[Federal Register: November 2, 1999 (Volume 64, Number 211)] [Rules and Regulations] [Page 59379-59428] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr02no99-16] [[Page 59379]] _______________________________________________________________________ Part III Department of Health and Human Services _______________________________________________________________________ Health Care Financing Administration _______________________________________________________________________ 42 CFR Parts 410, 411, 414, etc. Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2000; Final Rule [[Page 59380]] DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Care Financing Administration 42 CFR Parts 410, 411, 414, 415, and 485 [HCFA-1065-FC] RIN 0938-AJ61 Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2000 AGENCY: Health Care Financing Administration (HCFA), HHS. ACTION: Final rule with comment period. ----------------------------------------------------------------------- SUMMARY: This final rule makes several changes affecting Medicare Part B payment. The changes include: implementation of resource-based malpractice insurance relative value units (RVUs); refinement of resource-based practice expense RVUs; payment for physician pathology and independent laboratory services; discontinuous anesthesia time; diagnostic tests; prostate screening; use of CPT modifier -25; qualifications for nurse practitioners; an increase in the work RVUs for pediatric services; adjustments to the practice expense RVUs for physician interpretation of Pap smears; and revisions to the work RVUs for new and revised CPT codes for calendar year 1999 and a number of other changes relating to coding and payment. Furthermore, we are finalizing the 1999 interim physician work RVUs and are issuing interim RVUs for new and revised codes for 2000. This final rule solicits public comments on the second 5-year refinement of work RVUs for services furnished beginning January 1, 2002 and requests public comments on potentially misvalued work RVUs for all services in the CY 2000 physician fee schedule. This final rule also conforms the regulations to existing law and policy regarding: removal of the x-ray as a prerequisite for chiropractic manipulation; the exclusion of payment for assisted suicide; and optometrist services. This final rule also announces the calendar year 2000 Medicare physician fee schedule conversion factor under the Medicare Supplementary Medical Insurance (Part B) program as required by section 1848(d) of the Social Security Act. The 2000 Medicare physician fee schedule conversion factor is $36.6137. DATES: Effective date: This rule is effective January 1, 2000. This rule is a major rule as defined in Title 5, United States Code, section 804(2). In accordance with 5 U.S.C. section 801(a)(1)(A), we are submitting a report to the Congress on this final rule on October 29, 1999. Comment date: Comments on interim RVUs for selected procedure codes identified in Addendum C and on interim practice expense RVUs and malpractice RVUs for all codes as shown in Addendum B will be considered if we receive them at the appropriate address, as provided in the ADDRESSES section, no later than 5 p.m. on January 3, 2000. Comments on all RVUs considered under the 5-year refinement process as discussed in section IV of the preamble will be considered if we receive them at the appropriate address, as provided below, no later than 5 p.m. on March 1, 2000. ADDRESSES: Mail written comments related to the 5-year refinement process (1 original and 3 copies) to the following address: Health Care Financing Administration, Department of Health and Human Services, Attention: HCFA-1065-FC (5-Year Refinement), P.O. Box 8013, Baltimore, MD 21244-8013. Mail written comments related to interim RVUs for new and revised procedure codes, interim practice expense RVUs, and interim malpractice RVUs (1 original and 3 copies) to the following address: Health Care Financing Administration, Department of Health and Human Services, Attention: HCFA-1065-FC, P.O. Box 8013, Baltimore, MD 21244-8013. If you prefer, you may deliver your written comments to one of the following addresses: Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201, or Room C5-16-03, 7500 Security Boulevard, Baltimore, MD 21244-1850. Because of staffing and resource limitations, we cannot accept comments by facsimile (FAX) transmission. In commenting, please refer to file code HCFA-1065-FC. Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, in Room 443-G of the Department's offices at 200 Independence Avenue, SW., Washington, DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. (phone: (202) 690-7061). FOR FURTHER INFORMATION CONTACT: Benjamin Long, (410) 786-0007 (for issues related to accessing the physician fee schedule information on the HCFA homepage). Bob Ulikowski, (410) 786-5721 (for issues related to the resource-based malpractice relative value units). Carolyn Mullen, (410) 786-4589 (for issues related to resource-based practice expense relative value units). Jim Menas, (410) 786-4507 (for issues related to physician pathology services and independent labs and discontinuous anesthesia time). Ken Marsalek, (410) 786-4502 (for issues related to optometrist services). Bill Larson, (410) 786-4639 (for issues related to the coverage of prostate screening). Paul W. Kim, (410) 786-7410 (for issues related to nurse practitioner qualifications). Dorothy Honemann, (410) 786-5702 (for issues related to the X-ray requirement for chiropractic services). Bill Morse, (410) 786-4520 (for issues related to diagnostic tests). Marc Hartstein, (410) 786-4539 (for issues related to the conversion factor and physician fee schedule update and the regulatory impact analysis). Diane Milstead, (410) 786-3355 (for all other issues). SUPPLEMENTARY INFORMATION: Copies: To order copies of the Federal Register containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250- 7954. Please specify the date of the issue requested, and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa, Discover, or Master Card number and expiration date. Credit card orders can also be placed by calling the order desk at (202) 512-1800 (or toll free at 1-888-293-6498) or by faxing to (202) 512-2250. The cost for each copy is $8. As an alternative, you can view and photocopy the Federal Register document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the Federal Register. To order the disks containing this document, send your request to: Superintendent of Documents, Attention: Electronic Products, P.O. Box 37082, Washington, DC 20013-7082. Please specify, ``Medicare Program; Revisions to Payment Policies Under the Physicians Fee Schedule for Calendar Year 2000,'' and enclose a check or money order payable to the Superintendent of Documents, or enclose your VISA, Discover, or MasterCard number and expiration date. Credit card orders can be placed by calling the order clerk at (202) 512-1530 (or toll free at 1-888- 293-6498) or by [[Page 59381]] faxing to (202) 512-1262. The cost of the two disks is $19. Information on the Physician Fee Schedule can be found on our HCFA homepage. This data can be accessed by using the following directions: 1. Go to the HCFA homepage (http://www.hcfa.gov). 2. Click on ``Medicare.'' 3. Click on ``Professional/Technical Information.'' 4. Select Medicare Payment Systems. 5. Select Physician Fee Schedule. You will find information on the Physician Fee Schedule Regulation on this page, as well as other documents (for example, Lewin Group Report, Health Economics Research Report) that are referenced in the preamble. Or, you can go directly to the Physician Fee Schedule page by typing the following: http://www.hcfa.gov/medicare/pfsmain.htm. To assist readers in referencing sections contained in this preamble, we are providing the following table of contents. Some of the issues discussed in this preamble affect the payment policies but do not require changes to the regulations in the Code of Federal Regulations. Information on the regulation's impact appears throughout the preamble and not exclusively in section IX. Table of Contents I. Background A. Legislative History B. Published Changes to the Fee Schedule C. Components of the Fee Schedule Payment Amounts D. Development of the Relative Value Units II. Specific Proposals for Calendar Year 2000 and Responses to Public Comments A. Resource-Based Malpractice Relative Value Units 1. Current Malpractice Relative Value Unit System 2. Methodology for Developing Resource-Based Malpractice Relative Value Units B. Resource-Based Practice Expense Relative Value Units 1. Resource-Based Practice Expense Legislation 2. Current Methodology for Computing Practice Expense Relative Value Units 3. Refinement C. Adjustment to the Practice Expense Relative Value Units for a Physician's Interpretation of Abnormal Papanicolaou Smears D. Physician Pathology Services and Independent Laboratories E. Discontinuous Anesthesia Time F. Optometrist Services G. Assisted Suicide H. CPT Modifier -25 I. Nurse Practitioner Qualifications J. Relative Value Units for Pediatric Services K. Percutaneous Thrombectomy of an Arteriovenous Fistula L. Pulse Oximetry, Temperature Gradient Studies, and Venous Pressure Determinations M. Removal of Requirement for X-ray Before Chiropractic Manipulation N. Coverage of Prostate Cancer Screening Tests O. Diagnostic Tests 1. Supervision of Diagnostic Test 2. Independent Diagnostic Testing Facilities P. Other Issues III. Refinement of Relative Value Units for Calendar Year 2000 and Response to Public Comments on Interim Relative Value Units for 1999 (Including the Interim Relative Value Units Contained in the July 22, 1999 Proposed Rule) A. Summary of Issues Discussed Related to the Adjustment of Relative Value Units B. Process for Establishing Work Relative Value Units for the 2000 Physician Fee Schedule C. Other Changes to the 2000 Physician Fee Schedule and Clarification of CPT Definitions IV. Five Year Refinement of Relative Value Units A. Background B. Scope of the Five Year Review C. Refinement of Work Relative Value Units D. Nature and Format of Comments on Work Relative Value Units E. New Initiatives V. Physician Fee Schedule Update and Conversion Factor for Calendar Year 2000 VI. Provisions of the Final Rule VII. Collection of Information Requirements VIII. Response to Comments IX. Regulatory Impact Analysis A. Resource-Based Malpractice Relative Value Units B. Resource-Based Practice Expense Relative Value Units C. Adjustment to the Practice Expense Relative Value Units for a Physician's Interpretation of Abnormal Papanicolaou Smears D. Physician Pathology Services and Independent Laboratories E. Discontinuous Anesthesia Time F. Optometrist Services G. Assisted Suicide H. CPT Modifier -25 I. Nurse Practitioner Qualifications J. Relative Value Units for Pediatric Services K. Percutaneous Thrombectomy of an Arteriovenous Fistula L. Pulse Oximetry, Temperature Gradient Studies, and Venous Pressure Determinations M. Removal of Requirement for X-ray Before Chiropractic Manipulation N. Coverage of Prostate Cancer Screening Tests O. Diagnostic Tests 1. Supervision of Diagnostic Test 2. Independent Diagnostic Testing Facilities P. Budget Neutrality Q. Impact on Beneficiaries Addendum A--Explanation and Use of Addenda B Addendum B--Relative Value Units and Related Information Used in Determining Medicare Payments for Calendar Year 2000 Addendum C--Codes with Interim RVUs Addendum D--GPCI File Addendum E--Reference Set with 2000 Work RVUs In addition, because of the many organizations and terms to which we refer by acronym in this rule, we are listing these acronyms and their corresponding terms in alphabetical order below: AANA American Association of Nurse Anesthetists AMA American Medical Association APSA American Pediatric Surgical Association ASA American Society of Anesthesiologists BBA Balanced Budget Act of 1997 CF Conversion factor CFR Code of Federal Regulations CMDs Carrier Medical Directors CPEPs Clinical Practice Expert Panels CPT [Physicians'] Current Procedural Terminology [4th Edition, 1999, copyrighted by the AMA] CRNA Certified Registered Nurse Anesthetist DRE Digital rectal examination DRG Diagnostic Related Group E/M Evaluation and management GAF Geographic adjustment factor GPCI Geographic practice cost index HCFA Health Care Financing Administration HCPAC Health Care Professionals Advisory Committee HCPCS HCFA Common Procedure Coding System HHS [Department of] Health and Human Services IDTFs Independent Diagnostic Testing Facilities JUAs Joint Underwriting Associations MEDPAC Medicare Payment Advisory Commission MEI Medicare Economic Index MGMA Medical Group Management Association OBRA Omnibus Budget Reconciliation Act OIG Office of the Inspector General PSA Prostate-specific antigen PC Professional component PCF Patient Compensation Fund PEAC Practice Expense Advisory Committee PPS Prospective payment system ROS Risk-of-Service RUC [AMA's Specialty Society] Relative [Value] Update Committee RVU Relative value unit SMS Socioeconomic Monitoring Survey STS The Society of Thoracic Surgeons TC Technical component I. Background A. Legislative History Since January 1, 1992, Medicare has paid for physician services under section 1848 of the Social Security Act (the Act), ``Payment for Physicians'' [[Page 59382]] Services.'' This section contains three major elements: (1) A fee schedule for the payment of physicians' services; (2) a sustainable growth rate for the rates of increase in Medicare expenditures for physicians' services; and (3) limits on the amounts that nonparticipating physicians can charge beneficiaries. The Act requires that payments under the fee schedule be based on national uniform relative value units (RVUs) 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 because of changes resulting from a review of those 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 this tolerance is exceeded, we must make adjustments to the conversion factors (CFs) to preserve budget neutrality. B. Published Changes to the Fee Schedule In the July 22, 1999, proposed rule (64 FR 39609), we listed all of the final rules published through November 2, 1998, relating to the updates to the RVUs and revisions to payment policies under the physician fee schedule. In the July 22, 1999, proposed rule (64 FR 39608), we discussed several policy issues affecting Medicare payment for physicians' services including implementation of resource-based malpractice insurance relative value units (RVUs); refinement of resource-based practice expense RVUs; payment for physician pathology and independent laboratory services; discontinuous anesthesia time; prostate screening; diagnostic tests; qualifications for nurse practitioners; an increase in the work RVUs for pediatric services; adjustments to the practice expense RVUs for physician interpretation of Pap smears; revisions to the work RVUs for new and revised CPT codes for calendar year 1999; and a number of other issues relating to coding and payment. In the proposed rule, we also indicated that we would conform the regulations to existing law and policy regarding removal of the x-ray as a prerequisite for chiropractic manipulation, the exclusion of payment for assisted suicide, and optometrist services. This final rule affects the regulations set forth at-- Part 410, Supplementary medical insurance benefits; Part 411, Exclusions from Medicare and limitations on Medicare payment; Part 414, Payment for Part B medical and other services; Part 415, Services furnished by physicians in providers, supervising physicians in teaching settings, and residents in certain settings; and Part 485, Conditions of participation; specialized providers. The information in this final rule updates information in the July 22, 1999 proposed rule (64 FR 39608). 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 for 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 calendar year 2000 appears in section V. The RVUs for calendar year 2000 are in Addendum B. The GPCIs for calendar year 2000 can be found in Addendum D. Section 1848(e) of the Act requires the Secretary 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. Thus, the GPCIs reflect the relative practice expenses, malpractice insurance, and physicians' work in an area compared to the national average. In accordance with the law, 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 Units 1. Work Relative Value Units 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. The original work RVUs for most codes were developed by a research team at the Harvard School of Public Health in a cooperative agreement with us. In constructing the vignettes for the original RVUs, Harvard worked with panels of expert physicians and obtained input from physicians from numerous specialties. The RVUs for radiology services are based on the American College of Radiology relative value scale, which we integrated into the overall physician fee schedule. The RVUs for anesthesia services are based on RVUs from a uniform relative value guide. We established a separate CF for anesthesia services while 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 requires 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 (Public Law 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 requires us to implement resource-based malpractice RVUs for services furnished beginning in 2000. [[Page 59383]] II. Specific Proposals for Calendar Year 2000 and Responses to Public Comments In response to the publication of the July 22, 1999 proposed rule, we received approximately 2,050 comments. We received comments from individual physicians, health care workers, and professional associations and societies. The majority of comments addressed the proposals related to resource-based malpractice RVUs, resource-based practice expense RVUs, and supervision of diagnostic tests. The proposed rule discussed policies that affect the number of 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 will 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 2000. We discuss in detail the effects of these changes in the Regulatory Impact Analysis (section IX.) For the convenience of the reader, the headings for the policy issues correspond to the headings used in the July 22, 1999 proposed rule. More detailed background information for each issue can be found in the July 22, 1999 proposed rule. A. Resource-Based Malpractice Relative Value Units 1. Current Relative Value Unit System Malpractice RVUs are currently charge-based, using the same statutory formula discussed above for practice expense RVUs but using weighted specialty-specific malpractice expense percentages and 1991 average allowed charges. As with practice expense RVUs, malpractice RVUs for new codes after 1991 were extrapolated from similar existing codes or from work RVUs. Section 4505(f) of the BBA requires us to implement resource-based malpractice RVUs for services furnished beginning in 2000. With the implementation of resource-based malpractice RVUs and full implementation of resource-based practice expense RVUs in 2002, all physician fee schedule RVUs will be resource- based, thus eliminating the last vestiges of payment inequities that resulted from charges that did not accurately reflect the relative resources involved in providing a service. 2. Methodology for Developing Resource-based Malpractice RVUs The resource-based malpractice RVU methodology is data-driven based on malpractice insurance premium data. Malpractice premium data were used because they represent the actual malpractice expense to the physician and are widely available. Actual malpractice premium data were collected for the top 20 Medicare payment physician specialties. Data were collected from all 50 States, Washington D.C., and Puerto Rico. Data were collected from commercial and physician-owned insurers and from joint underwriting associations (JUAs), typically State government administered risk pooling insurance arrangements in areas where commercial insurers left the market. Adjustments were made to reflect mandatory patient compensation fund or PCF (a fund to pay for any claim beyond the statutory amount thereby limiting an individual physician's liability in cases of a large suit) surcharges in States where PCF participation is mandatory. Premium data reflect at least a 50 percent market share in each State, with the average market share being 77 percent. Adjustments were made to reflect a standard $1 million/$3 million mature claims made policy (a policy covering claims made rather than services provided during the policy term). Medicare physician specialties were mapped to malpractice insurance rating risk classes. A national average premium was computed for each specialty by weighting area geographic premiums by fee schedule RVUs. Specialty risk factors or indexes were then calculated by dividing the national average premium for each specialty by the national average premium for the specialty with the lowest premium, psychiatry. The risk factors describe the relative malpractice costs among specialties. Specialty-weighted resource-based malpractice RVUs were calculated for each procedure by summing, for all specialties providing the procedure, the product of each specialty's risk factor times the proportion of total service count for that procedure provided by the specialty. This number was then multiplied by the procedure's work RVUs to account for differences in risk-of-service (ROS) among procedures. If ROS differences were not recognized, all services performed exclusively by a given specialty would have the same resource-based malpractice RVUs, even though they might vary considerably in effort, difficulty, total payment, and their contribution to that specialty's malpractice liability. Since work RVUs reflect differences in time, intensity, and difficulty among procedures and are generally accepted as accurate, we proposed them as the best available proxy for determining ROS. To attain budget neutrality as required by law, the total new fee schedule resource-based malpractice RVUs were compared to the total current charge-based malpractice RVUs, and the appropriate adjustment was made to retain the same total malpractice RVUs. We proposed to add a new Sec. 414.22(c)(3) (Relative value units (RVUs)) to specify that, for services furnished in the year 2000 and subsequent years, the malpractice RVUs are based on the relative malpractice insurance resources for each service. A more detailed explanation of our methodology can be found in the July 22, 1999 proposed rule (64 FR 39610). We received the following comments on our proposed resource-based malpractice RVUs: Comment: Many commenters agreed that our methodology was generally reasonable and that malpractice risk-of-service (ROS) differences among procedures must be taken into account. While understanding that we used work RVUs to reflect the malpractice ROS differences because we could not find a better proxy, they commented that work RVUs may not be the best proxy to use for ROS and suggested that we work with the medical community to find a better alternative. Response: As we stated in the July 1999 proposed rule, we realize that work RVUs may not be the perfect proxy to reflect malpractice ROS differences. It is the best proxy available at this time. We will be happy to work with the medical community to find a better alternative and welcome any suggestions. Comment: The most frequently recurring comment was that, while the law requires that we use the most recent available data, the data used (1993 through 1995 malpractice premiums) is outdated and does not accurately reflect current malpractice premiums. Commenters suggested that we delay implementation of the resource-based malpractice RVUs until more recent data can be collected. If delay is not an option, the commenters requested that the resource-based malpractice RVUs be considered interim subject to change, when more recent data are collected and verified. Response: We used the 1993 through 1995 data because they were readily available. Moreover, we believe the use of these data are reasonable because it is our understanding that malpractice [[Page 59384]] insurance premiums have been relatively stable in the 1990s. The law requires us to implement the new malpractice RVUs in 2000. However, we do agree that the RVUs should be considered interim until they can be verified by more recent data. Comment: Some commenters stated that using two risk factors, surgical and nonsurgical, and applying the surgical risk factor to surgical services performed by a specialty, and the lower nonsurgical risk factor to the nonsurgical services performed by the specialty, does not recognize that physicians typically perform a wide range of services and that their malpractice costs are spread across the whole range. Since a physician's malpractice premium is usually determined by the higher risk services performed, the commenters state that the higher risk factor should be applied to the whole range of services. OBGYN specialties felt particularly strongly about this issue, stating that over 80 percent of OBGYNs do both obstetrics and gynecology, and that even if a physician only does a very minimal number of deliveries a year he or she will pay the much higher obstetric premium. Response: It is true that, for an individual physician in a specialty with different risk factors depending upon whether or not the physician performs surgery, the physician's malpractice premium will probably be based upon the higher risk services, depending upon the policies of the individual insurer. (For obvious surgical specialties, for example, general surgeon and thoracic surgeon, there is only one risk factor and this is applied to all services performed by that specialty.) The purpose of the resource based malpractice RVUs is not to guarantee each physician an absolute return of his or her malpractice costs. It is rather to construct malpractice RVUs based on the relative malpractice costs among services. We believe it is reasonable to use the lower risk factor for the values of the lower risk non-surgical services and to allocate the higher relative values to the higher risk services that cause them. In the case of OBGYN services, the higher obstetric premiums and risk factor were used for services that were clearly obstetrical services which drive these premiums, while the lower gynecology risk factor was used for all other services. This also seems consistent with support from many commenters that we use a risk of service adjuster for each service, as discussed earlier. Comment: Several commenters generally agreed with our policy of retaining the existing malpractice RVUs for codes with zero work RVUs (generally the technical component (TC) of diagnostic tests) rather than making them zero (as they would have been if we multiplied the premium-based RVUs by the work RVUs as our risk-of-service methodology provides). Some commenters pointed out that retaining the existing values leaves them charge based, however, and suggested that we work with the physician community to find an alternative proxy to work RVUs to use to adjust for risk-of-service. Some commenters suggested that we merely leave the work multiplication step out of the calculation. One commenter suggested that we use the non-physician clinical labor from the practice expense Clinical Practice Expert Panels (CPEPs). It was also pointed out that by retaining the present malpractice values for the TCs and applying our methodology to the professional component (PC) and the global fee, we created anomalies when the value of one of the parts, the TC, was greater than the value of the whole, the global fee. Response: As stated in the proposed rule, we welcome suggestions concerning a different proxy than work to use to reflect ROS differences among services with no work RVUs. We considered eliminating the work multiplication step, but did not accept this for the reason mentioned in the proposed rule: that without adjusting for ROS all services performed solely or almost solely by a specialty would have the same malpractice RVUs without regard to the different risks they may entail. We will consider all suggestions including using the CPEP data and may propose additional refinements in a future proposed rule. In addition, we have corrected the global PC and TC anomaly. Instead of separately calculating global values using our methodology, we have added the PC and TC to obtain the global value, because that value by definition is the sum of its TC and PC parts. Comment: Cardiologists commented that the two-tiered surgical breakdown was inadequate to reflect cardiologists' malpractice costs because some of their services (for example, angioplasties and cardiac catherization) do not neatly fall into either category, and that more categories than just surgery or nonsurgery are required. They also stated that we did not clearly define what are surgical and nonsurgical services. Response: As mentioned in the proposed rule we acknowledge that insurers vary as to categories of physician risk classifications. However, we believe that the major determinants of malpractice premiums are physician specialty and whether or not the physician performs surgery. We believe that our two risk factor methodology is generally adequate. Our proposed methodology was based on the CPT definition of surgery as a way to identify specific codes to be considered surgery or nonsurgery. We applied the surgical risk factors to services in the surgery section of CPT, codes 10000 through 69999, and the nonsurgical risk factors to all other services. After considering this comment, we acknowledge that the cardiological procedures they mentioned are quite invasive and more akin to surgery than most non-surgical services. We are, therefore, applying the higher cardiology surgical risk factor to the following cardiology catheterization and angioplasty codes: 92980 to 92998 and 93501 to 93536. Since all malpractice RVUs are considered to be interim, we welcome additional comments concerning other codes which should be considered as surgery for these purposes. Comment: Some commenters objected to our basing the resource-based malpractice RVUs on premium data for 20 specialties with other specialties being crosswalked to these 20 specialties. They stated that the RVUs should be based on actual data for all specialties. Some believed that it was particularly inappropriate to crosswalk non- physician specialties to the ``all physician'' category. Response: There are about 100 recognized specialties in our payment records. We do not believe it is practical, possible, or necessary to collect actual malpractice premium data on all these specialties. The 20 specialties most prominent in the data represent over 80 percent of physician fee schedule payments. The shares of payments of many of the other specialties for a specific service are extremely small and thus have virtually no effect on the specialty share-weighted calculation. As discussed in the proposed rule, insurers create their own risk classes generally using ISO codes. We mapped all specialties to the risk classes of St. Paul Companies, one of the oldest and largest malpractice insurers. These risk classes include multiple specialties that represent similar malpractice risk. To our knowledge, no insurer has established risk classes for each of the almost 100 Medicare specialties. Comment: Some commenters objected to our computing the malpractice RVUs for a service by weight-averaging the risk factors for all specialties providing the service. They state that this rewards the specialties with the lowest risk [[Page 59385]] factors and punishes the specialties with the highest risk factors. Response: The basic principle underlying the physician fee schedule is that the relative value for a service represents the resources required to provide the typical service for all physicians providing the service. Indeed, the law specifically prohibits any specialty payment differential. The RVUs are intended to reflect the relative resources required to provide the service compared to other services. Computing resource-based malpractice RVUs for a service by weight- averaging the relative costs of all specialties providing the service is not intended to reward or punish a particular specialty but to reflect average costs across all specialties providing the service and is entirely in keeping with the basic principles underlying the fee schedule. Comment: Radiology groups commented that, while both the TC and PC of radiology diagnostic tests contain malpractice RVUs, current and proposed malpractice RVUs are generally much higher for the TC than for the PC. They state that the radiologist supervising or interpreting the test bears the malpractice responsibility and believe that all or the bulk of malpractice RVUs currently in the TC should be moved to the PC. Response: We disagree with the commenters. The total TC RVUs (practice expense and malpractice) for the TC of radiology diagnostic tests represent the expenses required to perform the test--equipment, supplies, and technicians plus malpractice insurance. The total PC RVUs (work, practice expense and malpractice) represent only the interpretation of the test by the physician. In general, the current TC RVUs for radiology services are significantly higher than the PC RVUs because of the very expensive equipment, supplies and other costs. The malpractice RVUs are generally split in similar proportion between PC and TC as the practice expense RVUs. In cases where the physician or group provides both the TC and PC and bills for both components, the split is not a significant issue since the physician or group would receive the total payment. In many cases, the TC is provided by an entity--hospital or free standing imaging center--other than the physician providing the interpretation. The entity providing the TC, which includes a supervising physician who is most likely a radiologist, assumes the risk, such as excessive irradiation of the patient, of providing the TC. We can think of no reason to transfer any portion of malpractice RVUs from the entity (including a supervising physician) providing the majority of the service, the TC, to a physician who is providing only the interpretation. The malpractice liability associated with interpreting the test is reflected in the PC malpractice RVUs. Comment: One commenter stated that certain allergy and immunotherapy codes (95145 through 95170, 95010, and 95015) should not have zero malpractice RVUs as these codes contain work RVUs. Response: We agree that all services with physician work RVUs contain some potential malpractice liability and expense. This error occurred because we rounded to zero in our computation. We have given them a malpractice value of 0.01 RVU. Comment: Some commenters stated that we should base the resource- based malpractice RVUs on actual closed claims data as recommended by MEDPAC and discussed in the proposed July 1999 proposed rule. MEDPAC again recommended this approach in its comments and stated that some insurers maintain a data base relating malpractice claims to ICD-9 codes and that software is available to crosswalk ICD-9 to CPT codes. MEDPAC also commented that in using only the costs of malpractice premiums that we failed to factor into the malpractice RVUs the ``* * * loss of reputation* * *'' that a physician incurs from malpractice claims. MEDPAC also indicated that ``* * * psychological costs of professional liability are very important to physicians.'' Response: As stated in the proposed rule, we do not believe that closed claims data linking malpractice claims to CPT codes are widely available across the country for all or even a significant portion of the 7000 plus CPT codes paid under the physician fee schedule. If any such data are available, we expect they are for a very few codes on a limited geographical basis. Our coding experts tell us it is not possible to crosswalk ICD-9 codes to an individual CPT code with any degree of accuracy. The statute requires that the new malpractice system be based on the malpractice expense resources involved in furnishing the service. We believe that the physician's malpractice premium best reflects the malpractice expense. We do not believe that any loss of a physician's reputation from a malpractice claim would be related to the statutory requirement to base malpractice RVUs on the malpractice resources involved in furnishing the service; we do not believe that this intangible ``loss'' represents a resource used in furnishing a service. Indeed, we do not see how loss of reputation and psychological costs can be quantified. We encourage MEDPAC to further develop their idea, particularly as it relates to the statutory requirement, and submit their further analysis in comments to future physician fee schedule notices. Comment: Some neurologists listed five codes (95829, 95920, 95955, 95961, and 95962) assigned the neurology non-surgical risk factor that they believe are surgical services and should be assigned the higher neurology surgical risk factor. Response: Our medical consultants believe that these are not surgical services and no evidence was presented that these services result in higher malpractice premiums for neurologists. At this time, we will continue to apply the non-surgical risk factor to these services. We will reconsider this decision should evidence be presented that performance of these services results in higher malpractice premiums. Comment: Some neurosurgeons commented that the real effect of malpractice changes on neurosurgeons is masked by comparing estimated year 2000 allowed charges to 1999 allowed charges, thereby ignoring the effect on the malpractice RVU pool of the rebasing of the MEI from 1998 to 1999. They further commented that, while comparing 2000 to 1999 malpractice RVUs for neurosurgical procedures shows significant increases, comparing 2000 to 1998 malpractice RVUs will substantially reduce or eliminate these increases. They also stated that, while the updated MEI showed that the average malpractice expense represented 3.2 percent of gross income across all physician specialties, neurosurgeons have much higher malpractice expenses of about 7 percent of gross income. Neurosurgeons submitted a detailed methodology that they suggested might be used as an alternative to our proposed methodology. Response: The MEI was rebased in 1999 to reflect more recent (1997 as compared to 1989) data from the AMA's Socioeconomic Monitoring Survey (SMS) on physician income and expenses. The more recent data indicated that malpractice expenses across all physician specialties as a percentage of gross income had shrunk from 4.8 to 3.2 percent. In order to reflect these more recent data in the physician fee schedule, the pool of malpractice RVUs was reduced from 4.8 to 3.2 percent of total RVUs. We made this change on a budget-neutral basis: the 1.6 percentage points were redistributed among the work and practice expense RVUs. We always show impacts relative to current law, [[Page 59386]] regulations and policies; therefore, comparing 2000 to 1999 changes was not done to mask the effects of previous changes but was consistent with past practices. The effects of proposed 2000 malpractice RVUs were thus compared to existing 1999 levels. We agree that malpractice expenses of neurosurgeons are generally higher than the overall average 3.2 percent of gross income for all physicians. An examination of high volume codes performed primarily by neurosurgeons shows that the new resource-based malpractice RVUs range from about 6 percent of the total 1999 transition RVUs to about 9 percent of fully implemented total 2002 RVUs for a given service. We are examining the alternative methodology suggested by the neurosurgeons and will consider it along with other alternatives during future refinement of malpractice RVUs. Comment: Several surgical specialties commented that many of the ``winners'' under our proposal are relatively low-risk specialties (for example, nephrology, general practice, and family practice) with relatively low malpractice premiums, while many of the ``losers'' are high-risk specialties (for example, cardiac surgery and thoracic surgery) with relatively high malpractice premiums. While acknowledging that the gains or losses are minor, usually less than 1 percent, they state that the results are counter-intuitive and do not match clinical practice experience. Some believe that this is a continuation of a HCFA bias in favor of primary care specialties at the expense of surgical specialties. Response: We do not agree that the results are counter-intuitive or reflect any intentional bias. The impacts compare a new resource-based system with an existing charge-based system. The systems are on totally different bases. All the results show is what provided the Congress with the impetus to create the resource-based physician fee schedule in the OBRA 1989 and expand it in subsequent legislation: charges for physicians' services did not accurately reflect the relative resources required to provide the services. While over the course of the development of the fee schedule, the changes to a resource-based system did generally increase payments for primary care services relative to surgical services, it was because this was indicated by the resource input data and not as a result of any intentional HCFA bias. Result of Evaluation of Comments: After careful examination of comments, we are adopting our proposal that new resource-based malpractice RVUs calculated using the methodology described in the July 1999 proposed rule will become effective in 2000. We have modified our proposal to identify certain services as surgery for purposes of applying specialty risk factors to individual services. These RVUs can be found in Addendum B. B. Resource-Based Practice Expense Relative Value Units 1. Resource-Based Practice Expense Legislation Section 121 of the Social Security Act Amendments of 1994 (Public Law 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. The legislation specifically required that, in implementing the new system of practice expense RVUs, we must apply the same budget-neutrality provisions that we apply to other adjustments under the physician fee schedule. The BBA was enacted on August 5, 1997, before publication of the October 1997 final rule (62 FR 59103). Section 4505(a) of the BBA delayed the effective date of the resource-based practice expense RVUs until January 1, 1999. In addition, the BBA provided for the following revisions in the requirements to change from charge-based practice expense RVUs to resource-based RVUs. Instead of paying for all services entirely under a resource-based RVU system in 1999, section 4505(b) of the BBA provided for a 4-year transition period. The practice expense RVUs for the year 1999 will be the sum of 75 percent of charge-based RVUs and 25 percent of the resource-based RVUs. For the year 2000, the percentages will be 50 percent charge-based RVUs and 50 percent resource-based RVUs. For the year 2001, the percentages will be 25 percent charge-based RVUs and 75 percent resource-based RVUs. For subsequent years, the RVUs will be totally resource-based. Section 4505(e) of the BBA provided that, in 1998, the practice expense RVUs would be adjusted for certain services in anticipation of the implementation of resource-based practice expenses beginning in 1999. Thus, practice expense RVUs for office visits were increased. For other services whose practice expense RVUs exceeded 110 percent of the work RVUs and which were furnished less than 75 percent of the time in an office setting, the 1998 practice expense RVUs were reduced to a number equal to 110 percent of the work RVUs. This limitation did not apply to services that had proposed resource-based practice expense RVUs in the June 18, 1997 proposed rule (62 FR 33196) that increased from their 1997 practice expense RVUs. The procedure codes affected and the final RVUs for 1998 were published in the October 31, 1997 final rule (62 FR 59103). Section 4505(d)(3) also required that a proposed rule be published by May 1, 1998, with a 90-day comment period. A final rule was published on November 2, 1998, (63 FR 58816) and the transition began on January 1, 1999. The BBA also required that we develop new resource-based practice expense RVUs. In developing these new practice expense RVUs, section 4505(d)(1) required us to--(1) use, to the maximum extent practicable, generally accepted accounting principles that recognize all staff, equipment, supplies, and expenses, not just those that can be tied to specific procedures, and use actual data on equipment use and other key assumptions; (2) consult with organizations representing physicians regarding the methodology and data to be used; and (3) develop a refinement process to be used during each of the four years of the transition period. 