX 
118Coronary Artery 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)0066AMA-PCPIX 
TBDCoronary Artery Disease (CAD): LDL <100 mg/dlNACMSX 
197Coronary Artery Disease (CAD): Lipid Control0074AMA-PCPIXX 
201Ischemic Vascular Disease (IVD): Blood Pressure Management Control0073NCQAXX 
204Ischemic Vascular Disease (IVD): Use of Aspirin or another Antithrombotic0068NCQAXXX
TBDIschemic Vascular Disease (IVD): Complete Lipid Profile and LDL Control < 100 mg/dl0075NCQAxXX
5Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD)0081AMA-PCPIXX 
8Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD)0083AMA-PCPIXX 
228Heart Failure: Left Ventricular Function (LVF) TestingN/ACMSX 
198Heart Failure: Left Ventricular Function (LVF) Assessment0079AMA-PCPIX 
227Heart Failure: Weight Measurement0085AMA-PCPIX 
199Heart Failure: Patient Education0082AMA-PCPIX 
200Heart Failure: Warfarin Therapy for Patients with Atrial Fibrillation0084AMA-PCPIXX 
TBDMonthly INR for Beneficiaries on Warfarin555CMSX 
1Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus0059AMA-PCPIXX 
TBDDiabetes: Aspirin Use0729MN Community MeasurementX 
3Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus0061NCQAXX 
TBDDiabetes: Hemoglobin A 1 c Control (< 8.0%)575NCQAXX 
2Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control in Diabetes Mellitus0064NCQAXXX
117Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient0055NCQAXX 
18Diabetic Retinopathy: Documentation of Presence or Absence of Macular Edema and Level of Severity of Retinopathy0088AMA-PCPIX  
TBDDiabetic Retinopathy: Communication with the Physician Managing Ongoing Diabetes Care0089AMA-PCPIX  
119Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy in Diabetic Patients0062NCQAXX 
163Diabetes Mellitus: Foot Exam0056NCQAXX 
TBDDiabetes Mellitus: Tobacco Non-Use0729MN Community MeasurementX 
239Weight Assessment and Counseling for Children and Adolescents0024NCQAX  
240Childhood Immunization Status0038NCQAX  
TBDAppropriate Testing for Children with Pharyngitis0002NCQAX  
TBDPrenatal Care: Screening for Human Immunodeficiency Virus (HIV)0012AMA-PCPIX  
TBDPrenatal Care: Anti-D Immune Globulin0014AMA-PCPIX  
53Asthma Pharmacologic Therapy0047AMA-PCPIX  
64Asthma Assessment0001AMA-PCPIX  
TBDUse of Appropriate Medications for Asthma0036NCQAX  
51Chronic Obstructive Pulmonary Disease (COPD): Spirometry Evaluation0091NCQAX 
52Chronic Obstructive Pulmonary Disease (COPD): Bronchodilator Therapy0102AMA-PCPIX 
TBDChronic Obstructive Pulmonary Disease (COPD): Smoking Cessation Counseling ReceivedN/ACMSX 
71Oncology Breast Cancer: Hormonal Therapy for Stage IC-IIIC Estrogen Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer0387AMA-PCPIX  
72Oncology Colon Cancer: Chemotherapy for Stage III Colon Cancer Patients0385AMA-PCPIX  
102Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low Risk Prostate Cancer Patients0389AMA-PCPIX  
9Anti-depressant Medication Management:(a) Effective Acute Phase Treatment, (b) Effective Continuation Phase Treatment0105NCQAX  
TBDInitiation and Engagement of Alcohol and Other Drug Dependence Treatment: (a) Initiation, (b) Engagement0004NCQAX  
40Osteoporosis: Management Following Fracture of Hip, Spine or Distal Radius for Men and Women Aged 50 Years and Older0045NCQAX 
TBDLow Back Pain: Use of Imaging Studies0052NCQAX  
TBDChlamydia Screening for Women0033NCQAX  
12Primary Open Angle Glaucoma (POAG): Optic Nerve Evaluation0086AMA-PCPIX  
46Medication Reconciliation: Reconciliation After Discharge from an Inpatient Facility0097AMA-PCPIX 
TBD30-Day Post Discharge Physician VisitN/AColorado Foundation for Medical CareX 

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 seekcomment 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)

(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 d