[Federal Register: November 7, 2003 (Volume 68, Number 216)]
[Rules and Regulations]
[Page 63195-63395]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07no03-11]
[[Page 63195]]
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Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 410 and 414
Medicare Program; Revisions to Payment Policies Under the Physician Fee
Schedule for Calendar Year 2004; Final Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 410 and 414
[CMS-1476-FC]
RIN 0938-AL96
Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule for Calendar Year 2004
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
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SUMMARY: This final rule will refine the resource-based practice
expense relative value units (RVUs) and make other changes to Medicare
Part B payment policy. The policy changes concern: Medicare Economic
Index, practice expense for professional component services, definition
of diabetes for diabetes self-management training, supplemental survey
data for practice expense, geographic practice cost indices, and
several coding issues. In addition, this rule updates the codes subject
to the physician self-referral prohibition. We also make revisions to
the sustainable growth rate and the anesthesia conversion factor.
These changes will ensure that our payment systems are updated to
reflect changes in medical practice and the relative value of services.
We are also finalizing the calendar year (CY) 2003 interim RVUs and
are issuing interim RVUs for new and revised procedure codes for CY
2004.
As required by the statute, we are announcing that the physician
fee schedule update for CY 2004 is -4.5 percent, the initial estimate
of the sustainable growth rate for CY 2004 is 7.4 percent, and the
conversion factor for CY 2004 is $35.1339.
We published a proposed rule (68 FR 50428) in the Federal Register
on Part B drug payment reform on August 20, 2003. This proposed rule
would also make changes to Medicare payment for furnishing or
administering certain drugs and biologicals. We have not finalized
these proposals to take into account that the Congress is considering
legislation that would address these issues. We will continue to
monitor legislative activity that would reform the Medicare Part B drug
payment system. If legislation is not enacted soon on this issue, we
remain committed to completing the regulatory process.
DATES: Effective date: These regulations are effective on January 1,
2004.
Comment date: We will consider comments on the physician self-
referral designated health services additions and deletions identified
in Tables 8 and 9, and the interim work RVUs for selected procedure
codes identified in Addendum C if we receive them at the appropriate
address, as provided in the addresses section, no later than 5 p.m. on
January 6, 2004.
ADDRESSES: In commenting, please refer to file code CMS-1476-FC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission. Mail written comments (one original and
two copies) to the following address ONLY:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-1476-FC, P.O. Box 8013, Baltimore, MD
21244-8013.
Please allow sufficient time for us to receive mailed comments on
time in the event of delivery delays.
If you prefer, you may deliver (by hand or courier) your written
comments (one original and two copies) to one of the following
addresses:
Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or Room C5-14-03, 7500 Security Boulevard,
Baltimore, MD 21244-8013.
(Because access to the interior of the HHH 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 if you wish to retain proof of filing by stamping in and
retaining an extra copy of the comments being filed.)
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and could be considered late.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Pam West (410) 786-2302 (for issues related to practice expense.)
Jim Menas (410) 786-4507 (for issues related to anesthesia.)
Rick Ensor (410) 786-5617 (for issues related to Geographic Cost
Price Index (GPCI).)
Mary Stojak (410) 786-6939 (for issues related to the definition of
diabetes for diabetes self-management training (DSMT).)
Shannon Martin (410) 786-7939 (for issues related to rebasing of
the Medicare Economic Index (MEI).)
Craig Dobyski, (410) 786-4584 (for issues related to telehealth).
Joanne Sinsheimer, (410) 786-4620 (for issues related to updates to
the list of certain services subject to the physician self-referral
prohibitions).
Diane Milstead (410) 786-3355, Latesha Walker (410) 786-1101, or
Gaysha Brooks (410) 786-3355 (for all other issues.)
SUPPLEMENTARY INFORMATION:
Copies: To order copies of the Federal Register containing this
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This Federal Register document is also available from the Federal
Register online database through GPO access, a service of the U.S.
Government Printing Office. The Web site address is http://www.access.gpo.gov/nara/index.html
.
Accessing Physician Fee Schedule Web Site and Pricing Information
Information on the physician fee schedule and pricing files can be
found on our homepage. You can access this data by typing the
following: http://cms.hhs.gov/physicians/pfs or you can access this
data by using the following directions:
1. Go to the CMS homepage (http://www.cms.hhs.gov).
2. Place your cursor over the word ``Professionals'' in the blue
area near the top of the page. Select ``Physicians'' from the drop-down
menu.
3. Scroll down and under ``Payment/Billing'' select ``Physician Fee
Schedule'.
The Physician Fee Schedule pricing information is contained in two
public use files.
(1) National Physician Fee Schedule Relative Value File--This file
contains all CPT/HCPCS (excluding codes beginning with B, E, L, K, and
O), their short descriptions and a status indicator, which denotes
whether or not the service is priced under the physician fee schedule.
The file also contains the components used in the calculation of the
annual pricing amount (that is., the RVUs, GPCIs, and
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conversion factor), anesthesia conversion factors, and the payment
policy indicators used to price the claims with surgical modifiers.
This file does not contain the calculated pricing amounts.
(2) Physician Fee Schedule Payment Amount File National/Carrier--
This file contains the CPT code and the Medicare price for all services
priced under the Physician Fee Schedule. These data can be downloaded
for (a) the entire country, or (b) for a selected carrier (in most
cases carriers correlate with states). There is no option of requesting
data for selected HCPCS codes. The zip file, which is downloaded,
contains a file named PF04pc.doc, which explains the data contained in
each column. This file also contains a description of pricing
localities used in the Physician Fee Schedule. Due to the size of the
national file (as well as many of the carrier-specific files), these
data are provided in a comma-delimited format, which can be used to
populate database applications. Generally speaking, these data are too
large for Excel, however if a carrier specific file has 3 or fewer
localities, Excel can be used.
Another file that providers may find useful is the Zipcode to
Carrier Locality File. This file will map ZIP Codes to CMS carriers and
localities and map Zip Codes to their State and determine whether the
ZIP Code has a rural designation as determined by CMS. You can access
this file by typing the following: http://cms.hhs.gov/providers/pufdownload/default.asp#alphanu
or you can access this data by using
the following directions:
1. Go to the CMS homepage (http://www.cms.hhs.gov).
2. Place your cursor over the word ``Professionals'' in the blue
area near the top of the page. Select ``Physicians'' from the drop-down
menu.
3. Scroll down and under ``Payment/Billing'' select ``Medicare
Payment Systems.''
4. Scroll down and under Coding Files select ``Zipcode to Carrier
Locality File.''
Table of Contents
I. Background
A. Legislative History
B. Published Changes to the Fee Schedule
II. Specific Provisions for Calendar Year 2004
A. Resource-Based Practice Expense Relative Value Units
1. Resource-Based Practice Expense Legislation
2. Current Methodology
3. Practice Expense Proposals for Calendar Year 2004
B. Geographic Practice Cost Indices (GPCIs)
C. Coding Issues
III. Other Issues
A. Definition of Diabetes for Diabetes Self-Management Training
(DSMT)
B. Outpatient Therapy Services Performed ``Incident To''
Physicians Services
C. Status of Anesthesia Work and 5-Year Review
D. Payment Policies for Anesthesia Services
E. Technical Correction
F. Publication Issues
IV. Refinement of Relative Value Units for Calendar Year 2004 and
Response to Public Comments on Interim Relative Value Units for 2003
V. Update to the Codes for Physician Self-Referral Prohibition
VI. Physician Fee Schedule Update for Calendar Year 2004
VII. Allowed Expenditures for Physicians' Services and the
Sustainable Growth Rate
VIII. Anesthesia and Physician Fee Schedule Conversion Factors for
CY 2004
IX. Telehealth Originating Site Facility Fee Payment Amount Update
X. Provisions of the Final Rule
XI. Collection of Information Requirements
XII. Response to Comments
XIII. Regulatory Impact Analysis
Addendum A--Explanation and Use of Addendum B
Addendum B--2004 Relative Value Units and Related Information Used
in Determining Medicare Payments for 2004 Addendum C--Codes with
Interim RVUs
Addendum D--2004 Geographic Practice Cost Indices by Medicare
Carrier and Locality
Addendum E--2005 Geographic Practice Cost Indices by Medicare
Carrier and Locality
Addendum F--Updated List of CPT/HCPCS Codes Used to Describe Certain
Designated Health Services Under the Physician Self-Referral
Provision
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 below:
AMA American Medical Association
APC Ambulatory Payment Classification
BBA Balanced Budget Act of 1997
BBRA Balanced Budget Refinement Act of 1999
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and Protection
Act of 2000
CF Conversion factor
CFR Code of Federal Regulations
CMS Centers for Medicare & Medicaid Services
CNS Clinical Nurse Specialist
CPT [Physicians'] Current Procedural Terminology [4th Edition, 2002,
copyrighted by the American Medical Association]
CPEP Clinical Practice Expert Panel
CRNA Certified Registered Nurse Anesthetist
DHHS Department of Health and Human Services
E/M Evaluation and management
ESRD End-Stage Renal Disease
GAF Geographic adjustment factor
GPCI Geographic practice cost index
HCPCS Healthcare Common Procedure Coding System
HHA Home health agency
IDTFs Independent Diagnostic Testing Facilities
MCM Medicare Carrier Manual
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MGMA Medical Group Management Association
MPFS Medicare Physician Fee Schedule
MSA Metropolitan Statistical Area
OMB Office of Management and Budget
PC Professional component
PEAC Practice Expense Advisory Committee
PPO Preferred Provider Organization
PPS Prospective payment system
PRA Paperwork Reduction Act of 1995
RUC [AMA's Specialty Society] Relative [Value] Update Committee
RVU Relative value unit
SGR Sustainable growth rate
SMS [AMA's] Socioeconomic Monitoring System
SNF Skilled Nursing Facility
TC Technical component
I. Background
A. Legislative History
Since January 1, 1992, Medicare has paid for physicians' services
under section 1848 of the Social Security Act (the Act), ``Payment for
Physicians'' Services.'' This section provides for three major
elements: (1) A fee schedule for the payment of physicians' services;
(2) limits on the amounts that nonparticipating physicians can charge
beneficiaries; and (3) a sustainable growth rate (SGR) for the rates of
increase in Medicare expenditures for physicians' services. The Act
requires that payments under the fee schedule be based on national
uniform relative value units (RVUs) that are based on the resources
used in furnishing a service. Section 1848(c) of the Act requires that
national RVUs be established for physician work, practice expense, and
malpractice expense. Section 1848(c)(2)(B)(ii)(II) of the Act provides
that adjustments in RVUs may not cause total physician fee schedule
payments to differ by more than $20 million from what they would have
been had the adjustments not been made. If adjustments to RVUs cause
expenditures to change by more than
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$20 million, we must make adjustments to ensure that they do not
increase or decrease by more than $20 million.
B. Published Changes to the Fee Schedule
In the July 2000 proposed rule, (65 FR 44177), we listed all of the
final rules published through November 1999. In the August 2001
proposed rule (66 FR 40372) we discussed the November 2000 final rule
relating to the updates to the RVUs and revisions to payment policies
under the physician fee schedule.