2. Current Methodology for Computing Practice Expense Relative Value Units Effective with services furnished after January 1, 1999, we established a new methodology for computing resource-based practice expense RVU that uses 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's) Socioeconomic Monitoring System (SMS) data. This methodology is based on an assumption that current aggregate specialty practice costs are a reasonable basis for establishing initial estimates of relative resource costs of physicians' services across specialties. It then allocates these aggregate specialty practice costs to specific procedures and, thus, can be seen as a ``top-down'' approach. The following summarizes the general methodology used. (For more specific information refer to the June 5, 1998 proposed rule (63 FR 30826) and the November 1998 final rule with comment (63 FR 58816).) Practice Expense Cost Pools We used actual practice expense data by specialty, derived from the 1995 through 1997 SMS survey data, to create six cost pools: administrative labor, clinical labor, medical supplies, medical equipment, office supplies, and all other expenses. There were three steps in the creation of the cost pools. They are as follows: [[Page 59387]] (Step 1) We used the AMA's SMS survey of actual cost data to determine practice expenses per hour by cost category. The practice expense per hour for each physician respondent's practice was calculated as the practice expenses for the practice divided by the total number of hours spent in patient care activities by the physicians in the practice. (Step 2) We determined the total number of physician hours, by specialty, spent treating Medicare patients. This was calculated from physician time data for each procedure code and the Medicare claims data. (Step 3) We then calculated the practice expense pools by specialty and by cost category by multiplying the practice expenses per hour for each category by the total physician hours. For services with work RVUs equal to zero (including the TC of services with PC and TC), we created a separate practice expense pool using the average clinical staff time from the CPEP data (since these codes by definition do not have physician time), and the ``all physicians'' practice expense per hour. Cost Allocation Methodology For each specialty, we separated the six practice expense pools into two groups, direct costs and indirect costs, and used a different allocation basis for each group. For direct costs, which include clinical labor, medical supplies, and medical equipment, we used the CPEP data as the allocation basis. For the separate practice expense pool for services with work RVUs equal to zero, we are using, as an interim measure, 1998 practice expense RVUs to allocate the direct cost pools (clinical labor, medical supplies and medical equipment). Also, for all radiology services that are assigned work RVUs, we used the 1998 practice expense RVUs as an interim measure to allocate the direct practice expense cost pool for the specialty of radiology. For all other specialties that perform radiology services that are assigned work RVUs, we used the CPEP data for radiology services in the allocation of that specialty's direct practice expense cost pools. For indirect costs, which include administrative labor, office expenses, and all other expenses, we used the total direct costs or the 1998 practice expense RVUs, as described above, in combination with the physician fee schedule work RVUs, to allocate the cost pools. We converted the work RVUs to dollars using the Medicare CF (expressed in 1995 dollars for consistency with the SMS survey years). 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. Other Methodological Issues Global Practice Expense Relative Value Units For services with the PC and TC paid under the physician fee schedule, the global practice expense RVUs are set equal to the sum of the PC and TC. Practice Expenses per Hour Adjustments and Specialty Crosswalks Since many specialties identified in our claims data did not correspond exactly to the specialties included in the practice expenses tables from the SMS survey data, it was necessary to crosswalk these specialties to the most appropriate SMS specialty category. We also made the following adjustments to the practice expense per hour data (the rationale for these adjustments is explained in the November 1998 proposed rule (63 FR 58817): + For the specialty of ``oncology'' we set the medical materials and supplies practice expense per hour equal to the ``all physician'' medical materials and supplies practice expenses per hour. + We based the administrative payroll, office, and other practice expenses per hour for the specialties of ``physical therapy'' and ``occupational therapy'' on data used to develop the salary equivalency guidelines for these specialties. We set the practice expense per hour for the direct cost categories equal to the ``all physicians'' practice expense per hour from the SMS survey data. + We derived the resource-based practice expense RVUs for codes performed by audiologists from the practice expenses per hour of the other specialties that perform these codes. + For the specialty ``emergency medicine'' we used the ``all physician'' practice expense per hour to create practice expense cost pools for the categories ``clerical payroll'' and ``other expenses.'' + For the specialty ``podiatry'' and the specialty of ``maxillofacial prosthetics'' we used the ``all physician'' practice expenses per hour to create the practice expense pool. + For the specialty ``pathology'' we removed the supervision and autopsy hours reimbursed through Part A of the Medicare program from the practice expense per hour calculation. Time Associated with the Work Relative Value Units The time data resulting from the more current RUC refinement of the work RVUs have been, on the average, 25 percent greater than the time data obtained by the original Harvard research team for the same services in 1992. We adjusted the Harvard research team's time data by comparisons within families of CPT codes in order to ensure consistency between these data sources and fairness to those services not yet valued by the RUC. For services with no assigned physician times, such as dialysis, physical therapy, psychology and many radiology and other diagnostic services, we calculated estimated total physician times based on work RVUs, maximum clinical staff time for each service as shown in the CPEP data, or the judgment of our clinical staff. We calculated the time for the anesthesia CPT codes 00100 through 01996 using the base and time units from the anesthesia fee schedule and the Medicare allowed claims data. 3. Refinement Background Section 4505(d)(1)(C) of the BBA requires us to develop a refinement process to be used during each of the four years of the transition period. In the June 1998 proposed rule (63 FR 30822) and the November 2, 1998 final rule (63 FR 58818) we set out the parameters for a refinement process and indicated that RVUs for all codes would be considered interim for 1999 and for future years during the transition period. As part of the initial refinement process, in the November 1998 final rule, we outlined the steps we are undertaking to resolve the outstanding general methodological issues. These steps include the establishment of a mechanism to receive additional technical advice for dealing with these broad practice expense RVU methodological issues; evaluation of any additional recommendations from the GAO, MEDPAC, and the Practicing Physicians Advisory Council; and consultation with physicians' and other groups about these issues. In addition, we solicited comments and suggestions about methodology from organizations that have a broad range of interest and expertise in practice expense and survey issues. We also discussed a proposal submitted by the Relative Update Committee (RUC), which was supported by almost every medical specialty society, for the establishment of a Practice Expense Advisory Committee (PEAC), to review comments and make recommendations on the code- specific [[Page 59388]] CPEP data (that is, the clinical staff types and times, medical supplies, and medical equipment needed for each procedure) during this refinement period. This committee would make recommendations to the RUC, which would make final recommendations to us. Current Status of Refinement Activities Top-Down Methodology Comment: Several physician specialty societies expressed concern about what they perceive as a lack of progress in the refinement process. One surgical society noted the final report of the contractor we chose to evaluate methodological issues is not due until May 2000. Other commenters requested that we identify our plans for refinement, provide guidance to specialty societies for refining key data sources and inform the medical community of our progress. Several commenters recommended that we lengthen the time period for transition, while another requested that we consider all practice expense RVUs as interim until all refinements are complete, even beyond 2002. Two surgical specialty societies stated their concern that many of the methodological issues on which they previously commented have not yet been resolved, such as averaging of the CPEP inputs for services valued by more than one CPEP panel, the negative effect of high patient care hours on certain specialties, the effects of rounding on the physician time for evaluation and management (E/M) services, and the impact of errors in the Medicare claims data. Response: We can understand the frustration expressed by many of the commenters about the lack of many immediate revisions to our top- down methodology. However, this methodology is complex and is also dependent on the accuracy and interrelationship among five separate data sources: the SMS survey, the CPEP inputs, Harvard and RUC physician times, the Medicare claims data, and the work RVUs. In addition, because the RVUs must be budget neutral, any change we make that advantages one group could disadvantage another. Therefore, we must ensure that all refinements we make are methodologically sound, are consistent with Medicare policy, and, to the greatest degree possible, are based on objective information. We believe that we are now in a position to begin addressing many of the methodological issues that are of concern to those commenting on our refinement efforts. As indicated in the July 22, 1999 proposed rule (64 FR 39608), one of our main strategies for resolving the outstanding practice expense methodological issues was to establish a mechanism for obtaining expert advice and technical support. We awarded a one-year contract, beginning May 24, 1999, to The Lewin Group to provide technical assistance in evaluating the following aspects of the practice expense methodology: Evaluate the validity and reliability of the SMS data for specialty and subspecialty groups and academic and hospital-based specialties to determine which groups may not be adequately represented in the SMS survey. Assist us in our consultations with the AMA and the medical community on considering possible ways to improve the representativeness of the aggregate specialty-specific data so that sampling error is decreased and to eliminate as many sources of non- response and measurement error as possible. Evaluate the appropriateness of crosswalking unrepresented specialties to a specialty included in the AMA survey and develop alternative options to crosswalking. Determine which specialties' SMS data may be affected by inclusion of mid-level practitioners in specialty survey cost data and develop alternative methodologies to address the issue. Determine whether the impact on AMA SMS of non-billable hours is significant and, if so, develop methodologies for adjusting AMA/SMS to account for non-billable hours. Determine whether the impact of uncompensated care is significant and, if so, develop methodologies for adjusting the SMS data to account for uncompensated care. Identify and evaluate alternative and supplementary data from sources such as specialty and multi-speciality societies and future SMS surveys. Determine under what circumstances, if any, we should consider use of survey data other than AMA SMS data and, if this data could be used, develop criteria for accepting other surveys and determine the appropriate form of these surveys. Consider ways that specialty data that significantly change in a future survey can be selectively validated by AMA SMS through an independent auditor or other appropriate entity. Develop options for validating the Harvard/RUC physician procedure time data. Determine whether the effect of rounding time data for high volume/low time services is significant and, if so, develop methodologies to address it. Review options supplied by us for allocating indirect costs, including substituting physician time for physician work. Provide advice on developing a process for the 5-year review of practice expense RVUs. Our contractor has accomplished the following to date: Met with us and the AMA to discuss our future use of the AMA SMS survey and to discuss the design and structure of the AMA's new practice-level survey. The AMA plans to conduct its survey of practices in alternating years with the SMS survey. Our contractor has completed an evaluation of the 1998 SMS questionnaire and has completed an initial review of the methodology of the practice expense per hour values derived from the SMS data. Our contractor is developing recommendations regarding the practice survey design and methodology and is considering how we can use the practice-level survey and how we can cross-walk the information to the SMS survey. We hope to present the details of the final recommendations and our proposals regarding them in next year's physician fee schedule proposed rule. Met with the Society of Thoracic Surgeons (STS) to review the methodology used in their survey to make a specific recommendation concerning the use of this survey to calculate the practice expense per hour for cardiothoracic surgery. Hosted a meeting on September 15, 1999 with 37 representatives of physician specialty societies, 11 representatives of nonphysician practitioners and a number of representatives of the AMA. Our contractor held the meeting at our urging to allow an opportunity for representatives of physicians and other practitioners to raise issues and concerns regarding methodological issues which effect Medicare payment for practice expenses. Among other issues, our contractor discussed: + Improving collection reliability of practice expense data from the SMS survey including data on practitioners not represented in the SMS survey. + Developing and evaluating criteria for use of supplemental data collection efforts. + Defining and validating the number of hours physicians spend in patient care activities. + Appropriateness of crosswalk between HCFA and AMA specialty designations. Our contractor discussed concerns related to these and other issues and facilitated a discussion among the [[Page 59389]] participants of potential ways of improving the top down methodology. Submitted their first draft report, Practice Expense Methodology, dated September 24, 1999, containing an analysis and recommendations concerning SMS and other practice expense data. This report has been placed on HCFA's homepage under the title ``Lewin Group Report'' for anyone interested in reviewing it. (Access to our homepage was discussed under the ``Address'' section earlier.) Comment: We have received several comments regarding the effect of the step in our methodology that weight-averages all scaled specialty- specific dollar inputs for each CPT code to arrive at a single value for each service. Commenters claim that this step can cause redistributions in the specialty-specific practice expense pools and, in some cases, can cause anomalies in the payment for certain services. Several commenters indicate that payments for some nerve block injections will rise by several hundred percent in the office. The American Society of Anesthesiologists commented that the values for some of the nerve block injections make no sense in the real world and urged us to allow the refinement process to work before taking action with respect to in-facility practice expense values. Some commenters objected to the proposed increase in payments for outpatient E/M. A number of commenters noted that office-based E/M services will increase substantially under the proposed policy. The Society for Vascular Surgery objected to the proposed 4 to 7 percent increase in total RVUs for outpatient E/M. They indicated that the additional payments for an intermediate office visit (CPT code 99213) alone will increase $312,000,000 which will require further adjustments to the CF. The American College of Cardiology recommended that we should implement a way to reduce or eliminate the ``pool leakage'' for specialties such as cardiology that have a high practice expense per hour. Such high practice expense specialties can lose a portion of their pool to specialties with lower expenses when the costs are averaged. Other commenters also suggested that we should eliminate ``pool leakage.'' The American Association of Neurological Surgeons (AANS) made a similar comment regarding ``pool leakage.'' AANS asserted that pool leakage is unfair and violates that BBA mandate to develop a system that reflects physicians' actual practice expenses. The Society of Thoracic Surgeons (STS) commented that, because of the dropping of clinical staff time in the facility setting from the CPEP data, the values for cardiac and thoracic surgical procedures are reduced while values for cardiac and thoracic office visits are increased. The commenter asserted that the effect of this ``misallocation and subsequent weighted-averaging of E/M services across specialties is a virtual draining and redistribution of cardiac and thoracic surgery practice expenses to other specialties.'' The commenter further stated that other anomalies demonstrate the fallibility of this approach. For example, the scaling factors for clinical staff for thoracic and cardiac surgery become 1.75 and 2.2 respectively, which are far from the norm for other specialties. As a result of these high scaling factors, the values in the cardiac and thoracic surgery practice expense pools for E/M services are increased while the values for these same services are decreased in the internal medicine practice expense pool. Cardiac and thoracic surgery have a value for an E/M service which is about six times the values for these services in the internal medicine practice expense pool. Finally, these changes in the direct cost values for E/M services also cause the indirect practice expense for these services to increase in a distorted fashion. Response: We are required by statute to have a single payment for each service, regardless of the specialty performing that service. It is for this reason that we adopted the weight averaging of services. Under the top-down methodology, we calculate an ``SMS'' pool using the practice expense per hour from the AMA's SMS as follows: SMS Pool=Practice expense per hour * time per procedure * allowed services. This is summed by specialty across all procedures a specialty performs. We then calculate a ``CPEP'' pool using the estimates of direct expenses for specific procedures by the CPEP: CPEP Pool=Practice Expense for a procedure (as estimated by the CPEP) * allowed services. This is summed across all services a specialty does. There is a separate pool for each category of direct costs (clinical labor, supplies and equipment). The SMS pool is divided by the CPEP pool for each specialty to produce a scaling factor which is applied to the CPEP direct cost inputs. This process is intended to match costs counted as practice expenses in the SMS survey with items counted as a practice expense in the CPEP process. Ideally, all of the scaling factors would equal 1.0, which would suggest that practice expenses are being identified consistently within each pool. If the scaling factor is more than 1.0, the CPEP inputs for each specialty are increased prior to the weight-averaging step. If the scaling factor is less than 1.0, the CPEP inputs for each specialty are decreased prior to the weight-averaging step. If the scaling factors all equaled 1.0 or alternatively were within a narrow range of each other, the weight averaging step will have little impact on the final value for a procedure relative to the original CPEP estimates. Thus, the ideal is that the scaling factor equals 1.0. Alternatively, if the scaling factors among different specialties are equal to each other, each specialty specific value that goes into the weight-averaging step would be the same. Since the scaling factors tend to be less than one for the direct inputs, most specialties overestimated practice expenses in the CPEP relative to how the costs were estimated in the SMS survey. In the refinement process, one of our key interests is ensuring that there is consistency between costs counted as practice expenses in the SMS survey and costs which were counted as practice expenses in the CPEP process. To the extent this occurs and we can obtain reliable information on physician time related to performing individual procedures, we believe that scaling factors should approach 1.0 and these refinements would be an improvement in the top-down methodology. In the interim, we believe the policies in this final rule are an improvement in the top-down methodology. The scaling factors for clinical labor costs for most specialties move closer to 1.0 in this final rule. The scaling factor for all physicians increased from 0.54 to 0.72 in this final rule relative to last year's final rule. For a few specialties, the scaling factor deviates sharply from 1.0 as a result of these new policies. For instance, the scaling factor increased from 0.40 to 2.42 for thoracic surgery, 0.36 to 3.07 for cardiac surgery, and 0.51 to 5.72 for anesthesiology. Since the scaling factors for most specialties and for all physician pools move closer to 1.0, we do not believe that significant changes in policy related to the top-down methodology such as the ones suggested by commenters are necessary. We continue to believe the refinement process should be used to obtain better information on physician practice expenses to further improve the top- down methodology. We do not believe that results for a few specialties that deviate from the general trend indicate a significant problem with the top-down methodology. In fact, it is possible that the increase in the scaling factor that [[Page 59390]] results from changes in this final rule is due to an overstatement of SMS costs on practice expense per hour rather than an understatement of the CPEP pool. For instance, if a physician brings nonphysician practitioners to the hospital, whose services are charged for separately, the expenses associated with these practitioners generate physician revenue and should be considered as a part of the physician work RVU. Indeed, the STS indicated in its comments that thoracic surgeons frequently bring physician assistants to the operating room to perform duties typical of ``the first assistant-at-surgery.'' In this situation, the service of the assistant-at-surgery would be separately billable and would generate additional revenue to the physician. If it is commonplace for thoracic surgeons to bring physician assistants to the hospital for whose services Medicare may make an additional payment, it would be appropriate to examine whether expenses for physician assistants are included as a practice expense in the SMS and thus whether the practice expense per hour is overstated. Similarly, we believe it is possible that anesthesiologists responding to the SMS survey may have counted certified registered nurse anesthetists as a clinical practice expense even though they may receive an additional payment for the service of a CRNA providing anesthesia services during a surgical procedure. We do not know that this is the case but are instead indicating that this is an avenue for further research to explain the very high scaling factor for anesthesiology. We acknowledge that payments under our rule will largely decline for services which are predominantly performed in a facility and which had substantial inputs for clinical staff. However, we do not believe that this is illustrative of a problem with the top-down methodology. Indeed, as we explained above, we believe our policies are an improvement in the top-down methodology with a few exceptions. With respect to some of the code level results that were pointed out by commenters, we are concerned that there are a few instances where the scaling and weight-averaging methodology could cause changes in payment or redistributions that do not reflect the relative costs of performing certain services. These occur for a few services that are performed predominantly by a specialty whose scaling factor deviates sharply from 1.0. For instance, as indicated by some commenters, practice expense RVUs for pain management injection services would have increased substantially for reasons unrelated to the relative resources used in providing the service. This occurs because of the very high scaling factor for anesthesia that is applied to these services. As some commenters have noted, including anesthesiologists themselves, these values ``make absolutely no sense in the real world.'' For this reason, as an interim measure until refinement is completed, we will use the average scaling factor in place of the specialty specific scaling factor if the specialty specific scaling factor exceeds the average scaling factor by more than 3 standard deviations. This change will largely result in a reduction in the enormous increase in some of the pain management services from the proposed rule as a result of a different scaling factor being used for anesthesiology. Although these services still appear to have higher RVUs, the changes do not seem so extreme. We believe this change is warranted as an interim measure in situations where there is an extreme deviation in specialty scaling factor relative to the average scaling factor. As we have indicated, this interim measure is being taken to avoid extremely anomalous payments for certain services until we can further identify the reason for aberrant scaling factors. SMS Data As we explained in the July 1999 proposed rule we have received comments from a large number of medical specialty societies concerning the SMS data and the parameters under which we would accept supplementary data or new data. We identified as the top priority of the technical contractor the determination of (1) the circumstances, if any, under which we should consider use of survey data other than the SMS data; (2) the appropriate form of these other surveys; and (3) how these surveys or future SMS surveys can be appropriately validated for our use. Comment: Many organizations reiterated the concerns expressed in previous comments that their services or their actual costs are not adequately represented in the SMS data or, in the case of non-physician specialties, are not represented at all. Organizations representing emergency medicine, vascular surgery, podiatry, and optometry requested that we use supplementary data already collected for their specialties. Two organizations representing cardiology recommended that we use the most current SMS data in developing practice expense values for the year 2000. One of the comments states that a review of the most recent data indicates that no ``gaming'' took place in the responses to this new SMS survey, once reported practice expenses have only grown at about the rate of medical inflation. Two primary care specialty societies support our decision not to use supplementary data at this time and instead to use our outside contractor to develop reliable and standardized criteria for accepting and validating additional specialty-specific data. Response: We are still in the process of developing the general criteria for the use of supplementary practice expense surveys and more recent SMS survey data that could be used in the calculation of the specialty-specific practice expense per hour. We have made this issue the top priority for our methodological contractor. As stated above, our contractor has already met with AMA staff on several occasions to discuss the future use of the SMS survey, in particular the design, structure and potential use of the new practice-level SMS survey. Our contractor also held a meeting on this issue to which all major national specialty societies were invited in order to obtain input on concerns relating to the AMA SMS survey and other supplementary survey data. As mentioned earlier, we have just received the first draft report with our contractor's findings and recommendations on the criteria for acceptance of future data. We have not yet had the opportunity to review closely this report and its recommendations. Therefore, we are not yet ready to determine which already submitted or potential additional survey data would be acceptable, although we have previously stated our preference for future surveys to be carried out on a multi-specialty level, as is the SMS. We are pleased that, according to the comment mentioned above, the results in general from the latest SMS survey may not have differed significantly from the data that are used for this rule. Comment: The Society of Thoracic Surgeons (STS) had commented on last year's proposed rule (63 FR 30817) that the sample size in the SMS surveys used by us for cardiac, thoracic and vascular surgery was insufficient for use calculating accurate practice expenses for these specialties. The STS submitted a supplementary survey with these earlier comments that had a larger sample size and that showed a higher practice expense for cardiac and thoracic surgery. The comments stated that STS contracted with the AMA in April 1998, before it was known that the SMS data would be used in the determination of practice expense, to conduct an SMS-clone oversample. This survey showed a practice expense per [[Page 59391]] hour of $75.90, rather than the $63.80 from the 1994 through 1996 data. The STS requests that we use this later SMS data in the calculation of cardiac and thoracic surgery's practice expense per hour. Response: We believe that the STS survey is unique among all specialty surveys that we have received in that it both appears to be a clone of the SMS surveys already used in our calculations and was undertaken before our top-down methodology was proposed. Therefore, we asked our contractor to evaluate and advise us on the utility of considering the STS survey at this time. Our contractor met with the STS, discussed the issue with SMS technical staff and submitted a detailed questionnaire to STS about the methodology used in the survey. In the draft report on practice expense methodology mentioned above, our contractor discusses the standards that could be applied to supplementary data provided by specialty groups. The draft report suggests that supplemental data collection efforts: draw the sample from the AMA Physician Masterfile, when possible; survey a large enough number of individuals to assure an adequate number of useable responses; are based on SMS survey instruments and protocols, including administration and follow-up efforts; use the same contractors as SMS and be fielded during the same time-frame; consistently define, through the SMS and all additional surveys, practice expense and hours spent in patient care; give responsibility for data editing and analysis to the AMA's SMS project team. In a memo to us accompanying the above mentioned draft report, our contractor stated: ``We believe that the survey conducted by the Society of Thoracic Surgeons meets the standards we have set forth in the paper. Therefore, it is our recommendation that HCFA incorporate their supplemental survey data into its calculation of practice expense RVUs.'' We agree with this recommendation and will use the survey submitted by STS in the calculation of thoracic and cardiac surgery's practice expense per hour. Result of Evaluation of Comments We will use the survey submitted by STS in the calculation of thoracic and cardiac surgery's practice expense per hour. We recalculated the practice expense per hour for cardiac and thoracic surgery by weight-averaging the new survey information with practice expense SMS survey data from 1995 and 1996. Consistent with other specialty information we deflated values to reflect 1995 costs. We used the number of survey responses adjusted for non-response as the weights. In addition, we did not include the responses from vascular surgeons in the calculations for thoracic and cardiac surgery because we are now crosswalking vascular surgery to all physician practice expense per hour. This produced the following practice expense per hour: ---------------------------------------------------------------------------------------------------------------- Clinical Labor Supplies Equipment Clerical, Office & Other ---------------------------------------------------------------------------------------------------------------- $19.50 $1.93 $2.34 $48.20 ---------------------------------------------------------------------------------------------------------------- Adjustment to Direct Patient Care Hours for Pathology In the November 1998 final rule, we made adjustments to the direct patient care hours for pathologists to account for the fact that time spent performing autopsies and supervising technicians are Part A services. The pathologists had also requested that we eliminate some of the time for ``personally performing nonsurgical laboratory procedures including reports'' because this time also includes some part A services. We did not make this adjustment at the time because we did not have appropriate data. We now have the necessary information and in the July 1999 rule we proposed to remove three hours from the total patient care hours for pathologists. Comment: The College of American Pathologists, as well as individual commenters, supported the proposal to eliminate three of the 6.77 hours of pathology SMS time for performing nonsurgical laboratory procedures. The AMA also supports this proposal because the SMS survey shows that 45 percent of the 6.77 weekly hours spent on performing these procedures is non-reimbursable under the physician fee schedule. One surgical organization expressed concern that this adjustment will be made at the expense of all other specialty pools. Other commenters contended that many other physicians, besides pathologists, spend time in direct patient care activities for patients which is not separately billable including phone calls, waiting time, ``hallway'' patient consultations and ``stand-by'' time, or uncompensated care. Two commenters argued that specialties with high patient care hours are not treated fairly in the calculation of practice expense RVUs and ask that we consider removing such time from the SMS data for surgical specialties as well. In a similar comment, an anesthesiology society, though not opposed to the proposed pathology adjustment, urged its extension to other specialties as part of an across-the-board refinement of SMS-generated values. Response: We believe that the data presented by the College of American Pathologists, in conjunction with the AMA, is persuasive that three hours should be eliminated from the SMS direct patient care weekly hours for pathology. Therefore, we will make the adjustment at this time. However, though we do believe that pathology may differ from most specialties with regard to their split between Part A and Part B payments, we also agree that the other commenters raised a valid point concerning other specialties' non-billable hours that may be inadvertently captured in the SMS direct patient care hours data. It is because of this concern that we included the issue of the SMS patient care hours in the scope of work for our contractor. Over three pages in the draft report from our contractor, which is referenced above and which is available on our home page, are dedicated to this issue. The report points out that, if there is a discrepancy between the activities captured in the code-specific physician time values in the Harvard and RUC database and the activities that physicians considered in responding to the patient care hour question in the SMS survey, the practice expense pools could be biased in either direction. We hope to discuss recommendations on improving the accuracy of the patient care hours data in our next proposed rule. Result of Evaluation of Comments: We will eliminate 3 hours from pathology's direct patient care hours for ``personally performing nonsurgical laboratory procedures including reports'' because this time includes some part A services. CPEP Data Response to Comments on Egregious CPEP Errors and Anomalies/RUC Recommendations As we stated in last year's final rule, comments were submitted on the CPEP inputs for about 3000 CPT codes. In response to the July 1999 proposed rule, [[Page 59392]] a few additional comments on CPEP inputs have been received, most of them reiterations of comments previously submitted. In this year's proposed rule we stated that we plan to wait until we receive recommendations from the RUC before making significant changes to most code-specific inputs. The PEAC held its organizing meeting in February 1999 and met again in April to begin the task of refining the code- specific CPEP data. The PEAC and RUC then met at the end of September to further develop the approach to the refinement of the CPEP data and as a result of this meeting the RUC has forwarded recommendations to us on 65 CPT codes. The November 1998 final rule also pointed out that we had received comments on a number of egregious errors and anomalies that we would address in future rulemaking. Our responses to the comments on the errors and anomalies and to the RUC recommendations are discussed further below. Comment: One organization representing pediatric services supports our decision to wait for RUC recommendations on code-specific direct practice expense inputs, while an ophthalmology subspecialty society strongly recommends adopting the CPEP input changes suggested by ophthalmology groups now, without waiting for RUC recommendations. A primary care group recommended that we publish the CPEP errors and anomalies for review before we correct them in this final rule. A few other organizations suggested further changes to the RUC recommended inputs or changes in inputs for codes not yet reviewed or not agreed to by the PEAC and RUC. Response: We believe that, particularly at these first steps in refining the CPEP inputs, it is preferable to have a multi-specialty agreement on changing these data, rather than accepting the recommendations of a single group without the level of peer input that a group like the PEAC and RUC can afford. That is the major reason we have chosen to wait for the RUC recommendations before refining most of the CPEP data and why, at this point, we are not addressing the few additional changes suggested by commenters to the July 1999 proposed rule. The commenters pointed out at the same time that there are some obvious errors or anomalies when the corrective action is of a more technical nature. Therefore, we believe that it will be helpful to the refinement process to make these corrections at this time. Comments on Egregious Errors and Anomalies Outlined below are comments and our responses concerning those anomalies and errors for which corrections could easily be determined. It is important to note that while we are making some revisions now, all practice expense inputs for these codes are still subject to further comment, our refinement and potential PEAC and RUC review and action. In addition, we have made minor adjustments to the CPEP supply list by deleting a few supplies either because of the difficulty in measuring their use, or because the supplies were not fully used up during a single procedure and do not fit the definition that we use for direct supply costs. Therefore, the costs for tissues, biohazard bags and Lysol spray will be treated as indirect costs. This change should not affect the practice expense RVUs for any service, but it will help simplify the refinement of the supply inputs. Comment: The American Academy of Orthopaedic Surgeons and the American College of Surgeons both commented that we should delete separately billable casting materials from the CPEP inputs. Response: Casting materials are bundled into the payment for the initial fracture management procedures and separate billing for the supplies is not allowed under Medicare billing rules. Therefore, for these procedures, the casting supplies should remain as inputs. However, for casting and strapping codes CPT codes 29000 through 29750, casting supplies can be billed for separately, and including the supplies in the CPEP data would lead to double counting. Therefore, we have deleted the fiberglass roll, cast padding and cast shoe from the list of supplies for these procedures. Comment: The American College of Surgeons commented that we should delete Romazicon (used to reverse conscious sedation) from supplies wherever it appears since it is not typically used. Response: This comment brought to our attention that many drugs in addition to Romazicon are included in the supply lists of many procedures. Most drugs are separately billable and are not paid under the physician fee schedule. Therefore, in keeping with our general policy to retain in the CPEP data only those inputs that would be paid as practice expense under the physician fee schedule, we have deleted from the supply lists all those drugs that would be billed separately, which would include Romazicon. We have also deleted self-administrable drugs that are not payable under Medicare. The drugs that have been removed are: fentanyl, demerol injection, versed injection, valium injection, ativan syringe, bacitracin ointment, neosporin, benadryl, steroid kenalog, IV fluids, such as saline in various quantities, D5W, droperidol, romazicon, narcan, ancef, nubain, sodium chloride injection, lasix, brevital, decadron, esmolol IV, metopropol IV, sodium amobarbital, tylenol and ibuprofen. Comment: The American College of Surgeons commented that the supply lists for the insertion of bile duct catheters (CPT code 47510) and stents (CPT code 47511) include an extensive and costly list of supplies used to perform the procedure in the out-of-office setting. However, these supply costs are covered by the facility and therefore should be removed from the list of supplies for these codes. Response: We agree and note that the supplies listed in the facility setting appear to be connected with the performance of the procedure and will be included in the payment to the facility. Therefore, we have removed these supply costs from the data. However, since this is a 90-day global code and would be expected to have post- procedure visits in the office, we would welcome comments about appropriate supplies for the office visits during the global period. In addition, one CPEP panel listed 210 minutes of angio technician time in the post-procedure period. Because the services of an angio tech would only be needed during the procedure itself and not during the post- procedure office visits, we are deleting this time. Comment: The American College of Surgeons commented that the supply costs for the procto-sigmoidoscopies and flexible sigmoidoscopies are significantly higher than the supply costs for colonoscopy codes. They attributed this rank order problem partially to the inappropriate inclusion in the supply list of an expensive lumen tube for the sigmoidoscopy codes. They asserted that a lumen tube is not a typical supply for sigmoidoscopy codes and recommended the removal of this supply from these codes. Response: We are in agreement with the College of Surgeons that the lumen tube is not a typical supply for these procedures and are therefore deleting this supply from the sigmoidoscopy codes (specifically: CPT codes 45300, 45303, 45305, 45307, 45308, 45309, 45315, 45317, 45320, 45330, 45331, 45332, 45333, 45338 and 45339). Comment: The American Academy of Ophthalmology and the Macula, Retina and Vitreous Societies questioned the [[Page 59393]] prices identified in the CPEP data for the superblade. They indicated the price for the superblade should be $1.00 instead of the $30 listed in the Abt pricing file. Response: We have verified this lower price and will make the price change to the CPEP database. Comment: The American Academy of Ophthalmology, the American Optometric Association and the American Society of Cataract and Refractive Surgery stated that the CPEP data included a discrepancy in the supply costs for CPT code 92012 (eye exam, established patient, intermediate). The supply costs reflected were much higher than supply costs for the other eye exam codes. They felt the supplies for the eye exam codes are essentially the same and recommended that the supply values for CPT code 92012 should be changed to be consistent with the value used for the other codes in the series. Response: We have reviewed the CPEP data and made revisions to the supplies used for CPT code 92012 so that these supplies are consistent with those for other eye exam codes. (We removed as suggested: patient education booklet; fox shield; patch, eye; bleach; gonisol; contact lens solution; tape, VHS). Comment: The Macula, Retina and Vitreous Societies believed the price allocated for an 18 gauge filter needle, (listed at $46) was in error. They recommended a price of $1 for this supply. They initially also questioned the cost allocated for color film, but in later discussion agreed that the list price of $.85 is reasonable. Response: We agree that the price allocated for the 18 gauge filter needle is in error and after reviewing supply catalogs believe that the price suggested by the commenter ($1.00) is reasonable. We will revise the CPEP data accordingly. Comment: The American College of Cardiology pointed out that a cast cutter is listed in the supply list for two cardiovascular rehabilitation procedures (CPT codes 93797 and 93798) and should be removed. Response: The cast cutter has been deleted from the supply list for these codes. Comment: The American Academy of Neurology commented that CPT code 62270, spinal fluid tap, diagnostic and CPT code 62272, drainage of spinal fluid, are erroneously listed as having no supplies. A short list of suggested routine supplies was included with the comment. Response: We believe that the list is appropriate and have included these supplies in the CPEP inputs for these services. Comment: The Joint Council of Allergy, Asthma and Immunology (JCAAI) pointed out that no supplies were allotted to CPT 95070, bronchial allergy tests, though other codes in the family did have supplies listed. Response: We agree that the CPEP panel left out the supplies that should have been assigned to CPT 95070, and we found that this is also true for CPT 95071. Therefore, until the inputs for these bronchial allergy test codes can be refined, we are assigning to them the same supplies that are listed for the other codes in the family, such as CPT code 95065, nose allergy test, except that, because CPT codes 95070 and 95071 are inhalation tests, we are omitting the band aid, swab, gauze, tape and syringe included in other codes in the family. Comment: JCAAI also commented that there were rank order anomalies for the venom immunotherapy codes (CPT codes 95145 through 95149), because the needed antigens were not included in the supplies. The comment lists the antigens (adjusted for a single 1 cc dose) that are necessary for each service: CPT code 95145 requires a single venom; CPT code 95146 requires two venoms; CPT code 95147 requires three venoms; CPT code 95148 requires a three vespid mix plus a single venom; CPT code 95149 requires a three vespid mix, a single venom and a honey bee venom. Response: We agree that these venom antigens should be added to the supply lists for these codes and have made the necessary adjustments. Comment: The American College of Obstetrics and Gynecology (ACOG) commented that the CPEP inputs for CPT code 58350, reopen fallopian tube, show time for angiography supplies although this is not an angiography procedure. Response: Although the comment stated that the angiography supplies are in CPT code 58350, they actually are present in CPT code 58340, catheter for hysterography,(which ACOG states is overvalued in comparison to CPT code 58350). Consistent with the comment, we are deleting the angiographic vessel dilator and the vascular sheath. We also noticed that CPT code 58340 shows 63 minutes of angio technician, which we are deleting as this is not an angiography procedure. In addition, CPT code 58340 has 175 minutes of RN time in the intra-period in the non-facility setting, while CPT code 58350 shows only 63 minutes RN/MA in this period. In line with ACOG's comment that CPT code 58340 is overvalued, we are changing the intra time for CPT code 58340 to 63 minutes of RN/MA clinical time to match the input for CPT code 58350. Comment: Raytel Cardiac Services were concerned that data on supplies and clinical staff for arrhythmia monitoring services were based on only one monitored event during a 30-day period. The comment requested that we check for the appropriateness of the CPEP supplies and staff time for these services. Response: The CPEP panel stated that there were no clinical supplies associated with these monitoring services, and the commenter did not supply any information regarding the clinical staff duties required for these codes. Therefore, we have no basis for making any changes to the inputs for these monitoring services at this time, but would welcome further information on this issue from additional comments or from the PEAC and RUC. Comment: The American Academy of Dermatology commented that the actinotherapy and photochemotherapy CPT codes 96900, 96910, 96912 and 96913 were grossly undervalued because the CPEP equipment data do not include the costs of a photochemotherapy unit. The comment stated that these units also use almost 200 lamps a year. Response: It is clear that a photochemotherapy unit was omitted from the CPEP data in error, because these procedures could not be performed without this equipment. We will add the photochemotherapy unit and lamps to the CPEP database. Comment: The American College of Radiology pointed out that many of the cardiovascular nuclear medicine codes had two types of cameras assigned in the CPEP files, but that only one camera is needed. Response: We found that almost all of the nuclear medicine codes (CPT codes 78000 through 78999) had two or three cameras listed. We have included only one camera for each of these codes as suggested by the commenter. Comment: The American Urological Association commented that the cost of a lithotriptor is not included in the equipment in the in- office setting for CPT code 50590, extracorporeal shock wave lithotripsy. Response: The CPEP panel only evaluated inputs for this procedure in the facility setting. However, we assigned practice expense RVUs to both settings; the in-office inputs were crosswalked from the facility setting. As a result, there is no procedure-specific equipment listed in the office setting. We are adding a lithotriptor as requested by the commenter. [[Page 59394]] Comment: The College of American Pathologists (CAP) commented that the price of $1,481 in the CPEP data for a compound microscope was insufficient to cover the cost of the microscope used for pathology services. CAP submitted a quotation from a pathology equipment supplier which listed the cost of a pathologist's professional microscope at $11,600. Response: The price submitted by CAP appears more reasonable to us than the original CPEP price, and we will use the new price for the final rule, subject to later review. Comment: The American Association of Neurological Surgeons recommended that all receptionist time listed in the clinical activities field in the CPEP database be deleted from the labor file, since this should be indirect expense. Response: We agree and have deleted all administrative staff types from our current CPEP database since all administrative staff costs are included in our indirect expense pool. Comment: The American Academy of Orthopaedic Surgeons pointed out that the CPEP panel did not assign direct inputs to CPT code 27740, thus creating an anomaly in the family of codes 27730 through 27742. Response: The CPEP panel only included inputs for CPT code 27740 in the facility setting. We are adding the same clinical staff, supplies and equipment inputs to CPT code 27740, repair of leg epiphyses, in the office setting as are assigned to CPT code 27730, repair of tibia epiphyses. This should help eliminate this anomaly. Comment: The American Academy of Dermatology (AAD) commented that there are rank order anomalies in the family of excision of malignant lesions, CPT codes 11600 through 11606. Response: We examined these CPT codes and noted that 11601, 11603 and 11604 were missing routine supplies in the office setting and 11601 had no supply inputs in the facility setting. We are including the same supply inputs as are assigned to 11600, which should bring this code family back in line. Comment: AAD commented that there is a lack of logical progression in the values for lesions of different sizes in the CPT code series 11400, excision of benign lesions, and 17260, destruction of malignant lesions. Response: We determined that the 17260 series appeared to have a logical progression in the proposed rule. However, CPT codes 11403, 11404, 11423, 11424, 11444 have supplies missing in the office setting. These services should have at least the same supplies as their ``parent'' CPT codes, i.e., CPT codes 11403 and 11404 should have the same supplies as CPT codes 11400; CPT codes 11423 and 11424 the same as 11420; and CPT code 11444 the same as 11440. We are including these missing supplies. Comment: The American College of Chest Physicians and the National Association for Medical Direction of Respiratory Care commented that the practice expense RVUs for complex pulmonary stress testing, CPT code 94621, are lower than those for simple pulmonary stress testing, CPT code 94620. The commenter requested that this anomaly be corrected. Response: We agree that this anomaly should be corrected. As an interim correction until actual practice expense direct inputs can be developed for these services, which were not evaluated by the CPEP panels, we have crosswalked the supply and equipment inputs for CPT code 94621 from CPT code 94620, but have crosswalked the clinical staff time from the higher of the two CPEP panels' assigned clinical staff time for CPT code 93015, cardiovascular stress test. Comment: The American College of Nuclear Physicians/Society of Nuclear Medicine commented that CPT code 78494, heart image spect, should be referenced to CPT code 78464, heart image,(3D) single, and CPT code 78588, perfusion lung image, should be referenced to CPT code 78585, Lung V/Q imaging. Response: We agree that these crosswalks are appropriate, and we have made the changes. Comment: The American College of Obstetrics and Gynecology recommended the following crosswalk changes: CPT code 57308, fistula repair transperineal, should be crosswalked to either CPT code 57305, repair rectum-vagina fistula, or CPT code 57307, fistula repair and colostomy; CPT 57531, removal of cervix radical, should be crosswalked to CPT code 58210, extensive hysterectomy; CPT code 59866, abortion should be crosswalked to CPT code 59000, amniocentesis or CPT code 59015, chorion biopsy. The values for the CPT vaginectomy codes 57107, 57109, 57111 and 57112 are too low in comparison to other gynecologic oncology procedures. The commenter recommends that we use CPT code 58210, radical abdominal hysterectomy, as a crosswalk for these four codes, since the clinical staff time, supplies and equipment are similar. Response: We will crosswalk CPT codes 57308 to 57305, 57531 to 58210, and 59866 to 59000 as requested. Due to the clinical similarity of the procedures and the comparable follow up care, we are crosswalking the CPEP inputs from CPT code 57110 to CPT codes 57107 and 57111. For similar reasons we are crosswalking the CPEP inputs from 58200 to CPT codes 57109 and 57112. RUC Recommendations on CPEP Inputs The AMA forwarded for our consideration the direct input recommendations for 65 codes originally reviewed by the PEAC and subsequently approved by the RUC. The RUC states that in the majority of cases, the PEAC examined all of the direct inputs for a particular code, but that in several instances, the PEAC examined only a subset of the direct practice expenses. The comment also explains that, in those instances where the RUC approved crosswalking direct impact data to multiple codes, those crosswalked codes are listed. Several organizations representing neurology, ophthalmology, urology, dermatology and other specialties requested that we use these PEAC/RUC recommended refined inputs to calculate the practice expense RVUs for the year 2000 physician fee schedule. Response: We have reviewed the submitted codes and discuss our specific responses to each of them below. We appreciate the work of the PEAC and RUC in developing the recommendations on these 65 codes. From all of our previous experience in both the CPEP and validation panels, it is a very difficult, time-consuming and complex process to deal with the amount of detail required to arrive at reasonable inputs for a specific procedure. In addition, it takes time for all participants to achieve a level of comfort with our methodology. We are accepting most of the recommendations with the exceptions noted below, but some of the inputs may still need further review. It does appear that in reviewing the inputs more attention was understandably paid to the changes proposed by the presenting groups than to the original CPEP data that we believe could still need refining. For example, the quantity of supplies associated with many procedures would appear to need further discussion with a view to ensuring appropriate standardization among different services. Another problem lies in the inconsistent assignment in the CPEP data of equipment to either the procedure-specific or overhead equipment categories. This process, we acknowledge, has been hampered by the lack of clear definitions which we hope to correct in the near future. We would also appreciate more comments and discussion about what constitutes appropriate clinical staff [[Page 59395]] duties and times during the pre-service period. As most of the 65 codes are related to other codes that have not yet been reviewed by the PEAC and RUC, we are recommending that, as the group gains more experience and reviews related codes, this group of codes be reassessed to see if any further adjustments in inputs are warranted. As an alternative, we could propose our own changes to these codes in a future proposed rule. As discussed above, we have deleted a few minor supplies from the overall CPEP supply list either because of the difficulty in measuring their use or because the supplies were not fully used up during a single procedure. Therefore, tissues, biohazard bags, and Lysol spray have also been deleted from the supplies of these 65 procedures, when applicable. We also have deleted all separately billable and self- administrable drugs and casting supplies as described earlier. In addition, consistent with our policy excluding the CPEP inputs for clinical staff services for a facility patient, all clinical staff time in the out of office intra-service period has been eliminated. Other adjustments that we have applied to these 65 codes, when relevant, are as follows: We standardized all exam table paper to a quantity of 7 feet per visit, as that appears to be the most common quantity reported. We adjusted the quantity of patient gowns and pillow cases and other supplies to be consistent with the number of visits. We deleted items that could be considered office supplies or office equipment. We did not add any suggested equipment that was costed at less than $500, in order to fit the equipment definition used by Abt. Because we believe that betadine is only used on the day of a procedure, we deleted it from post-procedure visits. Listed below are the 65 codes on which we received RUC recommendations. We have noted any revisions, other than those specified above, that we have made to these recommendations. The RUC recommendations are available on our home page, as discussed earlier. Access to the homepage is discussed in the introductory section of this regulation under ADDRESS. CPT code 17000, Destruction by any method, including laser with or without surgical curettement, all benign or premalignant lesions other than skin tags or cutaneous vascular proliferate lesions, including local anesthesia; first lesion The RUC forwarded a recommendation for supplies only. We accepted their recommendation but deleted what appeared to be duplicated gauze supplies. CPT code 17003, Destruction by any method, including laser with or without surgical curettement, all benign or premalignant lesions other than skin tags or cutaneous vascular proliferate lesions, including local anesthesia; second through 14 lesions The RUC forwarded a recommendation only on the supplies for this service. This is an add-on code, for which there would be few added supplies since most are contained in the base code. We adjusted the supply list accordingly. In comments, the society representing dermatologists had indicated that this CPT code appeared to be over- valued in comparison with other CPT codes in the family. CPT code 17004, Destruction by any method, including laser with or without surgical curettement, all benign or premalignant lesions other than skin tags or cutaneous vascular proliferate lesions, including local anesthesia; 15 or more lesions The RUC forwarded a recommendation only on the supplies for this service. We accepted the recommendation but deleted what appeared to be duplicated gauze supplies and the drape sheet. CPT code 17304, Chemosurgery (Mohs micrographic technique), including removal of all gross tumor, surgical excision of tissue specimens, mapping, color coding of specimens, microscopic examination of specimens by the surgeon, and complete histopathologic preparation; first stage, fresh tissue technique, up to 5 specimens. We reviewed and made no changes to the RUC recommendation on clinical staff at this time. We accepted the recommended additions to the supply list; however, we removed the Mohs kit listed in the original CPEP data because it duplicated the pathology supplies that have been added to the list. For equipment, we moved the doppler, suction machine, x-ray view box and smoke evacuator from procedure- specific to overhead equipment because this equipment is used for a wide range of services and thus fits the definition of overhead equipment. We deleted the ECG machine from equipment since it is not needed for this procedure. CPT code 17305, Chemosurgery (Mohs micrographic technique), including removal of all gross tumor, surgical excision of tissue specimens, mapping, color coding of specimens, microscopic examination of specimens by the surgeon, and complete histopathologic preparation; second stage, fixed or fresh tissue, up to 5 specimens We made no changes to the RUC recommendation on clinical staff at this time. We deleted the Mohs kit from the supplies (as noted in discussion for CPT code 17304) as well as the sutures, suture kit and patient education pamphlet because we do not believe they are needed for each stage of this procedure. We also deleted the nerve stimulator because it is not typically used for this service. We made the same adjustments for equipment as we did for CPT code 17304. CPT code 17306, Chemosurgery (Mohs micrographic technique), including removal of all gross tumor, surgical excision of tissue specimens, mapping, color coding of specimens, microscopic examination of specimens by the surgeon, and complete histopathologic preparation; third stage, fixed or fresh tissue, up to 5 specimens We made no changes to the RUC recommendation on clinical staff at this time. We made the same adjustments in the supply and equipment lists as made for CPT code 17304. CPT code 17310, Chemosurgery (Mohs micrographic technique), including removal of all gross tumor, surgical excision of tissue specimens, mapping, color coding of specimens, microscopic examination of specimens by the surgeon, and complete histopathologic preparation; more than five specimens, fixed or fresh tissue, any stage We reviewed and made no changes to the RUC recommendation on clinical staff at this time. We deleted the Mohs kit for the reasons discussed for CPT code 17304 above. We also deleted gel foam, xylocain and the syringe from the supply list and all equipment because this is essentially an add-on code representing an increased number of specimens and these supplies and the equipment are reflected in the base code. CPT code 32000, Thoracentesis, puncture of pleural cavity for aspiration, initial or subsequent We reviewed and made no changes to the RUC recommendations for clinical [[Page 59396]] staff time or equipment. We deleted a syringe, xylocain and atropine from the supply list since these items should be included in the thoracentesis kit that is also on the supply list. CPT code 43239, Upper gastrointestinal endoscopy including esophagus, stomach, and either the duodenum and/or jejenum as appropriate; with biopsy single or multiple The RUC made recommendations only on supplies and we accepted them. CPT code 45330, Sigmoidoscopy, flexible diagnostic, with or without collection of specimen(s) by brushing or washing (separate procedure) The RUC made recommendations for supplies only. We accepted the recommendations with the following adjustments. We decreased the staff gowns and surgical masks to two items each to reflect that there would typically only be two staff, a physician and a nurse, involved in this procedure. CPT code 56340 Laparoscopy, surgical; cholecystectomy (any method). Only refinements to clinical staff time were proposed by the RUC. We reviewed the proposed changes and the original CPEP inputs. While the RUC proposed changes to the pre-service clinical staff time, we are not accepting these changes at this time because there was an inadequate explanation for these changes. We will continue to use the original CPEP time of 15 minutes for the pre-service clinical staff time. We also noted that the post-service staff time included two RNs. Since it is more typical for one RN to assist with patient care during post-operative visits, we allowed 76 minutes of staff time for one RN and deleted 25 minutes for a second RN from the original CPEP inputs. Total staff time is now 91 minutes. This is an interim value, and the CPT code may be subject to further refinements. CPT code 58100, Endometrial sampling (biopsy) with or without endocervical sampling (biopsy), without cervical dilation, any method (separate procedure) We reviewed and made no change to the RUC recommendation on clinical labor or supplies. We deleted the vaginal/surgical procedure tray from the procedure-specific equipment because it was less than $500 and the colposcope from the overhead equipment since it is not typically used for this procedure. CPT code 65855, Trabeculoplasty by laser surgery, one or more sessions We made changes based upon review of both the RUC recommendations and the comments of the American Academy of Ophthalmology (AAO) that described the practice expense proposals they made to the RUC. We will continue to use the original CPEP inputs for pre-service clinical staff time of zero minutes. We accepted the RUC's proposed refinements for intra-service time in the office, 62 minutes, and post-service time, 82.5 minutes. We also accepted the RUC's proposal for supplies and equipment. These values were crosswalked to CPT codes 66762, 66770 and 66761 as recommended by the RUC. CPT code 66170, Fistulization of sclera for glaucoma; trabeculectomy ab externo in absence of previous surgery We accepted the RUC's recommendation to value the procedure only in the facility setting. Based upon review of both the recommendations of the RUC and the comments of the AAO, we retained the original CPEP value of zero minutes for pre-service clinical staff time and decreased the post-service clinical staff time to 247 minutes. We accepted the recommendations for supplies and deleted the Argon Laser and Hoskins Lens from equipment because this procedure is performed in the facility setting only and therefore this equipment is not used in the office for this procedure. These are interim values and the code may be subject to further refinement. These values were crosswalked to CPT codes 66150 66155, 66160, and 66165 as recommended by the RUC. CPT code 66172, Fistulization of sclera for glaucoma; trabeculectomy ab externo with scarring from previous ocular surgery or trauma (included injection of antibiotic agents). This procedure was valued only in the facility setting. Based upon review of both the recommendations of the RUC and comments from the AAO, we retained the original CPEP value of zero minutes for pre- service clinical staff time and decreased the post-service clinical staff time to 330 minutes. We accepted the RUC's proposals for supplies and equipment. These are interim values and the code will be subject to further refinement. CPT code 66821, Discission of secondary membranous cataract (opacified posterior lens capsule and/or anterior hyaloid); laser surgery (eg YAG laser) (one or more stages) Based upon review of both the recommendations of the RUC and the comments of the AAO, we retained the original CPEP value of zero minutes for pre-service clinical staff time, we decreased the post- service clinical staff time to 55 minutes, and we accepted the RUC proposed refinement of 37 minutes of intra-service clinical staff time in the office. We accepted the RUC's proposals for supplies and equipment. These are interim values and the code may be subject to further refinement. CPT code 66984, Extracapsular cataract removal with insertion of intraocular lens prosthesis (one stage procedure), manual or mechanical technique (eg, irrigation and aspiration or phacoemulsification). This procedure was valued only in the facility setting. Based upon review of both the recommendations of the RUC and the comments of the AAO, we retained the original CPEP value of zero minutes for pre- service clinical staff time, and we decreased the post-service clinical staff time to 110 minutes. We accepted the RUC's proposals for supplies and equipment. These are interim values and the code will be subject to further refinement. These adjusted values were crosswalked to CPT codes 66830, 66840, 66850, 66852, 66920, 66983, 66985, and 66986 as recommended by the RUC. CPT code 67036, Vitrectomy, mechanical, pars plana approach This procedure was valued only in the facility setting. Based upon review of both the recommendations of the RUC and the comments of AAO, we retained the original CPEP value of zero minutes for pre-service clinical staff time, and we decreased the post-service clinical staff time to 124 minutes. We accepted the RUC's proposals for supplies and equipment. These are interim values and the code will be subject to further refinement. CPT code 67038, Vitrectomy, mechanical, pars plana approach; with epiretinal membrane stripping This procedure was valued only in the facility setting. Based upon review of both the recommendations of the RUC and the comments the AAO, we retained the original CPEP value of zero minutes for pre-service clinical staff time and we adjusted the post-service clinical staff time to 220 minutes. We accepted the RUC's proposals for supplies and equipment. These are interim values and the code will be subject to further refinement. These adjusted values were crosswalked to CPT codes 67039 and 67040 as recommended by the RUC. [[Page 59397]] CPT code 67800, Excision of chalazion; single Based upon review of both the recommendations of the RUC and the comments of the AAO, we retained the original CPEP value of zero minutes of pre-service clinical staff time, and we accepted the RUC's proposed refinements of 35 minutes for intra-service clinical staff time and 20 minutes of post-service clinical staff time. We also accepted their recommendations for supplies and equipment but corrected typographical errors in the quantity of betadine, irrigation fluid and sterile towels. These are interim values and the code will be subject to further refinement. These adjusted values were crosswalked to CPT codes 67700, 67710, 67715, 677801, 67805, 67810, 67840, 68020, 68040, 68100, 68110, 68115, 68130, 68135, 68440, 68705, and 68760 as recommended by the RUC. CPT code 67820, Correction of trichiasis; epilation, by forceps only This procedure was valued only in the office setting. We accepted the RUC proposed refinement of 35 minutes for intra-service clinical staff time. We also accepted the RUC's proposed refinements for supplies and equipment, except that we decreased the number of sterile towels and cotton tipped applicators because of typographical errors. These are interim values and the code will be subject to further refinement. CPT code 71020, Radiologic examination, chest, two views, frontal and lateral CPT code 72100, Radiologic examination, spine, lumbosacral; anteroposterior and lateral CPT code 72170, Radiologic examination, pelvis; anteroposterior only CPT code 73560, Radiologic examination, knee; one or two views CPT code 74000, Radiologic examination, abdomen; single anteroposterior view CPT code 74020, Radiologic examination, abdomen; complete, including decubitus and/or erect views For all these radiologic services we reviewed and made no changes in the RUC recommendation for clinical staff time. Date stickers and insert folders were deleted from the medical supplies because these are considered office supplies. We accepted the RUC recommendation for equipment except for deleting dictation equipment because it is considered office equipment and the lead shield because it does not cost over $500. CPT code 76519, Ophthalmic biometry by ultrasound echography, A-scan; with intraocular lens power calculation We reviewed and made no changes in the RUC recommendations for clinical staff time or supplies. We moved the printer from procedure- specific to overhead equipment because it can be used across a range of services. CPT code 76700, Echography, abdominal, B-scan and/or real time with image documentation complete The RUC made recommendations only on supplies and, after reviewing, we made no changes to their recommendations. CPT code 85060, Blood smear, peripheral, interpretation by physician with written report CPT code 85097, Bone marrow, smear interpretation only, with or without differential cell count Since these are professional services only, all clinical staff time, supplies, and equipment were deleted. Practice expenses are included for payment with other applicable CPT codes and, if practice expense inputs were included here, would result in a duplicate payment. CPT code 88104, Cytopathology, fluids, washings or brushings, except cervical or vaginal; smears with interpretation We made no changes in the clinical staff time, but made a minor revision to the supplies listed. We deleted the marking pen from the supplies because the cost per procedure was negligible and deleted the metal slide storage cabinet from overhead equipment because it is considered furniture. CPT code 88304, Level III--Surgical pathology, gross and microscopic examination CPT code 88305, Level IV--Surgical pathology, gross and microscopic examination We made no changes in the clinical staff time, but made a minor revision to the supply list. We deleted the marking pen from the supplies because the cost per procedure was negligible, and deleted the metal slide storage cabinet and the plastic block storage cabinet from overhead equipment because these items are considered furniture. We also deleted the Stryker saw which is not typically used with these procedures. CPT code 88312, Special stains; Group I for microorganisms, each We reviewed and made no changes to the RUC recommendations for clinical labor, equipment and supplies. CPT code 92004, Ophthalmological services; medical examination and evaluation with initiation of diagnostic and treatment program; comprehensive, new patient, one or more visits The RUC recommendation was for supplies only; we accepted the recommendation except for deleting the betadine from the supply list because it would not be used during an eye examination. CPT code 92012, Ophthalmological services; medical examination and evaluation with initiation or continuation of diagnostic and treatment program; intermediate, established patient CPT code 92014, Ophthalmological services; medical examination and evaluation with initiation or continuation of diagnostic and treatment program; comprehensive, established patient, one or more visits The RUC recommendation was for supplies only; we accepted this recommendation, except for deleting the betadine from the supply list because it would not be used during an eye examination. We also deleted the patient education pamphlet and contact lens solution to be consistent with comments from the American Academy of Ophthalmology. CPT code 92083, Visual field examination, unilateral or bilateral, with interpretation and report; extended examination We reviewed and made no changes to the RUC recommendations for clinical staff time or equipment. We deleted the black pins from the supply list because they are a reusable supply. These adjusted values were crosswalked to CPT code 92081 and 92082 as recommended by the RUC. CPT code 92235, Fluorescein angiography (includes multiframe imaging) with interpretation and report We reviewed and made no change to the RUC recommendations on supplies. For equipment, we deleted the electric table because a reclining exam chair is also included and both are not needed for this procedure. CPT code 92240, Indocyanine-green angiography (includes multiframe imaging) with interpretation and report We received RUC recommendations on equipment only. We deleted the [[Page 59398]] electric table because a reclining exam chair is also included and both would not be used for a given service. CPT code 92250, Fundus photography with interpretation and report We received a RUC recommendation on equipment only. We deleted the electric table because a reclining exam chair is also included and both are not needed for a given service. These adjusted values were crosswalked to CPT code 92230 as recommended by the RUC. CPT code 92507, Treatment of speech, language , voice, communication, and/or auditory processing disorder (includes aural rehabilitation); individual CPT code 92526, Treatment of swallowing dysfunction and/or oral function for feeding CPT code 92585, Auditory evoked potentials for evoked response audiometry and/or testing of the central nervous system We reviewed and made no change to the clinical staff time recommended by the RUC. However, we did not increase the wage rate for the audiologist as suggested by the RUC because we will address this issue globally for all staff types during refinement. CPT code 93307, Echocardiography, transthoracic, real-time with image documentation (2D) with or without M-mode recording; complete The RUC made recommendations only for supplies that we reviewed and made no changes. CPT code 93320, Doppler echocardiography, pulsed wave and/or continuous wave with spectral display ; complete A comment accompanying the RUC recommendation stated that this is an add-on code and questioned whether the RUC recommended equipment should be included. Because the cost of the equipment is reflected in the values for the base code, we have deleted all the equipment listed for this service. CPT code 94010, Spirometry, including graphic record, total and timed vital capacity, expiratory flow rate measurement(s), with or without maximal voluntary ventilation We reviewed and made no changes to the RUC recommendations for clinical labor, supplies or equipment. CPT code 95819, Electroencephalogram (EEG) including recording awake and asleep, with hyperventilation and/or photic stimulation We reviewed and made no changes to the RUC's clinical labor recommendations. We deleted the following items from the list of supplies: printer toner cartridge, since this is an office expense; the skin marking pen because the cost per procedure is negligible; the nasopharyngeal-electrode because it is not typically used with this procedure; and seconal and chloral hydrate since these are drugs that are not paid under the physician fee schedule. We moved the pulse oximeter from procedure-specific to overhead equipment because it can be used for a wide range of services and deleted the exam table because an electric bed is included with the equipment and both would not be needed for a given service. CPT code 95860, Needle electromyography, one extremity with or without relaxed paraspinal areas We reviewed and made no changes to the RUC's clinical labor recommendations. For supplies, we deleted the sharps container and blood medical waste bag since they are not disposed of after only one procedure. We also substituted the ENG electrode needle for the concentric ENG needle electrode because it is more typically used for this procedure. For equipment, we moved the hydrocollator from procedure-specific to overhead equipment because it is used for a wide range of services. CPT code 95900, Nerve conduction, amplitude and latency/velocity study, each nerve, any /all site(s) along the nerve; motor, without F-wave study CPT code 95904, Nerve conduction, amplitude and latency/velocity study, each nerve, any /all site(s) along the nerve; sensory We reviewed and made no changes to the RUC's clinical labor recommendations. For supplies, we deleted the skin marking pen and the stimulator bar electrode and pick-up electrodes because they are not disposable supplies. For equipment, we moved the hydrocollator from procedure-specific to overhead equipment because it is used for a wide range of services. CPT code 97022, Application of a modality to one or more areas; whirlpool Based on a review of the RUC recommendation and the original CPEP data, we are using the original CPEP staff time of 31 minutes in the intra-service period because the RUC recommended set-up time of 13 minutes is excessive. For supplies, we deleted the sterile drape, culterette and culture media because they are rarely used for this procedure, and we are deleting the patient education booklet because this procedure would be performed on the same patient more than once and a booklet would not be required at each session. We deleted the hilo table and hoyer lift from the equipment because they