In the November 2001 final rule with comment period (66 FR 55246),
we made revisions to resource-based practice expense RVUs; services and
supplies incident to a physician's professional service; anesthesia
base unit variations; recognition of Physicians' Current Procedural
Terminology (CPT) tracking codes; and nurse practitioners, physician
assistants, and clinical nurse specialists performing screening
sigmoidoscopies. We also addressed comments received on the June 8,
2001 proposed notice (66 FR 31028) for the 5-year review of work RVUs
and finalized these work RVUs. In addition, we acknowledged comments
received in response to a discussion of modifier-62, which is used to
report the work of co-surgeons. The November 2001 final rule also
updated the list of services that are subject to the physician self-
referral prohibitions in order to reflect CPT and Healthcare Common
Procedure Coding System (HCPCS) code changes that were effective
January 1, 2002. All these revisions ensure that our payment systems
are updated to reflect changes in medical practice and the relative
value of services. This final rule also conformed our regulations to
reflect statutory provisions of Medicare, Medicaid, and State Child
Health Insurance Program (SCHIP) Benefits Improvement and Protection
Act of 2000 (Pub. L. 106-554) (BIPA) concerning: the mammography
screening benefit; biennial screening pelvic examinations for certain
beneficiaries; expanded coverage for screening colonoscopies to all
beneficiaries; annual glaucoma screenings for high-risk beneficiaries;
coverage for medical nutrition therapy services for certain
beneficiaries; expanded payment for telehealth services; payment for
certain Indian Health Service for some services under the physician fee
schedule; and revision of the payment for certain physician pathology
services.
In the December 31, 2002 final rule with comment period (67 FR
79966), we refined resource-based practice expense RVUs and made other
changes to Medicare Part B policy. These included: The pricing of the
technical component for positron emission tomography (PET) scans,
Medicare qualifications for clinical nurse specialists, a process to
add or delete services to the definition of telehealth, the definition
for ZZZ global periods, global period for surface radiation, and
application of endoscopic reduction rules for certain codes. In
addition, this rule: Updated the codes subject to physician self-
referral prohibitions, expanded the definition of a screening fecal-
occult blood test, and modified our regulations to expand coverage for
additional colorectal cancer screening tests through our national
coverage determination process. We also made revisions to the SGR, the
anesthesia conversion factor (CF), and the work values for some
gastroenterologic services. We finalized the calendar year (CY) 2002
interim RVUs and assigned interim RVUs for new and revised procedure
codes for CY 2003, clarified the enrollment of therapists in private
practice and the policy regarding services and supplies incident to a
physician's professional services, and made technical changes to the
definition of outpatient rehabilitation services.
This final rule also revised the regulations at Sec. 485.618 to
allow registered nurses (RNs) to provide emergency care in certain
critical access hospitals (CAHs) in frontier areas (an area with fewer
than six residents per square mile) or remote locations (locations
designated in a State's rural health plan that we have approved).
As required by statute this final rule also announced that the
physician fee schedule update for CY 2003 was -4.4 percent, the initial
estimate of the SGR for CY 2003 was 7.6 percent, and the CF for CY 2003
was $34.5920, effective March 1, 2003. However, on February 28, 2003
(68 FR 9567), after enactment of the Consolidated Appropriations
Resolution of 2003 (Pub. L. 108-7), we published a final rule that
revised the estimates used to establish the SGRs for fiscal years 1998
and 1999 and announced a 1.6 percent increase in the CY 2003 physician
fee schedule CF for March 1 to December 31, 2003. The CF from March 1
to December 31, 2003 is $36.7856 and the anesthesia CF for this period
is $17.05. All other provisions of the December 31, 2002 final rule
were unchanged by the rule published February 28, 2003.
C. Components of the Fee Schedule Payment Amounts
Under the formula set forth in section 1848(b)(1) of the Act, the
payment amount for each service paid under the physician fee schedule
is the product of three factors--(1) a nationally uniform relative
value for the service; (2) a geographic adjustment factor (GAF) for
each physician fee schedule area; and (3) a nationally uniform
conversion factor (CF) for the service. The CF converts the relative
values into payment amounts.
For each physician fee schedule service, there are three relative
values--(1) an RVU for physician work; (2) an RVU for practice expense;
and (3) an RVU for malpractice expense. For each of these components of
the fee schedule, there is a geographic practice cost index (GPCI) for
each fee schedule area. The GPCIs reflect the relative costs of
practice expenses, malpractice insurance, and physician work in an area
compared to the national average for each component.
The general formula for calculating the Medicare fee schedule
amount for a given service in a given fee schedule area can be
expressed as:
Payment = [(RVU work x GPCI work) + (RVU practice expense x GPCI
practice expense) + (RVU malpractice x GPCI malpractice)] x CF
The CF for CY 2004 appears in section IX. The RVUs for CY 2004 are
in Addendum B. The GPCIs for CY 2004 can be found in Addendum D.
Section 1848(e) of the Act requires us to develop GAFs for all
physician fee schedule areas. The total GAF for a fee schedule area is
equal to a weighted average of the individual GPCIs for each of the
three components of the service. In accordance with the statute,
however, the GAF for the physician's work reflects one-quarter of the
relative cost of physician's work compared to the national average.
D. Development of the Relative Value System
1. Work Relative Value Units (RVUs)
Approximately 7,500 codes represent services included in the
physician fee schedule. The work RVUs established for the
implementation of the fee schedule in January 1992 were developed with
extensive input from the physician community. A research team at the
Harvard School of Public Health developed the original work RVUs for
most codes in a cooperative agreement with us. In constructing the
vignettes for the original RVUs, Harvard worked with expert panels of
physicians and obtained input from physicians from numerous
specialties.
The RVUs for radiology services were based on the American College
of Radiology (ACR) relative value scale,
[[Page 63199]]
which we integrated into the overall physician fee schedule. The RVUs
for anesthesia services were based on RVUs from a uniform relative
value guide. We established a separate CF for anesthesia services, and
we continue to recognize time as a factor in determining payment for
these services. As a result, there is a separate payment system for
anesthesia services.
2. Practice Expense and Malpractice Expense Relative Value Units
Section 1848(c)(2)(C) of the Act required that the practice expense
and malpractice expense RVUS equal the product of the base allowed
charges and the practice expense and malpractice percentages for the
service. Base allowed charges are defined as the national average
allowed charges for the service furnished during 1991, as estimated
using the most recent data available. For most services, we used 1989
charge data aged to reflect the 1991 payment rules, since those were
the most recent data available for the 1992 fee schedule.
Section 121 of the Social Security Act 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 practice
expense RVUs for each physician service. As amended by the BBA, section
1848(c) required the new payment methodology to be phased in over 4
years, effective for services furnished in 1999, with resource-based
practice expense RVUs becoming fully effective in 2002. The BBA also
required us to implement resource-based malpractice RVUs for services
furnished beginning in 2000.
II. Specific Provisions for Calendar Year 2004
In response to the publication of the August 15, 2003 proposed
rule, (68 FR 49030), and the December 2002 interim final rule, (67 FR
79966), we received approximately 2,433 comments. We received comments
from individual physicians, health care workers, and professional
associations and societies. The majority of comments addressed the
physician fee schedule proposals related to the dialysis G codes,
``incident to'' therapy services, and the geographic practice cost
indices locality payment discussion issue.
The proposed rule discussed policies that affected the RVUs on
which payment for certain services would be based. Certain changes
implemented through this final rule are subject to the $20 million
limitation on annual adjustments contained in section
1848(c)(2)(B)(ii)(II) of the Act.
After reviewing the comments and determining the policies we would
implement, we have estimated the costs and savings of these policies
and added those costs and savings to the estimated costs associated
with any other changes in RVUs for 2004. We discuss in detail the
effects of these changes in the Regulatory Impact Analysis in section
XIII.
For the convenience of the reader, the headings for the policy
issues correspond to the headings used in the August 15, 2003 proposed
rule. More detailed background information for each issue can be found
in the December 2002 interim final rule with comment period and the
August 2003 proposed rule.
A. Resource-Based Practice Expense Relative Value Units
1. Resource-Based Practice Expense Legislation
Section 121 of the Social Security Act 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 practice
expense RVUs for each physician's service beginning in 1998. In
developing the methodology, we were to consider the staff, equipment,
and supplies used in providing medical and surgical services in various
settings. The legislation specifically required that, in implementing
the new system of practice expense RVUs, we apply the same budget-
neutrality provisions that we apply to other adjustments under the
physician fee schedule.
Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L.
105-33), enacted on August 5, 1997, amended section 1848(c)(2)(B)(ii)
of the Act and delayed the effective date of the resource-based
practice expense RVU system until January 1, 1999. In addition, section
4505(b) of the BBA provided for a 4-year transition period from charge-
based practice expense RVUs to resource-based RVUs.
Further legislation affecting resource-based practice expense RVUs
was included in the Medicare, Medicaid and State Child Health Insurance
Program (SCHIP) Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L.
106-113) enacted on November 29, 1999. Section 212 of the BBRA amended
section 1848(c)(2)(B)(ii) of the Act by directing us 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. These data would supplement
the data we normally collect in determining the practice expense
component of the physician fee schedule for payments in CY 2001 and CY
2002. (In the 1999 final rule (64 FR 59380), we extended, for an
additional 2 years, the period during which we would accept
supplementary data.)
2. Current Methodology for Computing the Practice Expense Relative
Value Unit System
Effective with services furnished on or after January 1, 1999, we
established a new methodology for computing resource-based practice
expense RVUs that used the two significant sources of actual practice
expense data we have available--the Clinical Practice Expert Panel
(CPEP) data and the American Medical Association's (AMA) Socioeconomic
Monitoring System (SMS) data. The methodology was based on an
assumption that current aggregate specialty practice costs are a
reasonable way to establish initial estimates of relative resource
costs for physicians' services across specialties. The methodology
allocated these aggregate specialty practice costs to specific
procedures and, thus, can be seen as a ``top-down'' approach.
a. Major Steps
A brief discussion of the major steps involved in the determination
of the practice expense RVUs follows. (Please see the November 1, 2001
final rule (66 FR 55249) for a more detailed explanation of the top-
down methodology.)
[sbull] Step 1--Determine the specialty specific practice expense
per hour of physician direct patient care. We used the AMA's SMS survey
of actual aggregate cost data by specialty to determine the practice
expenses per hour for each specialty. We calculated the practice
expenses per hour for the specialty by dividing the aggregate practice
expenses for the specialty by the total number of hours spent in
patient care activities.
[sbull] Step 2--Create a specialty specific practice expense pool
of practice expense costs for treating Medicare patients. To calculate
the total number of hours spent treating Medicare patients for each
specialty, we used the physician time assigned to each procedure code
and the Medicare utilization data. We then calculated the specialty
specific practice expense pools by multiplying the specialty practice
expenses per hour by the total physician hours.
[sbull] Step 3--Allocate the specialty specific practice expense
pool to the specific services performed by each specialty. For each
specialty, we
[[Page 63200]]
divided the practice expense pool into two groups based on whether
direct or indirect costs were involved and used a different allocation
basis for each group.
(i) Direct costs--For direct costs (which include clinical labor,
medical supplies, and medical equipment), we used the procedure
specific CPEP data on the staff time, supplies, and equipment as the
allocation basis.
(ii) Indirect costs--To allocate the cost pools for indirect costs,
including administrative labor, office expenses, and all other
expenses, we used the total direct costs combined with the physician
fee schedule work RVUs. We converted the work RVUs to dollars using the
Medicare CF (expressed in 1995 dollars for consistency with the SMS
survey years).