are not typically used for the service. CPT code 97035, Application of a modality to one or more areas; ultrasound, each 15 minutes We reviewed and made no changes to the RUC's clinical staff time recommendation. However, we deleted the patient education booklet from supplies because it is not provided with every treatment. We also deleted the utility cart from equipment because the cost was under $500. CPT code 97110, Therapeutic procedure, one or more areas, each 15 minutes; therapeutic exercises to develop strength and endurance, range of motion and flexibility We made no changes to the RUC's clinical staff time recommendation. However, from the supply list we deleted the patient education booklet, because it would not be provided at each therapeutic session, as well as tape and ace bandage because they are not typically used. For equipment, the RUC recommendation suggested 50 percent utilization for the isokinetic strengthening equipment and the therapeutic exercise equipment set. We have instead assumed 100 percent utilization of the therapeutic exercise equipment as it is much more typically used than the isokinetic equipment. We also deleted the hilo table because there is another table listed in the equipment and only one or the other would be used for a specific procedure. CPT code 97530, Therapeutic activities, direct (one on one) patient contact by the provider (use of dynamic activities to improve functional performance); each 15 minutes We reviewed and made no changes to the RUC's clinical staff time recommendation. However, we deleted the patient education booklet, as well as tape and ace bandage, from supplies, because they are not typically used. For equipment, the RUC recommendation suggested 50 percent utilization for the isokinetic strengthening equipment and the therapeutic exercise equipment set. [[Page 59399]] We have instead used 100 percent utilization of the therapeutic exercise equipment as it is much more typically used. We also deleted the hilo table and the low mat table because the patient would typically be standing during this service. The RUC also forwarded to us recommendations for the CPEP inputs for the following services: CPT code 11100, Biopsy of skin, subcutaneous tissue and/or mucous membrane (including simple closure), unless otherwise listed (separate procedure); single, CPT code 52647, Non-contact laser coagulation of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included), CPT code 53850, Transurethral destruction of prostate tissue; by microwave thermotherapy, CPT code 53852, Transurethral destruction of prostate tissue; by radiofrequency thermotherapy, CPT code 64721, Neuroplasty and/or transposition; median nerve at carpal tunnel, CPT code 96408, Chemotherapy administration, intravenous; push technique, and CPT code 96410, Chemotherapy administration, intravenous; infusion technique, up to one hour. Since many of the changes proposed for these CPT codes included items not typically used for the procedures, duplicate inputs, inconsistent inputs or extensive additional in-office inputs for services currently only costed in the facility setting, we have concluded that further review is required before the proposed changes can be adopted or rejected. Therefore, the original CPEP inputs will remain unchanged. We solicit comments on these CPT codes to assist us with those refinements. Physicians' Clinical Staff in the Facility Setting In the ``top-down'' methodology set forth in the 1998 regulation, we used the raw CPEP inputs without applying edits to any of the data, and the staff time allotted to the use of clinical staff in the facility setting was therefore included. In our July 1999 rule, we proposed to exclude from the raw CPEP data all clinical staff time in the facility setting. The CPEP data is used in our methodology solely to allocate the specialty-specific practice expense pools to the individual CPT codes. We proposed to exclude this clinical staff time for the following reasons: (1) Medicare should not pay twice for the same service; (2) It is not typical practice for most specialties to use their own staff in the facility setting; (3) Inclusion of these costs is arguably inconsistent with both the law and Medicare regulations. We believe these reasons strongly support not including the costs of physicians' clinical staff used in the facility setting in the calculation of practice expense values. However, in the proposed rule, we invited comments on this issue and particularly solicited information about any possible instances where it would be appropriate to include data on the use of a physician's clinical staff in the facility setting. Comment: Several commenters, from the American Hospital Association (AHA) and other hospital trade groups, as well as from several physician specialty societies, believe we have correctly determined that it is not a typical practice for physicians to bring their own staff to the hospital. The AHA commented that 1,459 hospitals in the National Hospital Panel Survey were surveyed on physician practices in their institutions. They believe the Panel Survey ensures reliable national estimates by stratifying hospitals according to size and randomly selecting from each stratum in each of the nine census regions in disproportionately larger numbers as bed size increases. There were 573 responses to the survey. They stated that, though 63 percent of the hospitals surveyed answered that at some time in the last 6 months a physician brought his or her own staff to the hospital, only 11 percent of all responding hospitals said this was a regular practice. Two primary care specialty groups agreed that it is not typical for physicians to use their own clinical staff in the facility setting. One specialty group representing urologists acknowledged that a survey of its physician membership showed that less than 15 percent of its members take their clinical staff to facility settings. We also received many comments that took issue with the argument in the proposed rule that it is not typical practice for most specialties to use their own staff in the facility setting. Several commenters questioned the validity of the AHA survey. Some commenters argued that the category ``not a regular practice'' in the AHA survey was ambiguous because a negative answer to the question could mean either that no physicians regularly brought staff to the hospital or that only certain specialties, such as cardiothoracic surgeons or anesthesiologists, regularly brought staff to the hospital. Another specialty society commented that the AHA survey provides no basis for concluding that cardiothoracic surgeons do not bring their staff into the hospital because less than 25 percent of the hospitals in the U.S. provide open heart surgery. Many commenters merely stated, with no data to support their view, that it is common for their particular specialty to bring nurses or physician assistants with them to the facility to prepare the patient for surgery, assist during the procedure, and provide post-operative care. Other commenters referred to the results of one or more surveys that would indicate use of physicians' clinical staff in the facility setting, but did not include a copy of the survey or provide any details of the survey methodology, the sample used, or the questions asked. An organization representing neurosurgery referred to data collected by their society that suggests that between 40 and 60 percent of practices in the mid-West and South Central regions of the country use their employed clinical staff in the hospital. One organization representing a sub-specialty of cardiology cited a survey of its members that indicated that 55 percent of its members follow the practice of bringing staff to the hospital for purposes of patient education when performing such procedures as electrophysiology studies, pacing procedures and ablations. The commenter contended that hospital nurses are not knowledgeable enough about the above procedures to talk comprehensively with patients or families. Two specialty societies provided more extensive information regarding survey data on the use of clinical staff in the facility setting. The American Society of Anesthesiologists (ASA) stated that the ASA surveyed 220 anesthesia practice managers in August of this year. The survey referenced the fact that our proposed rule proposed to exclude from CPEP data the costs of clinical staff in the facility partly because of our belief that it was not typical and asked respondents if their practice used any of their own staff, excluding those who can bill separately, in the facility setting. The commenter reported that with a 65 percent response rate, 40 percent of the managers reported that they did use clinical staff in the facility setting. ASA further stated that a 1997 Abt survey for the ASA suggested that many anesthesia practices employ clinical staff with a mean of 0.32 employees per practice; this total included a mean of 0.19 [[Page 59400]] registered nurses and 0.04 anesthesia technicians. The commenter also argued that the typical cost criterion does not rest on any statutory footing and that allowances for practice expenses should be based on average cost rather than typical cost. The STS referred to surveys undertaken by the American Association of Physician Assistants and the Association of Physician Assistants in Cardiovascular Surgery that report physician assistants (PAs) are involved in at least 200,000 cardiac cases a year, that almost all these PAs have responsibilities in the operating room, and 85 percent are involved in postoperative care in the hospital. Response: We want to make it clear that we are not asserting that physicians never bring their own clinical staff into the facility setting or that this practice may not be more common among some specialties than among others. However, as stated in the proposed rule, we have not seen sufficient data to convince us that the use of the physician's clinical staff in the facility setting is a typical practice. The search for sufficient data did not start with the proposal in this year's proposed rule. Rather, the inclusion by most of the CPEP panels of varying amounts of inputs for clinical staff in the facility setting has been controversial from the start. While many medical specialties insist that the physicians' practice of bringing staff to the hospital is common, other specialties indicate that this is not a typical practice. In our Notice of Intent to Regulate published on October 31, 1997, we stated that there seemed to be some question of whether the practice of bringing a physician's staff to a facility was, in fact, common and widespread. We explicitly solicited information about this practice. We asked for comments about the extent to which the practice occurs, procedures involved, functions performed, type of staff employed, and staff training and credentialling. We specifically requested the name, location and characteristics of any facility where this practice occurred and the facility's requirements for credentialling the staff, including any limits on duties of the staff by the facility. In addition, we requested that where surveys had been conducted to document this practice, we wanted to receive copies of the surveys and results, including such details as the survey methodology and sampling design. The response to this request for information was sparse. We received only 16 responses to this issue, most were anecdotal without any specific information. Only two comments from specialty societies included information from surveys or objective sources. The American Academy of Ophthalmology (AAO) surveyed 300 ophthalmologists and reported that 45 percent of the respondents said they utilized staff out of the office. There was no information on the sample size, composition, or response rate. In addition, the information on the frequency of this practice was not clear. It appears from the information provided that a large portion of those who brought their own staff into the facility did so less than 100, and many probably less than 50, times a year. The STS included the PA surveys that are a part of their current comments from which they drew indirect inferences regarding the use of physicians' staff in the facility setting. However, neither the AAO nor the STS surveys answered the specific questions asked in the Notice. In December 1997, we received a copy of the AHA survey mentioned above that indicated that only 11 percent of the hospitals that responded to the survey said that it was a regular practice for physicians to bring their staff into the facility. We compared the results of the AHA survey with the AMA's 1996 SMS survey of physicians that included responses from 153 surgeons and obstetricians and gynecologists about the use of clinical staff in the facility setting and found that the findings correlated closely. In answer to the question, ``When the physician provides services in the hospital how often is he or she assisted by non-physician personnel employed by the physician's practice?,'' only 11 percent of the physicians answered ``always.'' In contrast, 68 percent answered ``never'' and another 9 percent ``occasionally.'' Equally important, in answer to the question, ``Are these non-physician personnel reimbursed by the hospital, reimbursed by a third party or are they paid directly by the practice for services provided in the hospital?,'' 38 percent of those who brought their staff to the facility answered ``reimbursed by hospital,'' and only 51 percent said they were paid by the practice. Therefore, it was both the absence of requested data that could actually demonstrate that it was typical for physicians to bring their staff to the hospital, as well as existence of data that strongly indicated that this indeed was not a typical practice, that has led us to the conclusion that it is indeed not typical for physicians to bring their staff to a facility. The only hard data supplied to us in the comments on the proposed rule were provided by the ASA and STS. The ASA reported the results of two surveys. The Abt study reported a mean of 0.32 full time equivalent (FTE) total clinical staff per practice, of which 0.19 FTE were registered nurses and only 0.04 FTE were anesthesia technicians. These relatively low numbers of clinical staff per practice would actually seem to support a conclusion that it is not typical to bring these staff to the hospital. The ASA also conducted their own study of 220 anesthesia practice managers. With a 65 percent response rate, about 40 percent of the respondents indicated that their practice employed clinical support personnel who were not eligible for direct reimbursement. There is, however, no indication in their comment about what this staff is doing and where they are doing it. In addition, this survey actually shows that 60 percent of practices do not employ clinical staff; therefore, this is not a typical practice. Apparently aware of this, the ASA argues that the typicality standard ``merely derives from the original studies undertaken as part of the development of physician work values when the Fee Schedule was initiated.'' The ASA then contends that we should base our practice expense on the cost of the average patient, not the typical patient. The ASA is correct that all of the RVUs, both work and practice expense, have been based on the services provided to the typical patient. Though we would be willing to discuss in the future the merits of using the typical versus the average patient for certain practice expense categories, we do not believe that the costs of an average patient would be meaningful regarding the use of clinical staff in the facility setting when there is such obvious inconsistency in practice patterns. All the use of the cost of an average patient would accomplish would be to consistently underpay some, while consistently overpaying others. As stated above, while STS submitted surveys compiled by two PA organizations, no information was included regarding the use of nurses in the facility setting. From the submitted surveys, it would appear that cardiovascular PAs are very active in the hospital setting. For example, the surveys showed that almost all cardiovascular PAs assist in the operating room. The problem with the submitted data is that, because PAs are eligible for direct reimbursement from Medicare, the physicians' costs associated with PAs cannot, in general, be considered practice expense. The same would be true of nurse practitioners. [[Page 59401]] After reviewing all the available data, we remain convinced that our position in the proposed rule was correct: it is not a typical practice for physicians to bring their own staff into the facility setting. Comment: We received only a few comments in response to our statement in the proposed rule that Medicare should not pay twice for the same service and that this was a major reason to exclude the clinical staff time for physicians' staff used in the facility setting from the CPEP data. Two groups contended that, to the extent that Part A is paying for the cost of clinical staff brought to the hospital by the physician, we should take measures to see that Part A monies are shifted to Part B. Two other organizations took issue with our statement that, because the hospital is already paid for providing all nursing care to its patients, the inclusion of the costs of physicians' clinical staff in calculating the practice expense RVUs would amount to paying twice for the same service. These commenters claimed that because hospital payments are reweighted annually to reflect changes in costs and charges, these facilities are not being reimbursed for the costs of clinical staff that physicians now bring themselves to the facilities. The STS argued that, though our observation in the proposed rule that there is separate Part B reimbursement for a PA acting as an assistant-at-surgery is generally true, this is not true in the academic setting where a resident is available, nor in California where state law requires that two physicians be present for every case. The commenters also raised the more general point that PAs are also used in the office setting and point out that 15,000 PAs are employed in family practice, either billing directly or being included as ``incident to'' physicians' services. The commenters asked why we have not raised this issue more broadly across all specialties and suggested that we could better eliminate duplicate payment for these clinical services by reducing the SMS specialty pools by the amount of income received for staff who can bill directly to Medicare. In response to our statement that much of the time claimed for clinical staff in the facility for making patient rounds is really a substitute for physician work, the STS states that the Congress and the government have explicitly encouraged the use of such physician extenders. The commenter conceded that it is possible that the work RVUs may need to be adjusted for all specialties, but added that it is not clear what activities are a substitute for physician work and which are added services. Finally, STS argued that excluding hospital-related clinical staff costs from CPEP data because they are not otherwise covered services or because they are separately reimbursable without taking similar action for all other CPEP inputs with similar characteristics is discriminatory. Response: In the proposed rule we stated our belief that the duties that were being attributed by many specialties to physicians' clinical staff in the facility setting were already paid for by Medicare through a mechanism other than physician expense. For example, an assistant at surgery can be paid separately. In addition, we already pay the facility to provide all nursing care to the facility patient whether that nurse is acting as a scrub nurse or monitoring a patient undergoing conscious sedation. We also pointed out that reviewing charts, making patient rounds or pulling chest tubes are physicians' services that are paid for through the physician work RVUs. In response to the comment that we should shift Part A monies to Part B so that a double payment would not be made, we believe this implies that we should adjust inpatient hospital PPS rates to remove costs associated with clinical staff brought to the hospital by physicians. We do not believe that such an adjustment is consistent with section 1886(d)(2)(C) of the Act which prescribes the methodology for standardizing PPS base year costs and calculating PPS rates for each fiscal year. We disagree with the comment that annual reweighting of hospital costs and charges means that hospitals are not being reimbursed for staff allegedly replaced by the clinic staff physicians bring to hospitals. The relative weights which determine payment for a diagnostic related group (DRG) are reweighted annually based on hospital charges. However, this only affects the relative payment for each DRG. Payment would continue to be included in the PPS rates unless a specific adjustment were made to remove these costs. As stated above, we do not believe such an adjustment is consistent with section 1886(d)(2)(C) of the Act. The STS made several interesting points in their comments, and we will respond to each. STS conceded that a PA acting as an assistant-at- surgery can be separately paid, but not when another doctor is there to assist. The STS did not clarify why the use of a PA would be necessary in such a situation or why, if a PA is used, Medicare should recognize any such extra costs. We believe that the STS has raised a valid issue about the general use of physician extenders across all specialties. It is true that in our proposed rule we only addressed the possible substitution of nonphysician practitioners' work for physician work in the facility setting for all specialties. It is not possible in the CPEP data to readily identify in office setting what clinical staff time might be a substitute for physician work or what staff is eligible for separate payment. It was relatively rare for the CPEP panels to identify a PA or nurse practitioner as the clinical staff type in the office setting. However, this is clearly an issue that we intend to address during the refinement process. In addition, as specific in- office codes are refined, either by us or by the PEAC and RUC, the question of possible duplication of physician work should be raised for all services. The STS also suggests adjustment of the SMS data to account for staff that may bill directly. As we noted above, we have asked our contractor to determine which specialties' SMS data may be affected by inclusion of mid-level practitioners in specialty survey cost data and to develop alternative methodologies to address it. It should also be noted that the practice-level SMS survey that is in development breaks out the costs for clinical staff who are eligible for direct payment. Regarding the commenter's argument that we are acting in a discriminatory manner unless we exclude from the CPEP data all inputs that are separately billable or not covered, we are attempting to do just that. In last year's final rule, we used the raw CPEP data and made no modifications for any separately billable or non-covered CPEP inputs. However, we have in this final rule identified separately billable supplies, such as drugs and casting materials, and have excluded these from the CPEP data. We have also excluded self- administered drugs from the supply list because they are not covered by Medicare. We invite comments about any other inputs currently in our CPEP database that fall into either category. After reviewing the comments on this issue, we continue to believe that including in CPEP data the costs of physicians' clinical staff in the facility setting would represent a duplicate payment that Medicare should not make. Comment: We also stated in the proposed rule that inclusion in CPEP data of the costs of clinical staff brought into the facility is arguably inconsistent with both the law and Medicare regulations. No commenter directly challenged this contention. However, several groups stated the general concern that the elimination of clinical staff costs from the CPEP data [[Page 59402]] contradicts the intent of section 4505(d) of the BBA that specifically states that, in developing such units, the Secretary shall utilize to the maximum extent practicable, generally accepted cost accounting principles which recognize all staff, equipment, supplies, and expenses, not just those which can be tied to specific procedures. The STS submitted an extensive comment on this point which stated that even if it were true that the clinical staff costs would be excluded from coverage under Medicare if physicians sought to bill separately for those services, the point is irrelevant and inconsistent with the statutory language and the history of the practice expense provisions. The comment stated that the Congress defined the term practice expense as ``all expenses for furnishing physicians'' services, excluding malpractice expenses, physician compensation, and other physician fringe benefits.'' The STS concluded that nothing in these definitions requires or even permits the agency to carve out from practice expenses RVU costs that would not be covered services on their own or that are separately reimbursable under Medicare. The commenter added that, to the contrary, the agency's mandate is to identify all practice expenses incurred by physicians in their practice and then to allocate all of those costs to particular procedures. Response: We believe that a reading of both the law and Medicare regulations leads to the conclusion that no payment should be made under the physician fee schedule that is attributable to the costs of physicians' clinical staff used in the facility setting. Section 1862(a)(14) of the Act which discusses exclusions from coverage states that, ``Notwithstanding any other provision of this title, no payment may be made under part A or part B * * * for any expenses incurred for items or services which are other than physicians' services (as defined in regulations promulgated specifically for purposes of this paragraph) * * * and which are furnished to an individual who is a patient of a hospital * * * by an entity other than the hospital * * * unless the services are furnished under arrangements. * * *'' (This section also exempts services of physician assistants, nurse practitioners, clinical nurse specialists, certified nurse-midwife services, qualified psychologist services, and services of certified registered nurse anesthetists from the above exclusion.) In Sec. 411.15 (Particular Services Excluded from Coverage) subparagraph (m)(1), the text paraphrases the above provision for hospital inpatients and adds that ``services subject to exclusion under this paragraph include * * * services incident to physicians' services.'' Section 411.15(m)(2) implements the exceptions to this exclusion, among them ``physician services that meet the criteria of Sec. 415.102(a) of this chapter for payment on a reasonable charge or fee schedule basis.'' Section 415.102(a) contains the definition of physicians' services required by section 1862(a)(14) of the Act and the criteria referred to in Sec. 411.15(m) above: ``If the physician furnishes services to beneficiaries in providers, the carrier pays on a fee schedule basis provided the following requirements are met: (1) The services are personally furnished for an individual beneficiary by a physician. (2) The services contribute directly to the diagnosis or treatment of an individual beneficiary. (3) The services ordinarily require performance by a physician.'' On September 8, 1998, we published a proposed rule on a prospective payment system for hospital outpatient services (63 FR 47552). This rule proposed to add Sec. 410.39 which embodies in regulation for the hospital outpatient setting the exclusion in Sec. 411.15 described above. Section 410.39(c) would exempt from the exclusion physicians' services that meet the requirements of Sec. 415.102(a) as described above, physician assistant, nurse practitioner, clinical nurse specialist, certified nurse midwife, and qualified psychologist services, as well as services of an anesthetist. A reading of all of the above suggests that no payment should be made under the physician fee schedule that reflects the costs of physicians' clinical staff used in the hospital setting. Services performed by nonphysician clinical staff do not fulfill the definition of services personally furnished by a physician, and, therefore, the exception to the exclusion for the physicians' services created by section 1862(a)(14) of the Act does not apply. In addition, nursing services, such as those performed by a scrub nurse working for a physician, do not ordinarily require performance by a physician and, thus, are not physicians' services for the purpose of section 1862(a)(14) of the Act. Finally, services ``incident to a physician's service'' are explicitly excluded from coverage in the hospital setting by Sec. 411.15(m)(1). As stated above, we received no comments that directly addressed our reading of the statute and regulations. The commenters merely cited the requirement of the BBA that we should utilize generally accepted cost accounting principles which recognize all staff, equipment, supplies, and expenses, not just those which can be tied to specific procedures. We believe that this section of the BBA, with its reference to the recognition of costs that are not tied to specific procedures, is primarily directed at our prior methodology of computing indirect costs; this section of the law does not supersede other provisions of the law or regulations governing Medicare payment. Nor is there any indication that the BBA was intended to prevent us from excluding noncovered or otherwise paid for services as allocators of direct practice expense. We are still convinced that the inclusion of the costs of clinical staff brought into the facility setting is inconsistent with the law and Medicare regulations. Comment: Several groups commented that there are appropriate services that clinical staff in the physician's office do perform for facility patients that are typical, are not paid for by Medicare under any other mechanism, and that would be permitted by our regulations. For example, clinical staff may help with arranging a psychiatric admission to the hospital, may make follow-up telephone calls to patients to give post-surgical instruction on drugs or pain management, or may give other clinical guidance to the patient or patient's family. The comments recommended that these clinical staff services be included as direct inputs in the facility setting. Response: We agree that there may be some clinical tasks that clinical staff in the office can appropriately perform for a facility patient. There first needs to be a general discussion about what are the appropriate clinical tasks that clinical staff might perform during each of the different global periods. (For example, we would not consider scheduling tests or procedures to be a clinical task but an administrative task and most of the CPEP panels assigned time for a scheduling secretary.) We would also like to obtain a general consensus about what are reasonable parameters for the times it takes to perform these clinical tasks. Once there is a general approach to this issue, we would consider recommendations for specific services. We welcome general comments on this issue; it would also seem to be an appropriate topic for discussion for the PEAC and RUC. Comment: Several commenters recommended that we delay implementation of this proposal until further data could be collected. Some of the commenters suggested that the PEAC or our contractors help resolve [[Page 59403]] the issue of including within practice expense inputs physicians' clinical staff time in a facility. Another group of commenters advised HCFA to survey physicians to identify the extent to which physicians use their own staff to provide services in facilities and their reasons for doing so. The AMA asked us to defer action on this proposal until the physician fee schedule final rule for 2001 because specialty groups have been given no opportunity for meaningful review of the reasonableness of the approach or its impacts. Other organizations suggested that we proceed with the proposal but allow affected specialty groups to present survey data on this issue to the PEAC to justify whether any of these costs should be included in the CPEP data. Response: We do not plan to delay implementation of our proposal to exclude the costs of physicians' clinical staff used in the facility setting from the CPEP inputs. We have reviewed and analyzed the submitted comments and continue to believe that the policy in our proposed rule on this issue is correct. Though the PEAC is free to discuss the issue of clinical staff in the facility setting if they so choose, we have the ultimate responsibility for making a decision on this basic policy issue. We will implement this proposal and will use the adjusted CPEP data in the calculation of the practice expense RVUs for the year 2000 physician fee schedule. Physician Time Pediatric Surgery Physician Time Data The physician time assigned to pediatric surgery codes was based on erroneously low time data from the original Harvard study, rather than on later data from the study of pediatric services performed by the same Harvard study team for the American Pediatric Surgical Association (APSA) in 1992. We proposed updating the physician times for these 48 pediatric surgical services upon receipt of the needed data. Comment: The APSA and the American College of Surgeons have forwarded to us the updated physician times for 48 pediatric surgical services and have requested that we use the times for the calculation of the practice expense pools that contain these services. Included with the comments is a detailed report entitled, ``Pediatric Surgery and the Medicare Fee Schedule for Physicians' Services: History, Analysis and Correction of Data on Physician Work and Physician Time.'' This request is supported by comments from the American Urological Association and the American Academy of Pediatrics. Response: We have substituted the revised times for these pediatric surgical services into our physician time database and will use them in all of our practice expense calculations. Physical Therapy and Occupational Therapy Times We had received comments indicating the times for the physical therapy codes (CPT 97001 through 97770) contained in the November 1998 final rule were too low due to the fact that only intra-service times were used. We agreed that it was appropriate to include some preservice and postservice times for these procedures and proposed adjusting the total code-specific times used to create the practice expense pools as shown in Table 6 ``Revised Times for CPT codes 97001 through 97770'' in the July 1999 proposed rule. Comment: Two major organizations commended us for recognizing that it is appropriate to include pre-service and post-service time and for adjusting the RVUs to reflect this time. However, they wanted us to use the times identified by the expert panel established by the American Physical Therapy Association (APTA) for CPT codes 97001 through 97770. They considered such times to more accurately reflect the times associated with each code. Response: We carefully evaluated the expert panel's submitted time for CPT codes 97001 through 97770 and used it in collaboration with our staff physicians' medical judgment to adjust the practice expense RVUs for these codes. The times as adjusted reflect nonduplicated pre- and post-service times that may occur when multiple services are provided during the same therapy session. The APTA acknowledged the potential for such overlap in commenting on our proposed rule. Comment: The American Occupational Therapy Association was pleased that we agreed to revise the occupational therapy times to include some pre- and post-service times for the physical medicine and rehabilitation CPT codes and the RUC surveyed intra-service time for the occupational therapy evaluation and occupational therapy re- evaluation CPT codes (97003 and 97004, respectively). Response: We appreciate the association's comment. Comment: An association representing physical therapists recommended that we include additional times for two CPT codes that were not reflected in the proposed rule. It was recommended that we use a 20 minute time period for new CPT code 97140. In addition, the association stated that CPT code 97150 should be added with a typical group session of approximately 45 minutes and pre- and post-time. Response: We are not clear about the commenter's statement that CPT codes 97140 and 97150 were not reflected in the proposed rule. These codes were listed in Addendum B of the proposed rule. We cannot adopt the recommendation to treat code 97140 as a 20 minute code. When the AMA added 97140 to the CPT codes in 1999, it defined it as a 15 minute code. Therefore, we cannot comply with commenter's request to increase the code's time to 20 minutes. After reviewing the comment for CPT code 97150, we have decided to refer it for close examination during the five year refinement process. RUC Time Database The primary sources for the physician time data used in creating the specialty-specific practice expense pools are the surveys done for the initial establishment of the work RVUs and the surveys submitted to the AMA's RUC. Some of the times used for the November 1998 final rule differed from the official RUC database. We indicated in the proposed rule that we plan to use the times from the verified database, in conjunction with the Harvard times, as the basis for determining physician times. Comment: The AMA has submitted a database that contains verified physician times for those codes considered by the RUC. However, according to a letter received September 30, 1999 from the RUC, there are certain complications in trying to calculate total physician time for the global surgical codes. The letter states: ``* * * it became apparent that a key assumption would need to be made about the E/M time for each office visit included in a global surgical period. At the most recent RUC meeting, it became apparent that there is not an obvious standard for this data element. * * * It is apparent that this is an issue of real importance and we will, therefore, place this issue back on the RUC's agenda for next year. However, we will be unable, at this time, to provide `total time calculations' for many of the codes in the RUC database, as we have not yet agreed on the most appropriate E/M time to be utilized in the calculations of the codes with global surgical periods.'' Response: We believe that it would not be appropriate to utilize the submitted RUC database until the RUC resolves the question of the E/M time [[Page 59404]] assigned to global surgical visits. The premature use of this data could potentially have unwarranted negative impacts on the specialties that perform these global services. Therefore, we will use the current time database as part of the calculation of the practice expense pools. Comment: One association commented that our adjustments to the physician time data as described in the 1998 Physician Fee Schedule final rule seem arbitrary and premature and decreased the time for urologic endoscopic procedures by a factor of 0.979. The commenter recommended that we dispense with these adjustments until the contractor has a chance to review the time data. A surgical association recommended that the unadjusted RUC or Harvard times be used in our practice expense calculations because the adjustments were arbitrary; for example the time for E/M codes was increased by 4 to 6 percent which has a serious impact. The commenter included a lengthy technical attachment entitled, ``Are Physician Time Data Correct?'' A primary care organization also stated it is not convinced that our decision to adjust the Harvard time data to ensure consistency between the RUC and Harvard data is appropriate. Response: The adjustment to reconcile the Harvard and RUC physician times was proposed in the June 5, 1998 proposed rule (63 FR 30818) and was adopted in the November 2, 1998 final rule (63 FR 58814). In this final rule we stated, ``We still believe this adjustment is appropriate and we will continue to use the adjusted values in our calculations for this final rule.'' There was not a discussion or proposal on this issue in the July 22, 1999 proposed rule. Therefore, we are not changing or dispensing with these adjustments in this final rule. However, we agree that the accuracy and consistency of the physician time data is vitally important to the appropriate calculation of the specialty practice expense pools, and we welcome further discussion on this issue from all parties. As noted above, we have asked our contractor to develop options for validating the Harvard and RUC time data and will share this discussion and any recommended options with the medical community. Comment: One organization noted that, for services with a small amount of time, a minor error in the time allotted can result in a relatively large difference in the practice expense allocated to such services. The commenter also recommended that we consider using an alternative approach for determining the time used in the calculation of practice expense for those services not performed by physicians. Response: We would be interested in receiving any suggestions about improved methods of verifying time for any specialty, physician or non- physician, and would be glad to consider any specific approaches that the commenter might want to suggest. Comment: The American Psychiatric Association commented that the physician times for psychotherapy codes with E/M services are sometimes less than those services without an E/M component. The commenter recommended that the times assigned to the codes with E/M be increased so that they are seven minutes more than the corresponding service without E/M. Response: We agree that the codes with E/M should be at least equal to those corresponding codes without E/M and are making this adjustment. The current discrepancy in times could be due to the previous changes in the coding of psychiatric services. However, we believe that any further increases in time for these codes might be better addressed during the 5-year review of work or by the RUC process. Comment: The American Psychiatric Association also commented that the physician times for CPT code 90847 (family psychotherapy with patient present) should be increased from 76 minutes to 101 minutes, so that it is the same as CPT code 90846 (family psychotherapy without patient present) and that the physician time for CPT code 90857 (interactive group psychotherapy) should be increased from 123 to 134 minutes so it is the same as CPT code 90853 (group psychotherapy). Response: The times for these codes were originally assigned by the RUC and were not affected by the change in CPT coding for psychiatric services. Therefore, we have decided to defer changes in these times to either the RUC process or the 5-year review. Crosswalk Issues Physical and Occupational Therapy Indirect Costs Based upon comments received on the November 2, 1998 rule and after consultation with industry representatives, we proposed increasing the estimated space requirements that were used as part of the calculation of the indirect practice expense per hour for physical and occupational therapists from 250 square feet to 500 square feet per therapist. Comment: The APTA commended us for recognizing that 250 square feet is not representative of the actual space needed by therapists in private practice and for proposing to increase the space allocation to 500 square feet. However, APTA asserted that 700-850 square feet is a more accurate measure of the square feet required for such therapists. Response: As stated in our proposed rule of July 1999, we currently crosswalk physical and occupational therapy services to the ``all physician'' practice expense per hour for direct costs. However, for indirect costs we believed that the crosswalk to ``all physicians'' would overstate the actual practice expense for therapy services. Instead, we used the data that were used to develop the therapy salary equivalency guidelines to create the practice expense per hour for these costs. These guidelines, which were developed for therapists working under contract for a facility, assumed a required space of 250 square feet per therapist. After further consideration of previous objections received from organizations representing both physical and occupational therapists about the insufficiency of the 250 square feet, we agreed that the 250 square feet space requirements might not be representative of the actual space needed by privately practicing therapists. Based on our analysis of the available data, we increased the space requirements to 500 feet. We have carefully considered the treatment space necessary for a therapist in private practice and have determined that 500 square feet or a space 25 feet by 20 feet is more than sufficient space for a single therapist to deliver services to a single typical patient. Although some treatment areas are larger, they are designed for multiple therapists to work simultaneously and serve multiple patients. Space requirements for areas such as waiting rooms, record rooms, and restrooms are considered in the overhead for therapists in private practice. Comment: Several organizations have remained strongly opposed to the use of salary equivalency guidelines to determine the clerical, office, and other practice expense pools for therapists. The associations recommended the SMS data in the ``all physician'' category as a more accurate measure of the expenses associated with operating a therapist's office. These commenters contended that the salary equivalency guidelines were not intended to serve as the basis for payment for patient treatment delivered in the therapist's office but rather to pay providers directly for these services when furnished by contract therapists who maintained separate administrative offices. They stated that [[Page 59405]] the guidelines established the maximum hourly rates that Medicare will reimburse the provider for therapy services furnished by such therapists. Thus, they argued that the salary equivalency guidelines should not be used to determine the clerical, office, and other practice expense pools for therapists because the overhead costs data used in the guidelines are associated with operating a contract therapist's administrative office but not the setting where the clinical services are furnished. Response: We continue to believe the salary equivalency guidelines better approximate the actual expenses for this cost pool than the ``all physicians'' practice expense category. As previously stated, we believe that using the ``all physicians'' practice expense category would considerably overstate the actual practice expense for occupational and physical therapists. We will continue to use the salary equivalency guidelines to calculate this portion of the practice expense pool for occupational and physical therapists for this final rule. However, during the refinement process, we will consider all data submitted on any service. Comment: An association objected to the use of salary equivalency data to determine the indirect expense portion of the practice expense portions of the RVUs. The association recommended that we use SMS survey data for a specialty whose indirect cost structure is similar to that of a therapy provider. It was suggested that the SMS survey data on physical medicine and rehabilitation, manipulation therapy or podiatry would be a more accurate measure of the expenses associated with operating a physical therapy office than the salary equivalency guidelines. Response: There is no SMS data specifically regarding podiatry services. The other recommended specialties are primarily hospital- based. Therefore, we continue to believe that the salary equivalency guidelines are the best estimate of the indirect costs for outpatient rehabilitation services. Vascular Surgery Based upon comments received on last year's proposed and final rules, we proposed to change vascular surgery's crosswalk from cardiothoracic surgery to the ``all physician'' practice expense per hour because this more appropriately reflects the office-based nature of much of vascular surgery's caseload. Comment: The International Society for Cardiovascular Surgery and The Society for Vascular Surgery stated their appreciation for the interim increase in vascular surgery's practice expense per hour to the ``all physician'' rate. However, the Societies are concerned that, despite this 5.8 percent increase in the practice expense per hour, and the overall lack of impact on vascular surgery of removing clinical staff from the facility setting, the fully implemented resource-based practice expense RVUs for eleven of their top fifteen services were decreased in the proposed rule. The American College of Surgeons (ACS) agreed that vascular surgeons have patients with more co-morbidities who require more E/M services than certain other specialties. The ACS thus supported the change in the crosswalk of vascular surgery from cardiac and thoracic surgeons to the ``all physician'' practice expense per hour. Response: We agree with the commenters that the use of the ``all physician'' practice expense per hour rate is an appropriate interim crosswalk for vascular surgery, and we are implementing this change. Concerning the decrease in the practice expense RVUs for the 11 listed services, all of these services are facility services that were originally assigned large amounts of clinical staff time in the facility setting. Because vascular surgeons perform a relatively large number of office-based services as well, the impact of the decreases in their facility services was offset by the increases in their office- based services, and therefore the removal of the inputs for clinical staff in the facility had little impact on the specialty as a whole. Calculation of Practice Expense Pools--Other Issues Medicare Claims Data Comment: The American College of Cardiology recommended that we use the most current Medicare claims data available because in the older data many cardiologists identified themselves as internists. This had the effect of decreasing the size of cardiology's practice expense pool. Response: We will be using the 1998 Medicare claims data, the most current data available, for the purposes of calculating expense RVUs for the year 2000. ``Zero Work'' Pool In the November 2, 1998 final rule, as an interim solution, we created a separate practice expense pool for all services with zero work RVUs because of the possibility that inaccuracies in the data were causing substantial reductions for these services. We used the ``all physicians'' category for the practice expense per hour for this pool and instead of allocating this pool by the CPEP data, we used the 1998 RVUs as the allocator. This was of benefit to most of the services included in this interim separate expense pool, but some specialties such as sleep medicine, neurology, ophthalmology and pathology were negatively affected by this methodological change. We received comments requesting that certain services negatively impacted by the adjustment in the 1998 final rule be taken out of this special pool and instead be treated in the same way as the vast majority of codes (that is, treated in the same manner as they were treated before the 1998 final rule adjustment). In the proposed rule, we requested comments both on an adjustment in general and on specific services that should either be included or excluded from the adjustment. Comment: We received many comments supporting the removal of requested services for the ``zero'' work pool. The comment from the AMA urged us to implement this provision with respect to any codes that specialties have requested be removed from the ``zero work'' pool. The AMA supported the establishment of this pool but only for true radiology services; all other ``zero work'' services should be developed in the same way as other services provided by the other specialties. Another comment from an organization representing primary care physicians supported a proposal to treat codes with zero work RVUs more consistently with other codes in the fee schedule. This commenter stated that the reason given for the creation of the pool was concern about possible inaccuracies in the CPEP data for the ``zero work'' codes, but since concern was expressed regarding the data for other codes as well, ``zero work'' codes should not be given special treatment. Several organizations representing ophthalmology and optometry opposed the use of the ``zero work'' pool and favored removing the ophthalmology codes from this pool. These commenters contended that the current approach is not resource-based and that the creation of the ``zero work'' pool undermined the rationale of the top- down approach. In addition, the commenters stated that ophthalmology has a practice expense per hour that is much higher than the ``all physician'' rate assigned to the ``zero work'' pool and that neither optometry nor ophthalmology were among the specialties requesting a change in methodology for their ``zero work'' services, because the data for eye care services is relatively good. A major surgical specialty society supported [[Page 59406]] plans to move services with zero work RVUs from their own pool and to treat them like other services and opposed retaining any services in the special pool. Several specialty societies representing imaging services, radiation oncology, cardiology subspecialties, and vascular surgery objected to the removal of any services from the ``zero work'' practice expense pool or modification of this pool. One of these commenters stated that the ``zero work'' pool should be retained, because it was created to approximate the costs of independently owned facilities that are not captured in the SMS data. The commenter offered as an alternative recommendation that the current RVUs of those services in the pool be maintained even if other codes are extracted from the pool. Several of the commenters stated that, because the current technical component allowances are virtually identical to those in effect prior to the institution of resource-based practice expense RVUs, a decision, which the commenters support, appeared to be have been made by HCFA that these values should remain unchanged pending further data collection and analysis. For those services that have been disadvantaged by their move to this ``zero work'' pool, the commenters suggested that we change their charge-based RVUs without removing them from the ``zero work'' pool. One commenter suggested that all ``zero'' work codes should be treated uniformly and the fact that some of these services fared better under the original top-down methodology is not a sufficient basis for removing them from the ``zero work'' pool. Response: We still believe that, although we regard the ``zero work'' pool as an interim solution, there is a need to maintain this pool until we have greater confidence in the data for the technical component and ``zero work'' services. However, we do not believe that we should force specialties to keep their services in this ``zero work'' pool if there is a stated preference to have these services treated by the same methodology as the vast majority of services. We also do not agree that our decision to create the ``zero work'' pool implied that the values for the technical component (TC) codes should necessarily be maintained in the change from a charge-based to a resource-based practice expense methodology. In the 1998 proposed rule, before we created the ``zero work'' pool, many of the TC services would have received large decreases in practice expense RVUs. In response to comments in the final rule of the same year, we stated, ``the possibility exists that inaccuracies in the CPEP data * * * are causing the substantial reductions * * *. Therefore * * * as an interim solution until the CPEP data for these services have been validated, we have created a practice expense pool for all services without work RVUs.'' The purpose of this pool was only to protect the TC services from the substantial decreases referred to in the above quote until further refinement could take place; the purpose, notwithstanding the specific outcomes of the complex practice expense calculations, was not to guarantee that these services alone would be unaffected by any changes in our methodology. We also stated that we were not convinced that there was a bias in the SMS survey data against TC services, although we agreed to examine the issue during refinement. While the creation of the ``no work'' pool was of benefit to most of the TC services contained in it, there was an unintended result of the pool's creation: the values of some specialties' TC services were severely reduced. We believe that it is appropriate to remove those services from the ``no work'' pool if the specialties performing these services make that request. We have no basis for increasing the charge- based RVUs for these codes as a way to offset the negative effects of the ``no work'' pool. Comment: The following comments were received that requested services be removed from the ``zero work'' pool: The American Academy of Sleep Medicine reiterated their request that the TC of CPT codes 95805 through 95811 be moved back into the practice expense pools of the specialties performing these services, allocating these pools using the CPEP data. The commenter stated that this recommendation has the support of the major organizations whose members provide sleep medicine services. The American Society of Electroneurodiagnostic Technologists supported the removal of neurology codes, CPT codes 95808 through 95956, from the ``zero work'' pool. The National Association of Epilepsy Centers, supported by the American Academy of Neurology, requested the removal of four of the major epilepsy services, CPT codes 95950, 95951, 95954, and 95956 from the ``zero work'' pool. The commenter stated that the resource-based data for these services collected through the CPEP process is more representative of the costs of these services than the charge-based values. The American Academy of Neurology commented that CPT codes 95805 through 95956 should be removed from the ``zero work'' pool because the CPEP-derived RVUs are more accurate than the historical charge-based values. The American College of Chest Physicians supported the proposal to move the sleep medicine CPT codes out of the ``zero work'' pool, and requested that any of the pulmonary CPT codes 94010 through 94799 that are contained in this pool be treated in the same way. The American Academy of Ophthalmology requested that we move any of the CPT codes 76511 through 76529 and 92081 through 92499 that are in the ``zero work'' pool back into the practice expense pools of the specialties that are providing these services. For all of these codes, ophthalmologists are the predominant specialty. This change is also supported in comments from the American Society of Cataract and Refractive Surgery. The American Optometric Association made the same request and added CPT codes 92060 and 92065 to the list of codes to remove; this same request was made by the Macula, Retina and Vitreous Societies. The College of American Pathologists requested that CPEP data be used to calculate all pathology technical component RVUs for the year 2000 rather than historical charge data. This recommendation was also supported by comments from the American Academy of Dermatology and individual commenters. Response: We will remove all of the above services from the ``zero work'' pool and return them to the practice expense pools of the specialties performing the services. Comment: The American College of Cardiology, the American Society of Echocardiography, and the American Society of Nuclear Cardiology commented that CPT codes 93307 and 93350 should not be removed from the ``zero work'' pool. Response: We will leave these services in the ``zero work'' pool as requested by the commenters. Site-of-Service Differential Clarification of Site-of-Service Policy In the 1998 final rule, we defined hospitals, skilled nursing facilities (SNFs) and ambulatory surgical centers (ASCs) as facilities for practice expense purposes. For purposes of physician practice expenses, all other sites of service are considered to be non-facility settings. The distinction between the non-facility and facility setting takes into account the higher expenses of the practitioner in the non- facility setting, where the practitioner typically bears the cost of the resources (for example, [[Page 59407]] clinical staff, supplies and equipment) associated with the service. The major purpose of the site of service distinction is to ensure that Medicare does not make a duplicate payment for any of the practice expenses incurred in providing a service for a Medicare patient. When the beneficiary is a hospital, SNF or ASC patient, the facility is paid for the clinical staff, supplies and equipment needed to take care of that patient, and the lower facility rate should be paid to the practitioner. Therefore, if the patient is a facility patient or if a facility bills for the service, the practitioner must bill for a facility site-of-service so that the practice expense accurately reflects the setting in which the service was furnished. In the proposed rule, we clarified the circumstances under which either the non-facility or facility RVUs are used to calculate payment for a service. Specifically, we clarified application of the site-of-service differential for procedures performed in an ASC that are not on the Medicare approved list; for therapy services provided in the facility setting; and for services provided to facilities where there is a ``mixture'' of nursing home and SNF patients. With respect to provision of services in a ``mixed'' facility, we specifically solicited comments on ways to examine the relative costs of treating patients in different settings, so that we can determine whether an adjustment to certain non-facility practice expense payments is appropriate. Comment: One organization objected to our stated policy that, in a mixed facility, the physician is responsible for ascertaining that there will be no Part A bill for the service in order to use the non- facility designation. The commenter stated that this would be a time consuming effort. Response: We do not believe that it would be an onerous task for the physician to determine at the time of service whether the patient is a SNF or a nursing home patient. This information is needed to pay the bill correctly, and the physician is in the best position to obtain this information quickly. Comment: The Renal Physicians Association, supported by comments from the American College of Physicians/The American Society of Internal Medicine, expressed concern about the application of the site- of-service differential to the monthly capitated payment (MCP) for end- stage renal disease services (CPT codes 90918 through 90921). The commenter stated that the series of E/M services that are represented by the MCP are highly variable and unpredictable and can be provided in a multitude of settings during the month. Therefore, the use of the site-of-service differential is not relevant to the MCP and should not apply. Response: We agree that the site-of-service designations are not meaningful for a monthly service that may be provided in different settings for the same patient during a given month. Therefore, CPT codes 90918 through 90921 should always be reported as a nonfacility service. Comment: An association representing speech-language pathologists and audiologists sought confirmation that there are no settings where speech-language pathology and audiology services would be classified as facility based for purposes of the physician fee schedule. Response: The commenter is correct. As stated in the final rule of November 2, 1998, outpatient rehabilitation services are subject to the non-facility based practice expense. Comment: One specialty society reiterated their belief that the site-of-service differential is inappropriately applied to some pediatric subspecialty services performed in the facility setting. The commenter maintained that the use of the facility practice expense RVUs could sacrifice access to high quality pediatric care. Two organizations representing gastroenterologists objected to the use of the site-of-service differential for endoscopy services, which require conscious sedation, because the higher rate paid for these services in the office could provide an incentive for physicians to perform these procedures in the inappropriate office setting. One of these commenters argued that we should either use a threshold that would require a procedure be performed a given percent of the time in the office before applying the site-of-service rule, or adopt MEDPAC's recommendation to establish a clinical consensus about the settings in which a service should be provided. An organization representing podiatrists commented that because they bring their own supplies into a skilled nursing facility (SNF) when providing services in that site, the lower facility rate should not be applied. The commenter contended that, even though multiple patients may be seen, each patient requires individual treatment. Another organization suggested we establish a site-of- service differential for services performed in a SNF in order to correct the inadequacies of payment for services performed in this site. An individual physician commented that there should not be a site-of-service penalty for the 67900 series of CPT codes, because these procedures are most safely and appropriately done in the facility setting. Response: We believe that these commenters do not understand the purpose or the calculation of the site-of-service differential under our new resource-based practice expense methodology. As stated above, the purpose of the differential is both to ensure that Medicare does not make a duplicate payment for any of the practice expenses incurred and to take into account the higher expenses of the practitioner in the non-facility setting. To the extent that the appropriate practice expense inputs--clinical staff, supplies and equipment, and indirect costs--have been assigned to the two settings, there should be no question of penalizing those who perform their services in a facility. The difference in practice expense RVUs in the two settings should only reflect the difference in the relative costs of performing that particular procedure in the facility or office setting. For that reason there should also be no financial incentive to perform a service in one or the other setting. As stated in previous rules, if there is evidence that it is not safe to perform a particular service in the office setting, this information should be submitted to HCFA's Office of Clinical Standards and Quality. Limitation on Facility RVUs As we explained in the proposed rule, non-facility RVUs would be expected to be higher than the facility RVUs for a given service, because the practitioner bears the costs of the necessary clinical staff, supplies, and equipment. However, because of anomalies in our calculations, generally due to the different mix of specialties delivering the service in the two settings, for some codes the facility RVUs are higher than the non-facility RVUs. We proposed to limit the facility rate so that it cannot be higher than the non-facility rate for any given code. Comment: An association representing urologists commented that we should not assume that any higher facility rate is always due to calculation errors and that we should evaluate these codes further before implementing the proposal. The AMA and an association representing gastroenterologists stated their belief that the imposition of such an across-the-board limit on facility RVUs is inappropriate, because the higher practice expense RVUs in the facility may be due to the different mix of specialties that care for the more complex, more costly cases in the facility setting. The AMA recommended [[Page 59408]] that we either use a weighted average of the RVUs from both settings or maintain the higher facility practice expense RVUs until each affected code can be reviewed. Several primary care organizations commented that they agree with the proposal to limit the facility rate so that it cannot be higher than the non-facility rate for any given code. One commenter agreed that non-facility RVUs would be higher than facility RVUs for a given service, because the practitioner bears the costs of the staff, supplies and equipment needed. Another commenter also supported the proposal because it addresses some of the anomalies in the practice expense RVUs. Response: We will implement the proposal so that the facility practice expense RVUs can never be higher than the non-facility practice expense RVUs. Because practice costs would always be expected to be at least somewhat higher in the office setting, where the practitioner is responsible for the costs of the staff, supplies and equipment, it would be an anomaly for the facility setting to have higher practice expense RVUs assigned. This adjustment only affects 222 facility services at this time, and the decrease in value for the affected services is minimal. There is no impact on any specialty as a result of this adjustment. Comment: One commenter stated that we stated under Site-of-Service Differential in the July 1999 proposed rule (64 FR 39622) our policy that when a service is performed in an ASC and the service is not on the Medicare approved list of procedures and we do not make a facility payment to the ASC, we consider the ASC a physician's office and use the non-facility (higher) RVUs. However, the commenter notes that in our proposed revision in Sec. 414.22(b)(5)(I) in the July 1999 proposed rule (62 FR 39641) we do not clearly state this point. Response: Upon review, we agree that our revision to 42 CFR Sec. 414.22 is not clear enough. We appreciate the commenter bringing this oversight to our attention. We, therefore, are revising Sec. 414.22 (b)(5)(i) to clarify that, when a physician performs a procedure on the ASC approved procedures list in an ASC, the lower facility practice expense RVUs apply, and that when a physician performs a procedure in an ASC that is not on the ASC approved procedures list, the higher non-facility practice expense RVUs apply. C. Adjustment to the Practice Expense Relative Value Units for a Physician's Interpretation of Abnormal Papanicolaou Smears As explained in the July 22, 1999 proposed rule, the codes for a physician's interpretation of an abnormal Papanicolaou (Pap) smear were revised in the November 1998 final rule to include three HCPCS level II codes (P3001, G0124, and G0141) in addition to the CPT code 88141. This revision was made to accommodate differences in Pap smear technology, and we evaluated the practice expense RVUs for each of these three codes in a slightly different manner. We now believe that it would be more appropriate to evaluate the work, practice expense, and malpractice RVUs for these codes identically and comparable to the values for CPT code 88141. We received a comment from one organization in support of our proposal. We are finalizing this proposal and making the practice expense RVUs identical for HCPCS codes P3001, G0124 and G0141. D. Physician Pathology Services and Independent Laboratories We proposed to revise our regulations to end payments to independent laboratories under the physician fee schedule for technical component physician pathology services furnished to hospital inpatients. (Some hospitals provide pathology services through hospital laboratories, and this provision does not affect them.) Under this proposal, independent laboratories would still be able to bill and receive payment from their Medicare carrier for the technical component of a physician pathology service furnished to beneficiaries who are not hospital inpatients. For the technical component of physician pathology services provided to a hospital inpatient, the hospital would have to bill and the independent laboratory would have to make arrangements with the hospital to receive payment. Specifically, we proposed revising Sec. 415.130(c) to state that after December 31, 1999, we would pay only hospitals for technical components of physician pathology services furnished to their inpatients. We received 55 comments mainly from pathology groups. Most of these commenters requested that the proposed regulation be withdrawn and the current policy continued. Other commenters, mainly specialty organizations, recommended that the implementation of the proposal be delayed two years and that arrangements in effect as of July 22, 1999, the date of the proposed regulation, be grandfathered and the current payment policy continued for them. Comment: Several commenters pointed out that if the proposal is implemented, hospitals might not compensate the independent laboratories for the technical component of physician pathology services. They referred to past practices where hospitals have not adequately compensated hospital pathologists for management functions related to the clinical laboratory, even though this cost was appropriately reflected in the hospital's prospective payment. The commenters refer to the Office of the Inspector General's (OIG) 1991 ``Report of Financial Relationships between Hospitals and Hospital- Based Physicians'' as well as the OIG's 1998 ``Compliance Program Guidance for Hospitals''. One commenter specifically asked if HCFA and OIG would create a safe harbor that sets forth a ``bright line'', for example 80 percent of the physician fee schedule allowance, for deeming as reasonable the negotiated technical component between hospitals that bill for the TC service and the independent laboratories that provide the service to the hospitals. Response: The anti-kickback statute, section 1128B(b) of the Act, prohibits any person from soliciting or accepting anything of value to induce the referral of business that is reimbursable by a Federal health care program. If a hospital were to condition, express or implied, the referral of physician pathology services to a clinical laboratory on the lab's agreement to accept less than fair market value for the technical component, it would implicate the anti-kickback statute. Under section 1128D(b)(3) of the Act, the OIG is prohibited from determining what constitutes fair market value in any specific situation. Comment: Some commenters contend that the factual information in the proposed rule is not correct and question whether double payment is, indeed, being made for the TC services. They believe there is significant question about whether, when the diagnostic related groups (DRGs) were constructed, initially priced and updated through the years, the TC for physician pathology services were adequately captured and incorporated in the DRGs. A few commenters remarked that it was and is the common practice in their State for hospitals to out-source the TC of physician pathology services to independent laboratories. [[Page 59409]] Response: Before the prospective payment system (PPS) system was implemented in 1983, we advised intermediaries that hospitals could appropriately include in their base period costs the laboratory cost of the physician pathology services furnished directly to hospital inpatients by that hospital laboratory. At the same time, we stated that if an independent laboratory billed the carrier for the physician pathology services, it could continue to do so, and these costs should not be included in the hospital's base period costs. At that time, the TC was incidental to the pathologist's professional service, and was not treated as a service in itself; it was the common practice at that time for the independent laboratory to bill a single charge that reflected both the TC and the PC physician pathology service. During the early, transitional years of the PPS, the prospective payment was based on a blend of a target amount (reflecting the hospital's specific cost) and a DRG amount. The DRG amount was a blend of regional and national standardized amounts, with separate standardized amounts for rural and urban areas. After the transition, hospital specific amounts were no longer used in payment, except for sole community hospitals. In Federal fiscal year 1995, the separate rural rate was eliminated, and rural hospitals began receiving the same rate as urban hospitals. Given that urban hospitals were much more likely to have the laboratory costs of physician pathology services included in their PPS base period costs used to calculate the urban standardized amount, it is our view that the DRG payment methodology compensates hospitals for the TC of physician pathology services. Also, the elimination of the separate rural standardized amount in Federal fiscal year 1995 similarly compensates rural hospitals for the TC of physician pathology services. It would be improper to continue to allow hospitals to receive Part A payments that reflect the TC of physician pathology services and simultaneously allow an independent laboratory to bill and be paid under the physician fee schedule for the same service. Comment: A few commenters question the assumption in the regulatory impact analysis that 60 percent of the allowed charges for independent laboratories represent billings for hospital inpatients. Based on information from its membership, the College of American Pathologists (CAP) estimated that, on average, 20 percent of Medicare payments to independent laboratories are for Medicare inpatient services. The commenters requested that this estimate of savings to Medicare be appropriately reduced. Response: We are accepting CAP's comment and calculating the estimate based on this information. Result of Evaluation of Comments We are adopting our proposal to pay only hospitals for the TC of pathology services furnished to its inpatients, but delaying implementation until January 1, 2001 to allow independent laboratories and hospitals sufficient time to negotiate arrangements. E. Discontinuous Anesthesia Time We proposed to revise our regulations to allow anesthesiologists and certified registered nurse anesthetists (CRNAs) to sum blocks of time around a break in continuous anesthesia care as long as there is continuous monitoring of the patient within the blocks of time. Payment for anesthesia services is based on the sum of base units plus time units multiplied by a locality-specific anesthesia CF. Under current regulations at Sec. 414.46(a)(1) (Additional rules for payment of anesthesia services), the base unit is the value for each anesthesia code reflecting all activities other than anesthesia time. Anesthesia time, as defined under Sec. 414.46(a)(2), starts when the anesthesiologist or CRNA prepares the patient for anesthesia care and ends when the anesthesiologist or CRNA is no longer in personal attendance; that is, when the patient is placed under postoperative care. While in most instances the anesthesiologist or CRNA remains continuously with the patient from the establishment of venous access to the conclusion of anesthesia attendance, there may be instances when there are breaks in the continuous presence of the anesthesiologist or CRNA. (See the July 22, 1999 proposed rule (64 FR 39624) for specific examples.) We proposed to revise the regulations in Sec. 414.46 to include this exception to the general requirement and to revise Sec. 414.60 (Payment for the services of CRNAs) to clarify this issue. Comment: Both of the national specialty groups, the American Society of Anesthesiologists and the American Association of Nurse Anesthetists, support the proposal to allow anesthesiologists and CRNAs to sum blocks of anesthesia time around a break in continuous anesthesia care as long as there is continuous monitoring of the patient within the blocks of time. Both groups requested that we provide guidance to anesthesiologists and CRNAs on how to report discontinuous anesthesia time. Response: Anesthesiologists and CRNAs should report the total anesthesia time on the HCFA claim form as the sum of the continuous anesthesia block times. The medical record should be documented so that a medical record auditor can see the continuous and discontinuous periods and that the reported total anesthesia time sums to the blocks of continuous time. Result of Evaluation of Comments: We are adopting the proposed policy and are revising the regulations accordingly. F. Optometrist Services The provisions of OBRA 1986 expanded coverage for optometrist services. While this statutory provision had been implemented through manual provisions, we had not revised the regulations to reflect this change. We proposed to revise the regulations at Sec. 410.23 (Limitations on services of an optometrist) to specify that Medicare Part B pays for the services of a doctor of optometry, acting within the scope of his or her license, if the services would be covered as physicians' services if performed by a doctor of medicine or osteopathy. The American Optometric Association supported the proposed revision to the regulations. Comment: The American Occupational Therapy Association (AOTA) asked that we clarify that optometrists may certify and recertify a beneficiary's need for occupational therapy services. According to AOTA, conforming changes should be made to Sec. 424.11(e) (Limitation on authorization to sign statements) and relevant manual provisions on physician certification procedures for outpatient therapy. AOTA states that the proposed Sec. 410.23 codifies the statutory provision that places optometrists in the same category as other physicians. Therefore, if a service is within the optometrists' lawful scope of practice, they contend it is permissible for a doctor of optometry to certify and recertify a beneficiary's need for occupational therapy services. Response: Section 1861(r)(4) of the law provides that an optometrist is a physician ``only with respect to the provision of items or services described in section 1861(s).'' Because certification and recertification are not services described in section 1861(s), we believe that the law does not permit optometrists to be considered physicians for the performance of these functions. We are changing the text of the regulation (Sec. 410.23) to more directly reflect the language of the law. Result of Evaluation of Comments: We are revising the regulations at Sec. 410.23 [[Page 59410]] to specify that Medicare Part B pays for services of a doctor of optometry, acting within the scope of his or her license, if he or she furnishes services described in section 1861(s) that would be covered as physicians' services when performed by a doctor of medicine or osteopathy. G. Assisted Suicide The Assisted Suicide Funding Restriction Act of 1997 prohibits the use of Federal funds to furnish or pay for any health care service or health benefit coverage for the purpose of causing, or assisting to cause, the death of an individual. The prohibition does not apply to withholding or withdrawing medical treatment, nutrition, or hydration. In addition, the prohibition does not apply to furnishing a service to alleviate pain, even if doing so may increase the risk of death, as long as the purpose is not to cause or assist in causing death. We are conforming our regulations to the provisions of this Act by adding a new paragraph (q) to Sec. 411.15 (Particular services excluded from coverage) to exclude from coverage any health care service for the specific purpose of causing, or assisting to cause, the death of an individual. Long standing Medicare policy has excluded such services under section 1862(a)(1)(A) of the Act. This section of the Act states that no payment may be made under Part A or Part B for any expenses for items or services that are not necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. One physician group expressed support for this provision, and we are including the provision in the final rule. H. CPT Modifier -25 Currently, the global surgery payment policies described in section 4820 of the Medicare Carriers Manual apply to procedures that have global periods of 0, 10, and 90 days as shown on the physician fee schedule database. We proposed to apply these policies also to those services and procedures for which the global period indicator is ``XXX.'' Currently, it is only when a significant, separately identifiable E/M service is furnished before furnishing a procedure with a global period of 0, 10, or 90 days that the E/M service may be paid in addition to the procedure. The coding mechanism for indicating that the E/M service is not related to the surgical procedure is to append modifier -25 (significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service) to the E/M service code. We proposed that, for selected procedures that have a global period indicator of ``XXX,'' when a significant, separately identifiable E/M service is furnished at the same time by the same