[sbull] Step 4--For procedures performed by more than one
specialty, the final procedure code allocation was a weighted average
of allocations for the specialties that perform the procedure, with the
weights being the frequency with which each specialty performs the
procedure on Medicare patients.
b. Other Methodological Issues
(i) Nonphysician Work Pool
For services with physician work RVUs equal to zero (including the
technical components of radiology services and other diagnostic tests),
we created a separate practice expense pool using the average clinical
staff time from the CPEP data and the ``all physicians'' practice
expense per hour.
We then used the adjusted 1998 practice expense RVUs to allocate
this pool to each service. We have removed services from the
nonphysician work pool if the requesting specialty predominates
utilization of the service. Also, for all radiology services that are
assigned physician work RVUs, we used the adjusted 1998 practice
expense RVUs for radiology services as an interim measure to allocate
the direct practice expense cost pool for radiology specialties to the
most appropriate SMS specialty.
(ii) Crosswalks for Specialties Without Practice Expense Survey Data
Since many specialties identified in our claims data did not
correspond exactly to the specialties included in the SMS survey data,
it was necessary to crosswalk these specialties to the most appropriate
SMS specialty.
(iii) Physical Therapy Services
Because we believe that most physical therapy services furnished in
physicians' offices are performed by physical therapists, we
crosswalked all utilization for therapy services in the CPT 97000
series to the physical and occupational therapy practice expense pool.
3. Practice Expense Proposals for Calendar Year 2004
a. Nonphysician Workpool
The nonphysician work pool is a special methodology that we used to
determine practice expense RVUs for many services that do not have
physician work RVUs. While the nonphysician work pool is of benefit to
many of the services that were originally included, we have allowed
specialties to request that their services be removed from the pool.
Because the nonphysician work pool includes a variety of services
performed by many different specialties, we use the ``all physician''
average practice expense per hour in place of a specialty-specific
practice expense per hour.
As discussed in the August 15, 2003 proposed rule, we are
continuing to study the alternatives that are available and any
modifications to the nonphysician workpool would be published in
proposed rulemaking.
Comment: Several specialty societies expressed support for the
ongoing study of this complex issue and appreciate that any
modifications to the nonphysician workpool would be published as
proposed rulemaking for review and comment prior to implementation. A
biopharmaceutical company commented that we should move forward to
develop a new methodology that better recognizes actual resource
consumption so that we can develop a preferable alternative.
Response: We are appreciative of the support and will continue to
study this issue.
b. Supplemental Practice Expense Survey Data
i. Survey Criteria and Submission Dates
As required by the BBRA, we established criteria to evaluate data
collected by organizations to supplement the data normally used in
determining the practice expense component of the physician fee
schedule. We have required supplementary survey data to be submitted by
August 1 to be considered for computing practice expense RVUs for the
following year. We proposed to change the required submission date to
March 1, which would allow us to publish our decisions regarding survey
data in the proposed rule and provide an opportunity for public comment
on survey results. We also proposed to extend for an additional 2 years
the period for accepting survey data that meets the criteria set forth
in the November 2000 final rule (as modified in the December 31, 2002
final rule). The deadline for submission of the supplemental data to be
considered in CY 2005 and CY 2006 would be March 1, 2004 and March 1,
2005, respectively.
Comment: Specialty societies expressed appreciation for our
proposal to extend the deadline for submission of surveys. Commenters
also approved of our proposal to change the due date for submission of
supplemental practice expense survey data to March 1, so that the
implications of the use of the survey data could be discussed in the
proposed rule.
Response: We will implement the change in the submission dates for
supplementary surveys as proposed. The deadline for submission of the
supplemental data to be considered in CY 2005 and CY 2006 would be
March 1, 2004 and March 1, 2005, respectively. We will revise Sec.
414.22(b)(6)(ii) to reflect this change.
ii. Submission of Supplemental Surveys
The College of American Pathologists (CAP) submitted supplemental
survey data for independent laboratories for consideration for CY 2004.
Our contractor, The Lewin Group, evaluated the data and has recommended
acceptance.
Comment: Based on our proposal to revise the date for submission of
supplemental survey data, CAP requested that we delay incorporation of
this survey data until next year's proposed rule. CAP also expressed an
interest in being able to evaluate the combined effects of the use of
the new survey data along with the technical change for pathology
services before the changes are implemented. Therefore, CAP requested
that we also extend the moratorium on calculating the technical
component as the difference between the global and professional
component practice expense RVUs by one additional year, as discussed in
the August 15, 2003 proposed rule. This request for a delay in
incorporating the new survey data, as well as extending the moratorium
was supported by the AMA and several specialty societies.
Response: We agree with the comments that suggest extending by one
year the moratorium on calculating the technical component practice
expense RVU as the difference between the global and professional
component RVUs for pathology services. We also agree with comments
suggesting that we not incorporate the CAP survey into the practice
expense methodology until next year. We will evaluate the CAP
[[Page 63201]]
survey in next year's proposed rule at the same time we show the effect
of the above described change for pathology services.
c. Practice Expense for a professional component service
While we typically assign all staff, equipment and supply costs for
services with professional and technical components (PC and TC) to the
technical portion of the service, in the proposed rule we discussed
limited instances where it is appropriate to assign direct inputs to a
PC service. We proposed to modify the practice expense methodology to
allow direct inputs to be added to PC services when these inputs are
clearly associated with the professional service, including when the
PEAC makes such recommendations. Specifically we proposed to add the
PEAC recommended staff times to the PC of the following cardiac
services: CPT codes 93508, 93510, 93511, 93514, 93524, 93526, 93527,
93528, 93529, 93530, 93531, 93532, 93533 and 93624.
Comment: The RUC, the AMA, the American College of Physicians and
societies representing cardiologists, cardiac rhythm specialists,
interventional radiologists, nuclear medicine, chest physicians,
radiation oncologists, radiologists, endocrinologists and
dermatologists expressed support for this change in methodology.
Commenters were also in agreement with the specific CPT codes mentioned
in the proposed rule, but requested that direct inputs also be added to
the PC of CPT codes 93619, 93620 and 93642, which were reviewed at the
January PEAC meeting. The RUC comment indicated that additional codes
might be identified at future PEAC/RUC meetings.
Response: We will finalize the proposed assignment of direct
practice expense to the proposed 14 cardiac services and will add the
PEAC recommended inputs to the PC of CPT codes 93619, 93620 and 93642,
as requested by the commenters.
d. Utilization Data
We use Medicare utilization data in the development of specialty-
specific practice expense RVUs that are then weight averaged to
determine a single practice expense RVU per code. Prior to 2003, we
used the most recent complete year of utilization data to determine the
practice expense RVUs. In the December 31, 2002 final rule (67 FR
79982), we adopted a policy of using the 1997 through 2000 Medicare
utilization in the practice expense methodology. For new codes created
since 2000, there are no Medicare utilization data. In the August 15,
2003 rule we proposed to follow a similar practice to the one described
above and use specialty-specific Medicare utilization data for codes
created after 2000 at the first opportunity they become available to
us. Since we will not have any utilization data at the time we first
establish practice expense RVUs for a new code, we proposed that we
continue, whenever possible, to make an assumption about the specialty
that will likely provide the service or to use the ``all physician''
average when we do not have sufficient information to assign any given
specialty.
Comment: The specialty societies representing internal medicine,
rheumatology and pulmonary medicine supported our proposal to use 1997
through 2000 Medicare utilization data for all codes that were in
existence at that time and to use specialty-specific Medicare
utilization data for codes created after 2000 when utilization data
first become available, using the ``all physician'' average when we do
not have sufficient information to assign a given specialty. These
commenters, as well as several others, suggested that the RUC and the
specialty societies could provide information on the specialties that
will likely perform a new service to minimize the potential changes to
the practice expense RVUs that will occur when we substitute actual for
estimated utilization. However, a specialty society representing
gastroenterology expressed concern that we are moving forward with
plans to shift the basis of our methodology for compiling data to a
five-year basis. The commenter urged us to not make changes until
extensive impact comparisons are conducted that can be evaluated by
physician community.
Response: We will implement our proposal to use specialty-specific
Medicare utilization data for codes created after 2000 at the first
opportunity they become available to us. We will also continue,
whenever possible, to make an assumption about the specialty that will
likely provide the service or to use the ``all physician'' average when
we do not have sufficient information to assign any given specialty.
Information about the specialty we assign to a code that has no
utilization data can be found in the utilization data files we make
available on the CMS web site following final rule publication. With
respect to the comment about shifting to a 5-year basis of utilization
data for the practice expense methodology, we are making no change in
policy for codes that existed in the 1997 to 2000 period. We are using
only the later year utilization data for codes that have been created
since that time. Any information from the RUC that could assist us in
this process would be welcomed.
Comment: A specialty society representing colon and rectal surgeons
agreed with our general utilization methodology, but disagreed that
averaged 1997-2000 utilization data should be used for all codes that
were not in existence for the entire period. The commenter argued that
the frequency for these codes might be artificially low because the
coding was new and that this may impact the relativity between new and
old codes in the same family with similar inputs. The society suggested
that any code that did not exist during the entire 1997-2000 period
default to 2002 or most recent data.
Response: As we have explained, the Medicare utilization is
important to the practice expense methodology because it determines
which specialty scaling factors will be applied to the estimated
practice expense input values in determining the practice expense RVUs
for each service. The proportion of the volume billed by each specialty
is more important to determining the practice expense RVU for a given
service than the total volume. If the code is low in volume but the
proportion of the code's volume billed by each specialty is generally
consistent over time, there will be little or no difference in a code's
practice expense RVUs, whether we use its initial year of utilization
or a later year to determine its value.
Comment: Commenters representing dermatology as well as a
pharmaceutical company expressed concern regarding the decrease in
payment for photodynamic therapy, CPT code 95657. The commenters noted
our discussion in the proposed rule indicating that this reduction in
the practice expense RVUs is occurring because of updates to the
Medicare utilization data used in the practice expense methodology. As
a result of the updated utilization data, the practice expense
methodology now uses the dermatology scaling factor (0.54) for supplies
instead of the all physician average (1.29), and this change leads to
the reduction in payment for the code. The commenters urged us to
reconsider the proposal and at least to reinstate physicians' ability
to bill separately in 2004 for the light-activating agent under the
appropriate J code and also to remove the drug from the practice
expense portion of the procedure.
Response: One of the functions of the utilization data in our
practice expense methodology is to assign all procedures to the
specialty-specific cost pools of the
[[Page 63202]]
specialty or specialties performing them. Each cost pool has its own
scaling factor. This scaling factor is used to scale the aggregate CPEP
procedure-level costs for a specialty to the aggregate costs for the
same specialty as determined by the SMS practice expense data. As we
indicated in the proposed rule, we do not have utilization data upon
which to determine the practice expense RVUs for a new code at the time
it is created. As a default, we have assigned many new codes the ``all
physician'' scaling factor until we have the data to move these codes
into the appropriate specialty cost pools. Because it allows us to
apply the appropriate specialty scaling factor, the use of the updated
utilization data in the practice expense methodology can lead to
increases or decreases in the value of a code, even though its practice
expenses remain unchanged. In this case, the supplies scaling factor
for dermatology is lower than that for ``all physicians,'' leading to a
decrease in practice expense RVUs when the dermatology scaling factor
was applied to the CPEP data of the photodynamic therapy service.
We believe the initial practice RVUs for photodynamic therapy were
too high, because the later information on Medicare utilization
indicates that we should have used the dermatology scaling factor which
would have produced a lower practice expense value. As we indicate
above, we are working to minimize changes that will occur in the
practice expense RVUs for a service by making an initial assumption
about which specialty will likely bill us for a service. However, we
believe our policy for new codes should be consistent with how we
determine the practice expense RVUs for existing codes, even if updates
to the Medicare utilization data lead to increases or decreases in the
practice expense RVUs.
Though we believe that it is appropriate to use the updated
utilization that results in a reduction in payment for CPT code 96567,
we will pay separately for the light activating agent beginning January
1, 2004. However, we are also further considering whether Medicare
should pay separately for certain topical drugs in certain
circumstances. Any change in policy would be discussed in future
rulemaking.
Comment: Specialty societies representing radiation oncology, as
well as individual commenters, expressed concern about the decrease in
payment for the intensity modulated radiation therapy (IMRT) treatment
service, CPT code 77418. The commenters stated that this was due to a
``quirk'' in the utilization data relating to new codes and requested
that this code be priced by the non-physician work pool methodology.
Response: We will calculate the practice expense RVUs for the IMRT
treatment service, CPT code 77418, using the nonphysician workpool
methodology. This will be consistent with the way we currently
calculate the practice expense for all other radiation therapy services
with no physician work RVUs.
Comment: The specialty society representing radiation oncology also
noted that there was a reduction in the practice expense RVUs for the
intensity modulated radiation therapy planning procedure, CPT code
77301. A remote cardiac monitoring service questioned why the use of
new utilization data could decrease the value of a code such as HCPCS
code G0249 for the provision of test material and equipment for home
INR monitoring.
Response: Both CPT code 77301 and HCPCS code G0249 were new codes
for which we did not have utilization data and which were initially
assigned the ``all physician'' scaling factor. As described above, now
that we have the utilization data, the services have been placed in the
specialty-specific cost pools based on how the service is billed to
Medicare, which have lower scaling factors than the ``all physician.''
This shift has led to the reduced practice expense RVUs for CPT code
77301. If we had placed this code in the radiation oncology cost pool
to begin with, it would have had the reduced practice expense payments
for the past two years as well. HCPCS code G0249 will actually have
increased practice expense RVUs in 2004 due to the effect of the
repricing of supplies.
Comment: We received one comment that questioned how updated
utilization data could have such a huge and direct effect on specific
codes. The commenter requested clarification from us on the workings of
the utilization data within the practice expense methodology so that
the public will understand how utilization data will affect new
technologies in the future.
Response: As explained above, one of the functions of the
utilization data in our practice expense methodology is to assign all
procedures to the specialty-specific cost pools of the specialty or
specialties performing them. If we do not know the specialty, we have
used ``all physician'' scaling factors. The ``all physician'' scaling
factors could be higher or lower than the specialty-specific scaling
factor and produce different RVUs for the code. For instance, CPT code
77301-26 is a PC service that has no direct cost inputs. Thus, its
practice expense RVUs are affected only by the indirect cost scaling
factor. To develop the 2003 practice expense RVUs for this code, we
adjusted indirect costs allocated to this code by the ``all physician''
indirect cost scaling factor of 0.57. However, for 2004, we have
Medicare utilization data from 2002 for this procedure code. Radiation
oncologists and radiologists respectively billed Medicare for 67
percent and 30 percent of the total volume of services provided to
Medicare patients in 2002. The weighted average scaling factor for all
the specialties that bill Medicare for this procedure code is 0.48.
Since we are adjusting indirect costs by 0.48 instead of 0.57, the
final practice expense value is lower.
e. Practice Expense Advisory Committee (PEAC)
The PEAC, a subcommittee of the RUC, has, since 1999, been
providing us with recommendations for refining the direct practice
expense inputs (clinical staff, supplies, and equipment) for existing
CPT codes.
1. Recommendations on CPEP Inputs for 2003
In the December 31, 2002 proposed rule, we responded to the PEAC
recommendations for the refinement to the CPEP direct practice expense
inputs for over 1200 codes, including refinements to codes from almost
every major specialty. In addition, the recommendations included
standardized times for office-based clinical staff for services
provided during a patient's hospitalization and for discharge day
management services, as well as pre-service clinical staff times for
323 neurosurgery procedures. We reviewed and accepted all of the
recommendations. We received the following comments on these revisions.
Comment: We received comments from specialty societies representing
dermatology, dermatolgic surgery and Mohs surgery expressing concern
regarding the decrease in practice expense RVUs for skin biopsy
procedures, CPT codes 11100 and 11101 and the destruction of benign or
premalignant lesion services, CPT codes 17000 and 17003. The commenters
questioned whether the reductions reflect errors in the validated
practice expense inputs used in the practice expense calculations.
Response: We have checked the practice expense inputs and found
that these match the clinical staff, supply and equipment inputs as
recommended by the RUC. The reduction in practice expense RVUs was
caused by the
[[Page 63203]]
refinement of these inputs, which, in turn, was based on the
presentation made to the PEAC by the dermatology specialty society. We
will, therefore, not make any further revisions to the practice expense
inputs for these services in this final rule.
2. Recommendations on CPEP Inputs for 2004
In the August 15, 2003 proposed rule we included the PEAC
recommendations from meetings held in September of 2002 and January
2003 as well as recommendations on the refinements to the clinical
staff time for all 90-day global services. In addition, the PEAC
convened a workgroup to make recommendations on the refinement of all
the 116 remaining evaluation and management codes. We reviewed the
submitted PEAC recommendations and proposed to accept them.
Comment: The American Osteopathic Association expressed
appreciation that we supported the recommended changes for the
osteopathic manipulative treatment codes and commended us for accepting
the PEAC recommendations for the clinical staff times for 90-day global
codes. The American College of Obstetricians and Gynecologists stated
that our acceptance of the PEAC recommendations is an example of
exceptional cooperation and collaboration in meeting the healthcare
needs of Americans served by the Medicare program. The American Academy
of Dermatology applauded our acceptance of the year's PEAC
recommendations. The AMA and the American College of Radiology stated
that they appreciate our recognition of the significant resources
specialty societies have devoted to the practice expense refinement
process and is thankful that our practice expense staff avail
themselves of specialty society input. The American College of Surgeons
also supported our acceptance of the PEAC recommendations, including
the decision to permit exceptions to the standard pre-service times for
some surgical procedures. The College other specialty societies also
expressed appreciation for our commitment to the refinement process.
Response: We, in turn, are appreciative of these positive comments.
We believe that it is only because of the cooperative working
relationship between the specialty societies, the AMA and CMS that
there has been such a high level of success in tackling practice
expense refinement.
Comment: The American College of Physicians as well as other
specialty societies representing surgeons, otolaryngologists,
podiatrists, geriatric psychiatrists, obstetricians and gynecologists,
cataract and refractive surgeons, neurosurgeons, dermatologists,
rheumatologists, radiologists and radiation oncologists supported our
inclusion of the PEAC recommendations in the proposed rule because this
would better enable specialty societies to address their impact and
make comments prior to publication of the final rule.
However, specialty societies representing chest physicians and
thoracic physicians disagreed with our decision to change our previous
practice of including the PEAC recommendations in the final, rather
than the proposed rule, because this meant that the recommendations
from the March PEAC meeting were not included for this year. The
society argued that changing this long-standing policy without
announcing it in the Federal Register is inappropriate. The comment
also contended that the specialty societies agreed to the inputs at the
PEAC meeting; therefore, negative comments would not be forthcoming.
Response: We discussed this issue at the January PEAC meeting and
indicated that we were considering including the PEAC recommendations
in the proposed rule and that the March recommendations would most
likely not be included. We made this decision because, now that the
PEAC is refining such a large number of codes, the revisions to the
inputs were not only changing the practice expense RVUs of the refined
codes, but also the values of services that were not refined.
Therefore, we believed it was prudent that revisions be subject to
comment before the revisions were implemented.
Comment: The specialty society representing podiatry identified
some discrepancies between the PEAC recommendations and the inputs in
the CPEP database for CPT codes 10060, 11000, 11055, 11056, 11057 and
11752 and requested that these be corrected.
Response: We have made the corrections as requested.
Comment: The American Society of Transplant Surgeons (ASTS)
commented that it is not appropriate to apply either the PEAC-approved
standard clinical staff times or RN/LPN/MTA staff blend for 90-day
global procedures to the transplant recipient or living donor services.
ASTS stated that it had been unaware that the PEAC was applying the
standard to all 90-day services unless a case was made to the PEAC that
the times should be increased. ASTS argued that there are substantial
atypical staff times required for transplant recipients due, in large
part, to the intensive education required for the transplant patient.
The commenter noted that the three new CPT codes for living donor
hepatectomies, CPT codes 47140-47142, were given increased pre-service
clinical staff time by the RUC and have an RN as the staff type. ASTS
requested that the current clinical staff times be retained and that an
RN be assigned rather than the blended staff type to the following
transplant services: CPT codes 32851, 32852, 32853, 32854, 33935,
33945, 47135, 47136, 48554, 48556, 50320, 50360, 50365, 50380, 50547.
Response: It does seem reasonable that at least some of these
services would have increased pre-times as do the living donor
hepatectomies recently reviewed by the RUC. Therefore, we will restore
the original CPEP clinical staff pre-times and use the RN staff type
for the above services on an interim basis for the coming year. We
anticipate that the society will bring all of these codes to the PEAC
for review for either the January or March meeting to ensure that the
times for the codes receive the same scrutiny as did the new transplant
codes. It should be noted that a few of the codes have lower original
CPEP pre-time than the PEAC standard of 60 minutes; for those codes we
did not change the PEAC standard time. We also are not revising the
post-procedure clinical staff times for these codes, because the
current times are in line with the post-service times assigned to the
new living donor hepatectomy codes recently reviewed by the RUC.
Comment: A commenter noted that high dose rate (HDR) brachytherapy
CPT codes 77781, 77782, 77783 and 77784 were not listed in Addendum C
of the proposed rule. Since these codes were approved by the PEAC and
forwarded to CMS, ACR questioned why these codes were not listed.
Response: The CPEP data base files had been revised to reflect the
PEAC recommendations for these codes. It was an oversight that they
were not included in Addendum C.
Comment: The American College of Surgeons listed several possible
errors in the CPEP database:
CPT code 11450--missing 1 minute of staff time
CPT codes 10080, 10081, 11770, 12032, 12035, 12046, 12047, 21550,
21920, 37609, 38300, 45300-45327, and 46600-46615--missing correct
number of gloves.
CPT codes 45900, 45905, 45910, 47382, 49320, 49321, 49322, 49422,
49429--supplies listed incorrectly--have nonfacility inputs when PEAC
recommended none in office setting.
[[Page 63204]]
Response: We thank the College for checking the database so
carefully. We have made the suggested corrections, with the following
notes: For CPT codes 10080, 10081 and 11770, the PEAC recommendation
listed 5 gloves, not 6. For CPT codes 45300-45327 and 46600-46615, we
adjusted the quantity of unsterile gloves to reflect that there are 2
pair in the minimum visit supply package; in addition, CPT codes 45321
and 45327 were not priced in the nonfacility setting.