physician, the physician must append to the E/M service code the modifier -25. The basis for this policy is that, because every procedure has an inherent E/M component, for an E/M service to be paid separately, a significant, separately identifiable service would need to be documented in the medical record. In other words, we want to prevent the practice of physicians reporting an E/M service code for the inherent evaluative component of the procedure itself. Comment: Some commenters expressed the view that rather than implement this coding instruction, the carrier should determine if there is a problem with a physician billing for E/M codes with surgical codes and target the physician for review. Response: We have received this suggestion many times in relation to other proposed coding edits. It is only within the past few years that the CPT Editorial Panel has begun to articulate more clarifying guidelines pertaining to the use of CPT-4 codes. In the meantime, the Congress has mandated that we promote uniformity in paying for services. Establishing coding principles associated with the CPT-4 coding system helps to achieve uniformity. We believe that establishing coding guidelines is an important adjunct to conducting reviews of problem practitioners. Comment: Many commenters agreed that the proposal is consistent with CPT guidelines but strongly urged clarification of the categories of services to which this policy would apply. For example, these commenters were unclear whether this policy would apply to diagnostic tests, immunizations, laboratory, and pathology services. Response: We are not making a blanket requirement that modifier -25 be used with every code in a specific category of services. Rather, we will implement this coding policy for specific HCPCS codes when we believe there is abuse or the potential for abuse in the reporting of an E/M service. Before implementing an edit for a specific code combination, we will provide an opportunity for review by physician groups. Comment: One commenter suggested we clarify that modifier -25 should be used and recognized as denoting a separate E/M service furnished in conjunction with a minor procedure bearing either the ``XXX'' or the ``000'' global period policy. Response: Our current policy for using modifier -25 is applicable to codes with global periods of 0, 10, and 90 days as stated in section 4822.A of the Medicare Carriers Manual. We proposed that, in furnishing a diagnostic or therapeutic service that has a global period of ``XXX'' as well, the same policy would apply and practitioners should decide whether the E/M component of a service having a global period of ``XXX'' is routinely furnished as part of the procedure or is a significantly, separately identifiable service. In general, for services with global periods of ``XXX,'' as well as those with 0, 10 and 90 days, when the E/M service is a significant, separately identifiable service, that is, the physician work furnished meets the criteria for the level of E/M service reported, modifier -25 should be appended to the procedure code. Comment: A few commenters questioned the accuracy of the statement in the proposal, ``Since every procedure has an inherent E/M component, in order for an E/M service to be billed, there must be a significant, separately identifiable service documented in the medical record.'' They asserted that the only procedures that have an ``inherent'' E/M component are those that are subject to our own global surgery policies that have been developed with input from the specialty societies. However, there are procedures, for example, radiation oncology services such as treatment planning and simulation which are not subject to our global surgery policies nor do they have an E/M component. Therefore, our statement that ``every procedure has an inherent E/M component'' is in error. In addition, commenters stated that since we worked with the CPT Editorial Panel to create modifier -25 to be used in appropriate specific instances, to propose using modifier -25 for all services is inconsistent with our previous actions. Commenters requested that we not implement the proposal without input from the AMA's Correct Coding Policy Committee (CCPC) and without adequate time for physician education. Response: One of the factors we will take into consideration as we identify the specific procedures for which the modifier -25 policy for separate payment for an E/M service will apply is whether the procedure, by definition, has an inherent E/M component. We intend to submit correct coding edits associated with this coding policy to the AMA's CCPC for comment with a potential implementation date of no [[Page 59411]] earlier than October 2000. Assuming CCPC's comments are furnished expeditiously, we believe there will be sufficient time for us to notify carriers of its decisions, for the specialty societies and the AMA to notify their members, and for carriers to publish the edits in their bulletins. Comment: Several commenters cited particular examples of diagnostic and treatment situations in which the E/M service and the procedure may be reported without the need for appending modifier -25. These examples are services represented by ophthalmology E/M codes 92002 through 92014 that result in the decision to perform a visual field examination or a fluorescein angioscopy and urology services ``that do not have a global period and, therefore, an E/M service would always be performed.'' Response: We will take these comments into consideration when we develop correct coding edits based on the coding instruction related to the use of modifier -25. Comment: Many commenters had reservations about the burden on physicians and carriers if this proposal were implemented. They were concerned that this proposal would lead to using modifier -25 routinely, which in turn would lead to more carrier audits. Another potential result with burdensome consequences to the practitioner and the carrier would be the number of appeals that would be generated because of contested denials when the practitioner is found to have adequate documentation for the services furnished but the denial was based on inadequate information. Response: While we agree that these scenarios are possible, our experience with the coding instruction associated with the modifier -59 (Distinct Procedural Service) has not validated this kind of concern. While carrier post-payment reviews of two of these scenarios, namely abuse of modifier -59 and lack of appropriate use of modifier -59, have not been extensive, we have no evidence that practitioners are routinely billing modifier -59 with multiple procedures performed on the same day by the same practitioner. The carrier claims processing systems contain edits that identify incorrect coding combinations. When an incorrect code combination is detected, payment for one of the codes is denied. These denials decrease Medicare expenditures. If the use of modifier -59 had become routine, we would expect to see an increase in expenditures because of the increased use of the modifier. This has not been the case. In fact, expenditure data show that billing of the same code pairs is fairly consistent from one quarter to the next, thus suggesting that practitioners are not routinely using modifiers. Comment: Other commenters suggested we identify the services that are problematic and work with the AMA to clarify CPT descriptions. Response: We will work with the AMA at the same time that we are implementing the modifier -25 policy. Comment: One specialty society stated that its members rarely furnish a service designated as one with no global period without performing services represented by an E/M visit code. Response: We agree that an identifiable E/M service may be furnished with many procedures for which no global period applies. However, we are concerned about those instances in which a minimum amount of evaluation is an inherent component of the service or procedure. For these instances, we do not agree that it is appropriate to report a minimum level E/M code in addition to the service or procedure. Comment: Pertaining to physical therapy codes, the assertion was made that the physical therapy evaluation codes 97001 and 97002 are not comparable to the ``E/M'' codes because they do not include the concept of ``management'' as do the E/M service codes. Since 97001 and 97002 are not comparable to the E/M codes and since modifier -25 can be used only with an E/M service, it would not be appropriate for it to be used with a physical therapy evaluation code when the physical therapy evaluation code is billed with a modality or therapeutic service. Response: We disagree with the assertion that physical therapy codes are not comparable to the codes usually referred to as E/M codes. The E/M service codes are described in such a way that they may be used to report either evaluation or management services; or evaluation and management services. We believe that modifier -25 may accurately be used with evaluation codes associated with occupational therapy, ophthalmology, physical therapy, psychiatry, and radiation consultation. Comment: Another commenter suggested that since many private payers do not recognize modifiers appropriately, our policy would create inconsistencies in how physicians report Medicare and non-Medicare services. Response: Under the current circumstances, this comment may be valid in relation to the use of any modifier, not just modifier -25. It is expected, however, that when the relevant portions of the Health Insurance Portability and Accountability Act are implemented, the format for claims for physicians' services will be standardized. In the meantime, the requirement to use modifier -25 in those instances when the E/M service is distinguishable from the pre-procedure work may actually strengthen the claim for payment. This result may persuade other third party payers to recognize this coding guideline thereby ensuring more consistency in payment. Result of Evaluation of Comments: We have considered the comments we received on the proposal and are proceeding to include procedures with a global period indicator of ``XXX'' the application of the global surgery payment policy in as it relates to the use of modifier -25. We will not, however, require the routine use of modifier -25 with all procedures having a global indicator of ``XXX.'' Instead, we will identify specific codes with which the E/M service furnished would need to be one that is documented as being significant and separately identifiable, and, hence, should be reported with modifier -25. We will seek review of these codes from physician specialty societies as well as those nonphysician practitioners who are authorized to bill Medicare on their own. Specific procedure codes for which the use of modifier -25 is required when a significant, separately identifiable E/M service is furnished and reported by the same physician or nonphysician practitioner will be included as edits in the Correct Coding Initiative edits. These edits will be implemented no earlier than October 1, 2000 and will continue to be added as appropriate on an ongoing basis. In the meantime, however, since modifiers are an inherent part of HCPCS, we urge all practitioners to familiarize themselves with them and to make it a practice to use them when applicable. I. Nurse Practitioner Qualifications As explained in the July 22, 1999, proposed rule (64 FR 39608), we gave additional consideration to the nurse practitioner (NP) qualifications because we realized that the qualifications would exclude many experienced NPs from continuing to qualify as NPs under the Medicare program. It was not our intention to establish qualifications in the November 1998 final rule (63 FR 58874) that would cause experienced NPs, who have been furnishing services to Medicare patients, to be barred from [[Page 59412]] billing under the Medicare program because they do not posses a master's degree or national certification. Therefore, we proposed NP qualifications that are less restrictive but that still ensure quality services are furnished to Medicare patients. We proposed progressively enhanced qualifications, including providing lead time for NPs to obtain a Medicare billing number under Section 2158 of the Medicare Carriers Manual, national certification, or (ultimately) a master's degree in nursing. Specifically, we proposed to revise Sec. 410.75(b) so that for Medicare Part B coverage of his or her services, a nurse practitioner must: (1)(i) Be a registered professional nurse who is authorized by the State in which services are furnished to practice as a nurse practitioner in accordance with State law; and (ii) Be certified as a nurse practitioner by a recognized national certifying body that has established standards for nurse practitioners; or (2) Be a registered professional nurse who is authorized by the State in which the services are furnished to practice as a nurse practitioner in accordance with State law and has been granted a Medicare billing number as a nurse practitioner by December 31, 2000; or (3) Be a nurse practitioner who, on or after January 1, 2001, applies for a Medicare billing number for the first time and meets the standards for nurse practitioners in paragraphs (b)(1)(i) and (b)(1)(ii) of this section; or (4) Be a nurse practitioner who, on or after January 1, 2003, applies for a Medicare billing number for the first time and possesses a master's degree in nursing and meets the standards for nurse practitioners in paragraphs (b)(1)(i) and (b)(1)(ii) of this section. Comment: Several individuals and some organizations, including the American College of Nurse Practitioners, American Nurses Association, and the National Association of Pediatric Nurse Associates & Practitioners, submitted comments in support of the proposal. However, a couple of the commenters expressed concern that an NP whose Medicare number expires in the future may encounter new and more stringent qualification requirements depending on the year he or she reapplies for a new Medicare number. One commenter was also concerned that certain NPs, who qualify to receive Medicare billing numbers under current requirements, would be unfairly disadvantaged if they do not need to apply for Medicare numbers before January 1, 2001. Response: As specified in the rule, the new qualifications beginning January 1, 2001, would apply only to those NPs applying for Medicare numbers for the very first time. Therefore, an NP would be subject only to the qualification requirements under which he or she received the initial Medicare number. As for those NPs who qualify for the Medicare program under current rules but have not billed Medicare, we do not share their concern. This proposal was specifically intended to (1) avoid barring veteran NPs from continuing to furnish services to Medicare beneficiaries and, (2) provide a lead time for the new NPs to obtain the master's degree. These revised qualification requirements do not detract from our goal to ultimately require all Medicare NPs to have a master's degree. Comment: Of the physicians and physician organizations that submitted comments, all but the American Academy of Family Physicians (AAFP) opposed the proposal. They stated that it would lessen the qualification requirements of NPs and endanger the safety of Medicare patients. A few individual doctors commented that they were appalled because the proposed rule would allow NPs to perform and bill Medicare directly for physicians' services. They believed that the proposal would not only raise issues regarding quality of care but also jeopardize the Medicare Trust Fund. Response: It is the Social Security Act (as amended by the BBA), and not this proposed rule, that authorizes NPs to directly bill Medicare for performing physicians' services. Moreover, we do not agree with these conclusions because the proposed qualification requirements are clearly stricter than those that exist currently. We note that the November 1998, final rule regarding NP qualifications was scheduled to become effective January 1, 2000 (see 64 FR 25456). Thus, the new rule merely permits the veteran NPs who have been serving the Medicare beneficiaries to continue to do so. Comment: The comments from most of the physician groups, such as the American Medical Association, and many of the individual doctors suggested that we emphasize and elaborate upon the provision requiring NPs to collaborate with physicians. Even AAFP requested that we address the definition of ``collaboration'' in a rule. In addition, some commenters asked that we specify in a rule that NPs should perform only those services specifically authorized by State law. Response: ``Collaboration'' was not a subject of the proposed rule, and we have no plans at this time to change the current definition. Comment: The women's health care NPs requested that we begin requiring the master's degree in 2007 to coincide with their plan to require master's degree of all women's health care NPs. Response: We believe that the lead time provided under our proposal is sufficient for all new NPs to obtain the master's degree in nursing. We recognize that even some states do not require the master's degree. Nevertheless, we note that we are not precluded from establishing our own qualification requirements for NPs who furnish services to Medicare patients. Result of Evaluation of Comments The rule concerning NP qualifications is adopted as proposed. In addition to revising Sec. 410.75(b), we are also making conforming changes to Sec. 485.705(c)(8). J. Relative Value Units for Pediatric Services During the 5-year review, we did not appropriately adjust work RVUs for certain pediatric surgical services. The present values reflect E/M services of the postoperative period as determined in the original study conducted by the Harvard research team and not the subsequent study of pediatric surgical services performed in 1992 by the Harvard research team for the American Pediatric Surgical Association (APSA). We proposed changing the RVUs for E/M services during the global surgical period for pediatric surgical services to reflect the findings of the 1992 Harvard study. Comment: The American Urological Association and the American Academy of Pediatrics supported this proposal. The American College of Surgeons and the APSA forwarded information from the 1992 Harvard study on work RVUs for pediatric surgical services and requested we use this data. Response: We have accepted the RVUs from the 1992 Harvard study and have substituted them in our database. Result of Evaluation of Comments: We are changing the RVUs to reflect the 1992 data. K. Percutaneous Thrombectomy of an Arteriovenous Fistula We proposed to implement a HCPCS code, defined as ``percutaneous thrombectomy and/or revision, arteriovenous fistula, autogenous or nonautogenous dialysis graft'' to be used until the AMA creates a permanent CPT code. We defined it analogously to open surgical procedures, CPT codes 36831 to 36833 and proposed a 90-day global period for this service to be consistent with the open surgical procedure codes and to facilitate comparisons with them. [[Page 59413]] We proposed individual local carrier pricing for the new HCPCS code. Comment: The International Society for Cardiovascular Surgery and the Society for Vascular Surgery expressed support for our proposal, and while the American College of Radiology was also in agreement with our proposal, they recommended a ``000'' global period rather than a 90 day global, as proposed. Response: We continue to believe that a 90-day global period is appropriate for this procedure because the effectiveness has been compared to open thrombectomies, for which 90-day global periods are used. Comment: The American Medical Association commented that adding the codes to HCPCS Level II , rather than through CPT, adds to the potential for confusion and incorrect coding. Response: We have defined a HCPCS Level II code because no appropriate CPT code exists. These procedures are currently being performed, so we believe that it is necessary to have a code for billing even though no CPT code has yet been developed. As we have stated, we also plan to collect data in conjunction with the reporting of the new code so that we, or the CPT Editorial Panel, may refine its definition. Comment: The Society for Cardiovascular and Interventional Radiology expressed support for our proposal; however, they recommended that the ``revision'' be dropped from the code description since a graft revision and declotting usually occur at separate sessions and a revision typically involves another physician. They also recommended that the interim HCPCS have a global period of ``000'' like other percutaneous therapies rather than the 90 day period proposed and that RVUs should be assigned for this interim code rather than allowing the procedure to be carrier priced. A manufacturer also expressed concern about the 90 day global period and that this code would be carrier priced. Response: We have specified carrier-pricing for this procedure for the reasons outlined by the commenters. If this is a heterogenous procedure with variations in how the thrombectomy is performed or whether a revision is done simultaneously, the carrier will be able to adjust the payment appropriately. We plan to collect data regarding the procedure variations, and we will consider revisions of the code definition, global period, and alternate codes after we have reviewed the data. Result of Evaluation of Comments We will implement this code as proposed with a 90 day global period and will review the collected data to determine if revisions to the code definition, global period and alternate codes should be made. L. Pulse Oximetry, Temperature Gradient Studies and Venous Pressure Determinations We proposed to discontinue separate payment for CPT codes 94760, 94761, 94762, 93740, and 93770 (pulse oximetry, temperature gradient studies and venous pressure determinations) and to list them in the physician fee schedule with a status code of ``B'' for ``payment always bundled into payment for other services.'' We stated that continuing to pay separately for these codes duplicates amounts included in both facility payments and practice expense RVUs. Comment: Several professional societies commented that we should not consider these services to be bundled with E/M service payments. One commenter noted that the CPT specifies that diagnostic studies may be reported separately. Another commenter stated that if we would not pay separately for pulse oximetry, physicians would not perform pulse oximetry but would refer patients for arterial blood gas determinations. Another commenter observed that the interpretation of pulse oximetry results can be complex. The American College of Chest Physicians and the American Academy of Sleep Medicine commented specifically that CPT code 94762, pulse oximetry by continuous overnight monitoring, is not performed in conjunction with an E/M. All commenters noted that pulse oximetry is a valuable procedure. Response: We agree that pulse oximetry is a valuable procedure. Because the technology has progressed and been simplified and reduced in cost, pulse oximetry is a routine inclusion in many procedures and visits. Pulse oximetry is no more invasive and arguably less invasive than recording the patient's temperature, another example of a diagnostic service for which we do not make separate payment. If interpretation of pulse oximetry or temperature data is complex, then that interpretation is clearly part of the medical decision making included in the E/M services. We believe that payment for pulse oximetry equipment is included in our facility and practice expense payments just as the costs of electronic thermometers are included. While we believe that pulse oximetry with continuous overnight monitoring is always performed in conjunction with an E/M service, we agree that the patient's use of the oximeter is separate from the typical use of equipment during the E/M service. Medicare coverage policy or some type of utilization standards to guide Medicare carrier review. Response: As required by the BBA, we are developing utilization guidelines for manual manipulation to treat subluxation of the spine when an x-ray is not required. Result of Evaluation of Comments: We are revising Sec. 410.22(b)(1) to delete the x-ray requirement. Thus, this section will state that Medicare Part B pays only for a chiropractor's manual manipulation of the spine to correct a subluxation if the subluxation has resulted in a neuromusculoskeletal condition for which manipulation is appropriate treatment. N. Coverage of Prostate Cancer Screening Tests Effective January 1, 2000, section 4103 of the BBA provides for Medicare coverage of certain prostate cancer screening tests for all male Medicare beneficiaries subject to certain frequency and other limitations. The BBA defines a prostate cancer screening test to mean a test (among other things) that is ``provided for the purpose of early detection of prostate cancer to a man over 50 years of age who has not had such a test during the preceding year.'' We interpreted this language to mean that payment may be made for a male beneficiary over 50 years of age or older (that is, starting at least one day after he has attained age 50) for both an annual screening digital rectal examination (DRE) and an annual screening prostate-specific antigen (PSA) test. We proposed to add a new Sec. 410.39 to provide coverage for two types of prostate cancer screening. To ensure that the screening DRE is performed as safely and accurately as possible, we proposed to require, in Sec. 410.39(b), that the examination be performed by the patient's attending physician who is either a doctor of medicine or osteopathy (as defined in section 1861(r)(1) of the Act), or by the beneficiary's attending physician assistant, nurse practitioner, clinical nurse specialist, or certified nurse midwife (as defined in section 1861(aa) and section 1861(gg) of the Act) who is authorized under State law to perform the examinations. In Sec. 410.39(c), we proposed that payment may not be made for a screening DRE performed for [[Page 59414]] a man age 50 or younger. For a patient over 50 years of age, payment would be made for a screening DRE only if the beneficiary has not had such an examination paid for by Medicare during the preceding 11 months following the month in which his last Medicare-covered screening DRE was performed. In Sec. 410.39(d), we specified that coverage is available for screening PSA tests only if they are ordered by the beneficiary's attending physician, or by the beneficiary's attending physician assistant, nurse practitioner, clinical nurse specialist, or certified nurse midwife who is authorized to order this test under State law. We included this coverage requirement to assure that beneficiaries receive appropriate information about the potential implications of screening tests. In Sec. 410.39(e), we proposed that payment may not be made for a screening PSA test performed for a man age 50 or younger. For an individual over 50 years of age, payment may be made for a screening PSA test only if he has not had such an examination paid for by Medicare during the preceding 11 months following the month in which his last Medicare-covered screening PSA test was performed. We also created a new HCPCS code, G0102, prostate cancer screening DRE, to be used for the screening DRE. A DRE is a relatively quick and simple procedure, and we have assigned it the same value as CPT code 99211, the lowest level E/M service. A DRE is usually furnished as part of an E/M service. We believe that it would be extremely rare for a DRE to be the only service provided during a patient encounter. For this reason, we proposed to bundle the DRE into the payment for an E/M service when a covered E/M service is furnished on the same day as a DRE. If the DRE is the only service furnished or is provided as part of an otherwise noncovered service, such as CPT code 99397 (preventive services visit), HCPCS code G0102 would be payable separately if all the aforementioned coverage requirements are met. We also created a new HCPCS code, G0103, prostate screening; prostate specific antigen (PSA), to be used for the screening PSA test. The screening PSA test is priced at the same payment rate as CPT code 84153 (PSA; total) and would be paid under the clinical diagnostic laboratory fee schedule. Comment: All the comments we received on this subject supported implementation of the prostate cancer screening provisions created by the BBA. One commenter indicated that the proposed requirements are consistent with current professional medical standards and generally in accord with the views of practicing physicians and various national medical societies. However, one commenter expressed concern that the BBA was silent with respect to the need for the ``attending'' requirement and suggested that we needed to furnish additional rationale for adopting the requirements in the final rule. Specifically, it was suggested that physicians other than the beneficiary's attending physician, such as a physician partner, might be qualified to substitute for the attending physician in his or her absence from the office or clinic. Response: Although the BBA is silent about who should perform DREs or order PSA tests for Medicare patients, section 1862(a)(1)(A) of the Act prohibits payment for services that are not reasonable and necessary for the diagnosis or treatment of illness or injury. Reasonable and appropriate qualification requirements help ensure that quality screening services are delivered to Medicare patients and that they are furnished with sufficient information about the implications and possible results of having a PSA blood test completed. It is true that an appropriately trained physician or other practitioner can perform this service safely and it does not have to be limited to the patient's attending physician. Based on the comments received from various medical societies, we believe that we can best help ensure that these new Medicare screening services are furnished safely and effectively to patients by requiring that they be done by the physician or other recognized practitioner (as stated elsewhere in this section) who is fully knowledgeable about the patient and would be responsible for explaining the results of the screening examination or test. We believe that under this formulation, a physician other than the patient's attending physician in a group practice can easily meet the requirement. Result of Evaluation of Comments: We are modifying our proposal to delete the word ``attending''. The revised requirement will be that the screening DREs and the screening PSA tests must be performed and ordered, respectively, by the beneficiary's physician, physician assistant, nurse practitioner, clinical nurse specialist, or certified nurse midwife who is fully knowledgeable about the patient and would be responsible for explaining the results of the screening examination (test). This revision is reflected in the new Sec. 410.39. Comment: One commenter indicated that Secs. 410.39(c)(1) and 410.39(e)(1) relating to the limitation on coverage of screening DREs and screening PSA tests are in conflict, and need to be clarified to make them consistent with the law and our interpretation of the law as explained in the preamble to the proposed rule. Response: We agree with the commenter. There is an inaccuracy in proposed Sec. 410.39(e)(1) that needs to be corrected. As we discussed in the preamble to the proposed rule, the BBA defines a prostate cancer screening test to mean a test (among other things) that is ``provided for the purpose of early detection of prostate cancer to a man over 50 years of age who has not had such a test during the preceding year.'' We have interpreted this to mean that payment may be made for a male beneficiary over 50 years of age or older (that is, starting at least one day after he has attained age 50) for both an annual screening DRE and an annual screening PSA test. This means, however, that payment may not be made for a male beneficiary on or before the day he attains age 50. Result of Evaluation of Comments: We are revising Sec. 410.39(e)(1) to provide that payment ``may not be made for a screening PSA blood test performed for a man on or before the day he attains age 50.'' We are leaving Sec. 410.39(c)(1) unchanged. Comment: Commenters agreed with our proposal to create a new code, G0102, for a DRE and pay for it at the same level as the lowest level E/M code, 99211. Two commenters agreed with our proposal to bundle the payment for a DRE into the payment for a covered E/M service furnished on the same day. Two other commenters stated that since the DRE is a separate covered benefit that it should always be paid separately. Response: As stated in the July 1999 proposed rule (64 FR 39627), a DRE is a very quick and simple examination taking only a few seconds. We believe it is rarely the sole reason for a physician encounter and is usually part of an E/M encounter. In those instances when it is the only service furnished or it is furnished as part of an otherwise non- covered service, we will pay separately for code G0102. In those instances when it is furnished on the same day as a covered E/M service, we believe it is appropriate to bundle it into the payment for the covered E/M encounter. Result of Evaluation of Comments: We are adopting our proposal to pay for a DRE (G0102) at the same level as the lowest level E/M service (99211) and to bundle the payment for the DRE into the payment for a covered E/M service [[Page 59415]] when the two services are furnished to the patient on the same day. O. Diagnostic Tests 1. Supervision of Diagnostic Tests Sections 4511 and 4512 of the BBA removed the restrictions on the areas and settings in which nurse practitioners (NPs), clinical nurse specialists (CNSs) and physician assistants (PAs) may be paid under the physician fee schedule for services that would be physicians' services if furnished by a physician. We proposed to revise Sec. 410.32(b) concerning diagnostic x-ray and other diagnostic tests and add an exception at Sec. 410.32(b)(2) to specify that no physician supervision of NPs and CNSs is required for diagnostic tests performed by NPs and CNSs when they are authorized by the State to perform these tests. In addition, we proposed to modify Sec. 410.32(b)(3) by means of a parenthetical to state that diagnostic tests that a PA is legally authorized to perform under State law require only a general level of physician supervision of the PA. We also proposed to add an exception criterion at Sec. 410.32(b)(2) so that physician supervision rules would not apply to pathology and laboratory codes in the 80000 series of the CPT payable under the physician fee schedule. These codes are within the scope of the Clinical Laboratory Improvement Amendments of 1988 (CLIA) regulations (Part 493), and we determined it would be unnecessarily confusing to apply another separate set of supervision rules to the performance of these procedures. The CLIA regulations should determine the level of supervision necessary, if any, for these procedures. We received many comments opposing the proposal to modify Sec. 410.32 to permit NPs and CNSs to order, interpret, and perform radiological procedures without physician supervision when they are authorized by the State to perform these services. Our proposal addressed only the last activity. The legal authority for NPs and CNSs to order and to interpret tests (and for PAs to perform these activities under physician supervision) is not at issue. Section 410.10(a)(3) already provides that nonphysician practitioners (including PAs, NPs, and CNSs) who are operating within the scope of their authority under State law may order diagnostic tests. With regard to the interpretation of diagnostic tests, Congress has specifically recognized the ability of PAs, NPs, and CNSs to furnish services that would be physician services, if furnished by a physician, subject to the provisions of State law. Several commenters expressed their approval of the proposal regarding PAs, NPs, and CNSs. Comment: Several commenters indicated that the proposal to change the regulation to permit NPs and CNSs to perform diagnostic tests without physician supervision did not explain why this change was being proposed. Response: As indicated in the July 1999 proposed rule (64 FR 39638), the proposal would conform the requirements of the physician supervision policy in Sec. 410.32(b) to the BBA provisions relating to PAs, NPs, and CNSs. Those provisions generally permitted these practitioners to bill directly for services that would be physicians' services if they were furnished by a physician. Comment: Many commenters expressed concern about the qualifications of NPs and CNSs to perform radiology procedures without physician supervision. The commenters pointed out that-- Radiologists undergo 4 to 5 years of residency training after medical school; NPs and CNSs do not have the training, education, or experience to be qualified to furnish radiology services; The lack of training undergone by NPs and CNSs in x-ray physics as well as nuclear medicine, magnetic resonance physics, and ultrasound physics, places the patient in a life-threatening position; and The policy on this matter should be a national policy, rather than a policy debated in each State legislature. Response: As indicated in the July 1999 proposed rule, we made the proposals to remove the requirement for physician supervision of NPs and CNSs for diagnostic tests for services NPs and CNSs are authorized to perform under State law and to establish a level of general supervision by a physician for diagnostic tests that PAs are authorized to perform under State law. Further, since we have not imposed requirements regarding specific training requirements for physician specialties to be able to perform and bill for these diagnostic tests, we believe that it is inappropriate to apply these requirements to practitioners whom the Congress has specifically recognized as having the ability to furnish services that would be physician services if furnished by a physician, subject to the provisions of State law. The Medicare law generally leaves the scope of practice of NPs, CNSs, and PAs to be determined by the individual States. Finally, we have no indication that NPs and CNSs will abuse their benefit by trying to perform diagnostic tests they are not qualified to do. Comment: A national organization of radiologic technologists questioned the reliance on the statutory language in section 4511 of the BBA for policy on the issue of supervision of NPs or CNSs for diagnostic testing and suggested that we are incorrectly interpreting this section by proposing to allow these practitioners to perform diagnostic testing without a supervising physician. The commenter went on to indicate that the proposed rule creates a practice opportunity for nurses that is not justified by the cited legislation, that it ignores existing law, and that we are in violation of the Administrative Procedure Act by making law that exceeds its congressional authority. Response: We believe that our proposal is within the law and reflects the intent of the Congress with regard to services of NPs and CNSs. Comment: One commenter said that it should be made clear in the final rule that the technical component which is the issue at hand, is not subject to the payment reduction applicable to services of nonphysician practitioners. Response: We agree with the commenter. Since May 1992, Section 16000 of the Medicare Carriers Manual has stated: ``For those services that have both a technical component and a professional component (such as a radiology service or a diagnostic test) or if the nonphysician practitioner provides an incident to service that is routinely separately billed, the percentage payment limitations do not apply to the technical component or to the incident to part of the service that is separately billed.'' Comment: Some commenters expressed concern about the effect of this proposal, if adopted, on the mammography certification program. Response: Mammography certification programs are regulated by the FDA (21 CFR Part 900), and entities performing mammography must comply with those regulations in order to be certified. Our regulations would not affect that process. Comment: Some commenters indicated that the proposed revision would be contrary to Stark I and II that was formulated to reduce self- referral and its potential for abuse. It was pointed out that self- referral has been shown to be an incentive for overutilization of imaging services. Response: The Stark provisions do not apply to the services of nonphysician practitioners. Comment: The American Medical Association suggested that the proposal not to require physician supervision for [[Page 59416]] tests NPs and CNSs are authorized to perform under State law be delayed until the controversy surrounding the requirement for NPS and CNSs to be working in collaboration is better resolved. Response: The collaboration requirement is not an issue upon which comments were sought under this year's proposed rule, and we do not believe that issue should delay implementation of this proposal. Comment: Several commenters expressed their opinions on issues relating to the levels of physician supervision that should be required for individual diagnostic tests. Response: No proposals on the levels of physician supervision required for individual diagnostic tests were included in the proposed rule, and we will not discuss them here. We plan to issue a program memorandum setting forth revised levels of supervision. Comment: One commenter indicated that the proposed rule cites section 4511 of the BBA as one of the reasons for eliminating the physician supervision requirements for NPs and CNSs and pointed out that section 4511 could be interpreted to mean that the provision only applies to ``incident to'' services. The commenter went on to say that, since ``incident to'' (as set forth in section 1861(s)(2)(A)) does not apply to diagnostic tests that have technical components, that provision of the BBA does not mandate the elimination of the physician supervision requirement for diagnostic tests performed by NPs and CNSs. Response: The technical components of diagnostic tests are covered under section 1861(s)(3) of the Act. Section 1848(j) of the Act specifies that services covered under that section are ``physicians' services'' for purposes of payment under the Medicare physician fee schedule. Section 4511 of the BBA provides that NPs and CNSs may bill directly for services that would be physician services if they were furnished by a physician, so long as the practitioners are authorized under State law to perform the services. This provision is not limited to ``incident to'' services. (In fact, the very definition of ``incident to'' services is that they are services which are included in a physician's bill and not separately billed; thus it would be difficult to read section 4511 as applying only to those services.) Comment: One commenter characterized the language used in our proposal to exclude pathology and laboratory codes in the 80000 series of the CPT from the physician supervision requirements of Sec. 410.32(b) as ``inflammatory, patronizing, and gratuitous.'' The language related to our statement that the decision as to the necessity of physician supervision in connection with these services should be made solely under the CLIA regulations and not under both the CLIA regulations and the physician fee schedule regulations. Response: Obviously, there was no intent to offend pathologists. We made the proposal to remove confusion with regard to the physician supervision requirements that apply to a class of codes. Result of Evaluation of Comments We are adopting our proposal to provide that-- Diagnostic tests payable under the physician fee schedule and performed by a nurse practitioner or clinical nurse specialist authorized to perform such tests under applicable State laws are excluded from the physician supervision requirement set forth in 42 CFR 410.32(b); Pathology and laboratory procedures listed in the 80000 series of the CPT and payable under the physician fee schedule are excluded from the physician supervision requirements of Sec. 410.32(b); and Diagnostic tests payable under the physician fee schedule and performed by a physician assistant authorized to perform tests under applicable State laws require only a general level of physician supervision. 