Comment: The American Society of Colon and Rectal Surgeons noted a
few errors in the CPEP supply database. The supply inputs had not been
changed to match the accepted new recommendations for CPT codes 45900,
45905, 45910, 47382, 49320, 49321, 49322, 49422 and 49429.
Response: We have made the corrections to the supply database and
thank the specialty for bringing this to our attention.
Comment: The American Speech-Language-Hearing Association (ASHA)
questioned the proposed 28 percent reduction in the practice expense
for CPT code 92507, Treatment of speech, language, voice,
communication, auditory processing and/or aural rehabilitation status.
The reduction is attributable to a decrease in clinical staff time.
ASHA contended that the PEAC recommendation was based on a vignette for
a child receiving such therapy, but that the time involved with a
typical adult patient receiving this treatment is much longer. ASHA
stated that a more reasonable time for clinical staff for this service
is 69 minutes compared to the proposed 46 minutes.
Response: We understand that the scenario for performing this
service for a child might be very different than for an adult because
an adult can participate in a more protracted therapy session. Because
it is not clear to us at this time what would be the typical scenario,
we will, on an interim basis, average the clinical staff time needed
during a speech therapy session for a child with that suggested by ASHA
for an adult. We will, therefore, assign 58 minutes of clinical staff
time to this service, with the expectation that ASHA will present CPT
code 92507 for further discussion and review at the PEAC.
Comment: We received several comments in response to our acceptance
of PEAC recommendations for evaluation and management (E/M) codes that
reduced payment rates for six nursing home services (CPT codes 99301-
99303 and 99311-99313) and two home visit codes (CPT codes 99348 and
99350). This payment reduction is primarily due to a decrease in the
clinical staff time assigned to these services.
The American Academy of Family Physicians (AAFP) supported our
acceptance of the PEAC recommendations for the E/M nursing facility
services. The commenter noted that current practice expenses are higher
for services provided in the non-SNF nursing facility than those
provided in the SNF facility. The commenter contended that the direct
practice expense inputs should not vary based on the type of nursing
facility setting and supported the elimination of the current
differential in the practice expense RVUs between the SNF and non-SNF
facility setting.
However, the American Medical Directors Association (AMDA)
representing long term care physicians, the American Geriatrics Society
(AGS) and a health care management company, Health Essentials, all
disagreed with our decision to accept the E/M nursing facility PEAC
recommendations and asked us to reconsider our decision to implement
them in 2004. The request to delay implementation was echoed by the
American Academy of Home Care Physicians and AGS relating to the two E/
M home visit codes.
The home care physicians argued that the PEAC recommendations for
the two home visit codes are flawed because these codes have not yet
been surveyed by the specialty performing this service. The commenters
also contended that their views were not represented when the PEAC
considered the refinements of the E/M home visit codes. Similarly, the
AMDA noted that the PEAC workgroup responsible for formulating the
recommendations for the nursing facility codes did not include long
term care physicians. The AMA also commented on this issue and
expressed concern that the PEAC recommendations did not include the
views of all the relevant medical specialties and requested that we
delay implementation of these E/M code recommendations to allow
impacted medical specialties an opportunity to present new information
to the PEAC.
In addition, the AMDA expressed concern regarding the current work
RVUs for nursing home visit services.
Response: At the time the PEAC recommendations were forwarded to
CMS, we agreed with the views expressed by the AFPP as to the
reasonableness of the practice expense recommendations for the E/M
codes for the nursing facility and home visits. However, we are also of
the opinion that the relevant medical specialties should be given the
opportunity to have their views considered by the PEAC. Consequently,
we will not go forward with these E/M recommendations in 2004. This
will allow time for the PEAC to reconsider the eight E/M codes with
input from representatives from the nursing home and home visit
specialties. We will use current CPEP practice expense inputs to price
these codes for 2004.
With regard to the concern expressed about the work RVUs for the
nursing home visits, in the 2004 final rule we will solicit
recommendations on codes to be reviewed during the next 5-year review
of work and we suggest that the society recommend review of these
codes.
Comment: A specialty society representing gastroenterologists
commented that the increased clinical staff pre-time added to certain
colorectal procedures needs to be applied equally to
gastroenterologists who provide those services.
Response: We have a single payment for each procedure regardless of
the specialty performing the service. Therefore, gastroenterologists
will be paid the same as colorectal surgeons when performing those
services for which we allowed increased pre-service clinical staff
time.
Comment: The American College of Radiology submitted several
corrections to the CPEP database for those instances where the database
differed from the PEAC recommendations that we accepted. The College
stated its appreciation for the opportunity to review the practice
expense data file for completeness and accuracy and applauded our
efforts to ensure that the database captures correct and complete
practice expense data.
Response: We thank the College for the time and effort expended in
checking this detailed data. We have made revisions to 19 codes: We
changed the quantity of sodium chloride injection for CPT codes 78306,
78315, 78460, 78461, 78464, and 78465; adjusted the quantity of films
for CPT code 76812; added missing supplies to CPT codes 77408, 77409,
77411, 77412, 77414, 77416, 76830 and 77290; removed equipment that had
been deleted from CPT codes 78478 and 78480; and corrected a
typographical error in the pre-service clinical staff time for CPT
codes 73218 and 75555.
g. Repricing of Clinical Practice Expense Inputs--Supplies
We use the practice expense inputs (the clinical staff, supplies,
and equipment assigned to each procedure) to allocate the specialty-
specific practice expense cost pools to the procedures
[[Page 63205]]
performed by each specialty. The costs of the original inputs assigned
by the Clinical Practice Expert Panels (CPEP) were determined by our
contractor, Abt Associates, based primarily on 1994 and 1995 pricing
data from supply catalogs. In addition, for many items on the equipment
and supply list, the associated costs were based on the recommendations
of a CPEP panel member, rather than on actual catalog prices.
Subsequent to the CPEP panels, equipment and supply items have also
been added to the CPEP data, with the costs of the inputs provided by
the relevant specialty society.
We contracted with a consultant to assist in obtaining current
pricing information and also to recommend revisions to improve the
uniformity and consistency of the CPEP supply database. On the basis of
these recommendations, in the August 15, 2003 proposed rule, we
proposed updates to the cost information for supplies in the database.
In addition, we proposed the following database revisions:
--Assignment of supply categories.
We proposed that supplies be assigned to one of 14 categories.
--Consolidation/standardization of item descriptions.
We proposed combining items which appeared to be duplicative and
modifiying descriptions using a key first word when possible for easier
identification of items. For example, ``mayo stand cover'' and ``drape,
sterile Mayo'' have both been changed to ``drape, sterile, for Mayo
stand.''
--Standardization of unit descriptions.
The current CPEP database contains over 72 unit descriptions
associated with supplies (for example, item, gram, and cup). To provide
consistency and ensure that inputs in the database accurately reflect
the quantity of an item used, we proposed to standardize the unit
description of items. We also proposed to specifically identify items
intended for single use through the use of ``uou'' (unit of use)
following the unit. These changes were reflected in Addendum D of the
proposed rule.
There were also items that had not been identified or for which
pricing information was not found that were included in Table 1 in the
August 15 proposed rule. Items that we proposed to delete from the
database were also identified in this table. We requested that
commenters, particularly the relevant specialty groups, provide us with
the needed pricing information with appropriate documentation. We also
stated if we did not obtain verified pricing information for an item,
it would be eliminated from the database.
Comment: The RUC expressed appreciation for the enormity of the
repricing project and stated that the proposed approach was well
organized and comprehensive. The American Association of Orthopedic
Surgeons also agreed that the assignment of supply categories would be
helpful in future refinement activities. The American College of
Physicians, the American College of Surgeons, and the American
Urological Association expressed support for our proposal to create a
numbering system and to standardize the descriptions of supply items to
increase accuracy of use. The American Academy of Dermatology also
supported this standardization of proposed ``unit of use'' as long as
its application does not assume that ``one size fits all'' as some
supplies may go from milliliter to liter in usage. The American Society
of Cataract and Refractive Surgery and the Outpatient Ophthalmic
Surgery Society thanked us for the repricing proposal because this will
ensure that we are using the more accurate and up-to-date supply costs,
thus reimbursing physicians more fairly. The American College of
Radiology recognized the need to update supply and pricing information
in the practice expense database and commended us for committing to
this extensive project. The American College of Surgeons also agreed
that the update of prices for supplies will improve the accuracy of the
direct practice expense data. The Society of Nuclear Medicine commended
us for committing to this extensive project. The American Urological
Association also appreciated this effort and acknowledged it as a huge
undertaking.
Response: We appreciate the positive feedback and would like to
thank all the staff of the specialty societies who worked with our
contractor to obtain the most representative prices for all of the
supplies in the CPEP input database.
Comment: A specialty society representing podiatrists agreed with
removal of hallux implant and the broach kit from the list of supplies
to be included under practice expense as both are separately billable
and the broach kit is also reusable. The commenter did not agree with
removal of the sterile ankle tourniquet since this is packaged as a
single use item. The comment included pricing information at $42.87
each (with documentation) for this supply.
Response: We will delete the hallux implant and the broach kit from
the CPEP supply data. We will retain the ankle tourniquet using the
pricing information supplied by the society.
Comment: Several commenters expressed concern about the reduction
in nonfacility practice expense for the interstitial laser coagulation
of the prostate procedure, CPT code 52647. A manufacturer of endo-
surgery equipment stated that the main reason for this decrease was the
decrease in the price assigned to the laser fiber used in this
procedure. We had proposed a price of $290 for this item, but the
commenter submitted documentation that indicated that the laser fiber
should be priced at $850 for CPT code 52647. In addition, the commenter
noted that we had proposed in Table 1 to delete the laser fiber because
it was reusable; however, this was incorrect as the laser fiber used in
this procedure could not be reused and should not be deleted from our
supply list.
Response: When the laser fiber was repriced, we believed the item
included in the supply list for CPT code 52647 was the same as a
``laser tip,'' which was priced at $290. We thank the commenters for
clarifying the issue. We agree that the laser fiber used in this
procedure is a disposable supply that we will retain in our CPEP supply
data at the $850 price documented by the commenter.
Comment: Commenters representing cardiac arrhythmia specialists and
a remote cardiac monitoring system recommend that we not delete the
transtelephonic monitor as a supply even though we are correct that the
patient and physician re-use this supply during the course of the
pacemaker's life. The specialty society commenter requested that the
expense of this supply, which costs $190, should be spread out over
approximately 5 years.
Response: The transtelephonic monitor as described would be
considered a piece of equipment, rather than a reusable supply.
However, unless the equipment costs over $500, we consider it as an
indirect cost and it is not included as a direct input. Therefore, we
will delete the item from our list of direct practice expense inputs as
proposed.
Comment: A specialty society representing chest physicians agreed
that the oximetry sensory probe, CPAP nasal pillow and flow sensor are
reusable and should be deleted from the list of CPEP supply inputs. The
society also agreed that albuterol is separately billable and should
also be deleted. Another commenter, representing sleep medicine, agreed
that the nasal pillow should be deleted. However, the commenter
representing chest physicians and a commenter representing thoracic
physicians disagreed with the proposal to delete
[[Page 63206]]
methacholine chloride because there is no ``J'' code to use when
billing, thus forcing physicians to used an unlisted service code. The
commenters also contended that the aerochamber should not be deleted
because, although reusable, it has a life of only about six months and
should be costed out accordingly. In addition, the commenters disagreed
that the inhaler is separately billable because a multi-use canister is
utilized for this test; therefore, the amount used from the canister
for each test should be included in the practice expense.
Response: We will delete the oximetry sensory probe, CPAP nasal
pillow and flow sensor and albuterol from the list of CPEP supply
inputs. We will also delete the aerochamber, because an item that is
reusable over a six-month period cannot be classified as a disposable
supply. The commenter is correct that there is not a HCPCS ``J'' code
for methacholine chloride. Therefore, we will keep this in the supply
database as requested so that physicians can avoid the burden of
submitting paper claims. We also will keep the inhalant in the database
using the quantity of 1 gram per procedure at $0.788.
Comment: Specialty societies representing radiologists and
interventional radiologists disagreed with the classification of the
Arrow mechanical thrombectomy device as reusable. The commenter
contended that this device is single-use because the difficulty in
cleaning the intra-luminary surface areas could lead to a risk of
contamination if the device is reused. Moreover, reprocessing the
thrombectomy device may result in fatigue-related failure.
The societies also disagreed with our contention that a Seldinger
needle is reusable; rather a Seldinger needle is single-use and should
not be removed as a supply item. It is the commenter's understanding
that hospitals are not in the practice of resterilizing Seldinger
needles.
While generally favoring reorganization of CMS' supply listing for
ease of use and not directly opposed to supply categories, one of the
commenters was concerned over the potential loss of granularity of cost
data associated with the use of supply categories and would oppose the
averaging of costs for the supply categories unless it is appropriate
to average from a cost and clinical standpoint. A similar comment was
sent by the radiology specialty society.
Response: We will retain the thrombectomy device and the Seldinger
needle as disposable supplies in our CPEP input database. With regard
to the classification of supplies, the commenter misunderstands the
purpose of assigning a classification to each supply. This will not be
used for pricing purposes in any way. Rather, the classifications can
be useful as a way to sort the long list of supplies in the database to
make it easier to find a particular item.
Comment: The contractor responsible for helping us with the
repricing of supplies informed us that a supply assigned to the
endometrial ablation procedure, CPT code 58353, was listed as a
catheter tray when it should be described as a thermal ablation balloon
catheter at a price of $727. In addition, our contractor supplied us
with prices for several new supply and equipment items mainly for
otolaryngology, that were not priced in the proposed rule but were
included in the PEAC recommendations.
Response: We will make the appropriate changes in the CPEP supply
and equipment databases.
Comment: Commenters representing pediatricians, pulmonary
physicians and family physicians pointed out that the new price we had
assigned to the safety syringe and needle did not cover the actual cost
of purchasing the entire needle stick device that is required by the
Occupational Safety and Health Administration.
Response: Our repricing contractor researched this issue for us and
agreed that the price we were proposing was too low for the appropriate
item. Based on documentation for a 10 ml Syringe with SafetyGlide
Needle, the safety syringe and needle will be priced at $.435 each,
instead of the $.28 that was proposed.
Comment: A surgical society commenter pointed out that we listed an
achalasia balloon in Table 1 in the proposed rule and indicated that it
was a supply used with CPT codes 45905 and 45910. The commenter stated
that both of these codes were refined in January and that they were not
priced in the office setting; therefore the balloon should no longer be
listed as a supply used with these services.
Response: Our CPEP database currently has these codes priced only
in the facility setting. However, these services had previously been
priced in the office and Table 1 was apparently developed before the
last of the PEAC recommendations were entered. The achalasia balloon no
longer appears on the CPEP supply database.
Comment: We received comments from the American College of
Physicians and another medical society representing allergy and
immunology with concerns about reductions in reimbursement for the five
venom immunology CPT Codes (95145-95149). The commenters believe the
reductions are due, in part, to the use of incorrect supply costs for
venom extracts that we priced at $5.18 per ml. The commenters provided
documentation of current prices of five different venoms from two of
the largest manufacturers of venom extracts. They proposed a price-
averaging methodology utilizing the small and large quantities of
venoms that are available from the two suppliers. A price of $12.22 per
milliliter of venom antigen results from using this methodology, and
the commenters suggest that this price be used in valuing four of the
five CPT Codes for venom immunology, with the exception of CPT Code
95147. When a patient requires three stinging insect venoms, as for CPT
95147, the commenters believe the 3-Vespid mix is typically used.
Again, the commenters suggested the same price-averaging method noted
above using cost information from the two vendors, which results in a
price of $23.49 per ml. This 3-vespid mix price could also be used to
value CPT Codes 95148 (four venoms) and 96149 (five venoms) with the
single venom, priced at $12.22, added once to CPT code 97148 and twice
to CPT Code 97149.
Response: We were pleased to receive the comments, as well as the
requested documentation, on the price for various venom extracts,
because the venom pricing information was not included in the PEAC
recommendations forwarded after the September 2002 meeting for these
CPT Codes. This lack of data necessitated the use of a generic stinging
insect venom price of $5.18 per ml. We accept the pricing information
supplied by these specialty societies, although we do not agree with
their proposed averaging of prices from both the small (5ml and 6ml)
and larger (10ml and 12ml) quantities of venoms. We believe it is more
appropriate to average the venom prices using the larger (10ml and
12ml) quantities because of the volume that is used in an accepted
venom immunotherapy program, which consists of a build up period of
about four months followed by monthly maintenance therapy. The
following prices result from this approach: $10.70 per ml of venom and
$21.26 for the 3-Vespid Mix. Venom pricing for the five CPT codes would
be as follows: CPT Code 95145 (one venom) at $10.70, CPT Code 95146
(two venoms) at $21.40, 95147 (three venoms using 3-vespid mix), would
be $21.26; CPT Code 97148 (four venoms), $21.26 + $10.70 = $31.96; and
the venom antigen price for
[[Page 63207]]
CPT Code 97149 (five venoms) would be $42.66 ($21.26 + $10.70 +
$10.70).
Comment: JCAAI also supplied pricing information for the multi-tine
device that was requested in Table 1 of our proposed rule. As was
suggested above, the commenters again proposed we average costs for
high and low volume purchases, excluding bulk pricing, to obtain the
price for each test.
Response: We appreciate the pricing information forwarded by JCAAI
and selected a purchase quantity that is in the middle of the suggested
range. For percutaneous allergy testing, CPT code 95004. This purchase
quantity represents testing 200 typical patients, each receiving 40
tests. We have added this Multi-tine per test price, $0.233,to the CPEP
database for CPT codes 95004 and 95010.
Comment: The American Speech-Language-Hearing Association (ASHA)
provided pricing information for the following items accompanied by the
requested documentation: Aphasia assessment treatment forms--$2.84 (for
a diagnostic aphasia examination form and aphasia diagnostic profile),
communication books/treatment notebook--$1.50 and eartip insert--$0.65
each or $0.39 each (two sources). The American Academy of
Otolaryngology--Head and Neck Surgery (AAO-HNS) submitted a price for
the eartip insert of $0.23 each and suggested that the communication
books/treatment notebook be deleted. The (AAO-HNS)also submitted a
price for cottonoids at $0.875 each and for the phenol applicator kit
at $15.95 each.
Response: We will use the submitted price for the aphasia forms and
will price the eartip insert at $0.423, which is the average of the
three prices submitted. The notebook, which is assigned to the speech-
language therapy code, would be used over a course of treatment, and is
not a disposable supply that is used or priced for a single service.
Therefore, we will delete this item from our CPEP supply data. For the
phenol applicator kit, we will use the price of $15.152 per kit that
represents an average price for a 6-kit and a 24-kit quantity purchase.
Because these kits contain the phenol that is used in the procedures,
phenol has been deleted as a separate supply from the 11 CPT codes that
are assigned the kit. AAO-HNS used a 10-pack quantity to assign a price
to each cottonoid, but we are using a 200-pack quantity that reflects
the high usage of this item. Therefore, we are using $0.773 as the
price for each cottonoid.
Comment: Specialty societies representing radiation oncology and
radiology disagreed that the fiducial screws used with the intensity
modulated radiation therapy procedure should be deleted from the CPEP
input supply list. The society argued that the screws are typically
used for this procedure and that they are not separately billable.
Response: We will retain the fiducial screws in the list of
supplies assigned to the intensity modulated radiation therapy
procedure.
Comment: The American Society of Colon and Rectal Surgeons offered
description changes for two services, CPT codes 46917 and 46924. The
society recommended that the descriptor for the laser tip for both
codes be changed to ``laser tip, bare (single use)'' at $150. The
commenter also requested that an ablation laser generator at $59,890 be
added to both codes and the existing laser, diode laser, and laser
generator be deleted.
Response: A note from our contractor who is working on our
repricing effort verified the above changes and we have revised our
supply and equipment databases to reflect them.
Comment: The American Association of Orthopaedic Surgeons agreed
with the proposed supply deletions listed in Table 1 of the proposed
rule that are used in orthopaedic surgery. In addition, the association
agreed with the concept of standardization of unit descriptions.
However, the comment contends that the term ``unit of use (uou)'' is
unclear and that we should consider alternative terms and abbreviations
that would be more intuitive.
Response: The supply items in Table 1 that were listed for
orthopaedic surgery are broach kit, hallux implant, sterile hand table
drape, sterile cuff tourniquet, cephalosporin and sterile ankle
tourniquet. As stated above, we will be deleting the broach kit and
hallux implant and will also delete the hand table drape, cuff
tourniquet and cephalosporin. As also noted above, we will retain the
sterile ankle tourniquet in the supply database because the comment
from the podiatry society argued that this item was not typically
reused.
With regard to the comment on the use of ``unit of use,'' we
selected the ``unit of use'' (uou) term to indicate any item that is
packaged for single use, even if the item is not completely used up.
This most often occurs with items that are packaged sterile. For
example, ``bacitracin (0.9gm uou)'' refers to one 0.9gm foil package.
The quantity entered would be 1 and not a smaller amount such as 0.3.
Once this foil package is broken, it is considered ``used up'' and
therefore the unit of use is 0.9gm. Specifically, any item with a
``unit of use'' designation is meant to be indicated in whole number
``unit of use'' quantities, not partials (e.g., entered as 1, 2, 3,
etc, and not 0.5, 1.5, etc.).
Comment: A commenter representing sleep medicine stated that our
proposed price of $25 is significantly below prices for standard CPAP
masks used in the polysomnography service, CPT code 95811. The
commenter submitted prices from two manufacturers that average to $88.
Response: It appears that the commenter has submitted prices for a
reusable CPAP mask that would not be included in our CPEP data as a
disposable supply. Therefore, we will price the disposable mask at
$25.135, as proposed.
Comment: We received a comment from the American Physical Therapy
Association (APTA) that contended there is a rank order anomaly caused
by the increased price for the electrode used for CPT code 97033,
iontophoresis. APTA noted that the price of a ``pair'' of electrodes
was $16 in 2001 but has increased to $23.98 under our current supply
repricing initiative. APTA has asked that we review the proposed cost
of this item as a means to moderate the rank order anomaly.
Response: We appreciate the comments offered by APTA and have
reviewed the cost of the supplies assigned to the iontophoresis
service. We determined that the electrodes for this service are
packaged and priced as ``kits'' that contain the complete set of
electrodes needed to provide one iontophoresis treatment. Therefore,
only one electrode ``kit'' is needed for this code, as opposed to the
two electrode ``pairs'' currently in our supply database. Consequently,
we have changed the supply list for iontophoresis in our database to
reflect that there is one kit, not two electrodes, at the proposed
price of $11.99. We believe that this should correct the rank order
anomaly.