2. Independent Diagnostic Testing Facilities In keeping with the BBA provisions concerning services furnished by NPs, CNSs and PAs as discussed in paragraph 1. above, we proposed to revise Sec. 410.33(a), which establishes criteria for the operation of independent diagnostic testing facilities (IDTFs), to include NPs and CNSs who perform diagnostic tests that the State authorizes them to perform in the list of entities that may be paid directly by the carrier. We also proposed to modify the implementation date for IDTFs from July 1, 1998 to March 15, 1999 to reflect the actual implementation date. Comment: Several commenters expressed concern that the proposal to add NPs and CNSs to the list of entities that may be paid directly by the carrier for diagnostic tests under the physician fee schedule would enable these practitioners to open their own imaging facilities and independently perform diagnostic imaging tests. Response: The Congress has specifically recognized the ability of NPs and CNSs to furnish physician services subject to the requirements of State law. The law evidences the intent of the Congress that the determination of the scope of services of NPs and CNSs may be determined by the individual States. We have no reason to believe that NPs and CNSs will abuse their benefit by trying to perform diagnostic tests they are not qualified to do. NPs and CNSs are not precluded from opening an IDTF. However, IDTFs that are owned and/or operated by NPs and CNSs must meet IDTF physician supervision requirements; that is, the IDTFs must employ or contract with a physician (MD or DO) to provide the required levels of supervision of technicians and equipment. Result of Evaluation of Comments We are adopting our proposal to amend Sec. 410.33(a) to change the effective date and to add NPs and CNSs to the list of entities that may be paid directly by the carrier for diagnostic tests under the physician fee schedule. P. Other Issues Orthopedic Physician Assistants OPAs are not recognized as PAs under Medicare. We received many comments concerning the recognition of orthopedic physician assistants (OPAs) as PAs for Medicare coverage purposes. We proposed including OPAs as PAs as part of last year's proposed rule, but we chose not to include the proposal in the final rule. For the reasons stated in the 1998 final rule (63 FR 58876 through 58878) we have no current plans to address the issue again. Image-Guided Biopsy We received comments concerning the current image-guided biopsy code, CPT code 19101. The commenters stated that currently two different procedures, open incisional biopsy and image-guided breast biopsy with the equipment that integrates imaging and biopsy are assigned this code and it cannot be fairly valued as it does not adequately reflect the skills, work or practice expense for the image guided stereotaxic breast biopsy procedure. The commenters recommended that a new separate code for image-guided vacuum assisted breast biopsy be established. Since this issue is under consideration for a change in coverage criteria, we will consider coding changes needed to implement any change in coverage. No changes will be made at this time. Portable X-ray Transportation We received comments concerning the payment rate for portable x-ray transportation codes R0070 and R0075. The commenters suggested that new [[Page 59417]] regional rates, independent of the physician fee schedule, be proposed for portable x-ray transportation codes R0070 and R0075. Until such regional rates are finalized, the commenters believed it would be appropriate to continue carrier pricing based on current year rates plus an annual adjustment for inflation. We continue to believe that the physician fee schedule is the appropriate vehicle for portable x- ray transportation payments because these services are payable only by virtue of section 1861(s)(3) of the Act. Also, we did not propose new RVUs for these services in this year's proposed rule. We will continue to require that these codes be carrier priced at least through the end of 2000. It is within the carrier's discretion to raise or lower payment levels, after appropriate notification, for reasons of inflation or other considerations. Supervision Requirements for Therapy Assistants An association representing physical therapists and another association representing occupational therapists, commented that the level of supervision required for therapy assistants in the private practice setting should be direct supervision rather than the personal supervision stipulated in the November 1998 final rule. They indicated that the personal supervision requirement changed the long-standing direct supervision requirement that was applicable to therapy assistants in private practice prior to January 1, 1999 (then known as therapy assistants in independent practice). The commenters further stated that the personal supervision requirement imposed a level of supervision higher than that required for therapy assistants furnishing such services in other Medicare settings and that the requirement is contrary to state law. While we acknowledge that we have been urged to revisit this issue, we did not include it in our proposed rule and we will not address the issue in this final rule. We believe that supervision issues raise concerns about quality of care, and we would prefer that any changes be the subject of public discussion. Therefore, before we would make changes in supervision requirements, we would include them in a future proposed rule. III. Refinement of Relative Value Units for Calendar Year 2000 and Response to Public Comments on Interim Relative Value Units for 1999 (Including the Relative Value Units Contained in the July 22, 1999 Proposed Rule) A. Summary of Issues Discussed Related to the Adjustment of Relative Value Units Section III. B. of this final rule describes the methodology used to review the comments received on the RVUs for physician work and the RVUs for new and revised CPT codes. Changes to CPT codes on the physician fee schedule reflected in Addendum B are effective for services furnished beginning January 1, 2000. B. Process of Establishing Work Relative Value Units for 2000 Physician Fee Schedule Our November 2, 1998 final rule (63 FR 58814) announced the final RVUs for Medicare payment for existing procedure codes under the physician fee schedule and interim RVUs for new and revised procedure codes. The RVUs contained in the rule applied to physician services furnished beginning January 1, 1999. We announced that we considered the RVUs for the interim procedure codes would be subject to public comment under the annual refinement process. We also included an additional 16 new and revised CPT codes in the July 22, 1999 proposed rule and requested comments on these CPT codes. We had received the RUC's recommendations for these CPT codes too late for them to be included in the November 1998 final rule. In this section, we summarize the refinements to the interim work RVUs that have occurred since publication of the November 1998 final rule and our establishment of the work and practice expense, and malpractice RVUs for new and revised procedure codes for the 2000 physician fee schedule. Work Relative Value Unit Refinements of Interim and Related Relative Value Units (Includes Table 1--Work RVU Refinement of 1999 Interim and Related Relative Value Units) Although the work RVUs in the November 1998 final rule were used to calculate 1999 payment amounts, we considered the work RVUs for the new or revised procedure codes to be interim. We accepted comments for a period of 60 days. We also included additional RUC work RVU recommendations in the July 22, 1999 proposed rule. We accepted comments on these work RVU recommendations for a period of 60 days. We received comments from four specialty societies on four CPT codes with interim work RVUs. Only comments received on codes listed in Addendum C of the November 1998 final rule or codes listed in section P. of the July 1999 proposed rule were considered. Due to the limited number of comments received, we did not convene multispecialty refinement panels. Rather, determinations were made by our medical staff. In reaching their conclusions they analyzed written comments of the specialty societies that commented. Table 1 lists the interim and related codes reviewed during the 1999 refinement process described in this section. This table includes the following information: CPT Code. This is the CPT code for a service. Description. This is an abbreviated version of the narrative description of the code. 1999 Work RVU. The work RVUs that appeared in the November 1998 or July 1999 rule are shown for each reviewed code. Requested Work RVU. This column identifies the work RVUs requested by the commenters. 2000 Work RVU. This column contains the final RVUs for physician work. The final work RVUs emerged from analysis of the specialty societies written comments on the 1999 interim valued CPT codes. Table 1.--Work RVU Refinement of 1999 Interim and Related RVUs ---------------------------------------------------------------------------------------------------------------- 1999 Work Requested 2000 Work CPT Code MOD Description RVU Work RVU RVU ---------------------------------------------------------------------------------------------------------------- 33975................ ................. Ventricular access device...... 21.00 21.00 21.00 33976................ ................. Ventricular access device...... 23.00 23.00 23.00 69990................ ................. Microsurgery add-on............ 3.47 3.47 3.47 78020................ 26............... Thyroid met uptake............. 0.60 0.67 0.60 ---------------------------------------------------------------------------------------------------------------- * All CPT codes and descriptors copyright 1998 American Medical Association. [[Page 59418]] Implantation of ventricular assist device (CPT codes 33975 and 33976) Comment: One speciality society commented that they concur with our proposed work RVUs for the intraoperative work associated with the implantation of a ventricular assist device. It should be noted that the concurrence was contingent upon the global period of ``XXX'' days that we assigned to CPT codes 33975 and 33976. Response: We believe that the substitution of an ``XXX'' global period for the original global period of 90 days, and the resulting reduction in the work RVUs for the implantation of ventricular assist devices, has resulted in equitable work RVUs for the implantation of ventricular assist devices. We appreciate the opportunity to work with specialty societies to accomplish equitable work RVUs. Microsurgery add-on (CPT code 69990) Comment: Many surgical groups commented that we should always pay separately for the use of the operating microscope unless its use is explicitly stated in the definition of the procedure. They claim that increasing use of the operating microscope has led to increased work. Response: We are sympathetic to the idea that increasing use of the operating microscope has led to increased work. However, the current evaluation of CPT code 69990 was not based on an evaluation of the increased work for the myriad of procedures for which an operating microscope may be used. We believe that it is unlikely that one add-on code can correctly reimburse for work done on procedures varying from cranial neurosurgery to foot surgery. Our 5-year review of work RVUs will be active in the coming year. We believe that the 5-year review process is the appropriate mechanism for reviewing appropriate payment for microsurgery. Comment: Two specialty groups recommended that we increase the physician work RVU of CPT code 78020, Thyroid carcinoma metastases, from 0.60 work RVUs to the AMA RUC recommended value of 0.67 work RVUs. Response: The specialty society reported that this procedure was previously reported with unlisted CPT code 78099. The specialty survey also estimated that this code will be billed approximately 15 percent of the time that CPT code 78018 is billed. According to Medicare frequency data, CPT code 78099 was only billed 61 times in 1997 while the projected utilization for CPT code 78020 for 1999 is approximately 575 claims annually. In order to keep budget neutrality within this family of codes we will retain its proposed recommendation of 0.60 work RVUs for CPT code 78020. Establishment of Interim Work Relative Value Units for New and Revised Physicians' Current Procedural Terminology Codes and New HCFA Common Procedure Coding System Codes for 2000 Methodology (Includes Table 2-- American Medical Association Specialty Society Relative Value Update Committee and Health Care Professionals Advisory Committee Recommendations and HCFA's Decisions for New and Revised 2000 CPT Codes) One aspect of establishing work RVUs for 2000 was related to the assignment of interim work RVUs for all new and revised CPT codes. As described in our November 25, 1992 notice on the 1993 fee schedule (57 FR 55938) and in section III.B of our November 22, 1996 final rule (61 FR 59505 through 59506) we established a process, based on recommendations received from the AMA's RUC, for establishing interim work RVUs for new and revised codes. This year we received work RVU recommendations for approximately 61 new and revised CPT codes from the RUC. Our staff and medical officers reviewed the RUC recommendations by comparing them to our reference set or to other comparable services for which work RVUs that had been established previously, or to both of these criteria. We also considered the relationships among the new and revised codes for which we received RUC recommendations. We agreed with the majority of those relationships reflected in the RUC values. In some cases, when we agreed with the RUC relationships, we revised the work RVUs recommended by the RUC to achieve work neutrality within families of codes. That is, the work RVUs have been adjusted so that the sum of the new or revised work RVUs (weighted by projected frequency of use) for a family of codes will be the same as the sum of the current work RVUs (weighted by their current frequency of use). For approximately 69 percent of the RUC recommendations, proposed work RVUs were accepted, and for approximately 31 percent, the work RVUs were decreased. There were also 7 CPT codes for which we did not receive a RUC recommendation. After review of these CPT codes by our staff and medical officers, we established interim work RVUs for all 7 CPT codes. Table 2 lists the new or revised CPT codes, and their associated work RVUs, that will be interim in 2000. This table includes the following information: A ``#'' identifies a new code for 2000. CPT code. This is the CPT code for a service. Modifier. A ``26'' in this column indicates that the work RVUs are for the professional component of the code. Description. This is an abbreviated version of the narrative description of the code. RUC recommendations. This column identifies the work RVUs recommended by the RUC. HCPAC recommendations. This column identifies work RVUs recommended by the HCPAC. HCFA decision. This column indicates whether we agreed with the RUC recommendation (``agree''); we established work RVUs that are higher than the RUC recommendation (``increase''); or we established work RVUs that were less than the RUC recommendation (``decrease''). Codes for which we did not accept the RUC recommendation are discussed in greater detail following Table 2. An ``(a)'' indicates that no RUC recommendation was provided. A discussion follows the table. HCFA Work RVUs. This column contains the RVUs for physician work based on our reviews of the RUC recommendations. 2000 Work RVUs. This column establishes the 2000 RVUs for physician work. Table 2.--AMA RUC and HCPAC Recommendations and HCFA Decisions for New and Revised 2000 CPT Codes ---------------------------------------------------------------------------------------------------------------- RUC HCPAC HCFA Work 2000 Work CPT* code MOD Description recommendation recommendation HCFA decision RVU RVU ---------------------------------------------------------------------------------------------------------------- 11980#..... ....... Hormone pellet .............. .............. (a)........... 1.48 1.48 implanation. 13102#..... ....... Repair wound/ 1.24 .............. Agree......... 1.24 1.24 lesion add-on. 13122#..... ....... Repair wound/ 1.44 .............. Agree......... 1.44 1.44 lesion add-on. [[Page 59419]] 13133#..... ....... Repair wound/ 2.19 .............. Agree......... 2.19 2.19 lesion add-on. 13153#..... ....... Repair wound/ 2.38 .............. Agree......... 2.38 2.38 lesion add-on. 20979#..... ....... US bone .............. .............. (a)........... 0.17 0.17 stimulation. 22318#..... ....... Treat odontoid 21.50 .............. Agree......... 21.50 21.50 fx w/o graft. 22319#..... ....... Treat odontoid 24.00 .............. Agree......... 24.00 24.00 fx w/ graft. 27096#..... ....... Inject 1.40 .............. Decrease...... 1.10 1.10 sacroiliac joint. 33140#..... ....... Heart 20.00 .............. Agree......... 20.00 20.00 Revascularize (TMR). 33244...... ....... Remove eltrd, 13.76 .............. Agree......... 13.76 13.76 Transven. 33249...... ....... Eltrd/insert 14.23 .............. Agree......... 14.23 14.23 pace-defib. 33282#..... ....... Implant pat- 4.17 .............. Agree......... 4.17 4.17 active ht record. 33284#..... ....... Remove pat- 2.50 .............. Agree......... 2.50 2.50 active ht record. 33405...... ....... Replacement of 30.61 .............. Agree......... 30.61 30.61 aortic valve. 33410#..... ....... Replacement of 32.46 .............. Agree......... 32.46 32.46 aortic valve. 33968#..... ....... Remove aortic 2.00 .............. Decrease...... 0.64 0.64 assist device. 35879#..... ....... Revise graft w/ 16.00 .............. Agree......... 16.00 16.00 vein. 35881#..... ....... Revise graft w/ 18.00 .............. Agree......... 18.00 18.00 vein. 36521#..... ....... Apheresis w/ .............. .............. (a)........... 1.74 1.74 adsorp/reinfuse. 36550#..... ....... Declot vascular .............. .............. (a)........... 0.00 0.00 device. 36819#..... ....... AV fusion by 14.00 .............. Agree......... 14.00 14.00 basilic vein. 39560#..... ....... Resect 12.00 .............. Agree......... 12.00 12.00 diaphragm, simple. 39561#..... ....... Resect 17.50 .............. Agree......... 17.50 17.50 diaphragm, complex. 50541#..... ....... Laparo ablate 16.00 .............. Agree......... 16.00 16.00 renal cyst. 50544#..... ....... Laparoscopy, 22.40 .............. Agree......... 22.40 22.40 pyeloplasty. 50546#..... ....... Laparoscopic 20.48 .............. Agree......... 20.48 20.48 nephrectomy. 50547#..... ....... Laparo removal 25.50 .............. Agree......... 25.50 25.50 donor kidney. 50548#..... ....... Laparo-asst 24.40 .............. Agree......... 24.40 24.40 remove k/ureter. 50945#..... ....... Laparo 17.00 .............. Agree......... 17.00 17.00 ureterolithotom y. 51990#..... ....... Laparo urethral 12.50 .............. Agree......... 12.50 12.50 suspension. 51992#..... ....... Laparo sling 14.01 .............. Agree......... 14.01 14.01 operation. 54692#..... ....... Laparoscopy, 12.88 .............. Agree......... 12.88 12.88 orchiopexy. 61751...... ....... Brain biopsy w/ 17.62 .............. Agree......... 17.62 17.62 CT/MR guide. 61862#..... ....... Implant 27.34 .............. Decrease...... 19.34 19.34 neurostim, subcort. 61885...... ....... Implant 8.00 .............. Decrease...... 5.85 5.85 neurostim one array. 61886#..... ....... Implant 8.00 .............. Agree......... 8.00 8.00 neurostim arrays. 62263#..... ....... Lysis epidural 7.20 .............. Decrease...... 6.02 6.02 adhesions. 62310#..... ....... Inject spine C/T 2.20 .............. Decrease...... 1.91 1.91 62311#..... ....... Inject spine L/S 1.78 .............. Decrease...... 1.54 1.54 (CD). 62318#..... ....... Inject spine w/ 2.35 .............. Decrease...... 2.04 2.04 cath, C/T. 62319#..... ....... Inject spine w/ 2.15 .............. Decrease...... 1.87 1.87 cath L/S (CD). 64470#..... ....... Inj 1.85 .............. Agree......... 1.85 1.85 paravertebral C/ T. 64472#..... ....... Inj 1.29 .............. Agree......... 1.29 1.29 paravertebral C/ T Add-on. 64479#..... ....... Inj foramen 2.20 .............. Agree......... 2.20 2.20 epidural C/T. 64480#..... ....... Inj foramen 1.54 .............. Agree......... 1.54 1.54 epidural add-on. 64483#..... ....... Inj foramen 1.90 .............. Agree......... 1.90 1.90 epidural L/S. 64484#..... ....... Inj foramen 1.33 .............. Agree......... 1.33 1.33 epidural add-on. 64573#..... ....... Implant 7.50 .............. Agree......... 7.50 7.50 neuroelectrodes. 64626#..... ....... Destr 3.28 .............. Agree......... 3.28 3.28 paravertebri nerve C/T. 64627#..... ....... Destr 1.16 .............. Agree......... 1.16 1.16 paravertebral N add-on. 72275#..... 26..... Epidurography... 0.83 .............. Decrease...... 0.54 0.54 72285...... 26..... X-ray C/T spine 1.16 .............. Agree......... 1.16 1.16 disk. 73542#..... 26..... X-ray exam, 0.64 .............. Decrease...... 0.54 0.54 sacroiliac joint. 76005#..... 26..... Fluoroguide for 0.60 .............. Decrease...... 0.54 0.54 spine inject. 76873#..... 26..... Echograph trans 1.92 .............. Decrease...... 0.99 0.99 R, pros study. 77427#..... ....... Radiation TX 3.31 .............. Agree......... 3.31 3.31 management, x5. 78267...... ....... Breath test 0.00 .............. Agree......... 0.00 0.00 attain/anal, C- 14. 78268...... ....... Breath test 0.19 .............. Decrease...... 0.00 0.00 analysis, C-14. 78456#..... 26..... Acute venous 1.00 .............. Agree......... 1.00 1.00 thrombus image. 92961#..... ....... Cardioversion, 4.60 .............. Agree......... 4.60 4.60 electric, int. 93727#..... 26..... Analyze ILR 0.52 .............. Agree......... 0.52 0.52 system. 93741#..... 26..... Analyze ht pace 0.90 .............. Decrease...... 0.64 0.64 device sngl. 93742#..... 26..... Analyze ht pace 1.03 .............. Decrease...... 0.73 0.73 device sngl. 93743#..... 26..... Analyze ht pace 1.17 .............. Decrease...... 0.83 0.83 device doub. 93744#..... 26..... Analyze ht pace 1.33 .............. Decrease...... 0.95 0.95 device doub. 96570#..... ....... Photodynamic tx, .............. .............. (a)........... 1.10 1.10 30 min. 96571#..... ....... Photodynamic tx, .............. .............. (a)........... 0.55 0.55 addl 15 min. 99170#..... ....... Anogenital exam, 1.75 .............. Agree......... 1.75 1.75 child. 99173#..... ....... Visual screening .............. .............. (a)........... 0.00 0.00 test. 99291...... ....... Critical care, 4.00 .............. Decrease...... 3.60 3.60 first hour. 99292...... ....... Critical care, 2.00 .............. Decrease...... 1.80 1.80 addl 30 min. ---------------------------------------------------------------------------------------------------------------- a No RUC recommendation provided. [[Page 59420]] # New Codes. * All numeric HCPCS CPT Copyright 1997 American Medical Association. Discussion of Codes for Which There Were No RUC Recommendations or for Which the RUC Recommendations Were Not Accepted The following is a summary of our rationale for not accepting particular RUC work RVU recommendations. It is arranged by type of service in CPT order. Additionally, we also discuss those CPT codes for which we received no RUC recommendations for physician work RVUs. This summary refers only to work RVUs. Subcutaneous hormone pellet implantation (CPT code 11980) We did not receive a work RVU recommendation from the RUC for CPT code 11980. Our clinical staff estimate that the work associated with CPT code 11980 is similar to that for insertion of implantable contraceptive capsules, CPT code 11975. For the 2000 fee schedule we will use the work RVUs from CPT code 11975 for CPT code 11980. The work RVU for CPT code 11980 will be considered interim for 2000. Low intensity ultrasound stimulation to aid bone healing, noninvasive (CPT code 20979) We did not receive a work RVU recommendation from the RUC for CPT code 20979. Our clinical staff estimate that the work associated with CPT code 20979 is comparable to a level 1 office visit for an established patient, CPT code 99211. The work RVU for CPT code 20979 will be considered interim for 2000. Injection procedure for sacroiliac joint arthrography and/or anesthetic/steroid (CPT code 27096) The RUC evaluated the work for this procedure based on a survey of radiologists and a clinical description of the service including the injection of both contrast and therapeutic substances. The RUC assigned a work RVU of 1.4, comparable to other contrast injection procedures. However, the RUC description also notes that this procedure is performed without contrast in which case it is reported as CPT code 20610 for a large joint injection. The work RVU for CPT code 20610 is 0.79. Our medical staff has confirmed that CPT 27096 is also commonly done without contrast. We estimate that CPT code 27096 will be performed half of the time without contrast. To maintain work neutrality, we assigned a work RVU of 1.10 based on the weighted average of procedures with contrast (CPT codes 27093 and 27095) valued at 1.40 work RVUs and a procedure without contrast (CPT code 20610) valued at 0.79 work RVUs. Removal of a percutaneous intra-aortic balloon assist device or pump (IABP) (CPT code 33968) The RUC evaluated the removal of a percutaneous IABP as equivalent to 30 minutes of critical care time and assigned a value of 2.00 work RVUs. Our medical staff wishes to emphasize that the time involved with weaning and observation of the patient prior to removal of the IABP should be billed under the appropriate E/M service. Furthermore, since weaning and observation prior to removal of the IABP ensures that the patient is hemodynamically able to tolerate removal of the IABP, we disagree with the RUC's conclusion that the work of removing an IABP is equivalent to the work of providing critical care services. Our medical staff estimate that the physician work involved is considerably less than 30 minutes. While compression of the removal site may be required for up to 30 minutes, the compression and observation is frequently delegated to hospital staff after a shorter physician observation period immediately following removal. The work has also decreased recently due to the use of smaller, 8 French IABPs and the availability of special compression devices. We have estimated the typical work as comparable to a level 1 subsequent hospital visit, CPT code 99231, and have assigned work RVUs of 0.64 to this procedure. We advise that this procedure must be performed personally by the billing physician in order to be considered a covered physician service. If the procedure is performed by nursing staff or a hospital catheterization lab technician, then the physician may not claim payment. When a claim is submitted for CPT code 33968, the time involved in removing the IABP may not be counted towards critical care time. Therapeutic apheresis with extracorporeal column adsorption and plasma reinfusion (CPT code 36521) We did not receive a recommendation from the RUC for CPT code 36521. Our clinical staff estimate that the work for this procedure is comparable to therapeutic apheresis involving plasma or cell exchange, CPT code 36520. Declotting by thrombolytic agent of implanted reservoir vascular access device or catheter (CPT code 36550) This is a new CPT code for which no work recommendation was made by the RUC. Our medical staff reviewed the submission to the AMA CPT panel and the RUC survey and determined that the skill level required for this procedure was that of a registered nurse with some specialized training. Furthermore, the procedure is generally performed by a registered nurse with physician assistance upon request. In the past, this procedure has been billed under CPT code 99211 (level 1 visit for an established patient), which is frequently used for services provided by ancillary staff under physician supervision. Therefore, we have assigned 0.00 physician work RVUs for this procedure. An E/M service may be billed separately if the physician participates in this procedure, or provides another, separately identifiable medically necessary E/M service. Therefore, inclusion of physician work RVUs for CPT code 36550 would lead to duplicate payments. Subcortical neurostimulator array implantation (CPT code 61862) The RUC evaluated this code with a building block approach that included the work of stereotactic localization, the device implantation, and 140 minutes of intraoperative testing contributing 8.00 work RVUs. The RUC recommendation for the entire procedure is 27.34 work RVUs. Because the time for intraoperative testing is variable, we are subtracting 8.00 work RVUs and assigning a value for the procedure of 19.34. We are advising using CPT codes 95961 (work RVUs of 2.97) and 95962 (work RVUs of 3.21), functional cortical and subcortical mapping, to report the work of intraoperative testing. We also note that since the work of stereotactic localization is included in 61862, we will deny payment for other stereotactic localization codes billed in conjunction with this code. [[Page 59421]] Incision and subcutaneous placement of cranial neurostimulator pulse generator or receiver, direct or inductive coupling; with connection to a single electrode array (CPT code 61885) and Incision and subcutaneous placement of cranial neurostimulator pulse generator or receiver, direct or inductive coupling; with connection to two or more electrode arrays (CPT code 61886) CPT code 61885 was revised to describe the placement of a cranial neurostimulator connected to a single electrode array while CPT code 61886 is a new code that describes the same procedure with connection to two or more electrode arrays. Currently most cranial neurostimulator placement is reported under CPT code 61885, whether connected to one, two, or more electrode arrays. In the future 100 percent of old CPT code 61885 will be billed as either CPT code 61885 or CPT code 61886. The RUC recommended an increase in work RVUs from 5.85 to 8.00 for CPT code 61885 and recommended a work RVU of 8.00 for CPT code 61886. Our medical staff does not think an increase in work for CPT code 61885 is justified. The work RVU for CPT code 61885 was increased during the last 5-year review of physician work, and the review of the material submitted by the RUC did not include evidence that the physician work for CPT code 61885 has changed in the last two years. Therefore, we will continue to assign 5.85 work RVUs to CPT code 61885. Our medical staff agrees that the physician work for CPT code 61886 is greater than the work for CPT code 61885 and will assign 8.00 work RVUs, as recommended by the RUC, to CPT code 61886. Additionally, we will monitor the utilization pattern for these codes to determine if a work neutrality adjustment is required in the future. Percutaneous lysis of epidural adhesions using solution injection (for example, hypertonic saline, enzyme) or mechanical means (for example, spring-wound catheter) including radiologic localization (includes contrast when administered) (CPT code 62263) This is a new CPT code for which the RUC recommended a work value of 7.20 work RVUs using a building block approach. We found flaws in the RUC construction of the building blocks. One building block, CPT code 62279 (Injection of diagnostic or therapeutic anesthetic or antispasmodic substance (including narcotics); epidural, lumbar, or caudal, continuous) was counted twice. This is incorrect since the catheter is only placed once. To correct this, we adopted the RUC's estimate that the injection portion of an injection code (which includes catheter placement) is \1/3\ of the total work of the code, and we assumed a total of two injections. This resulted in counting CPT code 62270 1.33 times instead of twice. Our medical staff also determined that the building block for fluoroscopic guidance was incorrectly crosswalked to new CPT code 76005 (see below) and that the appropriate crosswalk for fluoroscopic guidance was CPT code 76003 (Fluoroscopic localization for needle biopsy or fine needle aspiration) which requires comparable work. These corrections result in a work RVU of 6.02 for CPT code 62263. Epidural or subarachnoid spine injection procedures (CPT codes 62310, 62311, 62318, and 62319) New CPT codes 62310 through 62319 were developed to organize different routes (subarachnoid, epidural) at different levels (cervical, thoracic, lumber, caudal), for different substances (narcotic, anesthetic, steroid, antispasmodic). Nine CPT codes, previously used to report these services, were deleted and crosswalked into these four new CPT codes. Although we agree with the relativity established by the RUC, in order to retain budget neutrality within this family of codes the RUC recommendations had to be uniformly reduced. The work RVUs for these four new CPT codes will be: 62310 (work RVU=1.91), 62311 (work RVU=1.54), 62318 (work RVU=2.04), and 62319 (work RVU=1.87). Epidurography (CPT code 72275) The RUC compared this procedure to myelography, CPT code 72265, and assigned identical work RVUs of 0.83. While the RUC survey and discussion state that the work of epidurography is comparable, or even greater, than the work of myelography, the RUC notes also state that this service was previously reported as 72265-52, myelography with reduced service. The RUC discussion also notes that this procedure will be done as an adjunct procedure to epidural injections. Our medical staff has also determined that the work of epidurography is comparable to CPT codes 73525 (Hip Arthrography), 76003 (Fluoroscopic localization for needle biopsy and fine needle aspiration), and 73542 (Sacroiliac joint arthrography, see below). In view of the conflicting information received from the RUC, the comparability of work to the CPT codes above, and because use of epidurography as an adjunct procedure to epidural injections is very similar to the adjunctive use of sacroiliac joint arthrography for sacroiliac joint injections, we are assigning a work RVU of 0.54 to CPT code 72275. Sacroiliac joint arthrography (CPT code 73542) The RUC recommended a work RVU of 0.64 based on an evaluation that this procedure requires more work than the similar reference procedure, hip arthrography, CPT code 73525. However, the survey time estimates are virtually identical and the RUC description also notes that this procedure was previously reported as CPT code 73525. Our medical staff does not believe there is enough difference in the physician work components of CPT codes 73542 and 73525 to justify a higher work RVU for 73542. Therefore, we are assigning a work RVU of 0.54 to CPT code 73542. Fluoroscopic guidance and localization of needle or catheter tip for spine or paraspinous diagnostic or therapeutic injection procedures (epidural, transforaminal epidural, subarachnoid, paravertebral facet joint nerve or sacroiliac joint) including neurolytic agent destruction (CPT code 76005) The RUC recommended a work RVU of 0.60 for CPT code 76005 based on its estimate that more work was required than the similar referenced procedure, Fluoroscopic localization for needle biopsy or fine needle aspiration, CPT 76003, that is valued at 0.54 work RVUs. However, survey time estimates were almost identical and this procedure was previously reported as CPT code 76003. Based on the RUC survey, our medical staff does not believe there is enough difference in the physician work components of 76005 and 76003 to justify a higher work RVU for 76005. Therefore, we are assigning a work RVU of 0.54 to CPT code 76005. Prostate Volume Study (CPT code 76873) This procedure takes place weeks before interstitial radioactive seed placement for prostate cancer. Our medical staff are aware of two approaches to map the prostate for this purpose. The first involves measuring prostate volume by transrectal sonography, making 5 mm cuts of the prostate, and mapping prostate anatomy to a grid that is then used to implant the radioactive seeds accurately several weeks later. This approach does not involve the use of general anesthesia. The second approach takes place after the patient has been placed under [[Page 59422]] general anesthesia for seed implantation and involves positioning the patient, performing the volume study (with 5mm cuts of the prostate), calculating the treatment dose (by the radiation physicist), and immediately implanting the seeds. Even though this new CPT code was developed to describe the first approach, the RUC recommendation of 1.92 work RVUs was based on the use of general anesthesia for performance of the prostate volume study. Our medical staff estimates that the average time to perform the procedure is 30 minutes and that the work is comparable to performance of CPT code 76805, Echography, pregnant uterus, B-scan and/or real time with image documentation; complete. Therefore, we have assigned it a work RVU of 0.99. CPT code 76873 should not be used on the same day as seed implantation and, therefore, we will not allow payment for this service on the same day as seed implantation or other services that are part of seed implantation. Urea breath test, C-14; acquisition for analysis (CPT code 78267), and Breath test analysis, C-14 (CPT code 78268) The RUC recommended a work RVU of 0.00 for CPT code 78267 and 0.19 work RVUs for CPT code 78268. These CPT codes describe procedures currently paid under the lab fee schedule under CPT codes 83013 and 83014 respectively. Our medical staff have reviewed these codes and do not believe any physician work is required for the performance of either service. Moreover, the work required for performance of these services is practically identical to those services still described under CPT codes 83013 and 83014 which are urea breath tests using the C-13 isotope. Therefore, these codes will continue to be paid under the lab fee schedule with CPT code 78267 crosswalked to CPT code 83014 and CPT code 78268 crosswalked to CPT code 83013. Payment rates will be identical to the crosswalk codes. Electronic Analysis of pacing cardioverter-defibrillator * * * without reprogramming (CPT code 93741) The RUC recommended a work RVU of 0.90 for CPT code 93741. This recommendation was inconsistent with both the RUC survey data and with the building block approach that the RUC offered as an alternative. The reference procedure used in the RUC survey was CPT code 93737, Electronic analysis of cardioverter-defibrillator only * * * without reprogramming, that has a work RVU of 0.45. Our medical staff believes that the physician work for CPT code 93741 is greater than that of CPT code 93737, and notwithstanding the conflicting information received from the RUC, has assigned 0.64 work RVUs to CPT code 93741. This value is based on a building block approach combining 100 percent of CPT code 93737 and 50 percent of CPT code 93734, Electronic analysis of single chamber pacemaker system * * * without reprogramming which has a work RVU of 0.38. Electronic analysis of pacing cardioverter-defibrillator * * * single chamber, with reprogramming (CPT code 93742) The RUC recommended a work RVU of 1.03 based on their estimate that CPT code 93742 required 14 percent more work than CPT code 93741. This recommendation was inconsistent with both the results of the RUC survey and with their building block approach that combined 100 percent of CPT code 93738 (Electronic analysis of cardioverter/defibrillator only * * * with reprogramming, work RVU of 0.92) plus 50 percent of CPT code 93735 (Electronic analysis of single chamber pacemaker system * * * with reprogramming, work RVUs of 0.74). Our medical staff agrees that CPT code 93742 requires more physician work than CPT code 93741 because it includes reprogramming. After analysis of the conflicting information received from the RUC, we agree that CPT code 93742 requires 14 percent more work than CPT code 93741. Therefore, we have assigned 0.73 work RVUs to CPT code 93742. Electronic analysis of pacing cardioverter-defibrillator * * * dual chamber, without reprogramming (CPT code 93743) The RUC recommended 1.17 work RVUs for CPT code 93743 because of its estimate that CPT code 93743 required 30 percent more work than CPT code 93741. This recommendation was inconsistent with both the RUC survey data and its building block approach that combined 100 percent of CPT code 93738 with 50 percent of CPT code 93735. Our medical staff agrees that CPT code 93743 requires more work than CPT code 93741. After analysis of the conflicting information received from the RUC, we agree that CPT code 93743 