The following table, ``Table 1 Items Needing Specialty Input,''
lists those items on which we had requested specialty input, comments
we received and the actions we are taking.
[[Page 63208]]
Table 1.--Items Needing Specialty Input
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003 PE Prior status of
2003 PE supply description 2003 PE unit price Primary specialties supply item Commenter response CMS action taken
--------------------------------------------------------------------------------------------------------------------------------------------------------
Acetylcholine 10%................ 1 gram.............. $0.40 Nurse practitioner, See Note C. Need None............... See Note D.
neurology. patient-use item,
not R&D item.
Aerochamber...................... 1 item.............. ........... Cardiology, Item may be Agree--reusable. Disagree--Deleted.
internal medicine. deleted. May not Requests item be
be typical and may retained.
be separately
billable.
Albuterol........................ 1 ampule............ ........... Family practice, See Note B......... Agree--separately Deleted
internal medicine. billable.
Anthralin ointment............... 1 g................. 2.75 Dermatology........ See Note C......... None............... See Note D.
Aphasia assessment--forms average 1 item.............. 0.95 Psychiatry, See Note C......... Pricing information Retained at
neurology. submitted at $2.84. submitted price.
Balloon, achalasia............... 1 item.............. 255.00 General surgery, See Note C. (Codes NA in non-facility. Deleted.
colon and rectal utilizing this
surgery. item being
reviewed by CPT).
Blood dress package.............. 1 item.............. ........... Neurosurgery....... Item may be None............... Deleted.
deleted. Gowning
items listed
separately.
Broach kit....................... 1 item.............. ........... Podiatry, See Note A......... Agree--separately Deleted.
orthopaedic billable and
surgery. reusable.
Cable for EMG needle electrode... 1 item.............. 1.20 Neurology, PM&R.... See Note A......... None............... Deleted.
Centimeter ruler................. 1 each.............. 2.39 Radiation oncology, See Note A......... None............... Deleted.
dermatology.
Cephalosporin.................... 1 gm................ ........... Podiatry, See Note B......... Agree--separately Deleted
orthopedic surgery. billable.
Chordae Villae sampling kit...... 1 item.............. ........... Obstetrics, Item may be None............... Deleted.
gynecology. deleted.
Duplicated item
with catheter-
stylet kit.
Collagen kit..................... 1 each.............. 1383.00 Urology............ Need kit contents. NA in non-facility. Deleted.
Collagen sold as
individual
syringe. No
commercial kit
available.
Communication book/Treatment 1 each.............. ........... Otolaryngology, See Note C......... Audiology priced at Deleted--reusable.
notebooks. audiology. $1.50 or $3.50.
ENT proposed to
delete.
Cottonoids....................... 1 item.............. ........... Otolaryngology..... See Note C......... Submitted price of Retained at $0.73.
$0.875.
CPAP nasal pillow................ 1 each.............. ........... Pulmonary medicine. Item may be Agree--not typical. Deleted.
deleted.
Disposable CPAP
face mask also
included in code
95811. Nasal
pillows used with
reusable mask.
Cysto-catheter kit............... 1 item.............. 9.04 Urology, general Need kit contents None............... Deleted.
practice. and source/pricing
information.
Detection kit.................... 1 slide............. 8.50 Pathology, See Note C......... None............... See Note D.
neurology.
Developmental testing--forms 1 item.............. 2.64 Clinical See Note C. Submitted price of Retained at
average. psychologist, (Original item $0.40 for 96110 submitted prices.
multiple other price estimated by and $2.44 for
specialties. CPEP member.). 96111.
Eartip insert with sound tube.... 1 item.............. ........... Otolaryngology, See Note C......... Pricing information Retained at $0.423.
audiology. submitted by two
specialties.
EEG electrode, gold DIN.......... 1 item.............. 0.07 Neurology.......... See Note A......... None............... See Note E.
Electrode, ring.................. 1 item.............. 475.00 Obstetrics, See Note A......... None............... Deleted.
gynecology,
urology.
[[Page 63209]]
Electrodes, pickup, black tin, 1 item.............. 0.42 Podiatry, neurology See Note A......... None............... See Note E.
9mm.
Electrodes, pickup, red tin, 9mm. 1 item.............. 0.42 Podiatry, neurology See Note A......... None............... See Note E.
Fiducial screws, set of 4........ 1 set............... 558.00 Radiation oncology. Item may be Disagree--not Agree--Retained.
deleted. May not separately
be typical and may billable.
be separately Specialty requests
billable. (Screws item be retained.
used for IMRT head
fixation device,
but typical
patient vignette
is prostate
cancer.).
Film, fluoroscopic............... 1 sheet............. 3.51 Diagnostic See Note C......... None............... See Note D.
radiology,
anesthesia.
Flow sensors..................... 1 item.............. 1.51 Pulmonary medicine, See Note A......... Agree--reusable.... Deleted.
internal medicine.
Gold-palladium target............ 1 item.............. 0.59 Pathology.......... See Note A......... None............... Deleted.
Hallux implant................... 1 item.............. ........... Podiatry, See Note B......... Agree--separately Deleted.
orthopaedic billable.
surgery.
Headcover for MRI................ 1 item.............. 0.05 Diagnostic See Note C......... None............... See Note D.
radiology.
Inhalant......................... 1 ml................ 0.75 Cardiology, Item may be deleted Use is typical..... Retained at $0.788.
internal medicine. (May not be
``typical'' for
service.).
Laryngeal mirror................. 1 item.............. ........... Diagnostic See Note A......... None............... Deleted.
radiology,
otolaryngology.
Laser fiber...................... 1 item.............. 595.00 Urology............ See Note A......... Disagree--not Agree--retained at
reusable. submitted price.
Submitted price of
$850.
Laser fiber cleaving tool........ 1 item.............. 200.00 Urology............ See Note A......... None............... Deleted.
Methylcholine chloride........... 1 dose.............. 48.50 Pulmonary medicine, See Note B......... Disagree--not Agree--Retained at
internal medicine. separately $39.95.
billable. Requests
item be retained.
Mounting tray.................... 1 each.............. 40.00 Radiation oncology, See Note A......... None............... Deleted.
diagnostic
radiology.
Multi-tine device................ 1 item.............. ........... Allergy/immunology. See Note C......... Submitted pricing Retained at $0.23.
information.
Needle, 4 inch................... 1 item.............. ........... Obstetrics, See Note C......... None............... Deleted.
gynecology.
Needle, 4-6 inch................. 1 item.............. ........... Obstetrics, See Note C......... None............... Deleted.
gynecology.
Needle, seldinger................ 1 item.............. 72.90 Diagnostic See Note A......... Disagree--not Agree--Retained.
radiology, reusable.
multiple other
specialties.
Neurobehavioral status--forms 1 item.............. 5.77 Clinical See Note C. None............... See Note D.
average. psychologist, (Original item
multiple other price estimated by
specialites. CPEP member.).
Oximetry sensor probe............ 1 item.............. 15.00 Multiple See Note A......... Agree--resuable.... Deleted.
specialties.
Penile clamp..................... 1 item.............. 40.70 Urology............ See Note A......... None............... Deleted.
Phenol applicator kit............ 1 unit.............. ........... Otolaryngology..... See Note C......... Pricing information Retained at
submitted. $15.152.
Primary antibodies............... 1 slide............. 3.52 Pathology, See Note C......... None............... See Note D.
neurology.
Psych testing--forms average..... 1 item.............. 2.30 Clinical See Note C......... None............... See Note D.
psychologist.
Receive coil..................... .................... ........... Diagnostic See Note A......... None............... Deleted.
radiology.
Ruler............................ 1 each.............. 2.67 Radiation oncology, See Note A......... None............... Deleted.
diagnostic
radiology.
Scissors and clamp, disposable... 1 each.............. 0.62 Radiation oncology, Need clamp None............... See Note D.
diagnostic description and
radiology. source/pricing.
[[Page 63210]]
Sealant spray.................... .................... ........... Radiation oncology, See Note C......... None............... See Note D.
diagnostic.
Silverman needle................. 1 item.............. 66.35 Urology............ See Note A......... None............... Deleted.
Skin prep, one step.............. 1 item.............. 26.00 Cardiology......... Need inches used None............... See Note D.
per procedure
(196in per roll).
Smoke evacuation cartridge....... 1 item.............. 146.50 Obstetrics, See Note A......... None............... Deleted.
gynecology.
Sterile, hand table drape (24x43) .................... ........... Orthopaedic Item Deleted. Agree.............. Deleted.
surgery, hand Integral part of
surgery. hand/upper
extremity drape
supply item.
Sterilizing tray................. 1 each.............. 64.00 Radiation oncology, See Note A......... None............... Deleted.
diagnostic
radiology.
Steroid.......................... 1 cc................ 1.29 Urology............ See Note B......... None............... Deleted.
Sweat cells, 4 in a set.......... 1 set............... 260.00 Neurology.......... See Note A......... None............... Deleted.
Thrombectomy device.............. 1 item.............. 600.00 Diagnostic Additional Disagree--device is Agree--Retained.
radiology. information not reusable.
required. Device
is reusable. Need
to identify
specific PTD
single-use
accessories (e.g.
sheath rotator
drive basket).
Tourniquet, ankle, sterile....... 1 item.............. ........... Podiatry, See Note A......... Disagree--packaged Agree--retained at
orthopaedic for single use. submitted price.
surgery. Price submitted at
$42.87.
Tourniquet, cuff sterile......... .................... ........... Orthopaedic See Note A......... Agree.............. Deleted.
surgery, hand
surgery.
Traction straps.................. 1 item.............. 60.00 Radiation oncology, See Note A......... None............... Deleted.
diagnostic
radiology.
Transtelephonic monitor.......... .................... 10.56 Cardiology......... See Note A......... Agree--resuable, Disagree--Deleted.
but requests item
be retained.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CPT codes/descriptions only are copyright 2003 American Medical Assn. All Rights Reserved. Applicable FARS/DFARS apply.
Notes:
A. Item deleted. Reusable
B. Item deleted. Separately Billable
C. Additional information required.
D. Issue is pending. Still under review.
E. Issue is pending. Reuse discussion needed.
h. Miscellaneous Practice Expense Issues
Hyperbaric Oxygen Services
We proposed to assign, on an interim basis, the following practice
expense inputs to CPT code 99183, Physician attendance and supervision
of hyperbaric oxygen therapy, per session, when performed in the office
setting:
Staff: Respiratory Therapist for 135 minutes (for a 2 hour
treatment); Supplies: Minimum Visit Supply Package, 180 liters of
oxygen, 187 cubic feet of air; Equipment: Hyperbaric chamber.
Comment: A freestanding hyperbaric oxygen center expressed
appreciation that we priced this procedure in the non-facility setting.
The commenter also requested that we add certain staff time and some
supplies to the practice expense inputs assigned to this service.
The additional supplies requested include disinfectant for cleaning
the hyperbaric chamber after each patient, two otoscope covers to check
patients' ears pre and post treatment, and a denture cup and urinal. An
additional 24 minutes of clinical staff time (using the standard staff
blend) was also requested for preparing the room, greeting and gowning
the patient, patient education, taking vital signs before and after
treatment, positioning the patient and cleaning the room.