requires 30 percent more work than CPT code 93741. Therefore, we have assigned 0.83 work RVUs to CPT code 93743. Electronic analysis of pacing cardioverter-defibrillator * * * dual chamber, with reprogramming (CPT code 93744) The RUC recommended 1.33 work RVUs for CPT code 93744 based on its estimate that CPT code 93744 required 14 percent more work than CPT code 93743. This recommendation was inconsistent with both the RUC survey data and its building block approach. After analysis of the information received from the RUC, our medical staff agrees that CPT code 93744 requires 14 percent more work than CPT code 93743. Therefore, we have assigned 0.95 work RVUs to CPT code 93744. Photodynamic therapy by endoscopic application of light to ablate abnormal tissue via activation of photosensitive drug(s); first 30 minutes (CPT code 96570), and Photodynamic therapy by endoscopic application of light to ablate abnormal tissue via activation of photosensitive drug(s); each additional 15 minutes (CPT code 96571) These CPT codes describe a procedure that is performed to ablate abnormal tissue during a bronchoscopy or upper gastrointestinal endoscopy. These procedures have been billed using CPT codes for ablation or destruction of tumors not amenable to other described methods of destruction during endoscopy. Our medical staff reviewed the work RVUs for the base endoscopic procedure codes and the procedure codes used for billing photodynamic therapy (CPT 31641, 43228, and 43258) and valued the work for the new CPT codes as the difference between the work RVU of the CPT code billed and the CPT value of the endo base. We also assumed a procedure time of 60 minutes and are valuing CPT code 96570 at 1.10 work RVUs and CPT 96571 at 0.55 work RVUs. We will not allow payment for other endoscopy procedures on the same date unless it is for a significant, separately identifiable service (for example, ablation of a separate lesion) and the claim contains the appropriate modifier. Screening test of visual acuity (CPT code 99173) We consider this procedure to be a screening procedure for which Medicare payment is not authorized. There are no work RVUs associated with CPT code 99173. [[Page 59423]] Critical Care, 1st hour (CPT code 99291), and Critical Care, each additional thirty minutes (CPT code 99292) The definition of critical care in CPT 2000 has been revised and the RUC has forwarded a recommendation that the revised definition of critical care was editorial and did not warrant a change in work RVUs, which are 4.0 RVUs for code 99291 and 2.0 RVUs for CPT code 99292. Our medical staff disagrees. Therefore, in accordance with our policy of making work neutrality adjustments at the time a new or revised CPT code is published, we have made a work neutrality adjustment to these codes. We have assigned work values of 3.6 RVUs to CPT code 99291 and 1.8 RVUs to CPT code 99292 for the reasons set forth below. We compared the work intensity (RVUs per hour) of critical care to other E/M services. The work intensity for each E/M service was calculated from the ``typical'' performance time in the CPT code descriptor. Initial and subsequent hospital visits have a work intensity of 2.56 RVUs per hour, initial inpatient consultations have a work intensity of 1.98 RVUs per hour, and initial/established office visits have a work intensity of 2.67 RVUs per hour. Similar E/M services have similar work intensities to ensure that the assigned RVU is not anomalous. This facilitates appropriate utilization, coding, and payment. The work intensity of critical care, 4.0 RVUs per hour, is considerably higher than the work intensity of other E/M services. This higher work intensity has been justified on the basis that critical care is significantly different from care described by other E/M services. These differences have been said to include the following: Critical care is provided to critically ill patients who, by definition, are more severely ill than other patients. The analysis of multiple and complex databases needed to care for critically ill patients is a highly work intensive process, clearly greater than that required to care for non-critically ill patients. The frequent application of advanced technology essential to the care of critically ill patients clearly requires more intense work than is needed for the care of other patients. CPT 2000 includes significant and substantive changes in the definition of critical care that directly affect the work intensity of critical care. Among these changes are: Deletion of the word ``unstable'' to describe critically ill or injured patients. Redefinition of a critical illness to say, ``A critical illness or injury acutely impairs one or more vital organ systems such that the patient's survival is jeopardized.'' A change in the frequency for which the work of ``extensive interpretation of multiple databases and the application of advanced technology'' is required to meet the standards for critical care. CPT 1999 says that such work is ``often required'' while CPT 2000 says that such work ``may be required.'' As discussed below, the result of these new work requirements for critical care is to make it somewhat more comparable to the work requirements of E/M services with lower work intensities. In some situations this could allow E/M services with lower work intensities to be coded as critical care. The new definition of critical illness or injury does not sufficiently distinguish critically ill patients from other patients whose care is appropriately described by other E/M services with less work intensity. For example, many patients with an acute exacerbation of congestive heart failure, regardless of severity, could meet the new definition of critical illness. The problem is compounded by the elimination of the requirement for ``extensive interpretation of multiple databases and the application of advanced technology'' as a typical component of critical care. This will make it more difficult to distinguish between the work of critical care and the work of care appropriately coded under other E/M services. For example, the physician work required to manage patients with congestive heart failure varies significantly depending on the severity of illness. The care provided to many of these patients would, appropriately, be coded as a non-critical care E/M service because of the lower intensity of physician work required. In making the work neutrality adjustment we considered the work intensity of other E/M services as described above, and we modeled probable changes in the utilization pattern of critical care services. Our modeling included projections of the number of E/M services currently, and appropriately, coded as non-critical care that will be coded as critical care next year. Based upon this analysis, we estimate that the appropriate work neutrality adjustment for critical care services is 3.6 RVUs for code 99291 and 1.8 RVUs for code 99292. We will analyze the utilization data for codes 99291 and 99292 and other appropriate E/M services starting in January 2000 to determine whether actual utilization patterns match our projections. Based on this analysis, we will consider making further work neutrality adjustments, either increasing or decreasing the work RVUs, as appropriate. Note : Codes 99295 through 99298 were revised in CPT 2000. However, due to the different payment methodology for CPT codes 99295 through 99298, we are not proposing a work neutrality adjustment for these codes. Establishment of Interim Practice Expense Relative Value Units for New and Revised Physicians' Current Procedural Terminology (CPT) Codes and New HCFA Common Procedure Coding System Codes for 2000 Methodology We have developed a process for establishing interim practice expense RVUs (PERVUs) for new and revised codes that is similar to that used for work RVUs. Under this process, the RUC will recommend the practice expense direct inputs, that is, the staff time, supplies, and equipment associated with each new code. We will then review the recommendations in a manner similar to our evaluation of the recommended work RVUs. Because this is the first year that the RUC has been asked to develop the practice expense inputs for new CPT codes, and developing the practice expense inputs for new procedures is a complicated and time-consuming endeavor, the RUC recommended actual direct inputs for a minority of the new CPT codes. For the other procedures, the RUC either recommended a crosswalk to the inputs of an existing CPT code or made no recommendation at this time. For a few of the codes without a RUC recommendation, the interested specialty society sent us recommendations for possible crosswalks of the direct inputs. We will consider all direct cost input crosswalks to be a temporary proxy for the values for these crosswalked services until procedure-specific actual inputs can be developed. The table below lists the new CPT codes for which we agree with the RUC recommended crosswalk to the practice expense inputs of an existing CPT code: [[Page 59424]] ------------------------------------------------------------------------ New CPT Code Existing CPT Code ------------------------------------------------------------------------ 22318 Treat odontoid FX w/o graft..... 63075 Neck spine disk surgery. 22319 Treat odontoid FX w/ graft...... 22548 Neck spine Fusion. 27096 Inject sacroiliac joint......... 27093 Injection for hip X-ray. 35879 Revise graft w/ vein............ 35301 Rechanneling of artery. 35881 Revise graft w/ vein............ 35301 Rechanneling of artery. 50547 Lapro removal donor kidney...... 36830 Artery-vein graft. 62310 Inject spine C/T................ 56349 Esophagogastric fundoplasty. 62311 Inject spine L/S (CD)........... 62298 Injection into spinal canal. 62318 Inject spine w/ cath, C/T....... 62289 Injection into spinal canal. 62319 Inject spine w/ cath, L/S (CD).. 62277 Inject spinal anesthetic. 64470 Injection paravertebral C/T..... 64442 Injection for nerve block. 64479 Injection foramen epidural C/T.. 64442 Injection for nerve block. 64483 Injection foramen epidural L/S.. 64442 Injection for nerve block. 64626 Destroy paravertebral nerve C/T. 64622 Destroy paravertebral nerve L/S. 72275 Epidurography................... 72265 Contrast X-ray, lower spine. 73542 X-ray exam, sacroiliac joint.... 73525 Contrast X-ray of hip. 76005 Fluoroguide for spine injection. 76003 Needle localization by X- ray. 77427 Radiation TX management, X5..... 77430 Weekly radiation therapy. ------------------------------------------------------------------------ The following table shows the CPT codes for which the RUC provided no practice expense recommendations. Therefore, we crosswalked these new CPT codes to what we believe to be the most appropriate existing CPT codes. ------------------------------------------------------------------------ New CPT Code Existing CPT Code ------------------------------------------------------------------------ 11980 Implant hormone pellet(s)....... 11975 Insert contraceptive cap. 20979 US bone stimulation............. 20974 Electrical bone stimulation. 33140 Heart revascularize (TMR)....... 33020 Incision of heart sac. 33282 Implant pat-active HT record.... 33212 Insertion of pulse generator. 33284 Remove pat-active HT record..... 33233 Removal of pacemaker system. 33968 Remove aortic assist device..... No direct costs. 36521 Apheresis w/ adsorp/reinfuse.... 36520 Plasma and/or cell exchange. 36550 Declot vascular device.......... 99211 Office/outpatient visit, est. 61862 Implant neurostimu, subcort..... 61855 Implant neuroreceiver. 61886 Implant neurostim arrays........ 61855 Implant neuroreceiver. 92961 Cardioversion, electric, int.... 93610 Intra-atrial pacing. 93727 Analyze IRL system.............. 93272 ECG/review, interpret only. 93741 Analyze HT pace device single... 93737 Analyze cardio/ defibrillator. 93742 Analyze HT pace device single... 93738 Analyze cardio/ defibrillator. 93743 Analyze HT pace device dual..... 93738 Analyze cardio/ defibrillator. 93744 Analyze HT pace device dual..... 93738 Analyze cardio/ defibrillator. 99170 Anogenital exam, child.......... 57452 Examination of vagina. ------------------------------------------------------------------------ For the following CPT codes we received practice expense recommendations, from either the RUC or a specialty society, that require a short discussion. If we have made any modifications to the recommendations as a result of our review process, the specific changes are discussed. CPT Code 13102, Repair, complex, trunk; each additional 5 cm or less CPT Code 13122, Repair, complex, scalp, arms and/or legs; each additional 5 cm or less CPT Code 13133, Repair, complex, forehead, cheeks, chin, mouth, neck, axillae, genitalia, hands and or feet; each additional 5 cm or less CPT Code 13153, Repair, complex, eyelids, nose, ears and/or lips; each additional 5 cm or less The RUC made no practice expense recommendations for these above four CPT codes. However, the American Society of Plastic and Reconstructive Surgeons recommended to us that we reference these CPT codes to the practice expense inputs for the respective parent codes (CPT codes 13101, 13121, 13132 and 13152, respectively) and that we make the appropriate adjustments to account for the fact that these are add-on codes. We have accepted this recommendation. CPT Code 33410, Replacement, aortic valve, with cardiopulmonary bypass, with stentless tissue valve The RUC made no recommendation on this CPT code. However, the Society of Thoracic Surgeons recommended that we crosswalk the direct inputs for this procedure to the direct inputs of CPT code 33406, Repacement, aortic valve, with cardiopulmonary bypass, with homograft valve (freehand). We agree that this is an appropriate crosswalk. CPT Code 36819, Arteriovenous anastomosis, open; by basilic vein transposition The RUC approved a list of inputs that had been developed with reference to the inputs for existing CPT code 36830 and recommended their acceptance. We agree with the list of inputs, but have adjusted the supplies and staff times to reflect that there are only two post- visits assigned to CPT code 36819. CPT 39560, Resection, diaphragm; with simple repair CPT 39561, Resection, diaphragm; with complex repair The RUC made no recommendations on these CPT codes. However, the Society of Thoracic Surgeons recommended that we crosswalk the direct inputs for these procedures to the direct inputs of CPT codes 39501, Repair diaphragmatic laceration and 39502, Repair paraesophageal hiatus hernia, transabdominal, with or without [[Page 59425]] fundoplasty, vagotomy, and/or phyloroplasty, except neonatal, respectively. We agree that these are appropriate crosswalks. CPT Code 50541, Laparoscopy, surgical; ablation of renal cysts CPT Code 50544, Laparoscopy, surgical; pyeloplasty CPT Code 50546, Laparoscopy, surgical; nephrectomy CPT Code 50548, Laparoscopically assisted nephrourereterectomy CPT Code 50945, Laparoscopy, surgical; ureterolithotomy CPT Code 51990, Laparoscopy, surgical; urethral suspension for stress incontinence CPT Code 51992, Laparoscopy, surgical; sling operation for stress incontinence CPT Code 54692, Laparoscopy, surgical; ochiopexy for intra-abdominal testis The RUC recommended direct practice expense inputs for each of the above CPT codes. We accepted these recommendations with only minor modification. We removed the autoclave from the overhead equipment because it is not needed for the post-procedure visits for these services and adjusted the supplies for CPT code 50544 to reflect that the service is assigned two rather than three office visits. We did not add the female catheter at this time to the list of supplies for CPT codes 51990 and 51992 because we had no information on this supply. CPT Code 64472, Injection anesthetic agent and/or steroid, paravertebral facet joint or facet joint nerve; cervical or thoracic, each addition level CPT Code 64480, Injection, anesthetic agent and/or steroid, transforaminal epidural; cervical or thoracic, each additional level CPT Code 64484, Injection, anesthetic agent and/or steroid, transforaminal epidural; lumbar or sacral, each additional level CPT Code 64627, Destruction by neurolytic agent, paravertebral facet joint nerve; cervical or thoracic, each additional level The RUC sent us only suggested clinical staff intra-service times for these four add-on codes. These clinical staff times were derived by comparison to the RUC physician intra-service times. Because the clinical staff times and physician times are not always the same for a given service, we are, in the interim, crosswalking the practice expense inputs for CPT codes 64472, 64480, and 64484 to the direct inputs for a similar add-on code, CPT code 64443, Injection, anesthetic agent; paravertebral facet joint nerve, lumbar, each additional level. We are crosswalking the practice expense inputs for CPT code 64627 to another appropriate add-on code, CPT code 64623, Destruction by neurolytic agent; paravertebral facet joint nerve, lumbar, each additional level. CPT Code 76873, Echography, transrectal; prostate volume study for brachytherapy treatment planning The RUC recommended a list of direct cost inputs for this CPT code. However, because these practice expense recommendations differed greatly from the CPEP inputs for other CPT codes in the same family, we, as an interim measure, crosswalked the practice expense inputs for this code to CPT code 76872, Echography, transrectal, which was used by the RUC as the reference CPT code for this service and was also the CPT code used formerly to report this procedure. CPT Code 78456, Acute venous thrombosis imaging, peptide We accepted the RUC recommended direct practice expense inputs except that we deleted forms and labels (considered office supplies from the medical supply list) and the dictation machine (considered office equipment). We have not included the bar phantom at this time because the data provided with the recommendation was insufficient to develop a cost for this equipment. CPT Code 90471, Immunization administration; one vaccine We accepted the RUC's practice expense recommendations concerning clinical labor, supplies, and equipment inputs with the following adjustments: office supplies, which included the record sheet, school record form and Xerox copy, were deleted from the medical supply list; the APAP elixir was also removed since Medicare does not include coverage of self-administered drugs. We deleted the examination table from the overhead equipment, because it is not needed for the procedure and, in keeping with the CPEP definitions of the equipment categories, moved the refrigerator from the procedure-specific to the overhead medical equipment category. CPT Code 90472, Immunization administration; each additional vaccine We accepted the RUC recommendation for clinical staff time and made the same adjustments to the RUC recommendation for supplies as we did for CPT code 90471. In addition, we deleted all equipment because this is an add-on CPT code and all equipment costs are captured in the base CPT code. For the following CPT codes we did not receive practice expense recommendations from either the RUC or a specialty society and we were unable to do a direct crosswalk to existing CPT codes. CPT Code 62263, Percutaneous lysis of eipidural adhesions, with or without endoscopic guidance, using solution injection or mechanical means including x-ray localization with or without contrast We are crosswalking this service to CPT code 62282, Injection of neurolytic substance; epidural, lumbar or caudal, which is a service assigned three post-procedure visits. We are adjusting the inputs of CPT code 62263 to reflect the two post-procedure visits assigned to this procedure. CPT Code 96570, Photodynamic therapy by endoscopic application of light to ablate abnormal tissue via activation of photsensitive drug(s); first 30 minutes, and CPT code 96571 Photodynamic therapy by endoscopic application of light to ablate abnormal tissue via activation of photsensitive drug(s); each additional 15 minutes. These codes are add-on codes. That is, they will always be billed along with another procedure. Most of the direct practice expense inputs will be assigned to the base procedure. The inputs for 96570 and 96571 only reflect the additional inputs that are required. We have included an argon laser under equipment and 30 minutes of clinical staff intra-service time for CPT code 96570. For CPT code 95671, we included 15 minutes of clinical staff intra-service time. This is consistent with the discussion for these codes contained in the evaluation of the work RVUs. C. Other Changes to the 2000 Physician Fee Schedule and Clarification of CPT Definitions For the 2000 physician fee schedule, we are establishing or revising several alpha-numeric HCPCS codes for the reporting of certain services that are not clearly described by existing CPT codes. We view these codes as temporary since we will be referring them to the CPT Editorial Panel for possible inclusion in future editions of the CPT. Additionally, included in this section are some clarifications of proper usages of some new or revised codes. [[Page 59426]] External Counterpulsation (G0166) A new level 2 HCPCS code has been created to describe this technology. External counterpulsation (ECP) consists of sequential compression and decompression of a series of leg and lower trunk air- filled cuffs, coordinated with the cardiac cycle. ECP has been approved for patients with severe stable angina pectoris refractory to medical and/or surgical treatment. An average course of treatment consists of 35, one-hour treatments over seven weeks. We determined that the procedure is performed by non-physician personnel, but requires a physician to be available for emergencies and intermittent physician supervision. Because of the minimal physician involvement we have assigned .07 work RVU to HCPCS code G0166. We will not allow payment for the following services on the same day as ECP unless they are medically necessary and delivered in a clinical setting not involving ECP treatment: CPT code 97016 (vasopneumatic devices). CPT codes 93720, 93721, 93722 (total body plethysmography). CPT codes 93000, 93005, 93010 (electrocardiogram). CPT code 92971 (external cardioassist). CPT code 93922 (noninvasive physiologic studies of extremity arteries). If patients undergoing ECP require significant E/M services in the same period, those services should be billed using the appropriate E/M code with modifier -25 to indicate a significant separately identifiable service. Interim practice expense direct cost inputs were established based on the information available to us concerning the cost of the machine, hours per week of use, registered nurse/technical time per use, disposable supplies, and overhead. Because this is a new procedure, information on practice expense was limited. Therefore, we expect to refine these inputs as more information becomes available. Hyperbaric oxygen treatment not requiring physician attendance, per treatment session (G0167) This code was created because the only current code for hyperbaric oxygen treatment is CPT code 99183. Because many providers have stated that physician attendance may not be needed for hyperbaric oxygen treatment, the new HCPCS code G0167 was created to allow coding of these services. The creation of a code does not change current coverage policy. The physician work of this code is zero. The practice expense inputs were crosswalked to CPT code 99183, though we will consider a lower value in the future if we find that the practice expenses are lower in situations in which there is no physician attendance. Wound closure utilizing tissue adhesives only (G0168) This new code should only be used when a wound is closed solely with the use of this new product. Wounds closed with a combination of wound closure adhesives and other traditional methods of wound closure (staples or sutures) should still be coded using the appropriate CPT code (12001-12007). FDA data shows that the time needed to close a wound with wound adhesive is, on average, one quarter of the time needed to close a wound with traditional methods (including use of wound closure tapes). We estimate that the work of HCPCS code G0168 is comparable to the work of a level two E/M service and have assigned a work RVU of .45. We established interim practice expense inputs for this service by crosswalking inputs from CPT code 12001. We then adjusted the inputs by adding the cost of the wound adhesive and removing the supplies that would not be needed for this type of wound closure. We also reduced the clinical staff time to reflect that the wound size is less complex and treatment method less time consuming. Removal of devitalized tissue, without use of anesthesia (G0169) This code was created because the CPT codes 11040 through 11044 for debridement were created to describe complex surgical services requiring the use of general anesthesia. Many practitioners, including physical therapists, occupational therapists, and nurses, do active wound care under physicians' orders. Active care involves the use of high pressure water jets, scissors, or scalpels. Wound care involving use of dressings, gauze, or medications, but not active tissue removal, should not be coded using HCPCS code G0169. The service to be coded with HCPCS code G0169 typically involves regular removal of devitalized tissues in ulcers or non-healing wounds. We have created this code to eliminate the confusion involved in using debridement codes, some of which have 10 day global periods. This code will be recognized as a therapy service for purposes of the outpatient rehabilitation payment system and will replace the CPT codes 11040 and 11044 for use by physical and occupational therapists. We estimate that the work of HCPCS code G0169 is comparable to the work of CPT code 11040; therefore, we have assigned 0.5 work RVUs to this new code. For the practice expense component, we crosswalked the inputs for this code to the inputs for CPT code 97022, whirlpool therapy. Application of tissue cultured skin grafts, including bilaminate skin substitutes or neodermis, including site preparation, initial 25 sq cm; and G0171 Application of tissue cultured skin grafts, including bilaminate skin substitutes or neodermis, including site preparation, each additional 25 sq cm (G0170) CPT 1999 recommended that CPT codes 15100 to 15121, for split- thickness skin grafting, be used for tissue cultured or bilaminate skin substitutes or neodermis. Instead, we have decided that effective January 1, 2000, these services should be reported with the new HCPCS codes G0170 and G0171 on Medicare claims. The CPT codes for split- thickness skin grafts may no longer be used to describe tissue cultured or bilaminate skin substitutes or neodermis. Because the tissue cultured and ``bioengineered'' products are available for use on small skin ulcers, and because there is no need to harvest a graft and care for the donor site, we estimate that the physician work in using these cultures and ``bioengineered'' products is considerably less than the work in performing split-thickness skin grafts. The work value for the new codes was calculated with a building block approach using CPT code 15000 (skin graft with work value of 4.00) and either CPT code 15350 (skin homograft with work value of 4.00) or CPT code 15400 (skin heterograft with work value of 4.00). The work in preparing a graft site and placing a graft equals the work of CPT code 15000 plus 50 percent of the work of either CPT code 15350 or 15400, due to the multiple procedure reduction rule. Since the work values for CPT codes 15000, 15350, and 15400 are based upon graft site preparation and placement of a 100 sq. cm. graft or less, and HCPCS G0170 describes a graft size of 25 cm or less, the work value for HCPCS code G0170 is 25 percent of the work value of CPT code 15000 (4.00) plus 50 percent of CPT code 15350 or 15400 (2.00). This results in a work RVU of 1.5 (25 percent of 6.00). The work RVU for HCPCS code G0171 was calculated similarly using CPT codes 15001 (skin graft add-on with work [[Page 59427]] value of 1.00) and 15351 (skin homograft add-on with a work value of 1.00) resulting in a work RVU of .38 for HCPCS code G0171. We calculated the practice expense inputs for HCPCS code G0170 by crosswalking the supply and overhead equipment inputs from CPT 15350. We added a power table and soft tissue tray as the procedure-specific equipment inputs and added 80 minutes of RN/MA clinical time in the intra service period. For HCPCS code G0171 we added 20 minutes of RN/MA clinical time in the intra service period. IV. Five Year Refinement of Relative Value Units A. Background Section 1848(c)(2)(B)(i) of the Act requires that we review all RVUs no less often than every five years. As part of the final rule published December 8, 1994 (59 FR 63410), we solicited public comment on all work RVUs for approximately 7,000 CPT and HCPCS codes. The scope of the 5-year review was limited to work values, since at that time, the law required practice expense and malpractice RVUs be calculated based on 1991 allowed charges and practice expense and malpractice expense shares for the specialties performing the services. We applied the specialty practice cost shares from the AMA's Socioeconomic Survey to 1989 actual charges ``aged'' forward to approximate 1991 charges. In addition, we were aware of the move to replace the charge-based practice expense system by a resource-based methodology. The December 8, 1994 final rules also outlined the proposed process for refinement of the work RVUs and provided a suggested format for submission of comments. As a result of the December 8, 1994 final rule, we received more than 500 comments on approximately 1,100 codes. Subsequent to review of the comments by our medical staff, comments on approximately 700 codes were forwarded to the RUC for review. An additional 300 codes identified by our staff as potentially misvalued were also forwarded to the RUC. A process similar to that used for the annual physician fee schedule update was used for evaluating the proposed changes to the work RVUs and a notice discussing these proposed changes was published in the Federal Register May 3, 1996 (61 FR 19992). As outlined in the notice, for 28 percent of the codes we proposed to increase the work RVUs; for 61 percent of the codes we proposed to maintain the work RVUs and for 11 percent of the codes we proposed to decrease the work RVUs. (Our proposed work RVUs agreed with the RUC recommendations for 93 percent of the codes.) In response to the May 3, 1996 proposed notice, we received more than 2,900 comments on approximately 133 codes plus all anesthesia services. In order to address these comments, we convened multispecialty panels of physicians. A detailed discussion of this process, as well as the final results of the 5-year review, were included in the final rule with comment period published November 22, 1996 (61 FR 59490). B. Scope of the Five Year Refinement We have made several preliminary decisions about the scope of the 5-year refinement and issues for which we are requesting public comment. All work RVUs are subject to comment. Practice expense and malpractice expense RVUs will not be subject to comment and will not be recalculated as part of the 5-year refinement. Section 4505(f) of the BBA requires us to implement malpractice resource-based RVUs for services furnished beginning in CY 2000. The BBA at section 4505 also provides for a gradual 4-year transition for resource-based practice expenses, with resource-based practice expenses becoming fully effective in CY 2002. Since resource-based malpractice RVUs will have only just been implemented in CY 2000, and resource- based practice expenses will be in the middle of transitioning to a fully resource-based system, it would be premature to include these components in this 5-year review. While these components of the fee schedule will also eventually be subject to review, we will be evaluating how to best approach this task. C. Refinement of Work Relative Value Units During the first 5-year review, we relied on public commenters to identify services that were misvalued. For the second 5-year refinement of work RVUs for services furnished beginning January 1, 2002, we are requesting public comments on potentially misvalued work RVUs for all services in the CY 2000 physician fee schedule. These comments will be an important source of information that we will consider in developing further plans for the 5-year review which we will propose in 2001. However, since this process generally elicits comments focusing on undervalued codes, we will supplement the information we receive through these comments with other data and analyses we are initiating, as described in section IV.E. Comments will be considered if we receive them at the appropriate address as provided below, no later than 5 p.m., March 1, 2000. Mail written comments related to the 5-year refinement process (1 original and 3 copies) to the following address: Health Care Financing Administration, Department of Health and Human Services, Attention: HCFA-1065-FC (5-Year Refinement), P.O. Box 8013, Baltimore, MD 21244- 8013. Comments must include the appropriate CPT code (for example CPT code 90918) and the suggested RVUs (for example, 11.00 RVUs). Unless otherwise specified, we will assume that all suggested RVUs are on the 2000 scale. Failure to provide this information may result in our inability to evaluate the comments adequately. We will consider all comments on all work RVUs in the development of a proposed rule that we intend to publish in 2001. In that rule, we will propose the revisions to work RVUs that we believe need to be made. Finalization of that rule will be based on review and analysis of comments received in response to the proposed rule. In addition to internal review and analysis, we propose to share comments we receive on all CY 2000 RVUs with the RUC, which currently makes recommendations to us on the assignment of RVUs to new and revised CPT codes. This process was used during the first 5-year review and we believe that it was beneficial. The RUC's perspective will be helpful because of its experience in recommending RVUs for the codes that have been added to, or revised by, the CPT panel since we implemented the physician fee schedule in 1992. Furthermore, the RUC, by virtue of its multispecialty membership and consultation with approximately 65 specialty societies, involves the medical community in the refinement process. We emphasize, however, as we reiterated for the first 5-year review, that we retain the responsibility for analyzing the comments in the 2000 physician fee schedule, developing the proposed rule for 2001, evaluating the comments on the proposed rule, and deciding whether to revise RVUs. We are not delegating this responsibility to the RUC or any other organization. D. Nature and Format of Comments on Work Relative Value Units While all written public comments are welcomed, based on our past experience we have found it particularly beneficial if the comments include information in a particular format. This includes the CPT code, a clinical description of the service, and a discussion of how the work of that [[Page 59428]] service is analogous to one or more reference services. The use of one or more reference services is of fundamental importance because the relative value of the work in a physicians' service exists only in comparison with the physician work in another service. The reference services cited should be commonly performed services with established work RVUs and also fairly well understood outside of their specialty. We have included a list of suggested reference services in Addendum E. The RVUs assigned to these services represent benchmarks to serve as a basis for comparison with the work represented by other codes. However, the inclusion of these services in the reference set does not mean that they are exempted from public comment on the RVUs assigned to them. If none of the services in the reference set are suitable for reference, we recommend choosing another service from the physician fee schedule and explaining why it is a better reference procedure. Physician work has two components; time and intensity. The clinical analogy for many services can be strengthened by dividing the service into the following three time segments and comparing them with the respective segments of the reference services: Preservice work--Work performed before the actual procedure such as review of records, solicitation of informed consent, and preparation of equipment. Time spent by the physician dressing, scrubbing, and waiting for the patient should be identified. Preservice work also includes the time spent scrubbing, positioning, or otherwise preparing the patient. For surgical procedures with global periods, commenters should include estimates of the number, time, and type of visits from the day before surgery until the patient enters the operating room. The visit when the physician decides to operate and the visits preceding it should not be included in the estimate of preservice work since these services are not included in the Medicare definition of global period. Intraservice work--The actual performance of the procedure. For evaluation and management services, this would be described as ``face to face'' time in the inpatient setting. For surgical procedures, the customary term would be ``skin-to-skin'' or its equivalent for those procedures not beginning with incisions. Postservice work--Analysis of data collected from the encounter, preparation of a report, and communication of the results. For procedures with global periods, commenters should identify the time spent by the physician with the patient after the procedure on the same day and whether the patient typically goes home to an ordinary hospital bed or to the intensive care unit. Commenters should describe the number, time, and type of physician visits from the day after the procedure until the end of the global period. They should also distinguish inpatient from outpatient visits. In making these estimations, we encourage detailed clinical information such as data derived from operating logs, operative reports, medical charts concerning the length of service, the amount of work performed before and after the service, and the length of stay in the hospital. The usefulness of these data is greatly increased if the data are presented with comparable data for reference services and evidence that justifies that the data presented are nationally representative of the average work involved in furnishing the service. One common mistake commenters make is to provide data that are not representative of national practices. Another common mistake is to present a lengthy and elaborate description of the work in the service, but to omit, or to provide an incomplete description of, the comparability of the work in the service to the work in the reference procedure or procedures identified. Intensity of the work in the service is best compared by breaking the intensity into the following elements: Mental effort and judgment--Commenters should compare the service in question with a reference service as to the amount of clinical data that needs to be considered, the fund of knowledge required, the range of possible decisions, the number of factors considered in making a decision, and the degree of complexity of the interaction of these factors. Technical skill and physical effort--One useful measure of skill is the point in training when a resident is expected to be able to perform the procedure. Physical effort can be compared by dividing services into tasks and making the direct comparisons of tasks. In making the comparison, it is necessary to show that the differences in physician effort are not reflected accurately by differences in the time involved; if they are, considerations of physician effort amount to double counting of physician work in the service. Psychological stress--Two kinds of psychological stress are usually associated with physician work. The first is the pressure involved when the outcome is heavily dependent upon skill and judgment and a mistake has serious consequences. The second is related to unpleasant conditions connected with the work that are not affected by skill or judgment. These circumstances would include situations with high rates of mortality or morbidity regardless of the physician's skill or judgment, difficult patients or families, or physician physical discomfort. Of the two forms of stress, only the former is fully accepted as an aspect of work; many consider the latter to be a highly variable function of physician personality. Intensity often varies significantly in the course of furnishing a service. One common mistake commenters make is to ``anchor'' the value of the service to a point of maximum intensity during the service as the basis for comparing services. It is unlikely that the maximum intensity is an accurate reflection of the average intensity of a service; a lengthy procedure that is simple except for a few moments of extreme intensity is probably less work than one of equal length during which a fairly high level of intensity is maintained throughout. E. New Initiatives While we intend to continue the process used during the first 5- year review, we realize there were limitations to that process, particularly with respect to identifying overvalued codes. In preparation for the second 5-year review of work RVUs, we awarded a contract to Health Economic Research (HER) to obtain technical assistance to establish a framework for the second 5-year review. We were interested in identifying methods by which we could identify CPT codes in the physician fee schedule that may have been assigned inappropriate work RVUs and also identify services whose work RVUs may have changed since they were originally developed or last revised. HER identified seven methods that we could potentially use to identify misvalued services. These methods focus upon different components of the work RVU: Total work; time components of total work; that is, total service time, pre- and intra-service time, and post- operative visits; and work per unit of time. They include: 1. Clinical Panels. The use of clinical panels to evaluate total physician work. The panels could identify within clinical family rank order anomalies and cross-specialty anomalies in similar services and recalibrate reference set procedures. 2. Rasch Paired Comparison Method. This method identifies misvalued CPT codes in terms of either total or intra- [[Continued on page 59429]]