Response: We believe that the request for the above additional
practice expense inputs is reasonable. Currently, we have assigned
clinical staff time only for assisting during the procedure itself;
additional time was calculated using the times used by the PEAC for the
tasks listed. Therefore, we are adding these inputs to those already
assigned to the hyperbaric oxygen service. We have also requesting that
the PEAC review these inputs at a future meeting and the RUC has stated
that the PEAC will be reviewing this CPT code at the January or March
2004 meeting.
Comment: A commenter from another freestanding hyperbaric center
expressed concern that the proposed physician fee schedule payment for
CPT 99183 is approximately 25 percent of the payment in the hospital
setting. The commenter lists additional costs that
[[Page 63211]]
should be considered such as special cleaners and solvents for cleaning
the chamber, the costs of adherence to quality standards and costs for
laundering patients' clothing, sheets and blankets. The commenter also
stated that the hyperbaric chamber costs more than the $125,000 we have
assigned the item.
Response: As mentioned above, we have added disinfectant solution
for cleaning the chamber. We will be proposing the repricing of all
equipment in our CPEP database next year, which should ensure that the
price for the hyperbaric chamber reflects the typical cost. The cost of
laundering and much of the quality assurance costs are considered
indirect and are not reflected in our direct cost database. However, if
the PEAC does refine this code as planned, we will review any
recommendation submitted.
Maxillofacial Prosthetics PE/hour
We proposed to eliminate the special practice expense pool for
maxillofacial prosthetic services and to use otolaryngology as the
crosswalk for oral surgeons and maxillofacial surgeons as a more
appropriate approximation of the specialties' practice expense per
hour.
Comment: The American Association of Oral and Maxillofacial
Surgeons expressed appreciation for our work on this issue over the
past three years and heartily concurred with the decision to crosswalk
maxillofacial prosthetics to otolaryngology. The American Academy of
Otolaryngology-Head and Neck Surgery also supported our proposed
crosswalk.
Response: We will implement the crosswalk of maxillofacial
prosthetics to otolaryngology as proposed.
Holter Monitoring Codes
We proposed revising the practice expense inputs for holter
monitoring codes to remove items that were not needed to perform the
services. Specifically, we proposed deleting the ECG electrodes and
laser paper, as well as the electric bed, computer and holter monitor
from CPT codes 93225 and 93231 and deleting the razor, nonsterile
gloves, alcohol swab and tape, as well as the electric bed and exam
table from CPT codes 93226 and 93232.
Comment: A commenter representing an independent diagnostic testing
facility and another representing cardiologists expressed support for
the proposed revisions to the holter monitor codes.
We also received a comment from the RUC stating that the direct
practice expense inputs for these above holter monitoring services will
be reviewed by the PEAC at the January 2004 meeting.
Response: We will make the proposed changes to the holter
monitoring codes on an interim basis and will be glad to review the
recommendations from the PEAC when we receive them next year.
Other Practice Expense Issues
Comment: We have received requests from several commenters that we
value certain procedures currently priced only in the facility setting
in the non-facility setting as well. A manufacturer commented that
there is a need to price the hysteroscopic endometrial ablation
procedure, CPT code 58563, in the office to ensure Medicare patient
access to this alternative to hysterectomy in the least intrusive and
least costly setting. Several individual gynecologists have expressed
concern about the absence of a nonfacility rate for this service
because the facility payment does not cover the costs of performing
this procedure in the office.
A manufacturer of endoscopic and surgical supplies and equipment
expressed concern that several urology services which had previously
been priced in the non-facility setting, are no longer priced in that
setting. The commenter contended that the procedures can be performed
safely in the office and that patients will be forced to go to a
hospital or ambulatory surgical center for these procedures if the
office payment does not reflect the direct costs incurred by the
physician. The services in question are three cystourethroscopy
procedures, CPT codes 52224, 52275, 52276, and two destruction of
penile lesion procedures, CPT codes 54057 and 54065.
A consultant representing non-hospital based providers of LDL
apheresis, CPT code 36516, requested that we price this procedure in
the nonfacility setting and provided some cost data for this code. The
commenter stated that this procedure is commonly provided outside of
hospitals. A medical technology company requested that we price the
percutaneous implantation of neurostimulator electrodes procedure, CPT
code 64561, in the nonfacility setting. This service had previously
been priced in the office.
Response: We are aware that technological advances make it now
possible for more procedures to be safely performed in a physician's
office. However, CPT code 58563 has recently been reviewed by the PEAC,
and neither the gynecology specialty society nor the PEAC recommended
pricing this code in the office setting. Likewise, the urology
procedures and the neurostimulator service were reviewed this year by
the PEAC and the apheresis services last year by the RUC, and the PEAC
and the RUC recommended that these services not be priced in the office
setting based on the presentation made by the specialty societies. We
would not rule out working further with the commenters on these
requests, but we believe that it would not be appropriate to take such
an action in this final rule. We will be willing to discuss this issue
further to determine whether any action should be proposed in the
future.
Comment: The RUC comment identified the following anomalies in the
CPEP database for the clinical staff time for a few codes with 000 day
global periods:
B. (1) Percutaneous Abscess Drainage Codes
In 1997, CPT created new codes to differentiate between open and
percutaneous abscess drainage. Unlike their open procedure
counterparts, all of the percutaneous codes were assigned a global
period of 000 days with no follow-up visits assigned. However, CMS
crosswalked the direct inputs from the open codes, which have a
different global period, to the percutaneous codes, including the time
assigned for post-procedure office visits. The percutaneous abscess
drainage codes identified are CPT codes 32201, 44901, 47011, 48511,
49021, 49041, 49061, 50021, 58823. The comment stated that each of
these codes is currently priced in the facility setting only. Because
these procedures are predominately performed in the inpatient setting,
the comment further recommended that we assign zero direct practice
expense inputs for these codes.
(2) Closure of Eyelid by Suture
The commenter also pointed out that CPT code 67875, Closure of
eyelid by suture, has an assigned global period of 000 and includes no
post-procedure visits in the work relative value. However, the original
CPEP process appears to have assigned the code clinical staff time,
supplies, and equipment related to a follow up visit.
Response: We agree with the RUC that these 0-day global codes
should not have any direct costs assigned for post-procedure follow up
visits. Therefore, we are deleting from the database all the inputs
related to such visits.
Comment: Several commenters have expressed concern with the
unexplained reduction in nonfacility practice expense RVUs for HCPCS
code G0166, External counterpulsation.
Response: We have examined the practice expense data files and have
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discovered an error in the database. This has now been corrected.
Comment: A specialty society representing dermatology commented
that the practice expense RVUS for laser treatment of psoriasis
procedures, CPT codes 96920-96922, appear overvalued.
Response: The practice expense has increased for these codes
because we did not have a price for the laser tip used in these
procedures until this year. The laser tip is now priced at $240. We
have made adjustments to ensure the practice expense RVUs reflect the
correct pricing of supplies as well as the specialty performing the
service.
Comment: One specialty society that represents gastroenterologists
commented that we cut the payment rate for the colonoscopy procedure,
CPT 45385, by 10 percent in the nonfacility setting without explanation
or justification.
Response: The decrease in payment for this code is due to the
decreased practice expense inputs now assigned to the service. The PEAC
submitted recommendations for the direct practice expense inputs for
this service that were based on a presentation made by two other
gastroenterological specialty societies, and we have accepted these
recommendations because we believe them to be reasonable. The code was
included on Addendum C, ``Codes for Which We Received PEAC
Recommendation on Practice Expense Direct Cost Inputs,'' in the
proposed rule.
Comment: Several commenters representing pediatricians, family
physicians and chest physicians stated their concern with the proposed
decrease in the practice expense RVUs for immunization services, CPT
codes 90471 and 90472, which were removed from the non-physician work
pool and priced under the top-down methodology starting in 2003.
Response: We will return the two immunization services to the
nonphysician work pool. As discussed above, we are increasing the price
assigned to the needle stick prevention device that is in the supply
list for the immunization codes. However, the practice expense RVUs for
these codes would still be less than the current values. As discussed
above, the price for the needle stick prevention device is still
fluctuating as new manufacturers enter the market. In addition, it is
still not clear exactly which device is optimal for the protection of
medical staff. Therefore, until these issues are settled, we will price
these immunization services in the nonphysician work pool. This will
prevent any sharp decrease in payment for these codes, as well as for
payments for the HCPCS G-codes for administration of influenza,
hepatitis and pneumococcal vaccines, which are crosswalked to the
payment for CPT code 90471.
Comment: We received a comment from Venable, a diathermy
manufacturer, who voiced concerns about previous decreases in both the
work and the practice expense RVUs for the diathermy procedure, CPT
code 97024. According to the commenter, the PEAC recommendations we
accepted for 2002 included a substantial reduction in clinical labor
time, the elimination of supplies, and the undervaluing of the
diathermy equipment, including the assignment of inadequate time for
equipment use. Citing our current CPEP price of $3,120 as too low, the
commenter noted the cost of the diathermy machines they manufacture
range from $19,000 to $30,000 and noted the actual time of a typical
treatment is 20 minutes, and not 15, as currently listed. A previous
comment from the electrophysiology specialty section of the American
Physical Therapy Association (APTA) stated that the average cost of
diathermy ranges between $10,000 and $15,000.
Response: We believe the practice expense recommendation we
accepted from the PEAC in 2001 for the clinical labor and supplies is
appropriate. We would note here that the resultant PEAC recommendation
for clinical labor was just one minute less than that proposed by the
American Physical Therapy Association at the 2001 PEAC meeting. We
continue to support the PEAC's decision to eliminate the supplies for
some of the modality procedures, including diathermy, since these
services are typically performed with other therapy procedures where
the supply costs are captured. However, we agree with the commenter
that the current pricing of the diathermy equipment in our CPEP
database appears too low, and we will price the diathermy, on an
interim basis, at $10,000 for the 2004 fee schedule. In addition, we
will assign the requested 20 minutes as the typical time the diathermy
equipment is in use for each service. We are planning to propose a
repricing of all of the equipment included in our database next year
and will revisit the pricing of the diathermy equipment at that time.
In response to the commenter's work RVU concern, next year's final
rule will solicit recommendations of codes to be considered for review
under the five-year review of work that is to occur in 2005.
Comment: A commenter representing prosthetic urology focused on
reductions in payment for several 90-day global prosthetic urology
procedures. The commenter contended that these procedures were affected
by the adoption of the standard clinical staff times for 90-day global
procedures that did not reflect the extra staff time required for
patient training during post-procedure visits. In addition, almost half
of the prosthetic urology services were established in 2002 and this
appeared to have a negative effect on these codes. The commenter
strongly recommended that the standard clinical staff times not be
applied to the prosthetic urology codes and that we reinstate the
``benchmark'' clinical staff times.
Response: The commenter is correct that the major cause of the
decrease in practice expense RVUs for these services is the use of the
standard clinical staff time for 90-day global services. We do not have
``benchmark'' clinical staff times to reinstate for any of these
services. Rather, the current staff times are from the original CPEP
panel estimates that have not been reviewed by any multi-specialty
panel, such as the PEAC. We accepted the PEAC recommendation to apply
the standard clinical staff time to all 90-day global services that had
not been reviewed by the PEAC as having exceptions to the standard
times. All specialties, including urology, had ample opportunity to
present any codes for which they believed the standards did not apply;
these urology codes were not brought to the PEAC for review. We do n